Release Details

CalAmp Reports Second Quarter Fiscal Year 2024 Financial Results

October 5, 2023
The company generated positive Cash Flow from Operations and continued strong Adjusted EBITDA in Q2

IRVINE, Calif., Oct. 05, 2023 (GLOBE NEWSWIRE) -- CalAmp (Nasdaq: CAMP), a connected intelligence company that helps organizations monitor, track and protect their vital assets, today reported financial results for its second quarter of fiscal year 2024 ended August 31, 2023.  

Second Quarter Fiscal Year 2024 Financial Overview 

  • Total revenue was $61.7 million in the quarter, representing a $9.2 million decline sequentially and an $11.1 million decline year over year. 
  • Gross margin in the quarter decreased 200 basis points sequentially and 370 basis points year over year to 36.2% as a result of lower volumes and shift in product mix driven by strong shipments to industrial customers.
  • Software and Subscription Services (S&SS) revenue was $40.4 million in the quarter, down $4.6 million sequentially and $4.2 million year over year.   
  • Telematics Products revenue was $21.4 million, including a strong quarter from a large Industrial customer. This represented a $4.6 million decline sequentially and a $7.0 million decline year over year.
  • Recurring Application Subscription revenues were $18.7 million, representing a $0.5 million sequential decline, and a $1.8 million decline year over year.
  • Adjusted EBITDA decreased sequentially by $0.2 million and increased year over year by $1.1 million to $5.9 million in the quarter, or approximately 10% of revenue, driven by the realization of cost efficiencies.
  • GAAP net loss from continuing operations was $4.2 million, or a loss of $0.11 per share, a sequential decline from a loss of $4.0 million or $0.11 per share, and a year over year improvement from a loss of $7.5 million or a loss of $0.21 per share. 
  • Ended the quarter with $38.6 million in cash and cash equivalents and have $32.7 million of undrawn line availability subject to customary covenant tests.
  • As previously disclosed, we received a deficiency letter from the Nasdaq Stock Market notifying us that our stock price is not currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq. We have a Nasdaq initial compliance period that expires February 20, 2024, and we are exploring options to address this issue. For further details, see our Quarterly Report on Form 10-Q.

“CalAmp generated positive Cash Flow from Operations of $7.1 million and achieved strong Adjusted EBITDA of $5.9 million in the quarter as a result of our continued commitment to cost efficiencies. Consolidated revenue in the quarter was softer than expected as shipments of Telematics Products to our TSP and Channel customers slowed.  We are supporting these customers as they realign inventories with visible demand and respond to competitive pressures. While supporting this important segment, we are also pursuing growth opportunities in our other markets, powered by important new product releases such as our Vision 2.0 and ELD solutions.” said Interim CEO, Jason Cohenour. “As we navigate our dynamic marketplace, we will hone our segment focus and capture efficiencies as we strive to deliver non-GAAP profitable growth and positive cash flow.”

Business and Recent Highlights

  • Chosen by Transportes Castores, one of the largest Transportation and Logistics fleets in Mexico, as their partner for both tractor and trailer telematics.
  • Launched our new Electronic Logging Device (ELD) solution to the market.
  • Continued strong performance in our International Connected Car business (LoJack), powered by expanding deployments with large automotive OEMs and car rental agencies.
     
Summary Financial Information From Continuing Operations:
(In thousands except per share amounts)
             
    Three Months Ended     Six Months Ended  
    August 31,     August 31,  
Description   2023     2022     2023     2022  
Revenues:                        
Software & Subscription Services (S&SS)   $ 40,358     $ 44,511     $ 85,310     $ 84,068  
Telematics Products     21,356       28,317       47,295       53,486  
    $ 61,714     $ 72,828     $ 132,605     $ 137,554  
                         
Gross margin     36 %     40 %     37 %     40 %
                         
Net loss   $ (4,225 )   $ (7,494 )   $ (8,257 )   $ (19,667 )
Net loss per diluted share   $ (0.11 )   $ (0.21 )   $ (0.22 )   $ (0.55 )
Non-GAAP measures:                        
Adjusted EBITDA   $ 5,874     $ 4,766     $ 11,919     $ 6,622  
Adjusted EBITDA margin     10 %     7 %     9 %     5 %
                         
                         
Cash Flow from Operations   $ 7,143     $ (10,125 )   $ 4,163     $ (25,675 )

 

    August 31,     February 28,  
Description   2023     2023  
Cash and cash equivalents   $ 38,562     $ 41,928  
Working capital     70,619       68,295  
Deferred revenue     35,448       36,552  
Total debt (carrying value)     227,959       228,121  
             

 

    August 31,  
S&SS Supplemental Information:   2023     2022  
Remaining performance obligations   $ 194,200     $ 210,340  
Subscribers     1,765       1,307  

