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CalAmp Reports Second Quarter Fiscal Year 2023 Financial Results

·16 min read
CalAmp Corp.
CalAmp Corp.

Software and Subscription Services revenue increases 13% sequentially to $44.5 million and 61% of total revenue

Total consolidated revenue also increases 13% sequentially to $72.8 million as backlog remains solid

IRVINE, Calif., Sept. 22, 2022 (GLOBE NEWSWIRE) -- CalAmp (Nasdaq: CAMP), a connected intelligence company that helps organizations monitor, track and protect their vital assets, today reported financial results for its second quarter of fiscal year 2023 ended August 31, 2022.

“Consolidated revenue exceeded our expectations for mid to high single digit sequential growth, driven largely by Software and Subscription Services revenue that was 61% of total revenue,” said Jeff Gardner, CalAmp’s president and CEO. “The revenue growth in both Software and Subscription Services and Telematics Products was attributable to improvements in the supply chain which enabled us to accelerate customer conversions to recurring subscription contracts and fulfill more orders for our customers. Of the existing customers eligible to convert to recurring contracts, we exceeded a cumulative total of 50% in the quarter underscoring the progress we continue to make on our SaaS transformation.”

Second Quarter Fiscal Year 2023 Financial Overview

  • Total revenue increased 13% to $72.8 million, compared to $64.7 million in the prior quarter.

  • Software and Subscription Services (S&SS) revenue was a record $44.5 million, or 61% of total revenue, compared to $39.6 million in the prior quarter.

  • Telematics Products revenue increased 13% sequentially to $28.3 million due to an increase in device shipments.

  • Gross margin in the quarter increased to 39.8%, compared to 39.6% last quarter.

  • GAAP net loss from continuing operations was $7.5 million, or a loss of $0.21 per share.

  • Adjusted EBITDA was $4.8 million, or 7% of revenue, compared to adjusted EBITDA of $1.9 million, or 3% of revenue in the prior quarter.

  • Total S&SS subscribers were 1.3 million at quarter end, a 9% sequential increase and a 32% increase year-over-year.

  • Ended the quarter with $47.7 million in cash and cash equivalents, down from $59.0 million in the prior quarter.

Other Business and Recent Highlights

  • Converted top tier customers Localiza and Trimble to a subscription model.

  • Expanded its relationship with BMW in EMEA, adding the MINI brand.

  • Renewed contract with the City of Dallas to track and monitor additional vehicles.

  • Launched Transportation & Logistics solutions in EMEA, offering global use cases that include Supply Chain visibility and fleet management solutions.


Summary Financial Information From Continuing Operations:
(In thousands except per share amounts)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

August 31,

 

 

August 31,

 

Description

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software & Subscription Services (S&SS)

 

$

44,511

 

 

$

41,434

 

 

$

84,068

 

 

$

76,477

 

Telematics Products

 

 

28,317

 

 

 

37,577

 

 

 

53,486

 

 

 

82,208

 

 

 

$

72,828

 

 

$

79,011

 

 

$

137,554

 

 

$

158,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

40

%

 

 

42

%

 

 

40

%

 

 

41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(7,494

)

 

$

(5,425

)

 

$

(19,667

)

 

$

(11,425

)

Net loss per diluted share

 

$

(0.21

)

 

$

(0.15

)

 

$

(0.55

)

 

$

(0.33

)

Non-GAAP measures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted basis net income (loss)

 

$

(752

)

 

$

2,903

 

 

$

(4,157

)

 

$

5,849

 

Adjusted basis net income (loss) per diluted share

 

$

(0.02

)

 

$

0.08

 

 

$

(0.12

)

 

$

0.16

 

Adjusted EBITDA

 

$

4,766

 

 

$

8,301

 

 

$

6,622

 

 

$

16,686

 

Adjusted EBITDA margin

 

 

7

%

 

 

11

%

 

 

5

%

 

 

11

%


 

 

August 31,

 

 

February 28,

 

Description

 

2022

 

 

2022

 

Cash and cash equivalents

 

$

47,721

 

 

$

79,221

 

Working capital

 

 

78,524

 

