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CalAmp Reports FY 2005 Second Quarter Results

10/12/04

 

  • Q2 revenues up 110% from prior year to $51 million
  • Q2 net income improves $1.4 million from prior year

 

OXNARD, Calif., Oct. 12 /PRNewswire-FirstCall/ -- CalAmp Corp. (Nasdaq: CAMP) today reported results for its second quarter ended August 31, 2004.

Revenue for the second quarter of fiscal 2005 was $50.8 million, compared to $24.2 million for the second quarter of the prior year. The period-over- period increase in revenue is due primarily to the improvement in satellite product sales which began late in the Company's fiscal 2004 second quarter. Net income for the fiscal 2005 second quarter was $1,746,000 or $0.08 per diluted share, compared to net income of $390,000 or $0.03 per diluted share for the second quarter of last year.

For the six months ended August 31, 2004 revenue was $95.8 million, compared to $42.8 million in the prior year. Net income during the first six months of fiscal 2005 was $3,055,000 or $0.14 per diluted share, versus a net loss of $712,000 or ($0.05) per diluted share in the first six months of fiscal year 2004.

Fred Sturm, President and Chief Executive Officer, commented, "We are pleased with the performance of our Products Division which generated $43 million in revenue in the second quarter on the strength of our Direct Broadcast Satellite business that began improving over a year ago. We also received approval on two new DBS products late in the second quarter that are expected to begin shipping in volume during the latter part of the third quarter. Although the DBS market remains extremely competitive, we have been able to maintain our market position through a combination of ongoing product development and aggressive cost effectiveness programs. Our key customers in this business -- the satellite television service providers -- continue to gain market share at the expense of the cable television operators. We look forward to supporting the market's requirements for high performance, cost-effective outdoor electronics in a challenging and dynamic competitive environment."

Continued Mr. Sturm, "In the second quarter our Solutions Division generated revenues of nearly $8 million, but it remains in a loss position. Despite this loss, we made progress during the quarter in executing on our strategic business model of providing a complete end-to-end solution, most notably with our recently announced manufacturing agreement with EFJohnson. However, it is clear that we need to make certain adjustments to improve this division's financial performance. To that end, we recently strengthened our sales and marketing organization and have made adjustments in our overhead structure. We will closely monitor our performance with the objective of achieving profitable results for the Solutions Division as soon as possible without adversely impacting our ability to execute on our strategic model."

Mr. Sturm concluded, "Based on our current visibility, we estimate fiscal 2005 third quarter revenues in the range of $50 to $58 million and earnings in the range of $0.07 to $0.12 cents per diluted share. Included in these estimates are charges of $461,000 for amortization of intangible assets."

About CalAmp Corp.

CalAmp is a leading provider of breakthrough wireless and content delivery solutions, services and products. With comprehensive capabilities ranging from product inception through production, CalAmp is a trusted partner delivering cost-effective high quality solutions to a broad array of customers and markets. CalAmp is one of the largest suppliers of direct broadcast satellite (DBS) outdoor customer premise equipment to the U.S. satellite television market and offers solutions for digital multimedia delivery, residential broadband data delivery, healthcare, retailing applications, public safety markets and wireless enterprise connectivity. The company is headquartered in Oxnard, California and has approximately 600 employees. Founded in 1981, CalAmp has been publicly traded since 1983 as NASDAQ: CAMP.

Forward Looking Statement

Statements in this press release that are not historical in nature are forward-looking statements, which involve known and unknown risks and uncertainties. Words such as "may," "will," "expects," "intends," "plans," "believes," "seeks," "could," "estimate" and variations of these words and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including, general and industry economic conditions, competition, development factors, operating costs, the Company's ability to integrate the Vytek acquisition successfully and other risks and uncertainties that are detailed from time to time in the Company's filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, contact:
Crocker Coulson
Partner
CCG Investor Relations
(818) 789-0100
crocker.coulson@ccgir.com

Rick Vitelle
Chief Financial Officer
CalAmp
(805) 987-9000

                                CAL AMP CORP.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
              (Unaudited, in thousands except per share amounts)

                                     Three Months Ended   Six Months Ended
                                         August 31,          August 31,
                                       2004      2003       2004     2003

     Revenues                         $50,827   $24,197    $95,824  $42,763

     Cost of revenues                  40,503    20,997     77,199   38,257

     Gross profit                      10,324     3,200     18,625    4,506

     Operating expenses:
      Research and development          2,068     1,236      3,875    2,598
      Selling                           1,732       549      2,804    1,043
      General and administrative        3,179       843      5,624    1,661
      Intangible asset amortization       461        26        721       52
      In-process research and
       development                         --        --        471       --
                                        7,440     2,654     13,495    5,354

     Operating income (loss)            2,884       546      5,130     (848)

     Non-operating expense, net           (75)     (129)      (139)    (182)

     Income (loss) before income taxes  2,809       417      4,991   (1,030)

