CalAmp Reports Fiscal 2017 Second Quarter Financial Results
Michael Burdiek,
Revenue for the second quarter of fiscal 2017 was
Gross profit for the second quarter of fiscal 2017 was
GAAP net income for the second quarter of fiscal 2017 was
As of
During the second quarter, the company purchased and retired approximately 580,000 shares of its common stock at an aggregate cost of
Recent Business Highlights
- One of the largest telematics service providers in
North America has chosen various CalAmp LMU and TTU telematics device lines for its range of fleet and asset management solutions. This recent development follows another significant customer win in the first quarter with Omnitracs. - The company launched the LoJack-branded LotSmart™ and SureDrive™ telematics applications.
-
CalAmp received certification of its Instant Crash Notification (ICN) service by independent insurance industry research company CESVIMAP, which provides objective evaluations of crash test results for vehicle repair and other collision damage services to insurance companies inEurope ,Latin America andChina . - The company announced that two customers, MapAnything and Chevin, have chosen the CalAmp Telematics Cloud suite of services to enable their respective telematics applications offerings. With these additional customers,
CalAmp now has six companies that rely on this innovative service platform to power their telematics solutions. - LoJack Italy, the wholly-owned LoJack licensee, maintained its rapid growth at over 60% year-over-year.
Business Outlook
The Company remains cautious in the very near-term as macro conditions in
Excluding
- Consolidated revenue in the range of
\\$81 to \\$87 million , along with GAAP basis results of operations in the range of(\\$0.02) net loss to\\$0.02 net income per diluted share and non-GAAP net income in the range of\\$0.24 to \\$0.30 per diluted share. - Adjusted EBITDA in the range of
\\$11 to \\$14 million .
In addition, the Company expects its core business to steadily strengthen through the balance of this year, with momentum building into fiscal 2018.
Conference Call and Webcast
About
Forward-Looking Statements
Statements in this press release that are not historical in nature are forward-looking statements that, within the meaning of the federal securities laws including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, 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. The forward-looking statements in this press release address a variety of subjects, including the outlook for our fiscal 2017 third and fourth quarter operating results. Readers are cautioned that actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including global economic conditions (including Brexit), competitive pressures and pricing declines, softer-than-expected demand from key customers, intellectual property infringement claims, and other risks or uncertainties that are described in Part I, Item 1A of our Annual Report on Form 10-K for fiscal 2016 as filed on
Non-GAAP Financial Measures
"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
In this press release,
AT CALAMP: | AT NMN ADVISORS: |
Garo Sarkissian | Nicole Noutsios |
SVP, Corporate Development | (510) 315-1003 |
(949) 600-5600 | nicole@nmnadvisors.com |
CAL AMP CORP. | ||||||||||||
CONSOLIDATED INCOME STATEMENTS | ||||||||||||
(Unaudited, in thousands except per share amounts) | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
August 31, | August 31, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Revenues | \\$ | 90,479 | \\$ | 69,808 | \\$ | 181,626 | \\$ | 135,237 | ||||
