-- Consolidated second quarter revenues of $23.9 million, within guidance
and 4% higher than prior quarter.
-- Second quarter GAAP net loss of $4.2 million, or $0.17 per diluted
share; Adjusted basis (non-GAAP) loss of $2.3 million or $0.09 per diluted
share. Included in the GAAP and adjusted basis loss is a $1 million pre-tax
charge (or $0.04 per diluted share on a GAAP basis and $0.02 per diluted
share on an adjusted basis) related to a loss on the sale of preferred
stock in a privately held company.
-- Second quarter net cash provided by operations of $2.9 million.
-- Total debt balance reduced by $3.6 million in second quarter to $14.4
million.
Rick Gold, CalAmp's President and Chief Executive Officer, commented, "I am
pleased by our ability to continue growing revenue and generating operating
cash flow in this challenging economic environment. Our second sequential
quarter of top line growth was driven by the continued ramp of unit volumes
in our satellite products business, which showed an 8% increase in revenues
over the previous quarter, and a 2% sequential revenue growth in our
wireless datacom business. Looking ahead, I am encouraged by the strong
demand we are seeing for our satellite products in the second half of FY10,
and the expanding pipeline of new business opportunities in our wireless
datacom business."
Mr. Gold continued, "In addition, we remain committed to improving our
balance sheet and enhancing our financial flexibility. During the second
quarter, our focus on working capital management helped generate $2.9
million in cash flow from operations, and we reduced total debt by $3.6
million to a balance of $14.4 million."
Fiscal 2010 Second Quarter Results
Total revenue for the fiscal 2010 second quarter was $23.9 million compared
to $23.3 million for the second quarter of fiscal 2009. The year-over-year
increase in revenues was due primarily to higher sales of the Company's
satellite products, partially offset by lower sales of its wireless datacom
products.
Gross profit for the fiscal 2010 second quarter was $4.8 million or 20.1%
of revenues compared to gross profit of $7.5 million or 32.0% of revenue
for the same period last year. The reduction in gross profit and gross
margin percentage in the latest quarter was due primarily to lower wireless
datacom revenues.
Results of operations for the fiscal 2010 second quarter as determined in
accordance with U.S. Generally Accepted Accounting Principles ("GAAP") was
a net loss of $4.2 million or $0.17 loss per diluted share. This compares
to a net loss of $1.5 million or $0.06 loss per diluted share in the second
quarter of last year.
The Adjusted Basis (non-GAAP) net loss for the fiscal 2010 second quarter
was $2.3 million or $0.09 loss per diluted share compared to Adjusted Basis
net loss of $0.6 million or $0.02 loss per diluted share for the same
period last year. The Adjusted Basis net loss excludes the impact of
changes in the deferred income tax asset valuation allowance, amortization
of intangible assets and stock-based compensation expense, each net of tax
to the extent applicable. A reconciliation of the GAAP basis net loss to
Adjusted Basis net loss is provided in the table at the end of this press
release.
Included in the second quarter GAAP and Adjusted Basis net loss is a
pre-tax loss of approximately $1 million related to the sale of preferred
stock in a privately-held company. Net of tax, this amounted to $0.04 per
diluted share on a GAAP basis and $0.02 per diluted share on an Adjusted
Basis Pursuant to CalAmp's bank credit agreement, $1 million, representing
substantially all of the net proceeds of this asset sale, was applied to
the outstanding balance of CalAmp's bank term loan.
Liquidity
At August 31, 2009, the Company had total cash of $4.4 million, with $14.0
million in total outstanding bank debt and a $0.4 million note payable to a
key Direct Broadcast Satellite ("DBS") customer. Net cash provided by
operating activities was $2.9 million for the three months ended August 31,
2009. During the latest quarter, the principal on the Company's bank loan
was paid down by $1.8 million and the principal on the note payable to the
DBS customer was also paid down by $1.8 million.
