SOURCE: CalAmp Corp.

July 08, 2010 16:01 ET

CalAmp Reports Fiscal 2011 First Quarter Results

OXNARD, CA--(Marketwire - July 8, 2010) - CalAmp Corp. (NASDAQ: CAMP), a leading provider of wireless products, services and solutions, today reported results for its fiscal first quarter ended May 31, 2010. Key elements include:

--  Revenue of $26.3 million, up 15% from prior year and within guidance.
--  Consolidated gross margin percentage of 23.2%, up from 20.5% in prior
    year.
--  GAAP net loss of $2.5 million, or $0.09 per diluted share; Adjusted
    Basis (non-GAAP) net loss of $1.1 million, or $0.04 loss per diluted
    share; both within guidance.

Rick Gold, CalAmp's Chief Executive Officer, commented, "First quarter operating results were in line with expectations. Revenues increased 15% on a year-over-year basis and were driven by improving fundamentals in both our wireless datacom and satellite businesses. During the quarter, demand for our mobile resource management (MRM) products was particularly strong as new location tracking products launched earlier this year are resonating in the marketplace. Also contributing to wireless datacom revenues were two smart grid projects, as well as initial deployment activities on a Canadian public safety communications project and a rail transportation communications project that were announced earlier this year. As anticipated, first quarter revenues of our satellite business declined compared to the fourth quarter of fiscal 2010 but were up on a year-over-year basis. We expect next-generation satellite products that are currently in the customer qualification process, along with normal seasonal demand patterns in this market, will help drive growth and improve profitability during the remainder of fiscal 2011."

Fiscal 2011 First Quarter Results

Total revenue for the fiscal 2011 first quarter was $26.3 million compared to $23.0 million for the first quarter of fiscal 2010. The year-over-year increase in revenues was due to higher sales in both the Company's satellite and wireless datacom business segments. Satellite revenue of $10.5 million increased 13.8% from $9.2 million in the prior year, while wireless datacom revenue of $15.8 million increased 15.0% from $13.8 million in the prior year.

Consolidated gross profit for the fiscal 2011 first quarter was $6.1 million or 23.2% of revenue compared to gross profit of $4.7 million or 20.5% of revenue for the same period last year. The increase in gross profit and gross margin percentage in the latest quarter was due primarily to higher wireless datacom revenues.

Results of operations for the fiscal 2011 first quarter as determined in accordance with U.S. generally accepted accounting principles ("GAAP") was a net loss of $2.5 million or $0.09 per diluted share, compared to a net loss of $4.0 million or $0.16 per diluted share in the first quarter of last year.

The Adjusted Basis (non-GAAP) net loss for the fiscal 2011 first quarter was $1.1 million, or $0.04 loss per diluted share, compared to an Adjusted Basis net loss of $2.3 million or $0.09 loss per diluted share for the same period last year. The Adjusted Basis net loss excludes the impact of amortization of intangible assets and stock-based compensation expense, and includes an income tax benefit computed without giving effect to increases or decreases in the deferred income tax valuation allowance that are recognized for GAAP basis financial reporting. A reconciliation of the GAAP Basis pretax loss to the Adjusted Basis net loss is provided in the table at the end of this press release.

Liquidity

At May 31, 2010, the Company had total cash of $4.0 million and $12.1 million in total debt. Total debt at that date consists of $7.9 million drawn under the Company's revolving bank credit facility and subordinated debt of $4.2 million. The unused borrowing capacity on the bank revolver was $1.8 million at May 31, 2010. Net cash used in operating activities was $0.5 million during the first quarter of fiscal 2011.

Business Outlook

Commenting on the Company's business outlook, Mr. Gold said, "Based on current projections, we expect fiscal 2011 second quarter consolidated revenues will increase on a sequential quarter basis and be in the range of $27 to $30 million, with growth anticipated in both our satellite and wireless datacom businesses. The second quarter gross margin percentage is anticipated to improve slightly over the first quarter. As a result, we expect a GAAP Basis net loss in the range of $0.04 to $0.08 per diluted share. The Adjusted Basis net loss for the second quarter, which excludes intangibles amortization expense and stock-based compensation expense, is expected to be in the range of $0.01 to $0.04 per diluted share."

"In addition, based on our backlog of orders and pipeline of new opportunities, we are reaffirming our guidance that full-year fiscal 2011 revenues will increase 10% to 20% over fiscal 2010 and be in the range of $123 to $135 million, with growth in both our satellite and wireless datacom businesses. We continue to expect the consolidated gross margin for fiscal 2011 will be in the range of 23% to 27% of revenue, and that fiscal 2011 total operating expenses will be essentially flat compared to fiscal 2010."

Conference Call and Webcast

A conference call and simultaneous webcast to discuss fiscal 2011 first quarter financial results and business outlook will be held today at 4:30 p.m. Eastern / 1:30 p.m. Pacific. CalAmp's CEO Rick Gold and CFO Rick Vitelle will host the conference call. Participants can dial into the live conference call by calling 877-941-2333 (480-629-9723 for international callers). An audio replay will be available through July 15, 2010, by calling 800-406-7325 (303-590-3030 for international callers) and entering the access code 4323973.

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

CalAmp develops and markets wireless communications solutions that deliver data, voice and video for critical networked communications and other applications. The Company's two business segments are Wireless DataCom, which serves utility, governmental and enterprise customers, and Satellite, which focuses on the North American Direct Broadcast Satellite market. 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 Report on Form 10-K for fiscal 2010 as filed on May 6, 2010 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
                                                           May 31,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------
Revenues                                          $    26,346  $    23,000

Cost of revenues                                       20,223       18,293
                                                  -----------  -----------

Gross profit                                            6,123        4,707
                                                  -----------  -----------

Operating expenses:
  Research and development                              2,763        2,898
  Selling                                               2,622        2,201
  General and administrative                            2,509        2,757
  Intangible asset amortization                           306          341
                                                  -----------  -----------
                                                        8,200        8,197
                                                  -----------  -----------

Operating loss                                         (2,077)      (3,490)

Non-operating expense, net                               (400)        (467)
                                                  -----------  -----------

Loss before income taxes                               (2,477)      (3,957)

Income tax provision                                        -            -
                                                  -----------  -----------

Net loss                                          $    (2,477) $    (3,957)
                                                  ===========  ===========

Basic and diluted loss per share                  $     (0.09) $     (0.16)
                                                  ===========  ===========

Shares used in basic and diluted per share
 calculations                                          26,982       24,860



                       BUSINESS SEGMENT INFORMATION
                        (Unaudited, in thousands)


                                                     Three Months Ended
                                                           May 31,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------
Revenue
  Satellite                                       $    10,527  $     9,249
  Wireless DataCom                                     15,819       13,751
                                                  -----------  -----------

    Total revenue                                 $    26,346  $    23,000
                                                  ===========  ===========

Gross profit
  Satellite                                       $       793  $       427
  Wireless DataCom                                      5,330        4,280
                                                  -----------  -----------

    Total gross profit                            $     6,123  $     4,707
                                                  ===========  ===========

Operating loss
  Satellite                                       $      (270) $      (617)
  Wireless DataCom                                       (507)      (1,644)
  Corporate expenses                                   (1,300)      (1,229)
                                                  -----------  -----------
    Total operating loss                          $    (2,077) $    (3,490)
                                                  ===========  ===========



                              CAL AMP CORP.
                        CONSOLIDATED BALANCE SHEETS
                        (Unaudited - In thousands)

                                                    May 31,    February 28,
                                                      2010         2010
                                                  -----------  -----------
                                Assets
Current assets:
  Cash and cash equivalents                       $     4,026  $     2,986
  Accounts receivable, net                             13,423       16,520
  Inventories                                          11,079       10,608
  Deferred income tax assets                            2,263        2,656
  Prepaid expenses and other current assets             4,728        4,720
                                                  -----------  -----------
       Total current assets                            35,519       37,490
Equipment and improvements, net                         2,283        2,055
Deferred income tax assets, less current portion       10,410       10,017
Intangible assets, net                                  4,838        5,144
Other assets                                            2,264        2,247
                                                  -----------  -----------

                                                  $    55,314  $    56,953
                                                  ===========  ===========
            Liabilities and Stockholders' Equity
Current liabilities:
  Bank working capital line of credit             $     7,856  $     5,901
  Accounts payable                                     14,455       16,186
  Accrued payroll and employee benefits                 2,484        2,742
  Deferred revenue                                      5,274        4,740
  Other current liabilities                             3,553        3,526
                                                  -----------  -----------

      Total current liabilities                        33,622       33,095
                                                  -----------  -----------

Long-term debt                                          4,243        4,170
Other non-current liabilities                             262          489

Stockholders' equity:
  Common stock                                            277          277
  Additional paid-in capital                          151,918      151,453
  Accumulated deficit                                (134,142)    (131,665)
  Accumulated other comprehensive loss                   (866)        (866)
                                                  -----------  -----------

      Total stockholders' equity                       17,187       19,199
                                                  -----------  -----------

                                                  $    55,314  $    56,953
                                                  ===========  ===========



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

                                                     Three Months Ended
                                                           May 31,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------
Cash flows from operating activities:
  Net loss                                        $    (2,477) $    (3,957)
  Depreciation and amortization                           636          629
  Stock-based compensation expense                        523          412
  Non-cash interest expense                               134            -
  Changes in operating working capital                    717        3,477
  Other                                                    11            9
                                                  -----------  -----------

     Net cash (used) provided by operating
      activities                                         (456)         570
                                                  -----------  -----------

Cash flows from investing activities:
  Capital expenditures                                   (569)        (273)
  Collections on note receivable                          110           75
  Other                                                     -          (33)
                                                  -----------  -----------

     Net cash used in investing activities               (459)        (231)
                                                  -----------  -----------

Cash flows from financing activities:
  Proceeds from bank line of credit borrowings          1,955            -
  Debt repayments                                           -       (3,125)
                                                  -----------  -----------

     Net cash provided (used) by financing
      activities                                        1,955       (3,125)
                                                  -----------  -----------

Effect of exchange rate changes on cash                     -          255
                                                  -----------  -----------

Net change in cash and cash equivalents                 1,040       (2,531)

Cash and cash equivalents at beginning of period        2,986        6,913
                                                  -----------  -----------

Cash and cash equivalents at end of period        $     4,026  $     4,382
                                                  ===========  ===========




                              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 Loss and Adjusted Basis Net 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 Loss and Adjusted Basis Net 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 Pretax Loss to Adjusted Basis
(non-GAAP) Net Loss is as follows:

                                                     Three Months Ended
                                                           May 31,
                                                  ------------------------
                                                      2010        2009
                                                  -----------  -----------
GAAP basis pretax loss                            $    (2,477) $    (3,957)

Amortization of intangible assets                         306          341
Stock-based compensation expense                          523          412
                                                  -----------  -----------
Pretax income (loss) (non-GAAP basis)                  (1,648)      (3,204)

Income tax benefit (non-GAAP basis) (a)                   584          855
                                                  -----------  -----------
Adjusted basis (non-GAAP) net loss                $    (1,064) $    (2,349)
                                                  ===========  ===========

Adjusted basis net loss per diluted share         $     (0.04) $     (0.09)

Weighted average common shares outstanding
  on diluted basis                                     26,982       24,860


(a) The non-GAAP income tax benefit is computed using the Company's
    combined U.S. federal and state statutory tax rate of 40.0% and 40.7%
    in fiscal 2011 and 2010, respectively, excluding the pretax losses of
    foreign operations for which no income tax benefit is recognized and
    excluding the effects of increases and decreases in the deferred
    income tax valuation allowance.

Contact Information

  • AT THE COMPANY:
    Rick Vitelle
    Chief Financial Officer
    (805) 987-9000

    AT FINANCIAL RELATIONS BOARD:
    Lasse Glassen
    General Information
    (213) 486-6546
    lglassen@mww.com