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CalAmp Reports Fiscal 2017 Third Quarter Financial Results
Strong revenue contribution from MRM telematics product sales;
Record international revenue at 28.5% of consolidated Q3 revenue;
Consolidated gross margin of 42%

IRVINE, Calif., Dec. 21, 2016 /PRNewswire/ -- CalAmp (NASDAQ: CAMP), a leading provider of wireless products, services and solutions, today reported results for its fiscal 2017 third quarter ended November 30, 2016.

Revenue for the third quarter of fiscal 2017 was $83.4 million, an increase of 12% from the third quarter of fiscal 2016. The latest quarter included revenue of $29.9 million from LoJack products and services that was slightly lower than expected, as anticipated orders from two large international licensees were received late in the quarter and could not be fulfilled until early in the fourth quarter.

Michael Burdiek, CalAmp's President and Chief Executive Officer, said, "In the latest quarter Mobile Resource Management (MRM) telematics product sales reached the highest level of the last four quarters.  We are optimistic about our near-term growth as visibility has improved markedly from earlier in the year when macro factors negatively impacted demand for fleet telematics products in the U.S.  As we look ahead, we see a number of catalysts on the horizon to drive near and long-term growth for our novel portfolio of connected vehicle telematics solutions."

Gross profit for the third quarter of fiscal 2017 was $35.1 million, an increase of $8.5 million over the same quarter last year. Gross margin was 42% in the fiscal 2017 third quarter, up from 36% in the third quarter of fiscal 2016.  

The GAAP-basis net loss in the third quarter of fiscal 2017 was ($1.5) million, or ($0.04) per diluted share, compared to net income of $3.9 million, or $0.11 per diluted share, in the fiscal 2016 third quarter.  Non-GAAP adjusted basis net income for the fiscal 2017 third quarter was $7.6 million, or $0.21 per diluted share, compared to non-GAAP adjusted net income of $11.4 million, or $0.31 per diluted share, in the third quarter of fiscal 2016.  The third quarter earnings were impacted by higher legal expense of approximately $1.6 million over the comparable period last year and foreign currency exchange rate losses of $0.6 million

Adjusted EBITDA for the third quarter of fiscal 2017 was $10.0 million and Adjusted EBITDA margin was 11.9%.

As of November 30, 2016, the company had total cash and marketable securities of $101 million and total debt outstanding of $145 million, which is the carrying amount of the company's 1.625% convertible notes in the face amount of $172.5 million. Net cash provided by operating activities was $0.5 million during the third quarter of fiscal 2017. 

During the third quarter, the company purchased and retired approximately 975,000 shares of its common stock at an aggregate cost of $13.5 million pursuant to a stock repurchase plan adopted in June 2016.  As of November 30, 2016, the remaining authorization for additional share purchases under this plan is $3.1 million.

Recent Business and Financial Highlights

  • Revenue from international customers reached a record of 28.5% of consolidated quarterly revenues.
  • MRM telematics product sales reached the highest level of the past four quarters with fleet and connected car device revenue at record levels.
  • SaaS revenue grew 6% sequentially, driven by solid fleet subscriber growth and outstanding performance from LoJack Italy.
  • The company announced today that its Executive Vice President, Chief Financial Officer and Corporate Secretary, Rick Vitelle, plans to retire from the company after sixteen years of service. Mr. Vitelle will remain with the company until his successor is recruited and fully on‑boarded, to ensure an orderly and seamless transition.

Business Outlook 
The outlook for the fourth quarter ending February 28, 2017 is:

  • Consolidated revenue in the range of $84 to $89 million.
  • GAAP basis net income in the range of $.05 to $0.09 per diluted share and non-GAAP net income in the range of $0.25 to $0.31 per diluted share.
  • Adjusted EBITDA in the range of $11 to $15 million.

Conference Call and Webcast  
CalAmp is hosting a conference call for analysts and investors to discuss its fiscal 2017 third quarter results and outlook for its fiscal 2017 fourth quarter at 1:30 p.m. Pacific Time today.  Participants can listen in via webcast by visiting the Investor Relations section of CalAmp's website at www.calamp.com. Please go to the website at least 15 minutes early to register, download and install any necessary audio software. A replay of the webcast will be available for 30 days after the call.  The conference call can also be accessed by dialing 855-302-8830 (+1-330-871-6073 for international callers) and using the Conference ID# 35586307. Following the call, an audio replay will also be available by calling 855-859-2056 or +1-404-537-3406 and entering the Conference ID# 35586307. The audio replay will be available through December 28, 2016.