The Company's bank term loan has a maturity date of December 31, 2009, and
consequently the entire term loan balance is classified as a current
liability in the Consolidated Balance Sheet at August 31, 2009. The Company
is currently in active discussions with several banks, and expects to
refinance the term loan prior to the end of calendar 2009 from the proceeds
of an asset-based loan, possibly supplemented by proceeds from other
funding sources. The Company also expects to retire the note payable to a
key DBS customer during the fiscal third quarter.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said, "We are
experiencing a sharp increase in demand for our satellite products in the
second half of fiscal 2010. We expect to see fiscal third quarter
consolidated revenues increase significantly on a sequential quarter basis
and be in the range of $29 to $32 million, with a GAAP basis net loss in
the range of $0.03 to $0.07 per diluted share. The Adjusted Basis
(non-GAAP) results of operations for the third quarter, which exclude
changes in the valuation allowance for U.S. deferred tax assets,
intangibles amortization expense net of tax and stock-based compensation
expense net of tax, are expected to be in the range of $0.04 net loss to
breakeven. With the increased demand and strong operating momentum we
expect further growth in the fiscal 2010 fourth quarter with consolidated
revenues in the $34 to $38 million range and GAAP-basis profitability."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2010 second
quarter financial results and business outlook will be held today at 4:30
p.m. Eastern / 1:30 p.m. Pacific. CalAmp's President and CEO Rick Gold and
CFO Rick Vitelle will host the conference call. Participants can dial into
the live conference call by calling 877-941-6009 (480-629-9771 for
international callers). An audio replay will be available through October
15, 2009, by calling 800-406-7325 (303-590-3030 for international callers)
and entering the access code 4168016.
Additionally, a live webcast of the call is available on CalAmp's web site
at www.calamp.com. Participants are encouraged to visit the web site at
least 15 minutes prior to the start of the call to register, download and
install any necessary audio software. After the live webcast, a replay will
remain available until the next quarterly conference call in the Investor
Relations section of CalAmp's web site.
About CalAmp Corp.
CalAmp provides wireless communications solutions that enable
anytime/anywhere access to critical data and content. The Company serves
customers in the public safety, industrial monitoring and controls, mobile
resource management and direct broadcast satellite markets. The Company's
products are marketed under the CalAmp, Dataradio, SmartLink, Aercept,
LandCell and Omega trade names. 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, the Company's ability to refinance or extend
its bank term loan prior to the December 31, 2009 maturity date, and other
risks or uncertainties that are described in the Company's Annual Report on
Form 10-K for fiscal 2009 as filed on May 12, 2009 with the Securities and
Exchange Commission. Although the Company believes the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, it can give no assurance that its expectations will be
attained. The Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
-Financial Tables to Follow-
CAL AMP CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenues $ 23,940 $ 23,308 $ 46,940 $ 51,209
Cost of revenues 19,136 15,840 37,429 34,312
-------- -------- -------- --------
Gross profit 4,804 7,468 9,511 16,897
-------- -------- -------- --------
Operating expenses:
Research and development 2,633 3,131 5,531 6,331
Selling 2,402 1,647 4,603 3,919
General and administrative 2,501 3,266 5,258 6,362
Intangible asset amortization 342 1,240 683 2,572
-------- -------- -------- --------
7,878 9,284 16,075 19,184
-------- -------- -------- --------
Operating loss (3,074) (1,816) (6,564) (2,287)
Non-operating expense, net (1,169) (334) (1,636) (750)
-------- -------- -------- --------
Loss before income taxes (4,243) (2,150) (8,200) (3,037)
Income tax benefit - 652 - 1,042
-------- -------- -------- --------
Net loss $ (4,243) $ (1,498) $ (8,200) $ (1,995)
======== ======== ======== ========
Basic and diluted loss per share $ (0.17) $ (0.06) $ (0.33) $ (0.08)
======== ======== ======== ========
Shares used in basic and diluted
per share calculations 24,918 24,737 24,889 24,720
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenue
Satellite $ 9,964 $ 3,176 $ 19,213 $ 10,817
Wireless DataCom 13,976 20,132 27,727 40,392
-------- -------- -------- --------
Total revenue $ 23,940 $ 23,308 $ 46,940 $ 51,209
======== ======== ======== ========
Gross profit
Satellite $ 331 $ (81) $ 758 $ 652
Wireless DataCom 4,473 7,549 8,753 16,245
-------- -------- -------- --------
Total gross profit $ 4,804 $ 7,468 $ 9,511 $ 16,897
======== ======== ======== ========
Operating income (loss)
Satellite $ (728) $ (1,324) $ (1,345) $ (1,656)
Wireless DataCom (1,299) 916 (2,943) 1,973
Corporate expenses (1,047) (1,408) (2,276) (2,604)
-------- -------- -------- --------
Total operating loss $ (3,074) $ (1,816) $ (6,564) $ (2,287)
======== ======== ======== ========
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
August 31, February 28,
2009 2009
----------- ------------
Assets
Current assets:
Cash and cash equivalents $ 4,401 $ 6,913
Accounts receivable, net 12,178 13,682
Inventories 11,671 15,139
Deferred income tax assets 3,274 3,479
Prepaid expenses and other current assets 4,253 4,962
----------- ------------
Total current assets 35,777 44,175
Equipment and improvements, net 2,085 2,139
Deferred income tax assets, less current portion 13,252 13,111
Other intangible assets, net 5,828 6,473
Other assets 1,783 3,749
----------- ------------
$ 58,725 $ 69,647
=========== ============
Liabilities and Stockholders' Equity
Current liabilities:
Bank loan payable $ 13,985 $ 17,550
Subordinated note payable 410 3,528
Accounts payable 10,746 5,422
Accrued payroll and employee benefits 2,630 3,380
Accrued warranty costs 2,657 3,286
Other accrued liabilities 7,553 8,683
Deferred revenue 3,853 3,609
----------- ------------
Total current liabilities 41,834 45,458
----------- ------------
Non-current liabilities 975 990
Stockholders' equity:
Common stock 257 252
Additional paid-in capital 145,537 144,881
Accumulated deficit (129,014) (120,814)
Accumulated other comprehensive loss (864) (1,120)
----------- ------------
Total stockholders' equity 15,916 23,199
----------- ------------
$ 58,725 $ 69,647
=========== ============
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Six Months Ended
August 31,
----------------------
2009 2008
---------- ----------
Cash flows from operating activities:
Net loss $ (8,200) $ (1,995)
Depreciation and amortization 1,283 3,770
Stock-based compensation expense 858 361
Loss on sale of investment 1,008 -
Deferred tax assets, net - (1,046)
Changes in operating working capital 8,462 (376)
Other 23 -
---------- ----------
Net cash provided by operating activities 3,434 714
---------- ----------
Cash flows from investing activities:
Capital expenditures (544) (561)
Proceeds from sale of investment 992 -
Collections on note receivable 150 420
Earnout payments on TechnoCom acquisition - (872)
Other (36) 296
---------- ----------
Net cash provided (used) by investing
activities 562 (717)
---------- ----------
Cash flows from financing activities:
Proceeds from line of credit borrowing 1,000 -
Debt repayments (7,683) (1,500)
---------- ----------
Net cash used in financing activities (6,683) (1,500)
---------- ----------
Effect of exchange rate changes on cash 175 (388)
---------- ----------
Net change in cash and cash equivalents (2,512) (1,891)
Cash and cash equivalents at beginning of period 6,913 6,588
---------- ----------
Cash and cash equivalents at end of period $ 4,401 $ 4,697
========== ==========
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 Net Loss to Adjusted Basis (non-GAAP) Net Loss is as follows:
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
GAAP Basis Net Loss $ (4,243) $ (1,498) $ (8,200) $ (1,995)
Adjustments to reconcile to
Adjusted Basis Net Loss:
Increase in valuation allowance
for U.S. deferred tax assets 1,473 - 2,597 -
Amortization of intangible
assets, net of tax (1) 203 720 405 1,494
Stock-based compensation
expense, net of tax (1) 264 205 509 210
-------- -------- -------- --------
Adjusted Basis Net Loss $ (2,303) $ (573) $ (4,689) $ (291)
======== ======== ======== ========
Adjusted Basis Net Loss Per Diluted
Share $ (0.09) $ (0.02) $ (0.19) $ (0.01)
Weighted average common shares
Outstanding on diluted basis 24,918 24,737 24,889 24,720
(1) These reconciling items are tax effected using the Company's combined
U.S. federal and state statutory tax rate of 40.7% and 41.9% for the
six months ended August 31, 2009 and 2008, respectively.
Contact Information: AT THE COMPANY: Rick Vitelle Chief Financial Officer (805) 987-9000 AT FINANCIAL RELATIONS BOARD: Lasse Glassen General Information (213) 486-6546