Press Release Details

View all Press Releases

CalAmp Reports Fourth Quarter and Fiscal Year 2018 Financial Results

04/26/18
Record quarterly revenue of $94.4 million, up 10% year over year
Q4 MRM Telematics product revenue grew a record 29% year over year

IRVINE, Calif., April 26, 2018 /PRNewswire/ -- CalAmp (NASDAQ: CAMP), a telematics pioneer leading transformation in a global connected economy, today reported its financial results for the fourth quarter and fiscal year ended February 28, 2018.

"We achieved several transformative business and operational milestones during fiscal 2018, realizing record revenues and delivering strong adjusted EBITDA and free cash flows," said Michael Burdiek, President and Chief Executive Officer. "We realigned our global sales organization, armed our team with a comprehensive suite of SaaS solutions, and succeeded on closing several global enterprise opportunities in multiple market verticals. We are realizing the benefits of our investments and have a strong foundation to drive long-term profitable growth and increased recurring revenue."  

Fourth Quarter and Fiscal 2018 Financial Highlights

  • Consolidated revenue for the fourth quarter was $94.4 million, up 10% year over year.
  • Telematics Systems revenue for the fourth quarter was $78.3 million, driven by growth in our MRM Telematics product revenue, up 29% year over year.
  • Software & Subscription Services revenue for the fourth quarter was $16.1 million, driven by 31% year over year revenue growth in our LoJack Italia business.
  • International revenue for fiscal 2018 was $100.3 million, up 10% year over year and representing 27% of consolidated revenue.
  • Adjusted EBITDA for fiscal 2018 was $52.4 million and Adjusted EBITDA margin was 14%.
  • Free cash flows for fiscal 2018 was $58.6 million including a non-operating gain of $28.3 million from a settlement with a former LoJack supplier, which represents an increase of 228% over the prior year.
  • Operating cash flow of $66.9 million, an increase of 159% over the prior year.

Business Highlights

  • We partnered with Trimble to provide customized telematics and device management systems designed for high-value asset tracking to support a wide array of field service management and asset monitoring applications.
  • We announced the nationwide availability of LoJack's next generation of dual-mode telematics and SVR technology that combines connected car features and real-time CrashBoxx accident reporting with the proprietary LoJack Stolen Vehicle Recovery System, all supported by LoJack's unique law enforcement ecosystem.
  • We announced a partnership with TransUnion to monetize the installed base of dormant LoJack devices, enabling stolen vehicle recovery to benefit both insurance companies and their consumers. This is a fundamental step in expanding CalAmp's total addressable market through data monetization of the installed base of millions of LoJack and CalAmp devices.
  • LoJack Italia entered into an agreement to provide real-time vehicle data and crash management capabilities to European fleet management and long-term lease leader ALD Automotive Italia ("ALD"), making LoJack Italia the primary supplier of telematics solutions to ALD customers in Italy.
  • We received $13.3 million of net proceeds in April 2018 from a legal settlement with a former LoJack supplier. We expect to receive the final payment of $5.0 million of additional net proceeds in fiscal 2019 thereby further contributing to our strong free cash flows.

Summary Financial Information:

(In thousands except per share amounts)



















Three Months Ended



Year Ended




February 28,



February 28,


Description


2018


2017



2018



2017


















Revenues:
















Telematics Systems


$

78,285


$

70,912



$

302,126



$

274,314


Software & Subscription Services



16,110



15,214




63,786




61,719


Satellite (1)



-



-




-




15,069




$

94,395


$

86,126



$

365,912



$

351,102


















Gross margin



41%

 



42%

 




41%

 




41%

 


















Net income (loss)


$

(4,767)


$

(4,239)



$

16,617



$

(7,904)


Net income (loss) per diluted share


$

(0.13)


$

(0.12)



$

0.46



$

(0.22)


















Non-GAAP measures:
















Adjusted basis net income


$

10,949


$

9,852



$

42,161



$

38,557


Adjusted basis net income per diluted share


$

0.30


$

0.28



$

1.17



$

1.06


Adjusted EBITDA


$

13,062


$

12,831



$

52,382



$

49,368


Adjusted EBITDA margin



14%

 



15%

 




14%

 




14%

 


















(1) The Satellite business ceased operations effective August 31, 2016.




















As of February 28,










Description


2018


2017


























Cash and marketable securities


$

156,003


$

100,428










Working capital



180,356



128,864










Deferred revenue



34,520



26,919










1.625% convertible senior unsecured notes (carrying value)



154,299



146,827


























Fiscal 2019 First Quarter Business Outlook


(In thousands except per share amounts)























Range


Description


Low


High








GAAP financial information:







Revenues


$

91,000


$

95,000

Net income per diluted share


$

0.26


$

0.32








Non-GAAP financial information:







Adjusted EBITDA


$

12,000


$

14,000

Adjusted basis net income per diluted share


$

0.26


$

0.32

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 foregoing Fiscal 2019 First Quarter Business Outlook reflects the effects of adopting this new accounting standard.