About CalAmp 
CalAmp (NASDAQ: CAMP) is a pure-play pioneer in the connected vehicle and broader Industrial Internet of Things marketplace. The company's extensive portfolio of intelligent communications devices, robust and scalable telematics cloud services, and targeted software applications streamline otherwise complex Machine-to-Machine (M2M) deployments. These solutions enable customers to optimize their operations by collecting, monitoring and efficiently reporting business-critical data and desired intelligence from high-value mobile and remote assets. CalAmp is headquartered in Irvine, California and has been publicly traded since 1983. For more information, please visit www.calamp.com.

Forward-Looking Statements  
Statements in this press release that are not historical in nature are forward-looking statements that, within the meaning of the federal securities laws including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, involve known and unknown risks and uncertainties. Words such as "may", "will", "expect", "intend", "plan", "believe", "seek", "could", "estimate", "judgment", "targeting", "should", "anticipate", "goal" and variations of these words and similar expressions, are intended to identify forward-looking statements. The forward-looking statements in this press release address a variety of subjects, including the outlook for our fiscal 2017 fourth quarter operating results. Readers are cautioned that actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including global economic conditions, competitive pressures and pricing declines, softer-than-expected demand from key customers, intellectual property infringement claims, and other risks or uncertainties that are described in Part I, Item 1A of our Annual Report on Form 10-K for fiscal 2016 as filed on April 20, 2016 with the Securities and Exchange Commission. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurances that our expectations will be attained. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures  
"GAAP" refers to financial information presented in accordance with U.S. Generally Accepted Accounting Principles. This press release includes historical non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission. CalAmp believes that its presentation of historical non-GAAP financial measures provides useful supplementary information to investors. The presentation of historical non-GAAP financial measures is not meant to be considered in isolation from or as a substitute for results prepared in accordance with GAAP.

In this press release, CalAmp reports the non-GAAP financial measures of Adjusted Basis net income, Adjusted Basis net income per diluted share, Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization, Stock-Based Compensation and certain other adjustments as detailed in the accompanying non-GAAP reconciliation), and Adjusted EBITDA margin. Adjusted Basis net income excludes the impact of intangibles amortization expense, stock-based compensation, acquisition and integration expenses, and certain other adjustments as shown in the non-GAAP reconciliation provided in the table at the end of this press release.  CalAmp uses these non-GAAP financial measures to enhance the investor's overall understanding of the financial performance and future prospects of CalAmp's core business activities. Specifically, CalAmp believes that the use of these non-GAAP measures facilitates the comparison of results of core business operations between its current and past periods.

AT CALAMP:

AT NMN ADVISORS:

Garo Sarkissian

Nicole Noutsios         

SVP, Corporate Development

(510) 315-1003          

(949) 600-5600

nicole@nmnadvisors.com

 














CAL AMP CORP.

CONSOLIDATED INCOME STATEMENTS 

(Unaudited, in thousands except per share amounts)
















Three Months Ended


Nine Months Ended



November 30,


November 30,



2016


2015


2016


2015














Revenues


$

83,350


$

74,675


$

264,976


$

209,912














Cost of revenues



48,233



48,101



157,411



134,509














Gross profit



35,117



26,574



107,565



75,403














Operating expenses:













  Research and development



5,297



5,121



17,273



14,681

  Selling



12,818



5,975



36,809



17,320

  General and administrative



11,352



5,202



38,619



14,885

  Intangible asset amortization



3,857



1,663



11,203



4,962




33,324



17,961



103,904



51,848














Operating income



1,793



8,613



3,661



23,555














Non-operating income (expense):













  Investment income



201



438



1,109



423

  Interest expense



(2,479)



(2,252)



(7,377)



(5,180)

  Other income (expense)



(587)



6



(174)



(23)




(2,865)



(1,808)



(6,442)



(4,780)














Income (loss) before income taxes and













equity in net loss of affiliate



(1,072)



6,805



(2,781)



18,775














Income tax benefit (provision)



(135)



(2,603)



120



(7,015)














Income (loss) before equity in net  loss of affiliate



(1,207)



4,202



(2,661)



11,760














Equity in net loss of affiliate



(320)



(326)



(1,004)



(326)














