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CalAmp Reports Fiscal 2013 Third Quarter Results(Marketwire Via Acquire Media NewsEdge) OXNARD, CA -- (Marketwire) -- 12/20/12 -- CalAmp Corp. (NASDAQ: CAMP), a leading provider of wireless products, services and solutions, today reported results for its third quarter ended November 30, 2012. Highlights for the quarter include: Consolidated third quarter revenue of $44.3 million, up 35% compared to the third quarter last year; Wireless Datacom revenue up 40% year-over-year to an all-time high of $36.3 million. Third quarter GAAP net income of $4.2 million or $0.14 per diluted share, compared to $1.7 million, or $0.06 per diluted share, in third quarter of last year. Adjusted Basis (non-GAAP) net income of $5.2 million or $0.17 per diluted share, compared to $2.6 million, or $0.09 per diluted share, for the same period last year. Net cash provided by operations of $3.6 million in the third quarter, and total cash balance at quarter-end of $13.6 million. Commenting on the third quarter results, Michael Burdiek, CalAmp's President and Chief Executive Officer, said, "Our third quarter performance was driven by a 40% year-over-year revenue increase in our Wireless Datacom segment, due to continued strong demand for our Mobile Resource Management (MRM) solutions and growing contributions from our public safety and energy verticals. In addition, we closed the quarter with a higher backlog level compared to the second quarter, driven by strong bookings in MRM products, energy applications and international customer wins. Furthermore, we continue to see a healthy sales pipeline of new opportunities in our core segments that we believe should support ongoing growth in the coming years. In Satellite, we continue to be pleased with our performance and the contribution of this business to the bottom-line." Mr. Burdiek continued, "Separately, we just announced that we have signed a definitive agreement to acquire the operations of Wireless Matrix, a provider of fleet tracking applications and satellite communications services to the utility, oil and gas, rail and municipal verticals as well as to service fleets of large enterprise customers throughout North America. Its SaaS-based high margin recurring revenues account for approximately 85% of its total sales, with total revenues of approximately $30 million a year based on its just announced second quarter results. We expect that the Wireless Matrix transaction will result in greater scale, with an increase in our subscription and SaaS-based revenues to a level of approximately 20% of post-acquisition consolidated revenue. We expect this acquisition to be accretive on a non-GAAP basis in the near term while accelerating our growth prospects within our core markets and significantly enhancing our competitive positioning. We expect to complete this acquisition in March 2013." Fiscal 2013 Third Quarter ResultsTotal revenue for the fiscal 2013 third quarter was $44.3 million compared to $32.8 million for the third quarter of fiscal 2012, an increase of 35%. Wireless Datacom revenue increased 40% to $36.3 million from $25.9 million in the same period last year, and Satellite revenue was $8.0 million compared to $6.8 million in the third quarter last year. Consolidated gross profit for the fiscal 2013 third quarter was $14.0 million, an increase of $3.9 million over the same quarter last year that was primarily driven by higher revenue. The consolidated gross margin percentage was 31.6% in the fiscal 2013 third quarter, up from 31.0% in the third quarter last year, primarily due to substantial improvement in Satellite margins. GAAP-basis net income for the fiscal 2013 third quarter was $4.2 million, or $0.14 per diluted share, compared to net income of $1.7 million, or $0.06 per diluted share, in the third quarter of last year. Non-GAAP net income for the fiscal 2013 third quarter was $5.2 million, or $0.17 per diluted share, compared to non-GAAP net income of $2.6 million or $0.09 per diluted share for the same quarter last year. A reconciliation of the GAAP-basis pretax income to the non-GAAP net income is provided in the table at the end of this press release. LiquidityAs of November 30, 2012, the Company had cash and equivalents of $13.6 million and total debt of $5.3 million, including the $3.1 million carrying amount of a note payable issued in May 2012 in connection with the Navman Wireless asset purchase and supply agreement. Net cash (reflecting total cash less bank debt) at November 30, 2012 was $11.4 million, versus a net debt position of $2.1 million one year ago. Cash provided by operating activities during the third quarter was $3.6 million, and the unused borrowing capacity on the Company's bank revolver at the end of the third quarter was $9.8 million. Business OutlookCommenting on the Company's business outlook, Mr. Burdiek said, "We expect continued strong customer demand within our key verticals to drive significant year-over-year expansion of revenue and earnings in the fourth quarter of fiscal 2013. Based on our latest projections, we expect fiscal 2013 fourth quarter consolidated revenue in the range of $44 to $48 million. We anticipate Wireless Datacom revenue in the fourth quarter will be significantly higher year-over-year and relatively flat on a sequential quarter basis. Satellite revenue in the fourth quarter is expected to be up on a sequential quarter basis but down on a year-over-year basis. We expect that our fourth quarter operating results will be slightly impacted by acquisition-related expenses arising from the Wireless Matrix transaction." Mr. Burdiek continued, "In the fourth quarter we expect to recognize an income tax benefit of roughly $25 million that represents the tax savings associated with net operating loss and tax credit carryforwards that are expected to be utilized in future years. At the bottom line, we expect fourth