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CalAmp Reports FY 2005 Third Quarter Results; Q3 Revenues up 29% from Prior Year to $57 Million

01/11/05

OXNARD, Calif.--(BUSINESS WIRE)--Jan. 11, 2005--CalAmp Corp. (NASDAQ:CAMP) today reported results for its third quarter ended November 30, 2004.

Revenue for the third quarter of fiscal 2005 was $57.1 million, compared to $44.2 million for the third quarter of last year. Net income for the fiscal 2005 third quarter was $1,787,000 or $0.08 per diluted share, compared to net income of $3,452,000 or $0.22 per diluted share for the third quarter of last year. The revenue increase in the latest quarter compared to the third quarter of last year is attributable to the April 2004 acquisition of Vytek Corporation, which now operates as the Company's Solutions Division, and to higher sales of Direct Broadcast Satellite television reception products. The lower earnings per share was attributable primarily to the higher effective income tax rate (37.8% in the latest quarter compared to 9.9% in the third quarter of last year), and to an operating loss in the Solutions Division.

For the nine months ended November 30, 2004 revenue was $152.9 million, compared to $87.0 million in the prior year. Net income during the nine months ended November 30, 2004 was $4.8 million, or $0.22 per diluted share, versus net income of $2.7 million, or $0.18 per diluted share, in the comparable period of last year. Net cash provided by operating activities during the first nine months of fiscal 2005 was $8.1 million, compared to $6.7 million in the first nine months of fiscal 2004. The sales increase in the year-to-date period is due primarily to the growth in sales of Direct Broadcast Satellite television reception products.

Fred Sturm, President and Chief Executive Officer, commented, "We continue to be pleased with the performance of our Products Division, which generated over $50 million in revenue in the latest quarter. Demand for Satellite products improved during the quarter as we began volume shipments of two new products in support of our customers' multi-satellite and digital video recorder service offerings. We are a leading supplier to the U.S. Direct Broadcast Satellite television market which continues to gain market share from cable television operators. Although the aggressive price competition in this market is persistent, our organization has risen to the challenge by responding with innovative, cost effective and high quality products which differentiate us as a market leader."

Mr. Sturm added, "Revenue from the Solutions Division in the latest quarter was $6.6 million. We continue to take steps to bring this division to profitability as quickly as possible, including strengthening and refocusing the sales organization and making appropriate cost reductions. As previously announced, last month we appointed Steve L'Heureux as the new President of the Solutions Division. We expect that under his leadership we will be successful in expanding our revenue base and bringing this division to profitability."

Mr. Sturm concluded, "Based on our current visibility, we estimate fiscal 2005 fourth quarter revenues in the range of $62 to $68 million and earnings in the range of $0.11 to $0.15 per diluted share."

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 650 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.

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

                                Three Months Ended   Nine Months Ended
                                     November 30,      November 30,
                                  ----------------- ------------------
                                     2004     2003      2004     2003
                                  -------- -------- --------- --------

Revenues                          $57,066  $44,248  $152,890  $87,011

Cost of revenues                   46,767   37,514   123,966   75,771
                                  -------- -------- --------- --------

Gross profit                       10,299    6,734    28,924   11,240

Operating expenses:
  Research and development          2,315    1,338     6,190    3,936
  Selling                           1,847      627     4,651    1,670
  General and administrative        2,786      899     8,410    2,560
  Intangible asset amortization       486       26     1,207       78
  In-process research and
   development                          -        -       471        -
                                  -------- -------- --------- --------
                                    7,434    2,890    20,929    8,244
                                  -------- -------- --------- --------

Operating income                    2,865    3,844     7,995    2,996

Non-operating income (expense),
 net                                    8      (12)     (131)    (194)
                                  -------- -------- --------- --------

Income before income taxes          2,873    3,832     7,864    2,802

Income tax provision               (1,086)    (380)   (3,022)     (62)
                                  -------- -------- --------- --------

Net income                        $ 1,787  $ 3,452  $  4,842  $ 2,740
                                  ======== ======== ========= ========

Net income per share:
  Basic                           $  0.08  $  0.23  $   0.23  $  0.19
  Diluted                         $  0.08  $  0.22  $   0.22  $  0.18

Shares used in per share
 calculations:
  Basic                            22,356   14,788    21,135   14,760
  Diluted                          23,113   15,555    21,891   15,128

Business Segment Information (1)

