CAMP
$11.10
Calamp
$.03
.27%
Earnings Details
2nd Quarter August 2019
Thursday, September 26, 2019 4:05:00 PM
Tweet Share Watch
Summary

Calamp Beats but Guides Lower

Calamp (CAMP) reported 2nd Quarter August 2019 earnings of $0.14 per share on revenue of $93.2 million. The consensus earnings estimate was $0.10 per share on revenue of $91.4 million. The Earnings Whisper number was $0.11 per share. Revenue fell 2.9% compared to the same quarter a year ago.

The company said it expects third quarter non-GAAP earnings of $0.11 to $0.17 per share on revenue of $92.0 million to $98.0 million. The current consensus earnings estimate is $0.19 per share on revenue of $94.5 million for the quarter ending November 30, 2019.

CalAmp Corp provides wireless communications solutions applications to customers. Its business activities are organized into its Wireless DataCom and Satellite business segments.

Results
Reported Earnings
$0.14
Earnings Whisper
$0.11
Consensus Estimate
$0.10
Reported Revenue
$93.2 Mil
Revenue Estimate
$91.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CalAmp Reports Fiscal 2020 Second Quarter Financial Results

IRVINE, Calif., Sept. 26, 2019 /PRNewswire/ -- CalAmp (Nasdaq: CAMP), a technology solutions pioneer transforming the mobile connected economy, today reported its financial results for the fiscal 2020 second quarter ended August 31, 2019.

"We posted a solid quarter with consolidated revenue, adjusted EBITDA and non-GAAP EPS all within the higher end of the guidance range and further highlighted by a record quarter of Software and Subscription Services revenue that expanded to $31 million, or 33% of total revenue," said Michael Burdiek, president and chief executive officer. "Our recent acquisitions performed well, generating both increased revenue opportunities as well as newly identified cost synergies. Additionally, we are beginning to see the benefits from the 3G to LTE transitions by our Telematics Systems customers, which helped contribute to solid bookings in the quarter. Overall, I am pleased with our progress on key initiatives as we advance our strategic transformation to a global SaaS solutions provider."

Second Quarter Fiscal 2020 Financial Highlights

  • Consolidated revenue for the second quarter was $93.2 million, up 5% sequentially due to increased subscription revenue and down 3% year-over-year due to a decline in Telematics Systems product sales.
  • Software and Subscriptions Services revenue for the second quarter increased 65% year-over-year to $31.2 million, or 33% of consolidated revenue, driven by recent acquisitions coupled with LoJack® subscription services.
  • Telematics Systems revenue for the second quarter was $62 million, down 2% sequentially and 20% year-over-year as expected, principally due to a decline in Network & OEM products and MRM Telematics device revenues.
  • Worldwide subscribers increased to 1.3 million with the recent acquisitions of Tracker (UK) (Tracker), Car Track (LoJack Mexico) and Synovia Solutions, further accelerating the transition to a global software and solutions provider.
  • GAAP net loss for the second quarter was $7.4 million, or $0.22 per share, reflecting restructuring charges and purchase accounting adjustments related to the recent acquisitions.
  • Adjusted basis non-GAAP net income for the second quarter was $4.8 million, or $0.14 per diluted share, and at the high end of guidance.
  • Operating cash flow for the second quarter was $5.2 million, with Adjusted EBITDA of $10.6 million and Adjusted EBITDA margin of 11%.
  • Realigned organizational structure to generate operating expense synergies related to the recent acquisitions.