Cost of revenues | 52,865 | 44,505 | 109,178 | 86,408 | ||||||||
Gross profit | 37,614 | 25,303 | 72,448 | 48,829 | ||||||||
Operating expenses: | ||||||||||||
Research and development | 5,885 | 4,995 | 11,976 | 9,560 | ||||||||
Selling | 12,683 | 5,847 | 23,991 | 11,345 | ||||||||
General and administrative | 11,284 | 4,908 | 27,267 | 9,683 | ||||||||
Intangible asset amortization | 3,856 | 1,655 | 7,346 | 3,299 | ||||||||
33,708 | 17,405 | 70,580 | 33,887 | |||||||||
Operating income | 3,906 | 7,898 | 1,868 | 14,942 | ||||||||
Non-operating income (expense): | ||||||||||||
Investment income (loss) | 455 | (43) | 908 | (15) | ||||||||
Interest expense | (2,474) | (2,280) | (4,898) | (2,928) | ||||||||
Other income (expense) | (130) | (18) | 413 | (29) | ||||||||
(2,149) | (2,341) | (3,577) | (2,972) | |||||||||
Income (loss) before income taxes and | ||||||||||||
equity in net loss of affiliate | 1,757 | 5,557 | (1,709) | 11,970 | ||||||||
Income tax benefit (provision) | (864) | (2,058) | 255 | (4,412) | ||||||||
Income (loss) before equity in net | ||||||||||||
loss of affiliate | 893 | 3,499 | (1,454) | 7,558 | ||||||||
Equity in net loss of affiliate | (372) | - | (684) | - | ||||||||
Net income (loss) | \\$ | 521 | \\$ | 3,499 | \\$ | (2,138) | \\$ | 7,558 | ||||
Earnings (loss) per share: | ||||||||||||
Basic | \\$ | 0.01 | \\$ | 0.10 | \\$ | (0.06) | \\$ | 0.21 | ||||
Diluted | \\$ | 0.01 | \\$ | 0.10 | \\$ | (0.06) | \\$ | 0.21 | ||||
Shares used in computing earnings (loss) per share: | ||||||||||||
Basic | 36,390 | 36,135 | 36,425 | 36,049 | ||||||||
Diluted | 36,849 | 36,716 | 36,425 | 36,691 | ||||||||
BUSINESS SEGMENT INFORMATION | ||||||||||||
(Unaudited, in thousands) | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
August 31, | August 31, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Revenues | ||||||||||||
Wireless DataCom | \\$ | 83,807 | \\$ | 61,819 | \\$ | 166,557 | \\$ | 119,645 | ||||
Satellite | 6,672 | 7,989 | 15,069 | 15,592 | ||||||||
Total revenues | \\$ | 90,479 | \\$ | 69,808 | \\$ | 181,626 | \\$ | 135,237 | ||||
Gross profit | ||||||||||||
Wireless DataCom | \\$ | 36,209 | \\$ | 23,098 | \\$ | 68,719 | \\$ | 44,686 | ||||
Satellite | 1,405 | 2,205 | 3,729 | 4,143 | ||||||||
Total gross profit | \\$ | 37,614 | \\$ | 25,303 | \\$ | 72,448 | \\$ | 48,829 | ||||
Operating income | ||||||||||||
Wireless DataCom | \\$ | 5,035 | \\$ | 7,529 | \\$ | 6,072 | \\$ | 14,419 | ||||
Satellite | 139 | 1,557 | 1,547 | 2,777 | ||||||||
Corporate expenses | (1,268) | (1,188) | (5,751) | (2,254) | ||||||||
Total operating income | \\$ | 3,906 | \\$ | 7,898 | \\$ | 1,868 | \\$ | 14,942 | ||||
- more - |
CAL AMP CORP. | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(In thousands) | ||||||||||
August 31, | February 29, | |||||||||
2016 | 2016 | |||||||||
Assets | (Unaudited) | |||||||||
Current assets: | ||||||||||
Cash and cash equivalents | \\$ | 94,705 | \\$ | 139,388 | ||||||
Short-term marketable securities | 22,299 | 88,718 | ||||||||
Accounts receivable, net | 68,766 | 49,432 | ||||||||
Inventories | 27,999 | 16,731 | ||||||||
Prepaid expenses and other current assets | 7,314 | 4,498 | ||||||||
Total current assets | 221,083 | 298,767 | ||||||||
Property, equipment and improvements, net | 21,599 | 11,225 | ||||||||
Deferred income tax assets | 28,604 | 30,213 | ||||||||
Goodwill | 63,180 | 16,508 | ||||||||
Other intangible assets, net | 74,916 | 17,010 | ||||||||
Other assets | 10,777 | 10,640 | ||||||||
