-- Revenue of $29.5 million, up 23.2% from prior year and at high end of
guidance range.
-- Consolidated gross margin percentage of 25.0%, up from 20.1% in prior
year.
-- GAAP net loss of $0.9 million, or $0.03 loss per diluted share, better
than guidance; Adjusted Basis (non-GAAP) net loss of $0.2 million, or
$0.01 loss per diluted share, at high end of guidance range.
-- Second quarter net cash provided by operations of $0.4 million.
Rick Gold, CalAmp's Chief Executive Officer, commented, "We made
significant progress in the second quarter with consolidated revenue
increasing 23% year-over-year and 12% on a sequential quarter basis. We
are experiencing particularly strong growth in our wireless datacom
business with record revenues of mobile resource management (MRM) products
in the quarter and record backlog of wireless network products at the end
of the quarter. Demand for our MRM products is increasing in fleet
tracking, school bus tracking, trailer tracking and other emerging
applications. In addition, we are building momentum in the utility sector
where we are now engaged in more than two dozen new Smart Grid
infrastructure pilot projects. Based on the strong second quarter revenue,
our wireless datacom segment generated positive operating income for the
first time in nearly two years. Our Satellite segment also posted
improvements in the second quarter in revenue and operating profitability
on both a sequential and a year-over-year basis."
Fiscal 2011 Second Quarter Results
Total revenue for the fiscal 2011 second quarter was $29.5 million compared
to $23.9 million for the second quarter of fiscal 2010. The year-over-year
increase in revenues was due to higher sales in both the Company's wireless
datacom and satellite business segments. Wireless datacom revenue increased
29.3% to $18.1 million from $14.0 million in the same period last year,
while satellite revenue increased 14.6% to $11.4 million from $10.0 million
in the same period last year.
Consolidated gross profit for the fiscal 2011 second quarter was $7.4
million or 25.0% of revenue compared to gross profit of $4.8 million or
20.1% of revenue for the same period last year. The increase in gross
profit and gross margin percentage in the latest quarter were due primarily
to higher wireless datacom revenues.
Results of operations for the fiscal 2011 second quarter as determined in
accordance with U.S. generally accepted accounting principles ("GAAP") was
a net loss of $0.9 million or $0.03 per diluted share, compared to a net
loss of $4.2 million or $0.17 per diluted share in the second quarter of
last year.
The Adjusted Basis (non-GAAP) net loss for the fiscal 2011 second quarter
was $0.2 million, or $0.01 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 the end of the second quarter, the Company had total cash of $4.1
million and total debt of $12.1 million. Total debt at that date consisted
of $7.8 million drawn under the Company's revolving bank credit facility
and subordinated debt of $4.3 million. The unused borrowing capacity on
the bank revolver was $2.4 million at August 31, 2010. Net cash provided
by operating activities was $0.4 million during the second quarter of
fiscal 2011.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said, "Based on our
most recent projections, we expect fiscal 2011 third quarter consolidated
revenues will be in the range of $28 to $32 million, with GAAP Basis per
share results in the range of breakeven to a net loss of $0.04 per diluted
share. The Adjusted Basis income (loss) per share for the third quarter,
which excludes intangibles amortization expense and stock-based
compensation expense, is expected to be in the range of $0.02 net income to
$0.02 net loss per diluted share."
Mr. Gold added, "Looking at the full year, our wireless datacom segment
revenue is experiencing faster growth than our expectations at the
beginning of the year. However, because of some program delays, we do not
expect our satellite segment revenue to show the level of growth we had
previously expected in the third and fourth quarters. We now believe that
full-year fiscal 2011 consolidated revenues will be in the range of $115 to
$125 million, which includes expected year-over-year growth in wireless
datacom revenues of approximately 25%. Consolidated gross margin for
fiscal 2011 as a whole is expected to be in the range of 24% to 27% of
revenue, while total operating expenses for fiscal 2011 are expected to be
flat to slightly lower compared to fiscal 2010. We expect the full year
GAAP basis net loss to be in the range of $0.08 to $0.16 per diluted share
and Adjusted Basis income (loss) in the range of $0.03 net income to $0.05
net loss per diluted share. Looking further ahead, we believe the R&D
investments we have made in key growth markets including Smart Grid
communications are beginning to bear fruit and position us well for future
growth."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2011 second
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 877-941-8609 (480-629-9818 for international
callers). An audio replay will be available through October 13, 2010, by
calling 800-406-7325 (303-590-3030 for international callers) and entering
the access code 4370173.
