-- Consolidated third quarter revenues of $30.7 million, up 19% from prior
year and up 28% sequentially.
-- Third quarter GAAP net loss of $1.3 million, or $0.05 loss per diluted
share; Adjusted basis (non-GAAP) net income of $0.2 million, or $0.01 per
diluted share.
-- Third quarter net cash provided by operations of $0.8 million; fiscal
year-to-date operating cash flow of $4.2 million.
-- Completed refinancing of bank debt.
Rick Gold, CalAmp's President and Chief Executive Officer, commented,
"During the third quarter we generated strong top line growth with a 28%
sequential increase in consolidated revenue. This growth was driven by a
sharp ramp of our satellite products business, which delivered a 69%
sequential revenue increase and generated operating profitability. While
revenues from our wireless datacom business were flat on a sequential
quarter basis, in light of recent new order bookings and an increase in
backlog, we believe this business is poised to rebound over the next
several quarters."
Mr. Gold continued, "In addition, we are pleased to have completed the
recently announced refinancing of our bank debt, particularly considering
the challenging credit market conditions. Obtaining the new credit facility
with Square 1 Bank was an important milestone for CalAmp as it enhances our
financial flexibility and eliminates the uncertainty associated with what
had been the looming maturity of our previous bank credit agreement. CalAmp
is now on a much stronger financial footing as we move forward to execute
on our plan to achieve profitable growth with innovative products
addressing attractive wireless markets."
Fiscal 2010 Third Quarter Results
Total revenue for the fiscal 2010 third quarter was $30.7 million compared
to $25.8 million for the third quarter of fiscal 2009. The year-over-year
increase in revenues was due primarily to higher sales of the Company's
satellite products, partially offset by lower sales of its wireless datacom
products.
Consolidated gross profit for the fiscal 2010 third quarter was $5.9
million or 19.2% of revenues compared to gross profit of $7.6 million or
29.6% of revenue for the same period last year. The reduction in gross
profit and gross margin percentage in the latest quarter was due primarily
to lower wireless datacom revenues. Gross margin percentage for the
satellite products business increased to 10% in the third quarter, up from
3% in the second quarter, primarily due to better absorption of the fixed
expenses with the higher revenue level. However, the Company experienced
pressure on gross margins in the 3rd quarter from manufacturing
inefficiencies caused by component shortages and other factors associated
with the substantial increase in satellite product demand. This margin
pressure is expected to persist for much or all of the fourth quarter.
Results of operations for the fiscal 2010 third quarter as determined in
accordance with U.S. Generally Accepted Accounting Principles ("GAAP") was
a net loss of $1.3 million or $0.05 loss per diluted share. This compares
to a net loss of $1.8 million or $0.07 loss per diluted share in the third
quarter of last year. The net loss in the fiscal 2010 third quarter
includes a $1.4 million income tax benefit arising from the favorable
resolution of an uncertain income tax position that had previously been
reserved for pursuant to FASB Interpretation No. 48.
The Adjusted Basis (non-GAAP) net income for the fiscal 2010 third quarter
was $0.2 million or $0.01 per diluted share compared to Adjusted Basis net
loss of $4.5 million or $0.18 loss per diluted share for the same period
last year. The Adjusted Basis net income (loss) excludes the impact of
changes in the deferred income tax asset valuation allowance, amortization
of intangible assets and stock-based compensation expense, each net of tax
to the extent applicable. A reconciliation of the GAAP basis net loss to
Adjusted Basis net income (loss) is provided in the table at the end of
this press release.
Liquidity
At November 30, 2009, the Company had total cash of $4.5 million, with
$13.95 million in total outstanding bank debt. Net cash provided by
operating activities was $0.8 million for the three months ended November
30, 2009. During the quarter, the Company paid in full the outstanding
balance of its note payable to a key Direct Broadcast Satellite ("DBS")
customer.
Subsequent to the end of the third quarter, in December 2009, the Company
announced that it had paid in full the $13.95 million outstanding balance
of its bank debt, which had a maturity date of December 31, 2009. The
funds for this payoff were provided by a drawdown of $7.77 million under a
new revolving credit facility with Square 1 Bank of Durham, North Carolina.