     Income tax (provision) benefit    (1,063)      (27)    (1,936)     318

     Net income (loss)                 $1,746      $390     $3,055    $(712)

     Net income (loss) per share:
       Basic                            $0.08     $0.03      $0.15   $(0.05)
       Diluted                          $0.08     $0.03      $0.14   $(0.05)

     Shares used in per share
      calculations:
       Basic                           22,292    14,747     20,524   14,746
       Diluted                         22,809    14,916     21,224   14,746

     Business Segment Information (1)

                                     Three Months Ended    Six Months Ended
                                         August 31,           August 31,
                                       2004      2003       2004     2003
     Revenue:
      Products Division               $43,056   $24,197    $83,555  $42,763
      Solutions Division                7,771        --     12,269       --

        Total revenue                 $50,827   $24,197    $95,824  $42,763

     Gross profit
      Products Division                $8,503    $3,200    $15,769   $4,506
      Solutions Division                1,821        --      2,856       --

        Total gross profit            $10,324    $3,200    $18,625   $4,506

     Operating income (loss)
      Products Division                $6,036    $1,040    $10,670      $74
      Solutions Division               (2,083)       --     (3,592)      --
      Corporate expenses               (1,069)     (494)    (1,948)    (922)

        Total operating income (loss)  $2,884      $546     $5,130    $(848)

     (1) Effective with the acquisition of Vytek Corporation on
         April 12, 2004, CalAmp realigned its operations into a divisional
         structure in which CalAmp's existing Satellite and Wireless Access
         businesses were combined, together with Vytek's products
         manufacturing business, into a new Products Division.
         Vytek's principal operations, consisting of revenues generated by
         professional engineering services and the development of software
         applications, comprise the new Solutions Division.


                                  CAL AMP CORP.
                           CONSOLIDATED BALANCE SHEETS
                            (Unaudited - In thousands)

                                                    August 31,  February 28,
                                                       2004         2004

     Current assets:
      Cash and cash equivalents                       $25,268      $22,885
      Accounts receivable, net                         25,621       18,579
      Inventories                                      25,208       20,253
      Deferred income tax assets                        1,814        2,404
      Prepaid expenses and other current assets         3,915        3,244

        Total current assets                           81,826       67,365

     Equipment and improvements, net                    5,125        4,381

     Deferred income tax assets, less current portion   3,292        4,359

     Goodwill                                         100,942       20,938

     Other intangible assets, net                       4,800          200

     Other assets                                       2,346          399

                                                     $198,331      $97,642

     Current liabilities:
      Bank line of credit payable                      $3,000         $ --
      Current portion of long-term debt                 2,946        3,603
      Accounts payable                                 23,428       17,395
      Accrued payroll and employee benefits             3,820        1,513
      Other current liabilities                         4,787        2,078
      Deferred revenue                                  1,647           --

        Total current liabilities                      39,628       24,589

     Long-term debt, less current portion               6,116        7,690

     Stockholders' equity:
      Common stock                                        232          149
      Additional paid-in capital                      138,145       44,486
      Common stock held in escrow                      (9,594)          --
      Retained earnings                                24,605       21,550
      Accumulated other comprehensive loss               (801)        (822)

        Total stockholders' equity                    152,587       65,363

                                                     $198,331      $97,642


                                  CAL AMP CORP.
                        CONSOLIDATED CASH FLOW STATEMENTS
                            (Unaudited - In thousands)

                                                          Six Months Ended
                                                             August 31,
                                                         2004         2003

     Cash flows from operating activities:
       Net income (loss)                               $3,055        $(712)
       Depreciation and amortization                    2,075        1,613
       Write-off of in-process R&D                        471           --
       Equipment impairment writedowns                    201          575
       Deferred tax assets, net                         1,657         (289)
       Changes in operating working capital            (1,875)       2,045
       Other                                              143         (117)

         Net cash provided by operating activities      5,727        3,115

     Cash flows from investing activities:
       Capital expenditures                            (1,243)        (978)
       Proceeds from sale of property and equipment       627          285
       Acquisition of Vytek, net of cash acquired      (1,727)          --

         Net cash used in investing activities         (2,343)        (693)

     Cash flows from financing activities:
       Debt repayments, net of borrowings              (1,557)      (1,301)
       Proceeds from stock option exercises               556           12

         Net cash used in financing activities         (1,001)      (1,289)

     Net change in cash                                 2,383        1,133

     Cash at beginning of period                       22,885       21,947

     Cash at end of period                            $25,268      $23,080

SOURCE CalAmp Corp.
10/12/2004
CONTACT: Crocker Coulson, Partner of CCG Investor Relations, 818-789-0100, crocker.coulson@ccgir.com, for CalAmp; or Rick Vitelle, Chief Financial Officer of CalAmp, 805-987-9000
Web site: http://www.calamp.com
(CAMP)

10/12/2004 16:00 EDT http://www.prnewswire.com

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