 

  Three Months Ended  
  Aug 31, 2023     Aug 31, 2022     May 31, 2023  
Revenue by type of goods and services:                
Telematics devices and accessories (1) $ 37,358     $ 45,694     $ 46,291  
Rental income and other services $ 5,656       6,656     $ 5,434  
Recurring application subscriptions (2) $ 18,700       20,478     $ 19,166  
Total $ 61,714     $ 72,828     $ 70,891  
                 
Recurring application subscriptions, excluding Automotive Vehicle Finance Business (1) $ 18,694     $ 19,858     $ 19,166  

 

  1. Telematics devices and accessories during the three months ended August 31, 2023 includes a reversal of $1.2M of revenue related to an exchange of product in support of our customer's specialized regional requirements.
  2. Recurring application subscriptions includes $0.0 million, $0.6 million, and $0.0 million during the three months ended August 31, 2023, August 31, 2022, and May 31, 2023, respectively, attributable to the auto vehicle finance business which has been completely wound down. The three months ended August 31, 2023 additionally includes ($0.4M) of adjustments related to prior periods.

Third Quarter Fiscal Year 2024 Business Outlook

We expect FY24 Q3 revenues and Adjusted EBITDA to be slightly down sequentially.

A reconciliation of non-GAAP guidance financial measures to corresponding GAAP guidance financial measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty and potential variability of expenses, such as stock-based compensation expense-related charges, that may be incurred in the future and cannot be reasonably determined or predicted at this time. It is important to note that these factors could be material to our results of operations computed in accordance with GAAP.

Conference Call and Webcast

CalAmp is hosting a conference call for analysts and investors to discuss its second quarter fiscal year 2024 results at 2:00 p.m. Pacific Time today. Participants can listen in via webcast by visiting the Investor Relations section of its 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 90 days after the call. The conference call can also be accessed by dialing 833-470-1428  (+1-404-975-4839 for international callers) and using the Conference ID #757030. Following the call, an audio replay will also be available by calling 866-813-9403 or  1-929-458-6194 and entering the Replay ID # 181919. The audio replay will be available through October 12, 2023.

About CalAmp 

CalAmp (Nasdaq: CAMP) provides flexible solutions to help organizations worldwide monitor, track and protect their vital assets. Our unique combination of software, devices, and platform enables commercial and government organizations worldwide to increase efficiency, safety and transparency while accommodating the unique ways they do business. With over 10 million active edge devices and 275+ issued or pending patents, CalAmp is the telematics leader organizations turn to for innovation and dependability. For more information, visit calamp.com, or LinkedInTwitter, YouTube or CalAmp Blog.

Forward-Looking Statements

This announcement contains forward-looking statements (including within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and Section 27A of the U.S. Securities Act of 1933, as amended) concerning CalAmp. These statements include, but are not limited to, statements that address our expected future business and financial performance and statements about (i) our plans, objectives and intentions with respect to future operations, services and products, (ii) our competitive position and opportunities, (iii) our comprehensive review of strategic alternatives focused on enhancing  shareholder value, and (iv) other statements identified by words such as such as “may”, “will”, “expect”, “intend”, “plan”, “potential”, “believe”, “seek”, “could”, “estimate”, “judgment”, “targeting”, “should”, “anticipate”, “predict”, “project”, “aim”, “goal”, and similar words, phrases or expressions. These forward-looking statements are based on management’s current expectations and beliefs, as well as assumptions made by, and information currently available to, management, current market trends and market conditions, and involve risks and uncertainties, many of which are outside of our control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements. Particular uncertainties that could materially affect future results include any risks associated with global economic conditions and concerns; the outcome of our comprehensive review of strategic alternatives, including the availability of any strategic alternatives that are worthwhile to pursue; the effects of global outbreaks of pandemics or contagious diseases or fear of such outbreaks, such as the recent coronavirus (COVID-19) pandemic; global component shortages due to supply chain constraints caused by the COVID-19 pandemic; disruptions in sales, operations, relationships with customers, suppliers, employees; our ability to successfully and timely accomplish our transformation to a SaaS solutions provider; our transition out of the automotive vehicle financing business; competitive pressures; pricing declines; demand for our telematics products; rates of growth in our target markets; prolonged disruptions of our contract manufacturers’ facilities or other significant operations; force majeure or force-majeure-like events at our contract manufacturers’ facilities including component shortages; the ongoing diversification of our global supply chain; our dependence on outsourced service providers for certain key business services and their ability to execute to our requirements; our ability to improve gross margin; cost-containment measures; legislative, trade, tariff, and regulatory actions; integration, unexpected charges or expenses in connection with acquisitions; the impact of legal proceedings and compliance risks; the impact on our business and reputation from information technology system failures, network disruptions, cyber-attacks, or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; our ability to protect our intellectual property and the unpredictability of any associated litigation expenses; any expenses or reputational damage associated with resolving customer product and warranty and indemnification claims; our ability to sell to new types of customers and to keep pace with technological advances; market acceptance of the end products into which our products are designed; and other events and trends on a national, regional and global scale, including those of a political, economic, business, competitive, and regulatory nature. More information on these risks and other potential factors that could affect our financial results is included in our filings with the U.S. Securities and Exchange Commission (“SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings, which you may obtain for free at the SEC’s website at http://www.sec.gov. We undertake no intent or obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise, which speak as of their respective dates except as required by law.