Business and Recent Highlights

  • A major global mail delivery and package shipping company is launching a new program utilizing the full stack of CalAmp SC iOn supply chain visibility services to optimize the real-time trailer routing for thousands of ad hoc shipments per month.
  • Announced a strategic partnership with Sprint to deliver intelligent telematics devices and software applications, along with CalAmp iOn™ Device as a Service (DaaS) subscription services. The partnership will expand access to CalAmp's range of telematics services that improve operational efficiencies, secure high-value assets and drive greater profitability for Sprint's enterprise customers.
  • Global enterprise accounts such as Caterpillar are initiating more aggressive LTE retrofit programs for existing fleets as the 3G network sunset becomes imminent.
  • Announced a partnership with Toyota Motor Italy making LoJack Italia Stolen Vehicle Recovery services available to the entire range of Toyota vehicles sold in Italy.
  • Adoption of Here Comes The Bus school bus tracking app dramatically accelerates across the U.S., now serving school districts from California, Arizona, Oregon, Minnesota and Nebraska to Indiana, Georgia, North Carolina, Pennsylvania, Virginia and New York City.
  • Tracker in the U.K. launched SmartDealer and SmartDrive telematics solutions to boost dealer profitability, enhance customer loyalty and deliver peace of mind to consumers, while generating recurring revenue from software-as-a-service (SaaS)-based subscriptions.

Summary Financial Information:


(In thousands except per share amounts)









Three Months Ended



August 31,


Description

2019



2018


Revenues:








Telematics Systems

$

62,031



$

77,100


Software & Subscription Services


31,205




18,937



$

93,236



$

96,037


Gross margin


40

%



41

%









Net loss

$

(7,369)



$

(854)


Net loss per diluted share

$

(0.22)



$

(0.02)


Non-GAAP measures:








Adjusted basis net income

$

4,757



$

10,976


Adjusted basis net income per diluted share

$

0.14



$

0.31


Adjusted EBITDA

$

10,647



$

13,689


Adjusted EBITDA margin


11

%



14

%


















August 31,



February 28,


Description

2019



2019


Cash and marketable securities

$

201,473



$

274,012


Working capital


130,175




319,905


Deferred revenue


61,899




51,370


Total debt (carrying value)


300,097




275,905


 

Third Quarter Fiscal 2020 Business Outlook

(In thousands except per share amounts)









Range


Description

Low



High










GAAP financial information:








Revenues

$

92,000



$

98,000


Net loss per diluted share

$

(0.23)



$

(0.17)










Non-GAAP financial information:








Adjusted EBITDA

$

9,500



$

13,500


Adjusted basis net income per diluted share

$

0.11



$

0.17


Conference Call and Webcast

CalAmp is hosting a conference call for analysts and investors to discuss its second quarter fiscal 2020 results and outlook for the third quarter of fiscal 2020 at 1:30 p.m. Pacific Time today.  Participants can listen in via webcast by visiting the Investor Relations section of the 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 833-868-3300 (+1-918-398-8110 for international callers) and using the Conference ID#2990451. 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#2990451. The audio replay will be available through October 3, 2019.

About CalAmp

CalAmp (Nasdaq: CAMP) is a technology solutions pioneer transforming the mobile connected economy. We help reinvent business and improve lives around the globe with technology solutions that streamline complex mobile IoT deployments and bring intelligence to the edge. Our software and subscription-based services, scalable cloud platform and intelligent devices collect and assess business-critical data from mobile assets and their contents. We call this The New How, facilitating efficient decision making, optimizing mobile asset utilization and improving road safety.  CalAmp, headquartered in Irvine, California, has been publicly traded since 1983. LoJack® is a brand of CalAmp and a leader in stolen vehicle recovery and innovative automotive services. For more information, visit calamp.com, or LinkedIn, Facebook, 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; competitive pressures; pricing declines; rates of growth in our target markets; prolonged disruptions of our contract manufacturers' 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; cost-containment measures; legislative, trade, tariffs, and regulatory actions; integration, unexpected charges or expenses in connection with our recent acquisitions; the impact of legal proceedings and compliance risks; implementation of our new ERP system; 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 expense, 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 announcement.  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. 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. We have not included a quantitative reconciliation of our quarterly financial guidance for Adjusted EBITDA and Adjusted basis net income per diluted share to revenues and net loss per share, respectively, as the GAAP measures that we exclude from our non-GAAP financial information are difficult to reliably provide at this time without unreasonable effort.

CalAmp and LoJack and the related logos are among the trademarks of CalAmp Corp. and/or its affiliates in the United States, certain other countries, and/or the European Union. Any other trademarks or trade names mentioned are the property of their respective owners.

