OXNARD, Calif., Jan 11, 2007 (BUSINESS WIRE) -- CalAmp Corp. (Nasdaq:CAMP), a leading provider of wireless
communications products, today reported results for its fiscal 2007
third quarter ended November 30, 2006. Key highlights of the latest
quarter include:
-- Initial shipments of new generation Direct Broadcast Satellite
(DBS) products to support service providers' rollout of high
definition television (HDTV) programming.
-- Revenues of $61.1 million, GAAP earnings of $0.04 per diluted
share and Adjusted Basis (non-GAAP) earnings of $0.08 per
diluted share within expectations.
"During the fiscal third quarter, our core DBS business continued
to generate solid cash flows, and we made progress executing on our
business strategy to increase our market presence in wireless data
communication markets," commented Fred Sturm, CalAmp's President and
Chief Executive Officer. "On a sequential quarter basis, CalAmp's
increase in revenues was driven by sales to our Direct Broadcast
Satellite (DBS) customers along with growth in several of our wireless
data communications offerings including products for Mobile Resource
Management (MRM)."
Mr. Sturm continued, "CalAmp achieved a number of important
operational milestones during the third quarter, which position the
Company for a solid finish to fiscal 2007. Toward the end of the
quarter, we received product approval from both of our DBS customers
and began shipping next generation outdoor reception equipment. During
our fourth quarter, we expect meaningful revenues from the new DBS
products. As an indication of our leadership position in this market,
CalAmp is currently the only company supplying these latest products
to both DBS service providers. In our wireless data communications
business, we continue to aggressively execute our growth strategy.
Dataradio recently won a $1.3 million contract to provide a mobile
data communications system for the police, fire and EMS personnel of
Genesee County, Michigan. Additionally, CalAmp was selected to provide
key MRM components for GE Security's new NavLogix(TM) fleet tracking
service."
Fiscal 2007 Third Quarter Results
Revenue for the fiscal 2007 third quarter was $61.1 million
compared to $64.5 million for the third quarter of fiscal 2006. Growth
in the Company's wireless data communications business, driven by the
May 2006 acquisitions of Dataradio and the MRM product line, partially
offset lower DBS product sales and Solutions Division revenue in the
latest quarter.
Net income for the fiscal 2007 third quarter was $0.9 million or
$0.04 per diluted share compared to net income of $5.4 million or
$0.23 per diluted share for the third quarter of last year. Adjusted
Basis (non-GAAP) net income for the fiscal 2007 third quarter was $2.0
million or $0.08 per diluted share compared to Adjusted Basis net
income of $5.7 million or $0.24 per diluted share for the same period
last year. Adjusted Basis net income for the comparable periods
exclude the impact of amortization of intangible assets, stock-based
compensation expense, in-process research and development and
impairment loss, each net of tax where applicable. A reconciliation of
GAAP basis net income to Adjusted Basis net income is provided in the
table at the end of this press release.
Gross profit for the third quarter of fiscal 2007 was $12.7
million, or 20.8% of revenues compared to $16.5 million or 25.5% of
revenues for the same period last year. The reduction in gross profit
and gross margin were primarily the result of higher freight costs and
lower margins on final shipments of end-of-life DBS products. The
Company made the decision to incur higher freight costs to expedite
incoming materials in response to supply chain disruptions and demand
volatility in order to meet customer requirements. The Company expects
the higher level of freight costs to persist through much of the
fourth quarter until the supply pipeline for new DBS products has been
filled.
Liquidity
During the nine months ended November 30, 2006, the Company
generated operating cash flow of $11.7 million. At November 30, 2006,
the Company had total cash of $33.3 million, with $34.3 million in
total outstanding debt. Inventories were $20.8 million at the end of
the third quarter, representing annualized turns of 9 times based on
cost of sales in the latest quarter. Accounts receivable outstanding
at the end of the third quarter represents a 51 day average collection
period.