Non-GAAP Financial Measures

“GAAP” refers to financial information presented in accordance with U.S. Generally Accepted Accounting Principles. This announcement includes non-GAAP financial measures, as defined in Regulation G promulgated by the SEC. We believe that our presentation of non-GAAP financial measures provides useful supplementary information to investors. These non-GAAP financial measures are provided in addition to, and not as a substitute for measures of financial performance prepared in accordance with GAAP.

In this announcement, we report the non-GAAP financial measures of Adjusted EBITDA (earnings before investment income, interest expense, taxes, depreciation, amortization, stock-based compensation, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation and legal expenses, impairment losses and certain other adjustments as detailed in the accompanying non-GAAP reconciliation), and Adjusted EBITDA margin. We use these non-GAAP financial measures to provide investors with additional information about our financial performance and future prospects of our core business activities. Internally, these non-GAAP measures are significant measures used by management for purposes of evaluating our core operating performance, establishing internal budgets, calculating return on investment for development programs and growth initiatives, comparing performance with internal forecasts and targeted business models, strategic planning, evaluating and valuing potential acquisition candidates and how their operations compare to our operations, and benchmarking performance externally against our competitors. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors to help them evaluate our results of ongoing operations and enable additional period-to-period comparisons. The presentation of these and other similar items in our non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual.

CalAmp, LoJack, TRACKER, Here Comes The Bus, Bus Guardian, iOn Vision, CrashBoxx and associated logos are among the trademarks of CalAmp and/or its affiliates in the United States, certain other countries and/or the EU. Spireon acquired the LoJack® U.S. Stolen Vehicle Recovery (SVR) business from CalAmp and holds an exclusive license to the LoJack mark in the United States and Canada. Any other trademarks or trade names mentioned are the property of their respective owners.

AT CALAMP: AT CALAMP:
Jikun Kim Logan Lucas
SVP & CFO Corporate Strategy
ir@calamp.com ir@calamp.com

 

CALAMP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)
           
  Three Months Ended     Fiscal Year Ended  
  August 31,     August 31,  
    2023       2022       2023       2022  
                               
Revenues $   61,714     $   72,828     $   132,605     $   137,554  
Cost of revenues     39,370      $   43,816         83,200         82,895  
Gross profit     22,344         29,012         49,405         54,659  
Operating expenses:                              
Research and development     4,800      $   6,757         10,642         13,757  
Selling and marketing     9,618      $   12,734         20,641         24,212  
General and administrative     10,014      $   13,530         21,368         28,692  
Intangible asset amortization     1,128      $   1,330         2,350         2,672  
Total operating expenses     25,560         34,351         55,001         69,333  
Operating loss     (3,216 )       (5,339 )       (5,596 )       (14,674 )
Non-operating income (expense):                              
Investment income     277      $   (58 )       484         (172 )
Interest expense     (1,574 )    $   (1,464 )       (3,252 )       (2,997 )
Other expense, net     723      $   (507 )       594         (1,449 )
Total non-operating expenses     (574 )       (2,029 )       (2,174 )       (4,618 )
Loss from operations before income taxes     (3,790 )       (7,368 )       (7,770 )       (19,292 )
Income tax provision     (435 )    $   (126 )       (487 )       (375 )
Net loss $   (4,225 )   $   (7,494 )   $   (8,257 )   $   (19,667 )
Loss per share - continuing operations:                              
Basic $   (0.11 )   $   (0.21 )   $   (0.22 )   $   (0.55 )
Diluted $   (0.11 )   $   (0.21 )   $   (0.22 )   $   (0.55 )
Shares used in computing earnings (loss) per share:                              
  Basic     36,988         36,006         36,810         35,864  
  Diluted     36,988         36,006         36,810         35,864  


- more -

 

CALAMP CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
                 
        August 31,     February 28,  
        2023     2023  
                                Assets                  
                     
Current assets:                    
Cash and cash equivalents       $   38,562     $   41,928  
Accounts receivable, net           71,385         82,946  
Inventories           29,822         23,902  
Prepaid expenses and other current assets           26,617         26,019  
Total current assets           166,386         174,795  
                     
