Press Release Details

View all Press Releases

CalAmp Reports Fiscal 2019 Second Quarter Financial Results

09/27/18
Record quarterly revenue of $96 million, up 7% year-over-year
Gross margin of 41.5%, up from 40.1% in the prior quarter
Q2 Software and Subscription Services revenue of $18.9 million, up 21% year-over-year

IRVINE, Calif., Sept. 27, 2018 /PRNewswire/ -- CalAmp (Nasdaq: CAMP), a technology solutions pioneer leading transformation in a global connected economy, today reported its financial results for its fiscal 2019 second quarter ended August 31, 2018.

"We experienced accelerating growth in our Software & Subscription Services (SaaS) business, while delivering record consolidated revenue, gross margin expansion and earnings at the upper end of our guidance range. We had stronger than expected growth in Network and OEM products revenue, driven by solid demand from our heavy equipment OEM customers," said Michael Burdiek, President and Chief Executive Officer. "Our pipeline for SaaS solutions is robust and we are energized by the range of strategic opportunities to expand SaaS offerings to existing customers as well as to deliver newer over the top services to our telematics device installed base."

Q2 2019 Financial & Business Highlights

  • Consolidated revenue reached a new quarterly record of $96 million, up 7% year-over-year.
  • Gross margin was 41.5%, up from 40.1% in the prior quarter.
  • GAAP net loss of $0.9 million or a loss of $0.02 per diluted share due to a $2.0 million charge for the early retirement of debt.
  • Adjusted basis net income of $11.0 million or $0.31 per diluted share.
  • Telematics Systems revenue for the second quarter was $77.1 million driven by strong growth in Network and OEM products revenue, which was up 37% year-over-year.
  • Software & Subscription Services revenue for the second quarter was $18.9 million or 20% of consolidated revenue. Revenue growth was driven by freight transport subscriber additions and our LoJack Italia business.
  • Operating cash flow of $5.9 million, with Adjusted EBITDA of $13.7 million and Adjusted EBITDA margin of 14%.
  • We executed arrangements with large U.S. dealership groups including Salinas Valley Ford to leverage the LoJack brand and deliver telematics technology solutions to empower dealerships in delivering advanced connected car services and driver safety features to customers.
  • We announced a partnership with Premier Wireless Solutions (PWS) to provide telematics and IoT technologies coupled with data analysis to support a scooter-based, vehicle-sharing service that provides on-demand access to environmental friendly transportation alternatives in urban areas across the U.S.
  • We partnered with Hello Tractor and Aeris to equip John Deere tractors with intelligent telematics and wireless connectivity to create an "Uber for tractors" to support small farmers requiring access to tractor and other rental equipment to spur economic growth in Nigeria and other developing regions.
  • We completed a $230 million convertible debt issuance with a portion of the proceeds or approximately $54 million used to repurchase outstanding convertible notes due in May 2020 and another $15 million used to repurchase outstanding common stock.

 

Summary Financial Information:

(In thousands except per share amounts)












Three Months Ended




August 31,


Description


2018



2017











Revenues:









Telematics Systems


$

77,100



$

74,070


Software & Subscription Services



18,937




15,697




$

96,037



$

89,767











Gross profit


$

39,821



$

36,838


Gross margin



41.5

%



41.0

%










Net income (loss)


$

(854)



$

12,232


Net income (loss) per diluted share


$

(0.02)



$

0.34











Non-GAAP measures:









Adjusted basis net income


$

10,976



$

9,575


Adjusted basis net income per diluted share


$

0.31



$

0.27


Adjusted EBITDA


$

13,689



$

12,301


Adjusted EBITDA margin



14.3

%



13.7

%












As of August 31,



As of February 28,


Description


2018



2018











Cash and marketable securities


$

304,998



$

156,003


Working capital



325,648




180,356


Deferred revenue



46,486




34,520


Convertible senior unsecured notes (carrying value)



268,980




154,299




Fiscal 2019 Third Quarter Business Outlook


(In thousands except per share amounts)













Range


Description


Low



High











GAAP financial information:









Revenues


$

94,000



$

99,000


Net income per diluted share


$

0.07



$

0.13











Non-GAAP financial information:









Adjusted EBITDA


$

12,000



$

16,000


Adjusted basis net income per diluted share


$

0.29



$

0.35


Effective March 1, 2018, we adopted the new revenue recognition standard entitled Accounting Standards Update 2014-09, Revenue from Contracts with Customers ("ASC 606"). The Fiscal 2019 Third Quarter Business Outlook reflects the effects of adopting this new accounting standard.  In the third quarter and fiscal year 2019, we do not expect ASC 606 to have a material impact on our revenue.