 

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,



2019



2018



2019



2018



















Revenues

$


93,236


$


96,037


$


182,306


$


190,925


Cost of revenues



55,566




56,216




109,225




113,013


Gross profit



37,670




39,821




73,081




77,912


Operating expenses:

















Research and development



7,924




7,599




14,810




14,200


Selling and marketing



15,868




12,523




30,515




25,020


General and administrative



12,893




11,991




30,377




25,427


Restructuring



2,272




566




2,272




3,949


Intangible asset amortization



3,318




2,893




6,358




5,641





42,275




35,572




84,332




74,237


Operating (loss) income



(4,605)




4,249




(11,251)




3,675


Non-operating income (expense):

















Investment income



1,256




1,007




3,337




1,860


Interest expense



(5,555)




(3,767)




(11,011)




(6,432)


Gain on legal settlement



-




-




-




13,333


Loss on extinguishment of debt



-




(2,033)




-




(2,033)


Other income (expense)



193




(277)




(206)




(503)





(4,106)




(5,070)




(7,880)




6,225


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



(8,711)




(821)




(19,131)




9,900


Income tax benefit (provision)



1,342




497




3,599




(1,274)


Income (loss) before impairment loss and equity in net loss of affiliate



(7,369)




(324)




(15,532)




8,626


Impairment loss and equity in net loss of affiliate



-




(530)




(530)




(969)


Net income (loss)

$


(7,369)


$


(854)


$


(16,062)


$


7,657


Earnings (loss) per share:

















  Basic

$


(0.22)


$


(0.02)


$


(0.48)


$


0.22


  Diluted

$


(0.22)


$


(0.02)


$


(0.48)


$


0.21



















Shares used in computing earnings

















(loss) per share:

















  Basic



33,568




34,850




33,475




35,141


  Diluted



33,568




34,850




33,475




36,073




















 

CALAMP CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)


August 31,


February 28,


2019


2019

                                Assets














Current assets:








  Cash and cash equivalents

$


193,684


$


256,500

  Short-term marketable securities



7,789




17,512

  Accounts receivable, net



75,600




78,079

  Inventories



49,541




32,033

  Prepaid expenses and other current assets



24,555




19,373

       Total current assets



351,169




403,497









Property and equipment, net



56,920




27,023

Operating lease right-of-use assets



27,977




-

Deferred income tax assets



27,863




22,626

Goodwill



104,037




80,805

Other intangible assets, net



69,322




47,165

Other assets



22,154




22,510










$


659,442


$


603,626









                      Liabilities and Stockholders' Equity
















Current liabilities:








  Current portion of long-term debt

$


124,181


$


-

  Accounts payable



40,270




39,898

  Accrued payroll and employee benefits



9,329




8,808

  Deferred revenue



31,889




24,264

  Other current liabilities



15,325




10,622

      Total current liabilities



220,994




83,592









Long-term debt, net of current portion



175,916




275,905

Operating lease liabilities



29,780




-

Other non-current liabilities



39,456




38,476









Stockholders' equity:








  Common stock



341




336

  Additional paid-in capital



213,192




208,205

  Accumulated deficit



(18,289)




(2,227)

  Accumulated other comprehensive loss



(1,948)




(661)

      Total stockholders' equity



193,296




205,653


$


659,442


$


603,626









 


CALAMP CORP.


CONDENSED CONSOLIDATED CASH FLOW STATEMENTS


(Amounts in thousands)


(Unaudited)












Six Months Ended



August 31,




2019



2018

CASH FLOWS FROM OPERATING ACTIVITIES:









Net income (loss)

$


(16,062)


$


7,657


Depreciation



9,036




4,341


Intangible asset amortization expense



6,358




5,641


Stock-based compensation expense



5,726




5,147


Amortization of debt issue costs and discount



7,606




4,537


Impairment of operating lease right-of-use (ROU) assets



1,210




-


Noncash operating lease cost



3,100




-


Revenue assigned to factors



(3,109)




-


Loss on extinguishment of debt



-




2,033


Impairment loss on cost method investment



-




326


Tax benefits on vested and exercised equity awards



-




525


Deferred tax assets, net



(3,437)




(211)