\\$ | 420,159 | \\$ | 384,363 | |||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | \\$ | 36,604 | \\$ | 24,938 | ||||||
Accrued payroll and employee benefits | 10,800 | 6,814 | ||||||||
Deferred revenue | 16,855 | 9,438 | ||||||||
Other current liabilities | 17,945 | 8,375 | ||||||||
Total current liabilities | 82,204 | 49,565 | ||||||||
1.625% convertible senior unsecured notes | 143,260 | 139,800 | ||||||||
Other non-current liabilities | 13,500 | 5,551 | ||||||||
Stockholders' equity: | ||||||||||
Common stock | 364 | 367 | ||||||||
Additional paid-in capital | 223,680 | 229,159 | ||||||||
Accumulated deficit | (41,991) | (39,853) | ||||||||
Accumulated other comprehensive loss | (858) | (226) | ||||||||
Total stockholders' equity | 181,195 | 189,447 | ||||||||
\\$ | 420,159 | \\$ | 384,363 | |||||||
- more - |
CAL AMP CORP. | |||||||||||
CONSOLIDATED CASH FLOW STATEMENTS | |||||||||||
(Unaudited - In thousands) | |||||||||||
Six Months Ended | |||||||||||
August 31, | |||||||||||
2016 | 2015 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | \\$ | (2,138) | \\$ | 7,558 | |||||||
Depreciation expense | 4,032 | 1,675 | |||||||||
Intangible assets amortization expense | 7,346 | 3,299 | |||||||||
Stock-based compensation expense | 3,605 | 2,609 | |||||||||
Amortization of convertible debt issue costs and discount | 3,460 | 2,019 | |||||||||
Foreign currency remeasurement gains | (460) | - | |||||||||
Deferred tax assets, net | (1,091) | 4,106 | |||||||||
Equity in net loss of affiliate | 684 | - | |||||||||
Impairment of internal use software | 1,364 | - | |||||||||
Other | 14 | 7 | |||||||||
Changes in operating working capital | 2,500 | 7,489 | |||||||||
Net cash provided by operating activities | 19,316 | 28,762 | |||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from maturities of marketable securities | 66,419 | 6,634 | |||||||||
Purchases of marketable securities | - | (114,010) | |||||||||
Capital expenditures | (3,527) | (2,576) | |||||||||
Acquisition of Crashboxx | - | (1,500) | |||||||||
Acquisition of LoJack, net of cash acquired | (116,982) | - | |||||||||
Advances to unconsolidated subsidiary | (737) | - | |||||||||
Other | (36) | - | |||||||||
Net cash used in investing activities | (54,863) | (111,452) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of convertible notes | - | 172,500 | |||||||||
Payments of debt issuance costs | - | (5,291) | |||||||||
Purchase of convertible note hedges | - | (31,343) | |||||||||
Proceeds from issuance of warrants | - | 15,991 | |||||||||
Payment of acquisition-related note and contingent consideration | - | (1,262) | |||||||||
Repurchases of common stock | (8,451) | - | |||||||||
Taxes paid related to net share settlement of vested equity awards | (1,416) | (2,478) | |||||||||
Proceeds from exercise of stock options | 780 | 487 | |||||||||
Net cash provided (used) by financing activities | (9,087) | 148,604 | |||||||||
Effect of exchange rate changes on cash | (49) | - | |||||||||
Net change in cash and cash equivalents | (44,683) | 65,914 | |||||||||
Cash and cash equivalents at beginning of period | 139,388 | 34,184 | |||||||||
Cash and cash equivalents at end of period | \\$ | 94,705 | \\$ | 100,098 | |||||||
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CAL AMP 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 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, Adjusted basis net income per diluted share, | |||||||||||||||||
non-GAAP gross margin, Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization and | |||||||||||||||||