The Company also raised junior capital from a group of investors totaling
$6.18 million, which is comprised of $4.25 million from the sale of
approximately 1,932,000 shares of common stock and the issuance of $1.93
million in subordinated debt.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said, "Looking
ahead, we expect to see fiscal fourth quarter consolidated revenues
continue to increase sequentially and be in the range of $32 to $36
million, with growth expected in both our satellite products and wireless
datacom businesses. We expect a GAAP basis net loss in the range of $.01
to $.05 per diluted share. The Adjusted Basis (non-GAAP) net income (loss)
for the fourth quarter, which excludes changes in the valuation allowance
for U.S. deferred tax assets, intangibles amortization expense net of tax
and stock-based compensation expense net of tax, is expected to be in the
range of a $.02 loss to $.02 income per diluted share. We expect that
growth in our satellite business over the next year will be driven by the
launch of several new products that are currently in development. We also
expect that our wireless datacom business, which is dependent to a certain
degree on spending by governmental entities in the public safety sector,
will improve as general economic conditions rebound. Looking further
ahead, we believe that we now have the essential elements in place to grow
CalAmp's revenues back to an annual run rate greater than $200 million
level over the next 18 to 24 months, balanced between our satellite and
wireless datacom businesses."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2010 third
quarter financial results and business outlook will be held today at 4:30
p.m. Eastern / 1:30 p.m. Pacific. CalAmp's President and CEO Rick Gold and
CFO Rick Vitelle will host the conference call. Participants can dial into
the live conference call by calling 877-941-8609 (480-629-9818 for
international callers). An audio replay will be available through January
14, 2010, by calling 800-406-7325 (303-590-3030 for international callers)
and entering the access code 4197971.
Additionally, a 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. 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.
About CalAmp Corp.
CalAmp provides wireless communications solutions that enable
anytime/anywhere access to critical data and content. The Company serves
customers in the public safety, industrial monitoring and controls, mobile
resource management and direct broadcast satellite markets. For more
information, please visit www.calamp.com.
Forward-Looking Statements
Statements in this press release that are not historical in nature are
forward-looking statements that involve known and unknown risks and
uncertainties. Words such as "may," "will," "expect," "intend," "plan,"
"believe," "seek," "could," "estimate," "judgment," "targeting," "should,"
"anticipate," "goal" 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 product demand, competitive pressures
and pricing declines in the Company's satellite and wireless markets, the
timing of customer approvals of new product designs, the length and extent
of the global economic downturn that has and may continue to adversely
affect the Company's business, and other risks or uncertainties that are
described in the Company's Annual Report on Form 10-K for fiscal 2009 as
filed on May 12, 2009 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.
-Financial Tables to Follow-
CAL AMP CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three Months Ended Nine Months Ended
November 30, November 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenues $ 30,692 $ 25,834 $ 77,632 $ 77,043
Cost of revenues 24,795 18,193 62,224 52,505
-------- -------- -------- --------
Gross profit 5,897 7,641 15,408 24,538
-------- -------- -------- --------
Operating expenses:
Research and development 2,726 3,199 8,257 9,530
Selling 2,517 2,656 7,120 6,575
General and administrative 2,753 2,990 8,011 9,352
Intangible asset amortization 342 1,240 1,025 3,812
-------- -------- -------- --------
8,338 10,085 24,413 29,269
-------- -------- -------- --------
Operating loss (2,441) (2,444) (9,005) (4,731)
Non-operating expense, net (252) (522) (1,888) (1,272)
-------- -------- -------- --------
Loss before income taxes (2,693) (2,966) (10,893) (6,003)
Income tax benefit 1,374 1,128 1,374 2,170
-------- -------- -------- --------
Net loss $ (1,319) $ (1,838) $ (9,519) $ (3,833)
======== ======== ======== ========
Basic and diluted loss per share $ (0.05) $ (0.07) $ (0.38) $ (0.15)
======== ======== ======== ========
Shares used in basic and diluted
per share calculations 25,015 24,809 24,931 24,750
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Nine Months Ended
November 30, November 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenue
Satellite $ 16,802 $ 7,384 $ 36,015 $ 18,201
Wireless DataCom 13,890 18,450 41,617 58,842
-------- -------- -------- --------