The first quarter GAAP-basis net income per diluted share guidance range above includes a gain of $13.3 million from the April 2018 receipt of the 3rd installment of the legal settlement with a former LoJack supplier.  This fiscal 2019 first quarter non-operating gain is excluded from the Adjusted basis (Non-GAAP) 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 fourth quarter and fiscal year 2018 results and outlook for our first quarter of fiscal 2019 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# 9989626. 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# 9989626. The audio replay will be available through May 8, 2018.

About CalAmp
CalAmp (NASDAQ: CAMP) is a telematics pioneer leading transformation in a global connected economy. We help reinvent businesses 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 critical data from mobile and fixed assets for enterprises and consumers. We call this The New How, powering autonomous IoT interaction, facilitating efficient decision making, optimizing resource utilization, and improving road safety.  We are headquartered in Irvine, California and have been publicly traded since 1983. LoJack is a wholly owned subsidiary of CalAmp. 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 and products, (ii)  our competitive position and opportunities, and (iii) 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 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 margin; our ability to maintain tax concessions in certain jurisdictions; 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. Our filings with the U.S. Securities and Exchange Commission ("SEC"), which you may obtain for free at the SEC's website at http://www.sec.gov, discuss some of the important risk factors that may affect our business, results of operations, and financial condition.  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 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 provisions, gain from legal settlement 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 assets 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 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 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 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 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 CORP.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(Amounts in thousands, except per share amounts)


(Unaudited)




















Three Months Ended


Year Ended





February 28,


February 28,






2018



2017



2018



2017



















Revenues

$


94,395


$


86,126


$


365,912


$


351,102


Cost of revenues



55,973




50,339




215,022




207,750


Gross profit



38,422




35,787




150,890




143,352



















Operating expenses:

















  Research and development



6,908




4,732




25,761




22,005


  Selling and marketing



11,929




12,235




50,096




49,044


  General and administrative



13,930




18,500




52,089




57,119


  Intangible asset amortization



3,711




3,858




14,989




15,061





36,478




39,325




142,935




143,229



















Operating income (loss)



1,944




(3,538)




7,955




123



















Non-operating income (expense):

















Investment income



908




582




2,256




1,691


Interest expense



(2,622)




(2,519)




(10,280)




(9,896)


Gain on legal settlement



-




-




28,333




-


Other income (expense)



3




73




445




(101)





(1,711)




(1,864)




20,754




(8,306)



















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



233




(5,402)




28,709




(8,183)


Income tax benefit (provision)



(4,711)




1,443




(10,681)




1,563


Income (loss) before equity in net loss of affiliate



(4,478)




(3,959)




18,028




(6,620)


Equity in net loss of affiliate



(289)




(280)




(1,411)




(1,284)



















Net income (loss)

$


(4,767)


$


(4,239)


$


16,617


$


(7,904)



















Earnings (loss) per share:

















  Basic

$


(0.13)


$


(0.12)


$


0.47


$


(0.22)


  Diluted

$


(0.13)


$


(0.12)


$


0.46


$


(0.22)



















Shares used in computing earnings (loss) per share:

















  Basic



35,388




35,066




35,250




35,917


  Diluted



35,388




35,066




36,139




35,917



















CALAMP CORP.


CONDENSED CONSOLIDATED BALANCE SHEETS


(Amounts in thousands)


(Unaudited)




February 28,




2018


2017


                                Assets


















Current assets:










  Cash and cash equivalents


$


132,603


$


93,706


  Short-term marketable securities




23,400




6,722


  Accounts receivable, net




71,580




67,403


  Inventories




36,302




29,279


  Prepaid expenses and other current assets




12,000




9,595


       Total current assets




275,885




206,705












Property and equipment, net




21,262




21,162


Deferred income tax assets




31,581




27,504


Goodwill




72,980




72,980


Other intangible assets, net




52,456




67,223


Other assets




18,829




12,565














$


472,993


$


408,139












                      Liabilities and Stockholders' Equity




















Current liabilities:










  Accounts payable


$


35,478


$


30,266


  Accrued payroll and employee benefits




10,606




7,955


  Deferred revenue




17,757




14,662


  Other current liabilities




31,688




24,958


      Total current liabilities




95,529




77,841












1.625% convertible senior unsecured notes




154,299




146,827


Other non-current liabilities




24,249




20,229












Stockholders' equity:




















  Common stock




357




353


  Additional paid-in capital




218,217




211,187


  Accumulated deficit




(19,459)




(47,757)


  Accumulated other comprehensive loss




(199)




(541)


      Total stockholders' equity




198,916




163,242




$


472,993


$


408,139















CALAMP CORP.