 

 

90,928

 

Deferred revenue

 

 

35,412

 

 

 

39,670

 

Total debt (carrying value)

 

 

228,720

 

 

 

192,288

 

 

 

 

 

 

 

 

 

 


 

 

August 31,

 

S&SS Supplemental Information:

 

2022

 

 

2021

 

Remaining performance obligations

 

$

210,340

 

 

$

136,286

 

Subscribers

 

 

1,307

 

 

 

989

 


Third Quarter Fiscal Year 2023 Business Outlook

The Company is maintaining its policy of not providing quarterly guidance due to visibility into product shipments remaining difficult to accurately assess. However, the Company does expect to achieve low to mid single digit percentage point sequential revenue growth in the third quarter.

Conference Call and Webcast

CalAmp is hosting a conference call for analysts and investors to discuss its second quarter fiscal year 2023 results at 2:00 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 90 days after the call. The conference call can also be accessed by dialing 844-200-6205 (+1-929-526-1599 for international callers) and using the Conference ID #350499. Following the call, an audio replay will also be available by calling 866-813-9403 or +44-204-525-0658 and entering the Conference ID #367233. The audio replay will be available through September 29, 2022.

About CalAmp

CalAmp (Nasdaq: CAMP) provides flexible solutions to help organizations worldwide monitor, track and protect their vital assets. Our unique combination of software, devices, and platform enables over 14,000 commercial and government organizations worldwide to increase efficiency, safety and transparency while accommodating the unique ways they do business. With over 10 million active edge devices and 275+ issued or pending patents, CalAmp is the telematics leader organizations turn to for innovation and dependability. 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, services 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 of 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; the effects of global outbreaks of pandemics or contagious diseases or fear of such outbreaks, such as the recent coronavirus (COVID-19) pandemic; global component shortages due to supply chain constraints caused by the COVID-19 pandemic; disruptions in sales, operations, relationships with customers, suppliers, employees; our ability to successfully and timely accomplish our transformation to a SaaS solutions provider; our transition out of the automotive vehicle financing business; competitive pressures; pricing declines; demand for our telematics products; rates of growth in our target markets; prolonged disruptions of our contract manufacturers’ facilities or other significant operations; force majeure or force-majeure-like events at our contract manufacturers’ facilities including component shortages; the ongoing diversification of our global supply chain; our dependence on outsourced service providers for certain key business services and their ability to execute to our requirements; our ability to improve gross margin; cost-containment measures; legislative, trade, tariff, and regulatory actions; integration, unexpected charges or expenses in connection with acquisitions; the impact of legal proceedings and compliance risks; the impact on our business and reputation from information technology system failures, network disruptions, cyber-attacks, or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; 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. More information on these risks and other potential factors that could affect our financial results is included in our filings with the U.S. Securities and Exchange Commission (“SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings, which you may obtain for free 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, which speak as of their respective dates 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 (loss), Adjusted basis net income (loss) 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 and legal expenses, impairment losses and certain other adjustments as detailed in the accompanying non-GAAP reconciliation), and Adjusted EBITDA margin. Adjusted basis net income (loss) excludes the impact of intangible asset amortization expense, stock-based compensation, non-cash interest expense, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation and legal expenses, income tax provision adjustments, impairment losses and certain other adjustments as shown in the non-GAAP reconciliation provided in the table at the end of this announcement. We use these non-GAAP financial measures to provide investors with additional information about our financial performance and future prospects of our core business activities. 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 to help them evaluate our results of ongoing operations and enable additional 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, LoJack, TRACKER, Here Comes The Bus, Bus Guardian, iOn Vision, CrashBoxx and associated logos are among the trademarks of CalAmp and/or its affiliates in the United States, certain other countries and/or the EU. Spireon acquired the LoJack® U.S. Stolen Vehicle Recovery (SVR) business from CalAmp and holds an exclusive license to the LoJack mark in the United States and Canada. Any other trademarks or trade names mentioned are the property of their respective owners.