Business Outlook
Commenting on the Company's fiscal 2007 fourth quarter outlook,
Mr. Sturm said, "Based on our current estimates, we anticipate fiscal
2007 fourth quarter revenues will be in the range of $54 to $60
million, with net income in the range of $0.03 to $0.07 per diluted
share. Adjusted Basis (Non-GAAP) net income for the fourth quarter,
which excludes amortization of intangible assets and stock-based
compensation expense--each net of tax--is expected to be $0.07 to
$0.11 per diluted share."
Conference Call, Webcast and 10-Q filing
A conference call and simultaneous webcast to discuss fiscal 2007
third quarter financial results and business outlook will be held
today at 4:30 p.m. Eastern / 1:30 p.m. Pacific. The live webcast of
the call is available on CalAmp's web site at www.calamp.com.
Participants are encouraged to visit the web site at least 15 minutes
prior to the start of the call to register, download and install any
necessary audio software.
CalAmp's President and CEO Fred Sturm and CFO Rick Vitelle will
host the conference call. After the live webcast, a replay will remain
available until the next quarterly conference call in the Investor
Relations section of CalAmp's web site.
The reader is also referred to the Company's quarterly report on
Form 10-Q, filed today with the Securities and Exchange Commission.
About CalAmp Corp.
CalAmp is a leading provider of wireless communications products
that enable anytime/anywhere access to critical information, data and
entertainment content. With comprehensive capabilities ranging from
product design and development through volume production, CalAmp
delivers cost-effective high quality solutions to a broad array of
customers and end markets. CalAmp is the leading supplier of Direct
Broadcast Satellite (DBS) outdoor customer premise equipment to the
U.S. satellite television market. The Company also provides wireless
data communication solutions for the telemetry and asset tracking
markets, private wireless networks, public safety communications and
critical infrastructure and process control applications. For
additional information, please visit the Company's website at
www.calamp.com.
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", "expect", "intend",
"plan", "believe", "seek", "could", "estimate", "judgment",
"targeting", "should", 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, the timing of
customer approvals of new product designs, operating costs, the
Company's ability to efficiently and cost-effectively integrate its
acquired businesses, 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,
------------------- ---------------------
2006 2005 2006 2005
-------- -------- --------- ---------
Revenues $61,092 $64,463 $165,339 $169,704
Cost of revenues 48,390 47,999 127,699 129,127
-------- -------- --------- ---------
Gross profit 12,702 16,464 37,640 40,577
-------- -------- --------- ---------
Operating expenses:
Research and development 4,099 2,585 10,456 7,142
Selling 2,614 1,914 7,390 5,582
General and administrative 3,308 2,679 9,638 7,900
Intangible asset
amortization 1,229 403 2,905 1,375
In-process research and
development - - 6,850 320
Impairment loss - - 29,848 -
-------- -------- --------- ---------
11,250 7,581 67,087 22,319
-------- -------- --------- ---------
Operating income (loss) 1,452 (a) 8,883 (29,447)(a) 18,258
Non-operating income
(expense), net (141) 162 574 231
-------- -------- --------- ---------
Income (loss) before income
taxes 1,311 9,045 (28,873) 18,489
Income tax provision (415) (3,606) (3,047) (7,392)
-------- -------- --------- ---------
Net income (loss) $ 896 $ 5,439 $(31,920) $ 11,097
======== ======== ========= =========
Net income (loss) per share:
Basic $ 0.04 $ 0.24 $ (1.37) $ 0.49
Diluted $ 0.04 $ 0.23 $ (1.37) $ 0.48
Shares used in per share
calculations:
Basic 23,414 22,580 23,290 22,520
Diluted 23,679 23,592 23,290 23,272
(a) Operating income (loss) for the three and nine months ended
November 30, 2006 includes share-based compensation expense pursuant
to FAS123R of $541 and $1,614, respectively. Such expense is included
in the following captions of the Statement of Operations:
Three Nine
Months Months
Ended Ended
Statement of Nov. 30, Nov. 30,
Operations Caption 2006 2006
---------------------------- ---------- --------
Cost of revenues $39 $112
Research and
development expense 55 166
Selling expense 65 191
General and
administrative
expense 382 1,145
------- -------
$541 $1,614
======= =======
CAL AMP CORP.