Stock-Based Compensation and other adjustments as identified below), and Adjusted EBITDA margin. 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 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 the 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, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
GAAP basis net income (loss) | \\$ | 521 | \\$ | 3,499 | \\$ | (2,138) | \\$ | 7,558 | |||||||||
Intangible assets amortization expense | 3,856 | 1,655 | 7,346 | 3,299 | |||||||||||||
Stock-based compensation expense | 1,621 | 1,389 | 3,605 | 2,609 | |||||||||||||
Non-cash interest expense from amortization of debt discount | 1,562 | 1,353 | 3,069 | 1,736 | |||||||||||||
GAAP basis income tax provision (benefit) | 864 | 2,058 | (255) | 4,412 | |||||||||||||
Equity in net loss of affiliate | 372 | - | 684 | - | |||||||||||||
Acquisition and integration expenses | - | - | 3,539 | - | |||||||||||||
Non-cash cost of sales and depreciation on markup of | |||||||||||||||||
LoJack inventory and fixed assets | 671 | - | 4,681 | - | |||||||||||||
Legal arbitration expenses for LoJack battery claim | 1,080 | - | 1,460 | - | |||||||||||||
Adjusted basis income before income taxes | 10,547 | 9,954 | 21,991 | 19,614 | |||||||||||||
Income tax provision (non-GAAP basis) (a) | (463) | (116) | (847) | (287) | |||||||||||||
Adjusted basis net income | \\$ | 10,084 | \\$ | 9,838 | \\$ | 21,144 | \\$ | 19,327 | |||||||||
Adjusted basis net income per diluted share | \\$ | 0.27 | \\$ | 0.27 | \\$ | 0.57 | \\$ | 0.53 | |||||||||
Weighted average common shares outstanding on diluted basis | 36,849 | 36,716 | 36,931 | 36,691 | |||||||||||||
(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 | |||||||||||||||||
loss 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, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
GAAP basis net income (loss) | \\$ | 521 | \\$ | 3,499 | \\$ | (2,138) | \\$ | 7,558 | |||||||||
Investment income | (455) | 43 | (908) | 15 | |||||||||||||
Interest expense | 2,474 | 2,280 | 4,898 | 2,928 | |||||||||||||
GAAP basis income tax provision (benefit) | 864 | 2,058 | (255) | 4,412 | |||||||||||||
Depreciation expense | 2,211 | 883 | 4,032 | 1,675 | |||||||||||||
Intangible assets amortization expense | 3,856 | 1,655 | 7,346 | 3,299 | |||||||||||||
Stock-based compensation expense | 1,621 | 1,389 | 3,605 | 2,609 | |||||||||||||
Equity in net loss of affiliate | 372 | - | 684 | - | |||||||||||||
Acquisition and integration expenses | - | - | 3,539 | - | |||||||||||||
Non-cash cost of sales on markup of LoJack inventory | 309 | - | 4,319 | - | |||||||||||||
Legal arbitration expenses for LoJack battery claim | 1,080 | - | 1,460 | - | |||||||||||||
Adjusted EBITDA | \\$ | 12,853 | \\$ | 11,807 | \\$ | 26,582 | \\$ | 22,496 | |||||||||
Revenue | \\$ | 90,479 | \\$ | 69,808 | \\$ | 181,626 | \\$ | 135,237 | |||||||||
Adjusted EBITDA margin | 14.2% | 16.9% | 14.6% | 16.6% | |||||||||||||
The calculation of non-GAAP gross margin is as follows (dollars in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
August 31, | August 31, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
GAAP basis gross profit | \\$ | 37,614 | \\$ | 25,303 | \\$ | 72,448 | \\$ | 48,829 | |||||||||
Non-cash cost of sales on markup of LoJack inventory and fixed assets | 357 | - | 4,367 | - | |||||||||||||
Non-GAAP gross profit | \\$ | 37,971 | \\$ | 25,303 | \\$ | 76,815 | \\$ | 48,829 | |||||||||
Revenue | \\$ | 90,479 | \\$ | 69,808 | \\$ | 181,626 | \\$ | 135,237 | |||||||||
Non-GAAP gross margin | 42.0% | 36.2% | 42.3% | 36.1% | |||||||||||||
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