AT CALAMP:

AT SHELTON GROUP:

Kurt Binder

Leanne K. Sievers

EVP & CFO

(949) 224.3874

ir@calamp.com

sheltonir@sheltongroup.com


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,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

 

72,828

 

 

$

 

79,011

 

 

$

 

137,554

 

 

$

 

158,685

 

Cost of revenues

 

 

43,816

 

 

 

 

45,641

 

 

 

 

82,895

 

 

 

 

92,868

 

Gross profit

 

 

29,012

 

 

 

 

33,370

 

 

 

 

54,659

 

 

 

 

65,817

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

6,757

 

 

 

 

7,729

 

 

 

 

13,757

 

 

 

 

14,669

 

Selling and marketing

 

 

12,734

 

 

 

 

12,047

 

 

 

 

24,212

 

 

 

 

24,509

 

General and administrative

 

 

13,530

 

 

 

 

13,198

 

 

 

 

28,692

 

 

 

 

26,220

 

Intangible asset amortization

 

 

1,330

 

 

 

 

1,394

 

 

 

 

2,672

 

 

 

 

2,647

 

 

 

 

34,351

 

 

 

 

34,368

 

 

 

 

69,333

 

 

 

 

68,045

 

Operating loss

 

 

(5,339

)

 

 

 

(998

)

 

 

 

(14,674

)

 

 

 

(2,228

)

Non-operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income (loss)

 

 

(58

)

 

 

 

420

 

 

 

 

(172

)

 

 

 

1,068

 

Interest expense

 

 

(1,464

)

 

 

 

(3,804

)

 

 

 

(2,997

)

 

 

 

(7,653

)

Other expense, net

 

 

(507

)

 

 

 

(710

)

 

 

 

(1,449

)

 

 

 

(1,986

)

 

 

 

(2,029

)

 

 

 

(4,094

)

 

 

 

(4,618

)

 

 

 

(8,571

)

Loss from continuing operations before income taxes

 

 

(7,368

)

 

 

 

(5,092

)

 

 

 

(19,292

)

 

 

 

(10,799

)

Income tax provision from continuing operations

 

 

(126

)

 

 

 

(333

)

 

 

 

(375

)

 

 

 

(626

)

Net loss from continuing operations

 

 

(7,494

)

 

 

 

(5,425

)

 

 

 

(19,667

)

 

 

 

(11,425

)

Net income from discontinued operations, net of tax

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4,052

 

Net loss

$

 

(7,494

)

 

$

 

(5,425

)

 

$

 

(19,667

)

 

$

 

(7,373

)

Loss per share - continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

 

(0.21

)

 

$

 

(0.15

)

 

$

 

(0.55

)

 

$

 

(0.33

)

Diluted

$

 

(0.21

)

 

$

 

(0.15

)

 

$

 

(0.55

)

 

$

 

(0.33

)

Earnings per share - discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

0.12

 

Diluted

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

0.12

 

Shares used in computing earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,006

 

 

 

 

35,152

 

 

 

 

35,864

 

 

 

 

34,998

 

Diluted

 

 

36,006

 

 

 

 

35,152

 

 

 

 

35,864

 

 

 

 

34,998

 


CALAMP CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)

 

 

 

 

August 31,

 

 

February 28,

 

 

 

 

 

2022

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

$

 

47,721

 

 

$

 

79,221

 

Accounts receivable, net

 

 

 

 

 

74,802

 

 

 

 

61,544

 

Inventories

 

 

 

 

 

22,145

 

 

 

 

18,269

 

Prepaid expenses and other current assets

 

 

 

 

 

24,781

 

 

 

 

22,348

 

Total current assets

 

 

 

 

 

169,449

 

 

 

 

181,382

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

 

 

 

34,621

 

 

 

 

37,674

 

Operating lease right-of-use assets

 

 

 

 

 

10,367

 

 

 

 

12,327

 

Deferred income tax assets

 

 

 

 

 

3,633

 

 

 

 

4,165

 

Goodwill

 

 

 

 

 

93,377

 

 

 

 

94,436

 

Other intangible assets, net

 

 

 

 

 

28,769

 

 

 

 

31,965

 

Other assets

 

 

 

 

 

30,822

 

 

 

 