Total revenue $ 30,692 $ 25,834 $ 77,632 $ 77,043
======== ======== ======== ========
Gross profit
Satellite $ 1,647 $ 253 $ 2,405 $ 905
Wireless DataCom 4,250 7,388 13,003 23,633
-------- -------- -------- --------
Total gross profit $ 5,897 $ 7,641 $ 15,408 $ 24,538
======== ======== ======== ========
Operating income (loss)
Satellite $ 494 $ (838) $ (851) $ (2,494)
Wireless DataCom (1,848) (293) (4,791) 1,680
Corporate expenses (1,087) (1,313) (3,363) (3,917)
-------- -------- -------- --------
Total operating loss $ (2,441) $ (2,444) $ (9,005) $ (4,731)
======== ======== ======== ========
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
November 30, February 28,
2009 2009
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 4,515 $ 6,913
Accounts receivable, net 14,458 13,682
Inventories 11,633 15,139
Deferred income tax assets 3,473 3,479
Prepaid expenses and other current assets 4,119 4,962
----------- -----------
Total current assets 38,198 44,175
Equipment and improvements, net 2,175 2,139
Deferred income tax assets, less current portion 9,254 13,111
Intangible assets, net 5,486 6,473
Other assets 1,909 3,749
----------- -----------
$ 57,022 $ 69,647
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Bank loan payable $ 13,955 $ 17,550
Note payable - 3,528
Accounts payable 15,609 5,422
Accrued payroll and employee benefits 2,707 3,380
Accrued warranty costs 1,999 3,286
Other accrued liabilities 3,002 8,683
Deferred revenue 4,039 3,609
----------- -----------
Total current liabilities 41,311 45,458
----------- -----------
Non-current liabilities 546 990
Stockholders' equity:
Common stock 257 252
Additional paid-in capital 146,085 144,881
Accumulated deficit (130,333) (120,814)
Accumulated other comprehensive loss (844) (1,120)
----------- -----------
Total stockholders' equity 15,165 23,199
----------- -----------
$ 57,022 $ 69,647
=========== ===========
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Nine Months Ended
November 30,
--------------------
2009 2008
--------- ---------
Cash flows from operating activities:
Net loss $ (9,519) $ (3,833)
Depreciation and amortization 1,906 5,552
Stock-based compensation expense 1,416 838
Loss on sale of investment 1,008 -
Deferred tax assets, net - (2,371)
Changes in operating working capital 9,411 3,065
Other 24 -
--------- ---------
Net cash provided by operating activities 4,246 3,251
--------- ---------
Cash flows from investing activities:
Capital expenditures (835) (650)
Proceeds from sale of investment 992 -
Collections on note receivable 225 420
Earnout payments on TechnoCom acquisition - (1,183)
Other (36) 296
--------- ---------
Net cash provided (used) by investing activities 346 (1,117)
--------- ---------
Cash flows from financing activities:
Proceeds from line of credit borrowing 1,650 -
Debt repayments (8,808) (2,778)
--------- ---------
Net cash used in financing activities (7,158) (2,778)
--------- ---------
Effect of exchange rate changes on cash 168 (241)
--------- ---------
Net change in cash and cash equivalents (2,398) (885)
Cash and cash equivalents at beginning of period 6,913 6,588
--------- ---------
Cash and cash equivalents at end of period $ 4,515 $ 5,703
========= =========
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
GAAP.
In this press release, CalAmp reports the non-GAAP financial measures of
Adjusted Basis Net Income (Loss) and Adjusted Basis Net Income (Loss) Per
Diluted Share. CalAmp uses these non-GAAP financial measures to enhance the
investor's overall understanding of the financial performance and future
prospects of CalAmp's core business activities. Specifically, CalAmp
believes that a report of Adjusted Basis Net Income (Loss) and Adjusted
Basis Net Income (Loss) Per Diluted 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 the GAAP Basis Net Loss to Adjusted Basis (non-GAAP)
Net Income (Loss) is as follows:
Three Months Ended Nine Months Ended
November 30, November 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
GAAP Basis Net Loss $ (1,319) $ (1,838) $ (9,519) $ (3,833)
Adjustments to reconcile to
Adjusted Basis Net Loss:
Increase in valuation allowance
for U.S. deferred tax assets 970 - 3,567 -
Amortization of intangible
assets, net of tax (1) 203 792 608 2,434
Stock-based compensation
expense, net of tax (1) 331 305 840 535
-------- -------- -------- --------
Adjusted Basis Net Income (Loss) $ 185 $ (741) $ (4,504) $ (864)
======== ======== ======== ========
Adjusted Basis Net Income (Loss)
Per Diluted Share $ 0.01 $ (0.03) $ (0.18) $ (0.03)
Weighted average common shares
outstanding on diluted basis 25,015 24,809 24,931 24,750
(1) These reconciling items are tax effected using the Company's combined
U.S. federal and state statutory tax rate of 40.7% and 36.2% for the
nine months ended November 30, 2009 and 2008, respectively.
Contact Information: AT THE COMPANY: Rick Vitelle Chief Financial Officer (805) 987-9000 AT FINANCIAL RELATIONS BOARD: Lasse Glassen General Information (213) 486-6546