CONDENSED CONSOLIDATED CASH FLOW STATEMENTS



(Amounts in thousands)



(Unaudited)
















Year Ended





February 28






2018



2017


CASH FLOWS FROM OPERATING ACTIVITIES:











Net income (loss)


$


16,617


$


(7,904)



Depreciation expense




7,968




8,408



Intangible assets amortization expense




14,989




15,061



Stock-based compensation expense




9,298




7,833



Amortization of convertible debt issue costs and discount




7,472




7,027



Tax benefits on vested and exercised equity awards




937




-



Deferred tax assets, net




6,372




(2,735)



Unrealized foreign currency transaction gains




(524)




-



Equity in net loss of affiliate




1,411




1,284



Impairment of internal use software




-




1,364



Other




8




(32)



Changes in operating assets and liabilities




2,346




(4,510)


NET CASH PROVIDED BY OPERATING ACTIVITIES




66,894




25,796













CASH FLOWS FROM INVESTING ACTIVITIES:











Proceeds from maturities and sale of marketable securities




22,382




114,426



Purchases of marketable securities




(38,077)




(32,430)



Capital expenditures




(8,339)




(7,962)



Acquisition of LoJack, net of cash acquired




-




(116,982)



Advances to affiliate




(2,281)




(2,636)



Other




(136)




(2)


NET CASH USED IN INVESTING ACTIVITIES




(26,451)




(45,586)













CASH FLOWS FROM FINANCING ACTIVITIES:











Taxes paid related to net share settlement of vested equity awards




(2,594)




(1,780)



Proceeds from exercise of stock options




330




961



Repurchases of common stock




-




(25,000)


NET CASH USED IN FINANCING ACTIVITIES




(2,264)




(25,819)













EFFECT OF EXCHANGE RATE CHANGE ON CASH




718




(73)


Net change in cash and cash equivalents




38,897




(45,682)


Cash and cash equivalents at beginning of period




93,706




139,388













Cash and cash equivalents at end of period


$


132,603


$


93,706


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 Securities and Exchange Commission.  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 Investment Income, Interest Expense, Taxes, Depreciation, Amortization and stock-based compensation, gain on legal settlement 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 core business operations between its 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



Year Ended



February 28,



February 28,



2018


2017


2018


2017

GAAP basis net income (loss)

$


(4,767)


$


(4,239)


$


16,617


$


(7,904)

















Intangible assets amortization expense



3,711




3,858




14,989




15,061

Stock-based compensation expense



2,634




2,164




9,298




7,833

Non-cash interest expense from amortization of debt discount



1,703




1,601




6,627




6,232

GAAP basis income tax provision (benefit)



4,711




(1,443)




10,681




(1,563)

Equity in net loss of affiliate



289




280




1,411




1,284

Acquisition and integration expenses



-




344




-




4,513

Non-cash cost of sales on mark-up of LoJack inventory



29




20




29




4,339

Depreciation and write-off on mark-up of LoJack fixed assets



465




186




979




734

Gain on legal settlement



-




-




(28,333)




-

Litigation provision



605




7,244




7,415




7,244

Legal expense for LoJack battery performance issue



1,744




292




3,323




1,948

Adjusted basis income before income taxes



11,124




10,307




43,036




39,721

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



(175)




(455)




(875)




(1,164)

Adjusted basis net income

$


10,949


$


9,852


$


42,161


$


38,557

















Adjusted basis net income per diluted share

$


0.30


$


0.28


$


1.17


$


1.06

















Weighted average common shares outstanding on diluted basis



36,370




35,577




36,139




36,397

















(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



Year Ended



February 28,



February 28,



2018


2017


2018


2017

















GAAP basis net income (loss)

$


(4,767)


$


(4,239)


$


16,617


$


(7,904)

















Investment income



(908)




(582)




(2,256)




(1,691)

Interest expense



2,622




2,519




10,280




9,896

Income tax provision (benefit)



4,711




(1,443)




10,681




(1,563)

Depreciation



2,015




2,374




7,968




8,408

Amortization of intangible assets



3,711




3,858




14,989




15,061

Stock-based compensation



2,634




2,164




9,298




7,833

Equity in net loss of affiliate



289




280




1,411




1,284

Acquisition and integration expenses



-




344




-




4,513

Non-cash adjustment to inventory and fixed asset



335




20




335




4,339

Legal expense for LoJack battery performance issue



1,744




292




3,323




1,948

Litigation provision



605




7,244




7,415




7,244

Gain on legal settlement



-




-




(28,333)




-

Other



71




-




654




-

Adjusted EBITDA

$


13,062


$


12,831


$


52,382


$


49,368

















Revenue

$


94,395


$


86,126


$


365,912


$


351,102

















Adjusted EBITDA margin



14%




15%




14%




14%

 

CalAmp Corp. Logo

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/calamp-reports-fourth-quarter-and-fiscal-year-2018-financial-results-300637655.html

SOURCE CalAmp

Categories: Press Releases
View all Press Releases