Net income (loss)


$

(1,527)


$

3,876


$

(3,665)


$

11,434














Earnings (loss) per share:













  Basic


$

(0.04)


$

0.11


$

(0.10)


$

0.32

  Diluted


$

(0.04)


$

0.11


$

(0.10)


$

0.31














Shares used in computing earnings (loss) per share:













  Basic



35,731



36,319



36,196



36,138

  Diluted



35,731



36,803



36,196



36,728

















BUSINESS SEGMENT INFORMATION

(Unaudited, in thousands)
















Three Months Ended


Nine Months Ended



November 30,


November 30,



2016


2015


2016


2015

Revenues













  Wireless DataCom


$

83,350


$

62,842


$

249,907


$

182,487

  Satellite



-



11,833



15,069



27,425

    Total revenues


$

83,350


$

74,675


$

264,976


$

209,912














Gross profit 













  Wireless DataCom


$

35,117


$

23,416


$

103,836


$

68,102

  Satellite



-



3,158



3,729



7,301

    Total gross profit


$

35,117


$

26,574


$

107,565


$

75,403














Operating income 













  Wireless DataCom


$

3,171


$

7,389


$

9,243


$

21,808

  Satellite



-



2,415



1,547



5,192

  Corporate expenses



(1,378)



(1,191)



(7,129)



(3,445)

    Total operating income


$

1,793


$

8,613


$

3,661


$

23,555


- more -

 

 

 












CAL AMP CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands)
















November 30,


February 29,







2016


2016



                                Assets




(Unaudited)






Current assets:











  Cash and cash equivalents




$

75,147


$

139,388



  Short-term marketable securities





25,675



88,718



  Accounts receivable, net





66,969



49,432



  Inventories





31,484



16,731



  Prepaid expenses and other current assets



7,847



4,498














       Total current assets





207,122



298,767

























Property, equipment and improvements, net




21,676



11,225














Deferred income tax assets





28,024



30,213














Goodwill





63,564



16,508














Other intangible assets, net





71,074



17,010














Other assets





11,287



10,640


















$

402,747


$

384,363














                      Liabilities and Stockholders' Equity









Current liabilities:











  Accounts payable




$

33,392


$

24,938



  Accrued payroll and employee benefits





10,977



6,814



  Deferred revenue





15,243



9,438



  Other current liabilities





14,380



8,375














      Total current liabilities





73,992



49,565














1.625% convertible senior unsecured notes




145,021



139,800



Other non-current liabilities





15,244



5,551














Stockholders' equity:











  Common stock





355



367



  Additional paid-in capital





212,137



229,159



  Accumulated deficit





(43,518)



(39,853)



  Accumulated other comprehensive loss





(484)



(226)














      Total stockholders' equity





168,490



189,447


















$

402,747


$

384,363




- more -

 

 

 














CAL AMP CORP.


CONSOLIDATED CASH FLOW STATEMENTS


(Unaudited - In thousands)


















 

Nine Months Ended








November 30, 2016








2016


2015



Cash flows from operating activities:












Net income (loss)




$

(3,665)


$

11,434




Depreciation expense





6,034



2,608




Intangible assets amortization expense





11,203



4,962




Stock-based compensation expense





5,669



4,211




Amortization of convertible debt issue costs and discount





5,221



3,502




Deferred tax assets, net





(511)



6,595




Equity in net loss of affiliate





1,004



326




Impairment of internal use software





1,364



-




Changes in operating working capital





(6,512)



4,320




Other





(12)



(87)
















   Net cash provided by operating activities





19,795



37,871















Cash flows from investing activities:












Proceeds from maturities of marketable securities





88,742



35,552




Purchases of marketable securities





(25,699)



(142,032)




Capital expenditures





(5,818)



(3,388)




Acquisition of Crashboxx





-



(1,500)




Acquisition of LoJack, net of cash acquired





(116,982)



-




Advances to unconsolidated subsidiary





(1,401)



(2,156)




Other





(51)



(95)
















   Net cash used in investing activities





(61,209)



(113,619)















Cash flows from financing activities:












Proceeds from issuance of convertible notes





-



172,500




Payments of debt issuance costs





-



(5,291)




Purchase of convertible note hedges





-



(31,343)




Proceeds from issuance of warrants





-



15,991




Payment of acquisition-related note and contingent consideration



-



(1,687)




Repurchases of common stock





(21,923)



-




Taxes paid related to net share settlement of vested equity awards



(1,614)



(2,520)




Proceeds from exercise of stock options





834



592
















   Net cash provided (used) by financing activities





(22,703)



148,242















Effect of exchange rate changes on cash





(124)



-















Net change in cash and cash equivalents





(64,241)



72,494















Cash and cash equivalents at beginning of period





139,388



34,184















Cash and cash equivalents at end of period




$

75,147


$

106,678




- more -

 

 


CAL AMP CORP.


