Release Details

CalAmp Reports Third Quarter Fiscal Year 2024 Financial Results

January 9, 2024

IRVINE, Calif., Jan. 09, 2024 (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 third quarter of fiscal year 2024 ended November 30, 2023.

Third Quarter Fiscal Year 2024 Financial Overview   

  • Revenue was $53.6 million, representing a 13% decline QoQ and a 32% decline YoY driven primarily by softer demand in the TSP market segment.
  • Gross margin was 33%, representing a decline of approximately 340 bps QoQ and 100 bps decline YoY as a result of a shift in product mix and a higher-than-normal reserve for excess and obsolete inventory.
  • S&SS revenue was $34.5 million, representing a 15% decline QoQ and a 30% decline YoY. 
  • Telematics Products revenue was $19.2 million, representing a 10% decline QoQ and a 35% decline YoY. 
  • Recurring Application Subscription revenues were $17.8 million in the quarter, representing a 5% decline QoQ as well as YoY.  
  • Adjusted EBITDA was $1.0 million, representing a $4.8 million decline QoQ and a $3.7 million decline YoY.  
  • GAAP net loss from continuing operations was $85 million, or a loss of $2.27 per share.  This includes the impact of a $74 million goodwill impairment charge. 
  • Ended the quarter with $38.2 million in cash and cash equivalents down $400K QoQ. 

“In the third quarter, strength in our industrial and connected car segments was offset by soft demand in our TSP segment.  Soft demand with TSPs led to lower than expected consolidated revenue and Adjusted EBITDA.  We continue to work closely with our TSP customers as they rebalance inventory levels and respond to an overall competitive environment.  We are optimistic that our rejuvenated efforts in this segment will result in a return to revenue growth from current levels” said Interim CEO, Jason Cohenour. “During the quarter, we also implemented initiatives to narrow our strategic focus and to reduce cash expenses by approximately $16 million on an annualized basis.  Our sharpened focus on core segments, combined with a more efficient cost structure, adds considerable leverage to our operating model as we strive for a return to profitable growth.” 

Business and Recent Highlights  

  • Announced on January 8, 2024, the appointment of veteran technology leader Chris Adams as President and Chief Executive Officer, effective January 22, 2024.
  • Announced on December 18, 2023, the closing of a $45 million term loan with Lynrock Lake Master Fund LP to provide the company with additional financial capacity in support of its business transformation. 
  • CalAmp’s international connected car solution was granted Toyota “Genuine” status, enabling port installation, and streamlining the sales and customer delivery process.
  • Released the new Vision 2.1 solution, enabling telematics functionality through the standalone dash cam. 
  • Completed the technical migration of devices from legacy PULS device management platform to DMCTC.

Summary Financial Information From Continuing Operations:
(In thousands except per share amounts)

  Three Months Ended  Nine Months Ended 
  November 30,  November 30, 
Description 2023  2022  2023  2022 
Revenues:            
Software & Subscription Services (S&SS) $34,456  $49,264  $119,766  $133,332 
Telematics Products  19,169   29,625   66,464   83,111 
  $53,625  $78,889  $186,230  $216,443 
             
Gross margin  33%  34%  36%  38%
             
Net loss $(85,004) $(4,733) $(93,261) $(24,400)
Net loss per diluted share $(2.27) $(0.13) $(2.52) $(0.68)
Non-GAAP measures:            
Adjusted EBITDA $1,031  $4,698  $12,950  $11,320 
Adjusted EBITDA margin  2%  6%  7%  5%
             
             
Cash Flow from Operations $1,830  $3,834  $5,993  $(21,841)


  November 30,  February 28, 
Description 2023  2023 
Cash and cash equivalents $38,169  $41,928 
Working capital  69,258   68,295 
Deferred revenue  37,434   36,552 
Total debt (carrying value)  228,148   228,121 
       


  November 30, 
S&SS Supplemental Information: 2023  2022 
Remaining performance obligations $186,036  $252,200 
Subscribers  1,833   1,460 


 Three Months Ended 
 Nov 30, 2023  Nov 30, 2022  Aug 31, 2023 
Revenue by type of goods and services:        
Telematics devices and accessories (1)$31,217  $53,331  $37,358 
Rental income and other services$4,583   6,307  $5,656 
Recurring application subscriptions (2)$17,825   19,251  $18,700 
Total$53,625  $78,889  $61,714 
         
Recurring application subscriptions, excluding Automotive Vehicle Finance Business (1)$17,823  $18,761  $18,694 

(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, $0.5 million, and $0.0 million during the three months ended November 30, 2023, November 30, 2022, and August 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.

Fourth Quarter Fiscal Year 2024 Business Outlook

We expect Q4 FY24 revenues to be down slightly on a sequential basis and adjusted EBITDA to be stable.

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 third 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 January 16, 2024.