The third quarter GAAP-basis net income outlook above includes the expected gain of approximately $2.5 million related to the legal settlement with a former LoJack supplier.  This expected fiscal 2019 third quarter non-operating gain is excluded from the Non-GAAP Adjusted EBITDA and Adjusted basis net income per diluted share guidance range above.

Conference Call and Webcast 
We are hosting a conference call for analysts and investors to discuss our fiscal 2019 second quarter results and outlook for our third quarter at 1:30 p.m. Pacific Time today.  Participants can listen in via webcast by visiting the Investor Relations section of our 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 30 days after the call.  The conference call can also be accessed by dialing 855-302-8830 (+1-330-871-6073 for international callers) and using the Conference ID# 3966157. Following the call, an audio replay will also be available by calling 855-859-2056 or +1-404-537-3406 and entering the Conference ID# 3966157. The audio replay will be available through October 11, 2018.

About CalAmp
CalAmp (Nasdaq: CAMP) is a technology solutions pioneer leading transformation in a global connected economy. We help reinvent business and improve lives around the globe with technology solutions that streamline complex IoT deployments and bring intelligence to the edge.  Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data from mobile assets, cargo, companies, cities and people. We call this The New How, powering autonomous IoT interaction, facilitating efficient decision making, optimizing resource utilization, and improving road safety.  CalAmp is headquartered in Irvine, California and has been publicly traded since 1983. LoJack is a wholly owned subsidiary of CalAmp. For more information, visit calamp.com, or LinkedInTwitterYouTube or CalAmp Blog.  

Forward-Looking Statements
This press release 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 and products, (ii)  our competitive position and opportunities, and (iii) other statements identified by words such as "may", "will", "expect", "intend", "plan", "potential", "believe", "seek", "could", "estimate", "judgment", "targeting", "should", "anticipate", "predict" "project", "aim", "goal", "outlook" 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 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; competitive pressures; pricing declines; rates of growth in our target markets; prolonged disruptions of our or our contract manufacturers' manufacturing facilities or other significant operations; our dependence on outsourced service providers for certain key business services and their ability to execute to our requirements; our ability to maintain or improve gross margins; 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, warranty and indemnification claims; our ability to sell to new types of customers and to keep pace with technological advances; and other events and trends on a national, regional and global scale, including those of a political, economic, business, competitive, and regulatory nature. Other risks and uncertainties are detailed in our periodic public filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to, our Annual Report on Form 10-K for the fiscal year ended February 28, 2018, filed with the SEC on May 10, 2018 and our Quarterly Report on Form 10-Q for the quarter ended May 31, 2018 filed with the SEC on June 28, 2018. You may obtain these filings 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, 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 Basis net income, Adjusted Basis net income per diluted share, Adjusted EBITDA (Earnings Before Interest Income, Interest Expense, Income Taxes, Depreciation, Amortization, stock-based compensation, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation provisions, gain from legal settlement, restructuring charges and certain other adjustments as detailed in the accompanying non-GAAP reconciliation), and Adjusted EBITDA margin. Adjusted Basis net income excludes the impact of intangible asset amortization expense, stock-based compensation, non-cash interest from amortization of debt discount, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation provisions, gain on legal settlement, restructuring charges and certain other adjustments as shown in the non-GAAP reconciliation provided in the table at the end of this press release.  We use these non-GAAP financial measures to enhance the investor's overall understanding of the financial performance and future prospects of our core business activities. Management does not believe that these items are reflective of our underlying performance. However, 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 our performance 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 for a more consistent basis of comparison and to help them evaluate our results of ongoing operations and enable more meaningful period-to-period comparisons. The reconciling adjustments in our non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual.