Property and equipment, net           28,791         32,832  
Operating lease right-of-use assets           11,130         12,293  
Deferred income tax assets           3,395         3,275  
Goodwill           95,275         94,214  
Other intangible assets, net           24,887         26,633  
Other assets           34,054         36,078  
Total assets       $   363,918     $   380,120  
                     
                      Liabilities and Stockholders' Equity                    
                     
Current liabilities:                    
Current portion of long-term debt       $   -     $   705  
Accounts payable           46,206         52,716  
Accrued payroll and employee benefits           8,597         11,766  
Deferred revenue           24,764         25,448  
Other current liabilities           16,200         15,865  
Total current liabilities           95,767         106,500  
                     
Long-term debt, net of current portion           227,959         227,416  
Operating lease liabilities           10,385         12,314  
Other non-current liabilities           19,243         19,583  
Total liabilities           353,354         365,813  
Stockholders' equity:                    
  Common stock           377         374  
  Additional paid-in capital           188,200         184,672  
  Accumulated deficit           (177,073 )       (168,816 )
  Accumulated other comprehensive loss           (940 )       (1,923 )
Total stockholders' equity           10,564         14,307  
Total liabilities and stockholders' equity       $   363,918     $   380,120  
                     


- more -

 

CALAMP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 (Unaudited)
       
    Six Months Ended  
    August 31,  
      2023       2022  
CASH FLOWS FROM OPERATING ACTIVITIES:              
  Net loss $   (8,257 )   $   (19,667 )
                 
  Depreciation expense     8,795         8,215  
  Intangible asset amortization     2,350         2,672  
  Stock-based compensation     3,902         6,156  
  Amortization of debt issuance costs and discount     554         594  
  Non-cash operating lease cost     1,673         1,756  
  Revenue assigned to factors     (716 )       (1,524 )
  Deferred tax assets, net     1         129  
  Other     30         (67 )
  Changes in operating assets and liabilities of continuing operations     (4,169 )       (23,939 )
NET CASH USED IN OPERATING ACTIVITIES     4,163         (25,675 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:              
  Capital expenditures     (3,824 )       (4,891 )
NET CASH USED IN INVESTING ACTIVITIES     (3,824 )       (4,891 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:              
  Taxes paid related to net share settlement of vested equity awards     (502 )       (1,568 )
  Proceeds from exercise of stock options and contributions to employee stock purchase plan     131         502  
NET CASH USED IN FINANCING ACTIVITIES     (371 )       (1,066 )
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS     (3,334 )       132  
Net change in cash and cash equivalents     (3,366 )       (31,500 )
Cash and cash equivalents at beginning of year     41,928         79,221  
Cash and cash equivalents at end of year $   38,562     $   47,721  

 

CALAMP 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 announcement includes non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission.  We believe that our presentation of non-GAAP financial measures provides useful supplementary information to investors.  The presentation of 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 announcement, we report the non-GAAP financial measures of Adjusted EBITDA (earnings before investment income, interest expense, taxes, depreciation, amortization, stock-based compensation and other adjustments as identified below), and Adjusted EBITDA margin. We use these non-GAAP financial measures to provide investors with an overall understanding of the financial performance and future prospects of our core business activities. Specifically, we believe that the use of these non-GAAP measures facilitates the comparison of results of core business operations between current and past periods. 

The reconciliation of GAAP-basis net loss to Adjusted EBITDA and the calculation of Adjusted EBITDA margin are as follows (dollars in thousands):

  Three Months Ended     Six Months Ended  
  August 31,     August 31,  
  2023     2022     2023     2022  
                               
GAAP basis net loss $   (4,225 )   $   (7,494 )   $   (8,257 )   $   (19,667 )
                               
Investment (income) loss     (277 )       58         (484 )       172  
Interest expense     1,574         1,464         3,252         2,997  
Income tax provision     435         126         487         375  
Depreciation and amortization     5,595         5,389         11,145         10,887  
Stock-based compensation     1,724         3,196         3,902         6,156  
Litigation and non-recurring legal expenses     14         1,417         189         4,548  
Restructuring     -         -         -         -  
Costs incurred in transition of LoJack North America business to acquiror (a)     (276 )       233         (240 )       985  
Other     1,310         377         1,925         169  
Adjusted EBITDA $   5,874     $   4,766     $   11,919     $   6,622  
                               
Revenues $   61,714     $   72,828     $   132,605     $   137,554  
                               
Adjusted EBITDA margin     10 %       7 %       9 %       5 %

 

  1. Costs incurred in transition of business to acquiror are attributable to the wind-down and transfer of the LoJack North America business to Spireon.

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Source: CalAmp Corp.