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 LinkedIn, Twitter, 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:CalAmp Media
Jikun KimContact:
SVP & CFOMark Gaydos
ir@calamp.com Chief Marketing & Product Officer
 Mgaydos@calamp.com 


CALAMP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)
 
  
 Three Months Ended  Fiscal Year Ended 
 November 30,  November 30, 
  2023   2022   2023   2022 
                
Revenues$53,625  $78,889  $186,230  $216,443 
Cost of revenues 36,051  $52,275   119,251   135,170 
Gross profit 17,574   26,614   66,979   81,273 
Operating expenses:               
Research and development 4,051  $5,479   14,693   19,236 
Selling and marketing 8,884  $12,486   29,525   36,698 
General and administrative 10,114  $11,172   31,482   39,864 
Intangible asset amortization 1,116  $1,323   3,466   3,995 
Restructuring 1,718  $-   1,718   - 
Impairment loss 75,106   -   75,106   - 
Total operating expenses 100,989   30,460   155,990   99,793 
Operating loss (83,415)  (3,846)  (89,011)  (18,520)
Non-operating income (expense):               
Investment income (124) $818   360   646 
Interest expense (1,410) $(1,648)  (4,662)  (4,645)
Other expense, net (17) $211   577   (1,238)
Total non-operating expenses (1,551)  (619)  (3,725)  (5,237)
Loss from operations before income taxes (84,966)  (4,465)  (92,736)  (23,757)
Income tax provision (38) $(268)  (525)  (643)
Net loss$(85,004) $(4,733) $(93,261) $(24,400)
Loss per share - continuing operations:               
Basic$(2.27) $(0.13) $(2.52) $(0.68)
Diluted$(2.27) $(0.13) $(2.52) $(0.68)
Shares used in computing earnings (loss) per share:               
Basic 37,427   36,357   37,023   36,027 
Diluted 37,427   36,357   37,023   36,027 


CALAMP CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
 
  
    November 30,  February 28, 
    2023  2023 
Assets         
           
Current assets:          
Cash and cash equivalents   $38,169  $41,928 
Accounts receivable, net    70,909   82,946 
Inventories    34,059   23,902 
Prepaid expenses and other current assets    25,824   26,019 
Total current assets    168,961   174,795 
           
Property and equipment, net    25,724   32,832 
Operating lease right-of-use assets    10,168   12,293 
Deferred income tax assets    2,927   3,275 
Goodwill    20,583   94,214 
Other intangible assets, net    23,608   26,633 
Other assets    29,270   36,078 
Total assets   $281,241  $380,120 
           
Liabilities and Stockholders' Equity          
           
Current liabilities:          
Current portion of long-term debt   $-  $705 
Accounts payable    46,695   52,716 
Accrued payroll and employee benefits    10,112   11,766 
Deferred revenue    26,328   25,448 
Other current liabilities    16,568   15,865 
Total current liabilities    99,703   106,500 
           
Long-term debt, net of current portion    228,148   227,416 
Operating lease liabilities    9,007   12,314 
Other non-current liabilities    18,522   19,583 
Total liabilities    355,380   365,813 
Stockholders' equity:          
Common stock    379   374 
Additional paid-in capital    189,747   184,672 
Accumulated deficit    (262,077)  (168,816)
Accumulated other comprehensive loss    (2,188)  (1,923)
Total stockholders' equity    (74,139)  14,307 
Total liabilities and stockholders' equity   $281,241  $380,120 
           


 CALAMP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 
   
  Nine Months Ended 
  November 30, 
   2023   2022 
CASH FLOWS FROM OPERATING ACTIVITIES:       
 Net loss$(93,261) $(24,400)
         
 Depreciation expense 12,632   12,108 
 Intangible asset amortization 3,466   3,995 
 Stock-based compensation 5,469   8,186 
 Amortization of debt issuance costs and discount 825   877 
 Impairment losses 75,106   - 
 Non-cash operating lease cost 2,575   2,591 
 Revenue assigned to factors (798)  (2,143)
 Deferred tax assets, net 480   132 
 Other 381   122 
 Changes in operating assets and liabilities of continuing operations (882)  (23,309)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 5,993   (21,841)
         
CASH FLOWS FROM INVESTING ACTIVITIES:       
 Capital expenditures (6,176)  (9,294)
NET CASH USED IN INVESTING ACTIVITIES (6,176)  (9,294)
         
CASH FLOWS FROM FINANCING ACTIVITIES:       
 Taxes paid related to net share settlement of vested equity awards (520)  (1,675)
 Proceeds from exercise of stock options and contributions to employee stock purchase plan 131   502 
NET CASH USED IN FINANCING ACTIVITIES (389)  (1,173)
         
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (3,187)  (2,007)
Net change in cash and cash equivalents (3,759)  (34,315)
Cash and cash equivalents at beginning of period 41,928   79,221 
Cash and cash equivalents at end of period$38,169  $44,906 

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  Nine Months Ended 
 November 30,  November 30, 
 2023  2022  2023  2022 
                
GAAP basis net loss$(85,004) $(4,733) $(93,261) $(24,400)
                
Investment (income) loss 124   (818)  (360)  (646)
Interest expense 1,410   1,648   4,662   4,645 
Income tax provision 38   268   525   643 
Depreciation and amortization 4,953   5,216   16,098   16,103 
Stock-based compensation 1,567   2,030   5,469   8,186 
Litigation and non-recurring legal expenses 91   86   280   4,634 
Restructuring 1,718   -   1,718   - 
Costs incurred in transition of LoJack North America business to acquiror (a) (79)  232   (319)  1,217 
Impairment loss 75,106   -   75,106   - 
Other 1,107   769   3,032   938 
Adjusted EBITDA$1,031  $4,698  $12,950  $11,320 
                
Revenues$53,625  $78,889  $186,230  $216,443 
                
Adjusted EBITDA margin 2%  6%  7%  5%

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