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands except per share amounts)
Three Months Ended Nine Months Ended
November 30, November 30,
------------------- ---------------------
2006 2005 2006 2005
-------- -------- --------- ---------
Revenue
Products Division $59,484 $59,565 $157,784 $153,331
Solutions Division 1,608 4,898 7,555 16,373
-------- -------- --------- ---------
Total revenue $61,092 $64,463 $165,339 $169,704
======== ======== ========= =========
Gross profit
Products Division $11,983 $14,441 $ 34,714 $ 34,975
Solutions Division 719 2,023 2,926 5,602
-------- -------- --------- ---------
Total gross profit $12,702 $16,464 $ 37,640 $ 40,577
======== ======== ========= =========
Operating income (loss)
Products Division $ 3,819 $10,406 $ 7,336 $ 23,453
Solutions Division (779) (373) (32,384) (2,029)
Corporate expenses (1,588) (1,150) (4,399) (3,166)
-------- -------- --------- ---------
Total operating income
(loss) $ 1,452 (a)$ 8,883 $(29,447)(a)$ 18,258
======== ======== ========= =========
(a) Operating income (loss) for the three and nine months ended
November 30, 2006 includes share-based compensation expense pursuant
to FAS123R of $541 and $1,614, respectively. Such expense is included
in the operating income (loss) of the reporting segments as follows:
Three Nine
Months Months
Ended Ended
Reporting Segment Nov. 30, Nov. 30,
2006 2006
---------------------------- ---------- --------
Products Division $141 $531
Solutions Division 105 296
Corporate expenses 295 787
------- -------
$541 $1,614
======= =======
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
November February
30, 28,
2006 2006
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 33,284 $ 45,783
Accounts receivable, net 30,274 28,630
Inventories 20,821 18,279
Deferred income tax assets 4,139 4,042
Prepaid expenses and other current assets 8,443 2,502
--------- ---------
Total current assets 96,961 99,236
Equipment and improvements, net 6,571 5,438
Deferred income tax assets, less current portion - 2,344
Goodwill 89,835 91,386
Other intangible assets, net 19,872 5,304
Other assets 1,399 638
--------- ---------
$214,638 $204,346
========= =========
Liabilities and
Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2,215 $ 2,168
Accounts payable 12,820 12,011
Accrued payroll and employee benefits 3,431 3,608
Other accrued liabilities 4,954 2,763
Deferred revenue 1,313 1,323
--------- ---------
Total current liabilities 24,733 21,873
--------- ---------
Long-term debt, less current portion 32,048 5,511
--------- ---------
Deferred income tax liabilities 7,109 -
--------- ---------
Other non-current liabilities 1,034 853
--------- ---------
Stockholders' equity:
Common stock 235 232
Additional paid-in capital 138,199 135,022
Common stock held in escrow - (2,532)
Retained earnings 12,268 44,188
Accumulated other comprehensive loss (988) (801)
--------- ---------
Total stockholders' equity 149,714 176,109
--------- ---------
$214,638 $204,346
========= =========
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Nine Months Ended
November 30,
------------------
2006 2005
--------- --------
Cash flows from operating activities:
Net income (loss) $(31,920) $11,097
Depreciation and amortization 5,027 3,305
Stock-based compensation expense 1,614 -
Write-off of in-process R&D 6,850 320
Impairment loss 29,848 -
Stock option income tax benefits - 678
Excess tax benefit from stock-based compensation (392) -
Deferred tax assets, net 3,555 5,431
Changes in operating working capital (2,973) (6,485)
Other 84 16
--------- --------
Net cash provided by operating activities (A) 11,693 14,362
--------- --------
Cash flows from investing activities:
Capital expenditures (2,112) (1,555)
Proceeds from sale of property and equipment 16 143
Acquisition of Dataradio net of cash acquired (48,047) -
Acquisition of TechnoCom product line (2,478) -
Proceeds from Vytek escrow distribution 480 -
Acquisition of Skybility assets - (4,897)
--------- --------
Net cash used in investing activities (52,141) (6,309)
--------- --------
Cash flows from financing activities:
Proceeds from long-term debt 38,000 -
Debt repayments (11,416) (2,178)
Proceeds from stock option exercises 1,130 1,282
Excess tax benefit from stock-based compensation 392 -
--------- --------
Net cash provided (used) by financing
activities 28,106 (896)
--------- --------
Effect of exchange rate changes on cash (157) -
--------- --------
Net change in cash and cash equivalents (12,499) 7,157
Cash and cash equivalents at beginning of period 45,783 31,048
--------- --------
Cash and cash equivalents at end of period $ 33,284 $38,205
========= ========
(A) Net cash provided by operating activities for the nine months
ended November 30, 2006 is net of the payment of $5,355,000 of
accrued incentives paid by Dataradio to its workforce shortly after
the acquisition by CalAmp. These incentives were recorded as an
expense in Dataradio's pre-acquisition income statement.