29,632

 

Total assets

 

 

 

$

 

371,038

 

 

$

 

391,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

 

 

$

 

1,828

 

 

$

 

2,585

 

Accounts payable

 

 

 

 

 

39,863

 

 

 

 

31,815

 

Accrued payroll and employee benefits

 

 

 

 

 

10,181

 

 

 

 

10,929

 

Deferred revenue

 

 

 

 

 

23,378

 

 

 

 

26,174

 

Other current liabilities

 

 

 

 

 

15,675

 

 

 

 

18,951

 

Total current liabilities

 

 

 

 

 

90,925

 

 

 

 

90,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

 

 

 

226,892

 

 

 

 

189,703

 

Operating lease liabilities

 

 

 

 

 

10,717

 

 

 

 

13,382

 

Other non-current liabilities

 

 

 

 

 

20,684

 

 

 

 

22,640

 

Total liabilities

 

 

 

 

 

349,218

 

 

 

 

316,179

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

371

 

 

 

 

361

 

Additional paid-in capital

 

 

 

 

 

180,463

 

 

 

 

242,386

 

Accumulated deficit

 

 

 

 

 

(155,993

)

 

 

 

(165,965

)

Accumulated other comprehensive loss

 

 

 

 

 

(3,021

)

 

 

 

(1,380

)

Total stockholders' equity

 

 

 

 

 

21,820

 

 

 

 

75,402

 

Total liabilities and stockholders' equity

 

 

 

$

 

371,038

 

 

$

 

391,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 


CALAMP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

 

 

Six Months Ended

 

 

 

August 31,

 

 

 

 

2022

 

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Net loss

$

 

(19,667

)

 

$

 

(7,373

)

 

Less: Net income from discontinued operations, net of tax

 

 

-

 

 

 

 

4,052

 

 

Net loss from continuing operations

 

 

(19,667

)

 

 

 

(11,425

)

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

 

 

8,215

 

 

 

 

8,472

 

 

Intangible asset amortization

 

 

2,672

 

 

 

 

2,647

 

 

Stock-based compensation

 

 

6,156

 

 

 

 

5,409

 

 

Amortization of debt issuance costs and discount

 

 

594

 

 

 

 

5,191

 

 

Noncash operating lease cost

 

 

1,756

 

 

 

 

1,691

 

 

Revenue assigned to factors

 

 

(1,524

)

 

 

 

(2,601

)

 

Deferred tax assets, net

 

 

129

 

 

 

 

250

 

 

Other

 

 

(67

)

 

 

 

200

 

 

Changes in operating assets and liabilities of continuing operations

 

 

(23,939

)

 

 

 

1,012

 

 

Net cash provided by (used in) operating activities - continuing operations

 

 

(25,675

)

 

 

 

10,846

 

 

Net cash used in operating activities - discontinued operations

 

 

-

 

 

 

 

(395

)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

 

 

(25,675

)

 

 

 

10,451

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(4,891

)

 

 

 

(6,569

)

 

Net cash used in investing activities - continuing operations

 

 

(4,891

)

 

 

 

(6,569

)

 

Net cash provided by investing activities - discontinued operations

 

 

-

 

 

 

 

6,616

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

 

 

(4,891

)

 

 

 

47

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Taxes paid related to net share settlement of vested equity awards

 

 

(1,568

)

 

 

 

(4,017

)

 

Proceeds from exercise of stock options and contributions to employee stock purchase plan

 

 

502

 

 

 

 

900

 

NET CASH USED IN FINANCING ACTIVITIES

 

 

(1,066

)

 

 

 

(3,117

)

 

 

 

 

 

 

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

 

132

 

 

 

 

(954

)

Net change in cash and cash equivalents

 

 

(31,500

)

 

 

 

6,427

 

Cash and cash equivalents at beginning of period

 

 

79,221

 

 

 

 

94,624

 

Cash and cash equivalents at end of period

$

 

47,721

 

 

$

 

101,051

 


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 announcement includes non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission.  We believe that our presentation of non-GAAP financial measures provides useful supplementary information to investors.  The presentation of 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 announcement, we report the non-GAAP financial measures of Adjusted basis net income (loss), Adjusted basis net income (loss) per diluted share, Adjusted EBITDA (earnings before investment income, interest expense, taxes, depreciation, amortization, stock-based compensation and other adjustments as identified below), and Adjusted EBITDA margin. We use these non-GAAP financial measures to provide investors with an 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 current and past periods.