RECONCILIATION OF NON-GAAP MEASURES TO GAAP


(Unaudited)




















"GAAP" refers to financial information presented in accordance with U.S. Generally Accepted Accounting Principles. This press release includes




historical non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission.  CalAmp believes that




its presentation of historical non-GAAP financial measures provides useful supplementary information to investors.  The presentation of historical




non-GAAP financial measures is not meant to be considered in isolation from or as a substitute for results prepared in accordance with GAAP.























In this press release, CalAmp reports the non-GAAP financial measures of Adjusted basis net income, Adjusted basis net income per diluted share,




Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization and Stock-Based Compensation and other




adjustments as identified below), and Adjusted EBITDA margin. CalAmp uses these non-GAAP financial measures to enhance the investor's overall




understanding of the financial performance and future prospects of CalAmp's core business activities. Specifically, CalAmp believes that the use of




these non-GAAP measures facilitates the comparison of results of core business operations between its current and past periods.  











































The reconciliation of the GAAP basis net income (loss) to Adjusted basis (non-GAAP) net income is as follows (in thousands except per




share amounts):





















Three Months Ended


Nine Months Ended








November 30,


November 30,








2016


2015


2016


2015




GAAP basis net income (loss)



$

(1,527)


$

3,876


$

(3,665)


$

11,434






















Intangible assets amortization expense




3,857



1,663



11,203



4,962




Stock-based compensation expense




2,064



1,602



5,669



4,211




Non-cash interest expense from amortization of debt discount




1,562



1,370



4,631



3,106




GAAP basis income tax provision (benefit)




135



2,603



(120)



7,015




Equity in net loss of affiliate




320



326



1,004



326




Acquisition and integration expenses




630



-



4,169



-




Non-cash cost of sales and depreciation on markup of


















 LoJack inventory and fixed assets 




186



-



4,867



-




Legal arbitration expenses for LoJack battery claim




196



-



1,656



-






















Adjusted basis income before income taxes




7,423



11,440



29,414



31,054






















Income tax benefit (provision) (non-GAAP basis) (a)




138



(57)



(709)



(344)






















Adjusted basis net income



$

7,561


$

11,383


$

28,705


$

30,710






















Adjusted basis net income per diluted share



$

0.21


$

0.31


$

0.78


$

0.84






















Weighted average common shares outstanding on diluted basis




36,087



36,803



36,651



36,728






















(a)  The non-GAAP income tax provision represents cash taxes paid or payable for the period after giving effect to the utilization of net operating





loss and tax credit carryforwards.



































The reconciliation of GAAP basis net income (loss) to Adjusted EBITDA, and the calculation of Adjusted EBITDA margin, are as follows




(dollars in thousands):





















Three Months Ended


Nine Months Ended








November 30,


November 30,








2016


2015


2016


2015






















GAAP basis net income (loss)



$

(1,527)


$

3,876


$

(3,665)


$

11,434






















Investment income




(201)



(438)



(1,109)



(423)




Interest expense




2,479



2,252



7,377



5,180




GAAP basis income tax provision (benefit) 




135



2,603



(120)



7,015




Depreciation expense




2,002



933



6,034



2,608




Intangible assets amortization expense




3,857



1,663



11,203



4,962




Stock-based compensation expense




2,064



1,602



5,669



4,211




Equity in net loss of affiliate




320



326



1,004



326




Acquisition and integration expenses




630



-



4,169



-




Non-cash cost of sales on markup of LoJack inventory




-



-



4,319



-




Legal arbitration expenses for LoJack battery claim




196



-



1,656



-






















Adjusted EBITDA



$

9,955


$

12,817


$

36,537


$

35,313






















Revenue



$

83,350


$

74,675


$

264,976


$

209,912






















Adjusted EBITDA margin




11.9%



17.2%



13.8%



16.8%






# # #

 

 

 

 

 

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SOURCE CalAmp