CALAMP CORP.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(Amounts in thousands, except per share amounts)


(Unaudited)


















Three Months Ended



Six Months Ended




August 31



August 31




2018



2017



2018



2017





















Revenues


$

96,037



$

89,767



$


190,925



$


177,848


Cost of revenues



56,216




52,929





113,013





103,567


Gross profit



39,821




36,838





77,912





74,281





















Operating expenses:



















Research and development



7,599




6,725





14,200





12,557


Selling and marketing



12,523




12,515





25,020





25,186


General and administrative



11,991




10,756





25,427





27,166


Restructuring



566




-





3,949





-


Intangible asset amortization



2,893




3,710





5,641





7,568





35,572




33,706





74,237





72,477





















Operating income



4,249




3,132





3,675





1,804





















Non-operating income (expense):



















Investment income



1,007




396





1,860





729


Interest expense



(3,767)




(2,567)





(6,432)





(5,085)


Gain on legal settlement



-




15,032





13,333





15,032


Loss on extinguishment of debt



(2,033)




-





(2,033)





-


Other income (expense)



(277)




314





(503)





431





(5,070)




13,175





6,225





11,107





















Income (loss) before income taxes and equity in net loss of affiliate



(821)




16,307





9,900





12,911


Income tax benefit (provision)



497




(3,699)





(1,274)





(2,619)


Income (loss) before equity in net loss of affiliate



(324)




12,608





8,626





10,292


Equity in net loss of affiliate



(530)




(376)





(969)





(713)





















Net income (loss)


$

(854)



$

12,232



$


7,657



$


9,579





















Earnings (loss) per share:



















Basic


$

(0.02)



$

0.35



$


0.22



$


0.27


Diluted


$

(0.02)



$

0.34



$


0.21



$


0.27





















Shares used in computing earnings (loss) per share:



















Basic



34,850




35,204





35,141





35,136


Diluted



34,850




36,021





36,073





35,973


 

CALAMP CORP.


CONDENSED CONSOLIDATED BALANCE SHEETS


(Amounts in thousands)


(Unaudited)













August 31,
2018



February 28,
2018


Assets


















Current assets:









Cash and cash equivalents


$

273,972



$

132,603


Short-term marketable securities



31,026




23,400


Accounts receivable, net



70,981




71,580


Inventories



31,194




36,302


Prepaid expenses and other current assets



14,482




12,000


   Total current assets



421,655




275,885











Property and equipment, net



22,405




21,262


Deferred income tax assets



21,421




31,581


Goodwill



73,284




72,980


Other intangible assets, net



46,385




52,456


Other assets



25,773




18,829




$

610,923



$

472,993











Liabilities and Stockholders' Equity


















Current liabilities:









Accounts payable


$

36,159



$

35,478


Accrued payroll and employee benefits



7,544




10,606


Deferred revenue



20,683




17,757


Other current liabilities



31,621




31,688


   Total current liabilities



96,007




95,529











Convertible senior unsecured notes, net



268,980




154,299


Other non-current liabilities



36,200




24,249











Stockholders' equity:


















Common stock



348




357


Additional paid-in capital



222,981




218,217


Accumulated deficit



(12,963)




(19,459)


Accumulated other comprehensive loss



(630)




(199)


   Total stockholders' equity



209,736




198,916




$

610,923



$

472,993











 

CALAMP CORP.


CONDENSED CONSOLIDATED CASH FLOW STATEMENTS


(Amounts in thousands)


(Unaudited)













Six Months Ended




August 31,




2018



2017


CASH FLOWS FROM OPERATING ACTIVITIES:









Net income


$

7,657



$

9,579


Depreciation expense



4,341




3,983


Intangible assets amortization expense



5,641




7,568


Stock-based compensation expense



5,147




4,044


Amortization of convertible debt issue costs and discount



4,537




3,679


Loss on extinguishment of debt



2,033




-


Impairment loss on cost method investment



326




-


Tax benefits on vested and exercised equity awards



525




241


Deferred tax assets, net



(211)




669


Unrealized foreign currency transaction losses (gains)



187




(385)


Equity in net loss of affiliate



969




713


Other



(72)




55


Changes in operating assets and liabilities



5,753




5,863


NET CASH PROVIDED BY OPERATING ACTIVITIES



36,833




36,009











CASH FLOWS FROM INVESTING ACTIVITIES:









Proceeds from maturities and sale of marketable securities



32,792




7,268


Purchases of marketable securities



(40,312)




(4,548)


Capital expenditures



(5,770)




(3,713)


Advances to equity method investee



(1,063)




(650)


Other



(78)




(135)


NET CASH USED IN INVESTING ACTIVITIES



(14,431)




(1,778)











CASH FLOWS FROM FINANCING ACTIVITIES:









Proceeds from issuance of 2025 Convertible Notes



230,000




-


Payment of debt issuance costs of 2025 Convertible Notes



(7,305)