CAL AMP CORP.
NON-GAAP EARNINGS RECONCILIATION
(Unaudited, in thousands except per share amounts)
Non-GAAP Earnings
Reconciliation
-------------------------------
"GAAP" refers to financial information presented in accordance with
Generally Accepted Accounting Principles in the United States. 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 accounting
principles generally accepted in the United States.
In this press release, CalAmp reported the non-GAAP financial
measures of Adjusted Basis net income and diluted earnings per
share. CalAmp uses these non-GAAP financial measures to enhance the
investor's overall understanding of the financial performance and
prospects for the future of CalAmp's core business activities.
Specifically, CalAmp believes that a report of Adjusted Basis net
income and diluted earnings per share provides consistency in its
financial reporting and facilitates the comparison of results of
core business operations between its current and past periods.
The reconciliation of GAAP basis net income (loss) to Adjusted Basis
net income is as follows:
Three Months Ended Nine Months Ended
November 30, November 30,
------------------- ------------------
2006 2005 2006 2005
---------- -------- --------- --------
GAAP basis net income (loss) $ 896 $ 5,439 $(31,920) $11,097
Adjustments to reconcile to
non-GAAP net income:
Amortization of intangible
assets, net of tax 693 242 1,638 825
Stock-based compensation
expense, net of tax 305 - 910 -
In-process R&D, net of tax
in fiscal 2006 - - 6,850 192
Impairment loss - goodwill - - 29,012 -
Impairment loss - intangible
assets, net of tax - - 472 -
---------- -------- --------- --------
Adjusted Basis net income $ 1,894 $ 5,681 $ 6,962 $12,114
========== ======== ========= ========
Adjusted Basis net income per
diluted share $ 0.08 $ 0.24 $ 0.29 $ 0.52
Weighted average common shares
outstanding on diluted basis 23,679 23,592 23,701 23,272
Reconciling items that are not treated as tax deductible in computing
the GAAP basis income tax provision (in-process research and
development in fiscal 2007 and goodwill impairment loss) are not
tax-effected in the Non-GAAP Earnings Reconciliation. The remaining
reconciling items are tax-effected using an adjusted year-to-date
effective income tax rate that is computed by excluding from pretax
income (loss) those reconciling items that are not treated as tax
deductible in computing the GAAP basis income tax provision. The
computation of the adjusted year-to-date effective income tax rate
is as follows:
Nine Months Ended
November 30,
------------------
2006 2005
--------- --------
Pretax income (loss) as
reported $(28,873) $18,489
Add back nondeductible items:
In-process research and
development in fiscal 2007 6,850 -
Impairment loss - goodwill 29,012 -
-------- -------
Pretax income before
nondeductible items 6,989 18,489
Income tax provision as
reported 3,047 7,392
-------- -------
Year-to-date effective income
tax rate as adjusted 43.6% 40.0%
======== =======
SOURCE: CalAmp Corp.
CalAmp Corp.
Rick Vitelle, Chief Financial Officer, 805-987-9000
or
Financial Relations Board
Lasse Glassen, 310-854-8313 (General Information)
lglassen@financialrelationsboard.com