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

 

Three Months Ended

 

 

Six Months Ended

 

 

August 31,

 

 

August 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP basis net loss

$

 

(7,494

)

 

$

 

(5,425

)

 

$

 

(19,667

)

 

$

 

(7,373

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from discontinued operations, net of tax

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(4,052

)

Intangible assets amortization

 

 

1,330

 

 

 

 

1,394

 

 

 

 

2,672

 

 

 

 

2,647

 

Stock-based compensation

 

 

3,196

 

 

 

 

2,937

 

 

 

 

6,156

 

 

 

 

5,409

 

Non-cash interest expense

 

 

290

 

 

 

 

2,585

 

 

 

 

594

 

 

 

 

5,191

 

GAAP basis income tax provision

 

 

126

 

 

 

 

333

 

 

 

 

375

 

 

 

 

626

 

Litigation and non-recurring legal expenses

 

 

1,417

 

 

 

 

471

 

 

 

 

4,548

 

 

 

 

1,119

 

Costs incurred in transition of LoJack North America business to acquiror (b)

 

 

233

 

 

 

 

482

 

 

 

 

985

 

 

 

 

1,715

 

Other

 

 

310

 

 

 

 

321

 

 

 

 

520

 

 

 

 

962

 

Adjusted basis income (loss) before income taxes

 

 

(592

)

 

 

 

3,098

 

 

 

 

(3,817

)

 

 

 

6,244

 

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

 

 

(160

)

 

 

 

(195

)

 

 

 

(340

)

 

 

 

(395

)

Adjusted basis net income (loss)

$

 

(752

)

 

$

 

2,903

 

 

$

 

(4,157

)

 

$

 

5,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted basis net income (loss) per diluted share

$

 

(0.02

)

 

$

 

0.08

 

 

$

 

(0.12

)

 

$

 

0.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding on a diluted basis

 

 

36,006

 

 

 

 

36,122

 

 

 

 

35,864

 

 

 

 

36,083

 


The reconciliation of GAAP-basis net 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,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP basis net loss

$

 

(7,494

)

 

$

 

(5,425

)

 

$

 

(19,667

)

 

$

 

(7,373

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from discontinued operations, net of tax

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(4,052

)

Investment (income) loss

 

 

58

 

 

 

 

(420

)

 

 

 

172

 

 

 

 

(1,068

)

Interest expense

 

 

1,464

 

 

 

 

3,804

 

 

 

 

2,997

 

 

 

 

7,653

 

Income tax provision

 

 

126

 

 

 

 

333

 

 

 

 

375

 

 

 

 

626

 

Depreciation and amortization

 

 

5,389

 

 

 

 

5,636

 

 

 

 

10,887

 

 

 

 

11,119

 

Stock-based compensation

 

 

3,196

 

 

 

 

2,937

 

 

 

 

6,156

 

 

 

 

5,409

 

Litigation and non-recurring legal expenses

 

 

1,417

 

 

 

 

471

 

 

 

 

4,548

 

 

 

 

1,119

 

Costs incurred in transition of LoJack North America business to acquiror (b)

 

 

233

 

 

 

 

482

 

 

 

 

985

 

 

 

 

1,715

 

Other

 

 

377

 

 

 

 

483

 

 

 

 

169

 

 

 

 

1,538

 

Adjusted EBITDA

$

 

4,766

 

 

$

 

8,301

 

 

$

 

6,622

 

 

$

 

16,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

 

72,828

 

 

$

 

79,011

 

 

$

 

137,554

 

 

$

 

158,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

7

%

 

 

 

11

%

 

 

 

5

%

 

 

 

11

%


(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.

(b)

Costs incurred in transition of business to acquiror are attributable to the wind-down and transfer of the LoJack North America business to Spireon.