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 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 Six Months Ended
August 31, August 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenues $ 29,490 $ 23,940 $ 55,836 $ 46,940
Cost of revenues 22,122 19,136 42,345 37,429
-------- -------- -------- --------
Gross profit 7,368 4,804 13,491 9,511
-------- -------- -------- --------
Operating expenses:
Research and development 2,779 2,633 5,542 5,531
Selling 2,675 2,402 5,297 4,603
General and administrative 2,200 2,501 4,709 5,258
Intangible asset amortization 276 342 582 683
-------- -------- -------- --------
7,930 7,878 16,130 16,075
-------- -------- -------- --------
Operating loss (562) (3,074) (2,639) (6,564)
Non-operating expense, net (368) (1,169) (768) (1,636)
-------- -------- -------- --------
Loss before income taxes (930) (4,243) (3,407) (8,200)
Income tax benefit - - - -
-------- -------- -------- --------
Net loss $ (930) $ (4,243) $ (3,407) $ (8,200)
======== ======== ======== ========
Basic and diluted loss per share $ (0.03) $ (0.17) $ (0.13) $ (0.33)
======== ======== ======== ========
Shares used in basic and diluted
per share calculations 27,094 24,918 27,038 24,889
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenue
Satellite $ 11,416 $ 9,964 $ 21,943 $ 19,213
Wireless DataCom 18,074 13,976 33,893 27,727
-------- -------- -------- --------
Total revenue $ 29,490 $ 23,940 $ 55,836 $ 46,940
Gross profit
Satellite $ 1,145 $ 331 $ 1,938 $ 758
Wireless DataCom 6,223 4,473 11,553 8,753
-------- -------- -------- --------
Total gross profit $ 7,368 $ 4,804 $ 13,491 $ 9,511
======== ======== ======== ========
Operating income (loss)
Satellite $ 31 $ (728) $ (239) $ (1,345)
Wireless DataCom 618 (1,299) 111 (2,943)
Corporate expenses (1,211) (1,047) (2,511) (2,276)
-------- -------- -------- --------
Total operating loss $ (562) $ (3,074) $ (2,639) $ (6,564)
======== ======== ======== ========
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
August 31, February 28,
2010 2010
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 4,051 $ 2,986
Accounts receivable, net 13,650 16,520
Inventories 11,987 10,608
Deferred income tax assets 2,161 2,656
Prepaid expenses and other current assets 4,551 4,720
------------ ------------
Total current assets 36,400 37,490
Equipment and improvements, net 2,087 2,055
Deferred income tax assets, less current
portion 9,686 10,017
Intangible assets, net 4,562 5,144
Other assets 1,783 2,247
------------ ------------
$ 54,518 $ 56,953
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Bank working capital line of credit $ 7,799 $ 5,901
Accounts payable 15,158 16,186
Accrued payroll and employee benefits 2,572 2,742
Deferred revenue 5,097 4,740
Other current liabilities 2,642 3,526
------------ ------------
Total current liabilities 33,268 33,095
------------ ------------
Long-term debt 4,315 4,170
Other non-current liabilities 546 489
Stockholders' equity:
Common stock 281 277
Additional paid-in capital 152,046 151,453
Accumulated deficit (135,072) (131,665)
Accumulated other comprehensive loss (866) (866)
------------ ------------
Total stockholders' equity 16,389 19,199
------------ ------------
$ 54,518 $ 56,953
============ ============
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Six Months Ended
August 31,
------------------
2010 2009
-------- --------
Cash flows from operating activities:
Net loss $ (3,407) $ (8,200)
Depreciation and amortization 1,253 1,283
Stock-based compensation expense 1,004 858
Amortization of debt issue costs and discount 268 -
Loss on sale of investment - 1,008
Deferred tax assets, net 807 -
Changes in operating working capital 104 8,567
Other 9 23
-------- --------
Net cash provided by operating activities 38 3,539
-------- --------
Cash flows from investing activities:
Capital expenditures (712) (544)
Proceeds from sale of investment - 992
Collections on note receivable 229 150
Other - (36)
-------- --------
Net cash (used in) provided by investing
activities (483) 562
-------- --------
Cash flows from financing activities:
Net proceeds from line of credit borrowing 1,898 1,000
Debt repayments - (7,683)
Taxes paid related to net share settlement of vested
equity awards (388) (105)
-------- --------
Net cash provided by (used in) financing
activities 1,510 (6,788)
-------- --------
Effect of exchange rate changes on cash - 175
-------- --------
Net change in cash and cash equivalents 1,065 (2,512)
Cash and cash equivalents at beginning of period 2,986 6,913
-------- --------
Cash and cash equivalents at end of period $ 4,051 $ 4,401
======== ========
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 Six Months Ended
August 31, August 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
GAAP basis pretax loss $ (930) $ (4,243) $ (3,407) $ (8,200)
Amortization of intangible assets 276 342 582 683
Stock-based compensation expense 481 446 1,004 858
-------- -------- -------- --------
Pretax income (loss) (non-GAAP
basis) (173) (3,455) (1,821) (6,659)
Income tax benefit (non-GAAP basis)
(a) 20 1,193 604 2,048
-------- -------- -------- --------
Adjusted basis (non-GAAP) net loss $ (153) $ (2,262) $ (1,217) $ (4,611)
======== ======== ======== ========
Adjusted basis net loss per diluted
share $ (0.01) $ (0.09) $ (0.05) $ (0.19)
Weighted average common shares
outstanding on diluted basis 27,094 24,918 27,038 24,889
(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