                                Three Months Ended   Nine Months Ended
                                     November 30,      November 30,
                                  ----------------- ------------------
                                     2004     2003      2004     2003
                                  -------- -------- --------- --------
Revenue:
  Products Division               $50,425  $44,248  $133,980  $87,011
  Solutions Division                6,641        -    18,910        -
                                  -------- -------- --------- --------

    Total revenue                 $57,066  $44,248  $152,890  $87,011
                                  ======== ======== ========= ========

Gross profit
  Products Division               $ 8,737  $ 6,734  $ 24,506  $11,240
  Solutions Division                1,562        -     4,418        -
                                  -------- -------- --------- --------

    Total gross profit            $10,299  $ 6,734  $ 28,924  $11,240
                                  ======== ======== ========= ========

Operating income (loss)
  Products Division               $ 6,191  $ 4,447  $ 16,861  $ 4,521
  Solutions Division               (2,379)       -    (5,971)       -
  Corporate expenses                 (947)    (603)   (2,895)  (1,525)
                                  -------- -------- --------- --------

    Total operating income        $ 2,865  $ 3,844  $  7,995  $ 2,996
                                  ======== ======== ========= ========

(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)

                                           November 30,   February 28,
                                              2004           2004
                                         --------------  -------------

Current assets:
  Cash and cash equivalents                  $  26,528      $  22,885
  Accounts receivable, net                      28,565         18,579
  Inventories                                   24,364         20,253
  Deferred income tax assets                       885          2,404
  Prepaid expenses and other current
   assets                                        4,692          3,244
                                         --------------  -------------

       Total current assets                     85,034         67,365

Equipment and improvements, net                  4,943          4,381

Deferred income tax assets, less current
 portion                                         3,269          4,359

Goodwill                                       100,885         20,938

Other intangible assets, net                     4,514            200

Other assets                                       425            399
                                         --------------  -------------

                                             $ 199,070      $  97,642
                                         ==============  =============

Current liabilities:
  Current portion of long-term debt          $   2,924      $   3,603
  Accounts payable                              23,829         17,395
  Accrued payroll and employee benefits          3,391          1,513
  Other current liabilities                      4,133          2,078
  Deferred revenue                               1,862              -
                                         --------------  -------------

      Total current liabilities                 36,139         24,589
                                         --------------  -------------

Long-term debt, less current portion             8,395          7,690
                                         --------------  -------------

Stockholders' equity:
  Common stock                                     232            149
  Additional paid-in capital                   131,261         44,486
  Common stock held in escrow                   (2,548)             -
  Retained earnings                             26,392         21,550
  Accumulated other comprehensive loss            (801)          (822)
                                         --------------  -------------

      Total stockholders' equity               154,536         65,363
                                         --------------  -------------

                                             $ 199,070      $  97,642
                                         ==============  =============


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

                                                     Nine Months Ended
                                                        November 30,
                                                     -----------------
                                                        2004     2003
                                                     -------- --------

Cash flows from operating activities:
  Net income                                         $ 4,842  $ 2,740
  Depreciation and amortization                        3,218    2,381
  Write-off of in-process R&D                            471        -
  Equipment impairment writedowns                        241      575
  Deferred tax assets, net                             2,609     (144)
  Changes in operating working capital                (3,375)   1,248
  Other                                                   96      (61)
                                                     -------- --------

     Net cash provided by operating activities         8,102    6,739
                                                     -------- --------

Cash flows from investing activities:
  Capital expenditures                                (1,970)  (2,026)
  Proceeds from sale of property and equipment           835      579
  Acquisition of Vytek, net of cash acquired          (1,727)
                                                     -------- --------

     Net cash used in investing activities            (2,862)  (1,447)
                                                     -------- --------

Cash flows from financing activities:
  Debt repayments, net of borrowings                  (2,300)  (2,325)
  Proceeds from stock option exercises                   703      372
                                                     -------- --------

     Net cash used in financing activities            (1,597)  (1,953)
                                                     -------- --------

Net change in cash                                     3,643    3,339

Cash at beginning of period                           22,885   21,947
                                                     -------- --------

Cash at end of period                                $26,528  $25,286
                                                     ======== ========

CONTACT: CalAmp Corp.
Rick Vitelle, 805-987-9000
or
CCG Investor Relations
Crocker Coulson, 818-789-0100
crocker.coulson@ccgir.com

SOURCE: CalAmp Corp.

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