quarter non-GAAP net income in the range of [$0.14 to $0.18] per diluted share and GAAP basis net income in the range of [$0.11 to $0.15] per diluted share before the effect of the aforementioned income tax benefit. The fourth quarter tax benefit at its currently estimated amount would add approximately $0.83 to the fourth quarter GAAP-basis EPS." Mr. Burdiek concluded, "Looking ahead to fiscal 2014 and beyond, the pending Wireless Matrix acquisition is expected to accelerate our growth prospects, strengthen our competitive position within key verticals and increase our subscription and SaaS-based revenues. We are excited about the opportunity to leverage the strengths of our two companies in addressing the needs of the rapidly growing MRM marketplace." Conference Call and WebcastA conference call and simultaneous webcast to discuss third 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 Michael Burdiek and CFO Rick Vitelle will host the conference call. Participants can dial into the live conference call by calling 877-407-0784 (1-201-689-8560 for international callers) and using the Conference ID # 405156. An audio replay will be available through December 27, 2012 by calling 877-870-5176 or 858-384-5517 and entering the Conference ID # 405156. 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 CalAmpCalAmp 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 enterprise, utility and government 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 wireless and satellite markets, the timing of customer approvals of new product designs, intellectual property infringement claims, the effects of the proposed automatic federal budget cuts if the scheduled sequester were to take effect in early 2013, interruption or failure of our Internet-based systems used to wirelessly configure and communicate with the tracking and monitoring devices that we sell, the ability to finance and consummate the Wireless Matrix acquisition, integration issues that may arise in connection with that acquisition, and other risks or uncertainties that are described in the Company's Report on Form 10-K for fiscal 2012 as filed on April 26, 2012 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 INCOME STATEMENTS (Unaudited, in thousands except per share amounts) Three Months Ended Nine Months Ended November 30, November 30, -------------------- -------------------- 2012 2011 2012 2011 --------- --------- --------- --------- Revenues $ 44,340 $ 32,752 $ 132,188 $ 101,107 Cost of revenues 30,308 22,583 90,345 69,681 --------- --------- --------- --------- Gross profit 14,032 10,169 41,843 31,426 --------- --------- --------- --------- Operating expenses: Research and development 3,564 2,622 10,393 8,405 Selling 2,982 2,731 8,963 8,175 General and administrative 2,699 2,606 8,849 8,135 Intangible asset amortization 475 310 1,267 972 --------- --------- --------- --------- 9,720 8,269 29,472 25,687 --------- --------- --------- --------- Operating income 4,312 1,900 12,371 5,739 Non-operating expense, net (138) (172) (330) (2,120) --------- --------- --------- --------- Income before income taxes 4,174 1,728 12,041 3,619 Income tax provision (19) (28) (45) (43) --------- --------- --------- --------- Net income $ 4,155 $ 1,700 $ 11,996 $ 3,576 ========= ========= ========= ========= Earnings per share - basic and diluted Basic $ 0.14 $ 0.06 $ 0.42 $ 0.13 Diluted $ 0.14 $ 0.06 $ 0.40 $ 0.13 Shares used in computing earnings per share: Basic 29,210 27,869 28,537 27,583 Diluted 30,096 28,800 29,684 28,445 BUSINESS SEGMENT INFORMATION (Unaudited, in thousands) Three Months Ended Nine Months Ended November 30, November 30, -------------------- -------------------- 2012 2011 2012 2011 --------- --------- --------- --------- Revenues Wireless DataCom $ 36,334 $ 25,905 $ 102,178 $ 73,465 Satellite 8,006 6,847 30,010 27,642 --------- --------- --------- --------- Total revenues $ 44,340 $ 32,752 $ 132,188 $ 101,107 ========= ========= ========= ========= Gross profit Wireless DataCom $ 12,612 $ 9,503 $ 36,786 $ 29,487 Satellite 1,420 666 5,057 1,939 --------- --------- --------- --------- Total gross profit $ 14,032 $ 10,169 $ 41,843 $ 31,426 ========= ========= ========= ========= Operating income (loss) Wireless DataCom $ 4,500 $ 2,999 $ 12,893 $ 9,528 Satellite 498 (156) 2,327 (891) Corporate expenses (686) (943) (2,849) (2,898) --------- --------- --------- --------- Total operating income $ 4,312 $ 1,900 $ 12,371 $ 5,739 ========= ========= ========= ========= CAL AMP CORP. CONSOLIDATED BALANCE SHEETS (In thousands) November 30, February 28, 2012 2012 ------------- ------------- Assets (Unaudited) Current assets: Cash and cash equivalents $ 13,560 $ 5,601 Accounts receivable, net 20,867 14,383 Inventories 13,237 10,057 Deferred income tax assets 6,459 5,425 Prepaid expenses and other current assets 3,371 4,323 ------------- ------------- Total current assets 57,494 39,789 Property, equipment and improvements, net 2,614 1,761 Deferred income tax assets, less current portion 5,378 6,412 Goodwill and other intangible assets, net 6,191 2,738 Other assets 905 781 ------------- ------------- $ 72,582 $ 51,481 ============= ============= Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 2,539 $ 1,100 Accounts payable 13,046 9,523 Accrued payroll and employee benefits 4,254 4,405 Deferred revenue 5,794 6,305 Other current liabilities 3,048 2,268 ------------- ------------- Total current liabilities 28,681 23,601 ------------- ------------- Long-term debt 2,796 1,900 Other non-current liabilities 1,770 1,003 Stockholders' equity: Common stock 298 287 Additional paid-in capital 156,836 154,485 Accumulated deficit (117,734) (129,730) Accumulated other comprehensive loss (65) (65) ------------- ------------- Total stockholders' equity 39,335 24,977 ------------- ------------- $ 72,582 $ 51,481 ============= ============= CAL AMP CORP. CONSOLIDATED CASH FLOW STATEMENTS (Unaudited - In thousands) