CalAmp Reports Fiscal 2013 Second Quarter Results

Marketwired

OXNARD, CA--(Marketwire - Sep 25, 2012) - CalAmp Corp. (NASDAQ: CAMP), a leading provider of wireless products, services and solutions, today reported results for its second quarter ended August 31, 2012. Highlights for the quarter include:

  • Consolidated second quarter revenue of $44.0 million, up 30% compared to the second quarter last year; Wireless Datacom revenue up 34% year-over-year to an all-time high of $34.2 million.
  • Second quarter GAAP net income of $3.7 million or $0.12 per diluted share, compared to $1.4 million, or $0.05 per diluted share, in second quarter of last year.
  • Adjusted Basis (non-GAAP) net income of $4.9 million or $0.17 per diluted share, compared to $3.0 million, or $0.11 per diluted share, for the same period last year.
  • Net cash provided by operations of $4.0 million in the second quarter, and total cash at quarter-end of $10.2 million.

Commenting on the second quarter results, Michael Burdiek, CalAmp's President and Chief Executive Officer said, "We continue to experience operating momentum with strong performance once again driven by the Wireless Datacom segment, where revenue grew 34% year-over-year to $34.2 million. This record-setting revenue was due to continued strong customer demand for our Mobile Resource Management (MRM) products and services, significant contributions from our Rail initiative and improving fundamentals in public safety. In addition, we continue to be pleased with the performance of our Satellite segment and its contribution to the bottom-line." 

Mr. Burdiek continued, "Our backlog exiting the second quarter remains robust and we have a healthy pipeline of new opportunities supporting a good tailwind as we enter the second half of fiscal 2013." 

Fiscal 2013 Second Quarter Results
Total revenue for the fiscal 2013 second quarter was $44.0 million compared to $33.8 million for the second quarter of fiscal 2012, an increase of 30%. Wireless Datacom revenue increased 34% to $34.2 million from $25.5 million in the same period last year, and Satellite revenue was $9.8 million compared to $8.3 million in the second quarter last year.

Consolidated gross profit for the fiscal 2013 second quarter was $14.1 million, an increase of $2.3 million over the same quarter last year primarily as a result of higher revenue. The gross margin percentage was 32.1% in the fiscal 2013 second quarter versus 35.0% in the second quarter last year, which included a $3 million patent sale for which there was no associated cost of revenue. Excluding the effects of last year's patent sale, the consolidated gross margin in the latest quarter was up 3.4 percentage points year-over-year due primarily to substantial improvement in Satellite margins.

GAAP net income for the fiscal 2013 second quarter was $3.7 million, or $0.12 per diluted share, compared to net income of $1.4 million, or $0.05 per diluted share, in the second quarter of last year.

Non-GAAP net income for the fiscal 2013 second quarter was $4.9 million, or $0.17 per diluted share, compared to non-GAAP net income of $3.0 million or $0.11 per diluted share for the same quarter last year. A reconciliation of the GAAP basis pretax income to the non-GAAP net income is provided in the table at the end of this press release.

Liquidity
As of August 31, 2012, the Company had cash and equivalents of $10.2 million and total debt of $5.7 million, including the $3.2 million carrying amount of a note payable issued in May 2012 in connection with the Navman Wireless asset purchase and supply agreement. Net cash (reflecting total cash less bank debt) at August 31, 2012 was $7.7 million, versus a net debt position of $4.0 million one year ago. Cash provided by operating activities during the second quarter was $4.0 million, and the unused borrowing capacity on the bank revolver at the end of the second quarter was $9.5 million.

Business Outlook
Commenting on the Company's business outlook, Mr. Burdiek said, "Based on our latest projections, we expect fiscal 2013 third quarter consolidated revenue in the range of $41 to $45 million. We anticipate Wireless Datacom revenue in the third quarter will be significantly higher year-over-year and up slightly on a sequential quarter basis. Satellite revenue in the third quarter is expected to be up year-over-year but lower on a sequential quarter basis due to normal demand fluctuations. At the bottom line, we expect third quarter GAAP basis net income in the range of $0.10 to $0.14 per diluted share, and non-GAAP net income in the range of $0.14 to $0.18 per diluted share. Looking further ahead into our fourth quarter, we expect continued strength within our Wireless segment and a strong rebound in Satellite revenues from the third quarter, with consolidated fourth quarter revenues projected to be in the range of $43 to $49 million.

Mr. Burdiek concluded, "We are experiencing strong demand as we drive expansion within our key verticals. Looking ahead to the second half of fiscal 2013 and beyond, we believe we have established a solid foundation for further revenue and earnings growth." 

Conference Call and Webcast
A conference call and simultaneous webcast to discuss first 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 Michael Burdiek and CFO Rick Vitelle will host the conference call. Participants can dial into the live conference call by calling 877-407-0784 (1-201-689-8560 for international callers) and using the Conference ID # 399613. An audio replay will be available through October 3, 2012 by calling 877-870-5176 or 858-384-5517 and entering the Conference ID # 399613.

Additionally, a live webcast of the call will be 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 enterprise, utility and government 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 wireless and satellite markets, the timing of customer approvals of new product designs, intellectual property infringement claims, the effects of the proposed automatic federal budget cuts if the scheduled sequester were to take effect in early 2013, interruption or failure of our Internet-based systems used to wirelessly configure and communicate with the tracking and monitoring devices that we sell, and other risks or uncertainties that are described in the Company's Report on Form 10-K for fiscal 2012 as filed on April 26, 2012 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 INCOME STATEMENTS  
(Unaudited, in thousands except per share amounts)  
                       
  Three Months Ended     Six Months Ended  
  August 31,     August 31,  
  2012     2011     2012     2011  
                               
Revenues $ 43,987     $ 33,801     $ 87,848     $ 68,355  
                               
Cost of revenues   29,852       21,976       60,037       47,098  
                               
Gross profit   14,135       11,825       27,811       21,257  
                               
Operating expenses:                              
  Research and development   3,657       2,679       6,829       5,783  
  Selling   3,173       2,852       5,981       5,444  
  General and administrative   3,052       3,030       6,150       5,529  
  Intangible asset amortization   475       310       792       662  
    10,357       8,871       19,752       17,418  
                               
Operating income   3,778       2,954       8,059       3,839  
                               
Non-operating expense, net   (102 )     (1,592 )     (192 )     (1,948 )
                               
Income before income taxes   3,676       1,362       7,867       1,891  
                               
Income tax provision   (17 )     (6 )     (26 )     (15 )
                               
Net income $ 3,659     $ 1,356     $ 7,841     $ 1,876  
                               
Earnings per share - basic and diluted                              
  Basic $ 0.13     $ 0.05     $ 0.28     $ 0.07  
  Diluted $ 0.12     $ 0.05     $ 0.27     $ 0.07  
                               
Shares used in computing earnings per share:                              
  Basic   28,476       27,524       28,201       27,441  
  Diluted   29,692       28,310       29,478       28,268  
                               
                               
                               
BUSINESS SEGMENT INFORMATION  
(Unaudited, in thousands)  
                               
  Three Months Ended     Six Months Ended  
  August 31,     August 31,  
  2012     2011     2012     2011  
Revenues                              
  Wireless DataCom $ 34,173     $ 25,523     $ 65,844     $ 47,560  
  Satellite   9,814       8,278       22,004       20,795  
    Total revenues $ 43,987     $ 33,801     $ 87,848     $ 68,355  
                               
Gross profit                              
  Wireless DataCom $ 12,429     $ 11,380     $ 24,174     $ 19,984  
  Satellite   1,706       445       3,637       1,273  
    Total gross profit $ 14,135     $ 11,825     $ 27,811     $ 21,257  
                               
Operating income (loss)                              
  Wireless DataCom $ 4,002     $ 4,399     $ 8,393     $ 6,529  
  Satellite   749       (447 )     1,829       (735 )
  Corporate expenses   (973 )     (998 )     (2,163 )     (1,955 )
    Total operating income $ 3,778     $ 2,954     $ 8,059     $ 3,839  
                               
           
           
CAL AMP CORP.  
CONSOLIDATED BALANCE SHEETS  
(In thousands)  
           
  August 31,     February 28,  
  2012     2012  
Assets (Unaudited)        
Current assets:              
  Cash and cash equivalents $ 10,235     $ 5,601  
  Accounts receivable, net   19,617       14,383  
  Inventories   13,012       10,057  
  Deferred income tax assets   7,183       5,425  
  Prepaid expenses and other current assets   3,951       4,323  
               
    Total current assets   53,998       39,789  
               
Property, equipment and improvements, net   2,399       1,761  
               
Deferred income tax assets, less current portion   4,739       6,412  
               
Goodwill and other intangible assets, net   6,657       2,738  
               
Other assets   745       781  
               
  $ 68,538     $ 51,481  
Liabilities and Stockholders' Equity              
Current liabilities:              
  Current portion of long-term debt $ 2,444     $ 1,100  
  Accounts payable   14,318       9,523  
  Accrued payroll and employee benefits   3,593       4,405  
  Deferred revenue   6,107       6,305  
  Other current liabilities   3,191       2,268  
               
    Total current liabilities   29,653       23,601  
               
Long-term debt   3,256       1,900  
Other non-current liabilities   1,576       1,003  
               
Stockholders' equity:              
  Common stock   296       287  
  Additional paid-in capital   155,711       154,485  
  Accumulated deficit   (121,889 )     (129,730 )
  Accumulated other comprehensive loss   (65 )     (65 )
               
    Total stockholders' equity   34,053       24,977  
               
  $ 68,538     $ 51,481  
               
   
           
CAL AMP CORP.  
CONSOLIDATED CASH FLOW STATEMENTS  
(Unaudited - In thousands)  
           
  Six Months Ended  
  August 31,  
  2012     2011  
Cash flows from operating activities:              
  Net income $ 7,841     $ 1,876  
  Depreciation and amortization   1,260       1,385  
  Stock-based compensation expense   1,672       1,099  
  Amortization of debt issue costs and discount   22       724  
  Write-off of cumulative foreign currency translation account   -       801  
  Changes in operating working capital   (3,517 )     (494 )
  Deferred tax assets,net   (85 )     -  
  Other   15       -  
               
    Net cash provided by operating activities   7,208       5,391  
               
Cash flows from investing activities:              
  Capital expenditures   (920 )     (389 )
  Navman Wireless asset purchase agreement   (1,000 )     -  
  Collections on note receivable   283       298  
               
    Net cash used in investing activities   (1,637 )     (91 )
               
Cash flows from financing activities:              
  Repayments of bank line of credit   -       (2,215 )
  Proceeds (repayments) of bank term loan   (500 )     3,000  
  Repayment of subordinated notes payable   -       (5,000 )
  Payment of debt issue costs   -       (63 )
  Payment of withholding taxes on vested employee equity awards   (2,515 )     (1,016 )
  Proceeds from exercise of stock options and warrants   2,078       9  
               
    Net cash used in financing activities   (937 )     (5,285 )
               
Net change in cash and cash equivalents   4,634       15  
               
Cash and cash equivalents at beginning of period   5,601       4,241  
               
Cash and cash equivalents at end of period $ 10,235     $ 4,256  
               
               
               
CALAMP CORP.
NON-GAAP EARNINGS RECONCILIATION
(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. 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 and Adjusted Basis Net Income 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 and Adjusted Basis Net Income 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 Income 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,  
  2012     2011     2012     2011  
                               
GAAP basis pretax income $ 3,676     $ 1,362     $ 7,867     $ 1,891  
                               
Amortization of intangible assets   475       310       792       662  
Stock-based compensation expense   814       567       1,672       1,099  
Write-off of cumulative foreign currency translation account   -       801       -       801  
Pretax income (non-GAAP basis)   4,965       3,040       10,331       4,453  
                               
Income tax provision (non-GAAP basis) (a)   (51 )     (6 )     (111 )     (15 )
Adjusted Basis net income $ 4,914     $ 3,034     $ 10,220     $ 4,438  
                               
Adjusted Basis net income per diluted share $ 0.17     $ 0.11     $ 0.35     $ 0.16  
                               
Weighted average common shares outstanding on diluted basis   29,692       28,310       29,478       28,268  
     
(a)   The non-GAAP income tax provision reflects the income taxes paid/payable (or received/receivable) based on on the non-GAAP pretax income for the period. Pretax income for all periods presented was offset to a substantial degree by net operating loss carryforwards.
 
Contact:
AT CALAMP:
Garo Sarkissian
VP, Corporate Development
(805) 987-9000

AT ADDO COMMUNICATIONS:
Lasse Glassen
(424) 238-6249
lasseg@addocommunications.com

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