-


Purchase of capped call on 2025 Convertible Notes



(21,160)




-


Repurchase of 2020 Convertible Notes



(53,683)




-


Proceeds from unwind of note hedges and warrants on 2020  Convertible Notes



3,122




-


Taxes paid related to net share settlement of vested equity awards



(3,347)




(2,335)


Proceeds from exercise of stock options



101




128


Repurchases of common stock



(28,564)




-


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES



119,164




(2,207)











EFFECT OF EXCHANGE RATE CHANGE ON CASH



(197)




906


Net change in cash and cash equivalents



141,369




32,930


Cash and cash equivalents at beginning of period



132,603




93,706











Cash and cash equivalents at end of period


$

273,972



$

126,636


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 press release includes historical non-GAAP financial measures, as defined in Regulation G promulgated by the SEC. We believe that our 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 GAAP.

In this press release, we report the non-GAAP financial measures of Adjusted basis net income, Adjusted basis net income per diluted share, Adjusted EBITDA (Earnings Before Interest Income, Interest Expense, Income Taxes, Depreciation, Amortization and stock-based compensation, loss on extinguishment of debt, gain on legal settlement, restructuring charges and other adjustments as identified below), and Adjusted EBITDA margin. We use these non-GAAP financial measures to enhance the investor's 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 our core business operations between current and past periods.  

The reconciliation of GAAP basis net income (loss) to Adjusted basis (non-GAAP) net income is as follows (in thousands except per share amounts):



Three Months Ended



Six Months Ended




August 31



August 31




2018



2017



2018



2017


GAAP basis net income (loss)


$

(854)



$

12,232



$


7,657



$


9,579





















Intangible assets amortization expense



2,893




3,710





5,641





7,568


Stock-based compensation expense



2,680




2,227





5,147





4,044


Non-cash interest expense from amortization of debt discount



2,355




1,653





4,067





3,263


GAAP basis income tax provision (benefit)



(497)




3,699





1,274





2,619


Equity in net loss of affiliate



530




376





969





713


Loss on extinguishment of debt



2,033




-





2,033





-


Realized gain on investment of equity securities



-




-





629





-


Gain on legal settlement



-




(15,032)





(13,333)





(15,032)


Litigation provision



459




411





887





6,486


Legal expense for LoJack battery performance issue



564




430





2,250





927


Restructuring



566




-





3,949





-


Impairment loss on equity investment



326




-





326





-


Other



121




169





366





355


Adjusted basis income before income taxes



11,176




9,875





21,862





20,522


Income tax provision (non-GAAP basis) (a)



(200)




(300)





(400)





(550)


Adjusted basis net income


$

10,976



$

9,575



$


21,462



$


19,972





















Adjusted basis net income per diluted share


$

0.31



$

0.27



$


0.59



$


0.56





















Weighted average common shares outstanding on diluted basis



35,718




36,021





36,073





35,973




(a)  The non-GAAP income tax provision represents cash taxes paid or payable for the period after giving effect to the utilization of net operating losses and tax credit carryforwards.

The reconciliation of GAAP-basis net income (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




2018



2017



2018



2017





















GAAP basis net income (loss)


$

(854)



$

12,232



$


7,657



$


9,579





















Investment income



(1,007)




(396)





(1,860)





(729)


Interest expense



3,767




2,567





6,432





5,085


Income tax provision (benefit)



(497)




3,699





1,274





2,619


Depreciation



2,298




1,958





4,341





3,983


Amortization of intangible assets



2,893




3,710





5,641





7,568


Stock-based compensation



2,680




2,227





5,147





4,044


Equity in net loss of affiliate



530




376





969





713


Loss on extinguishment of debt



2,033




-





2,033





-


Legal expense for LoJack battery performance issue



564




430





2,250





927


Litigation provision



459




411





887





6,486


Gain on legal settlement



-




(15,032)





(13,333)





(15,032)


Restructuring



566




-





3,949





-


Other



257




119





479





239





















Adjusted EBITDA


$

13,689



$

12,301



$


25,866



$


25,482





















Revenue


$

96,037



$

89,767



$


190,925



$


177,848





















Adjusted EBITDA margin



14.3

%



13.7

%




13.5

%




14.3

%

 

CalAmp Corp. Logo

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/calamp-reports-fiscal-2019-second-quarter-financial-results-300720612.html

SOURCE CalAmp

Categories: Press Releases
View all Press Releases