Impairment loss and equity in net loss of affiliate



530




969


Other



456




115


Changes in operating assets and liabilities



(11,794)




5,753

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES



(380)




36,833










CASH FLOWS FROM INVESTING ACTIVITIES:









Proceeds from maturities and sale of marketable securities



27,340




32,792


Purchases of marketable securities



(17,617)




(40,312)


Capital expenditures



(10,720)




(5,770)


Acquisition, net of cash acquired



(60,634)




-


Advances to affiliate



(530)




(1,063)


Other



3




(78)

NET CASH USED IN INVESTING ACTIVITIES



(62,158)




(14,431)










CASH FLOWS FROM FINANCING ACTIVITIES:









Proceeds from issuance of 2025 Convertible Notes



-




230,000


Payment of debt issuance costs of 2025 Convertible Notes



-




(7,305)


Purchase of capped call on 2025 Convertible Notes



-




(21,160)


Repurchase of 2020 Convertible Notes



-




(53,683)


Proceeds on unwind of note hedge and warrants on 2020 Convertible Notes



-




3,122


Taxes paid related to net share settlement of vested equity awards



(1,729)




(3,347)


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



995




101


Repurchases of common stock



-




(28,564)

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES



(734)




119,164










EFFECT OF EXCHANGE RATE CHANGE ON CASH



456




(197)

Net change in cash and cash equivalents



(62,816)




141,369

Cash and cash equivalents at beginning of period



256,500




132,603

Cash and cash equivalents at end of period

$


193,684


$


273,972

 

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 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 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 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 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 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


Six Months Ended


August 31,


August 31,


2019


2018


2019


2018

GAAP basis net income (loss)

$


(7,369)


$


(854)


$


(16,062)


$


7,657

















Intangible assets amortization expense



3,318




2,893




6,358




5,641

Stock-based compensation expense



3,183




2,680




5,726




5,147

Non-cash interest expense



3,863




2,355




7,606




4,067

GAAP basis income tax provision (benefit)



(1,342)




(497)




(3,599)




1,274

Impairment loss and equity in net loss of affiliate



-




530




530




969

Acquisition and integration related expenses



46




-




1,190




-

Loss on extinguishment of debt



-




2,033




-




2,033

Realized gain on investment of equity securities



-




-




-




629

Gain on legal settlement



-




-




-




(13,333)

Litigation and non-recurring legal expenses



777




1,023




4,584




3,137

Restructuring



2,272




566




2,272




3,949

Other



459




447




920




692

Adjusted basis income before income taxes



5,207




11,176




9,525




21,862

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



(450)




(200)




(600)




(400)

Adjusted basis net income

$


4,757


$


10,976


$


8,925


$


21,462

















Adjusted basis net income per diluted share

$


0.14


$


0.31


$


0.26


$


0.59

















Weighted average common shares outstanding on diluted basis



33,799




35,718




33,766




36,073

















(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



Six Months Ended



August 31,



August 31,



2019



2018



2019



2018






















GAAP basis net income (loss)

$


(7,369)



$


(854)



$


(16,062)



$


7,657






















Investment income



(1,256)





(1,007)





(3,337)





(1,860)


Interest expense



5,555





3,767





11,011





6,432


Income tax provision (benefit)



(1,342)





(497)





(3,599)





1,274


Depreciation and amortization



8,509





5,191





15,394





9,982


Stock-based compensation



3,183





2,680





5,726





5,147


Impairment loss and equity in net loss of affiliate



-





530





530





969


Loss on extinguishment of debt



-





2,033





-





2,033


Acquisition and integration related expenses



46





-





1,190





-


Litigation and non-recurring legal expenses



777





1,023





4,584





3,137


Gain on legal settlement



-





-





-





(13,333)


Restructuring



2,272





566





2,272





3,949


Other



272





257





507





479


Adjusted EBITDA

$


10,647



$


13,689



$


18,216



$


25,866






















Revenue

$


93,236



$


96,037



$


182,306



$


190,925






















Adjusted EBITDA margin



11

%




14

%




10

%




14

%

 

CalAmp Corp. Logo

 

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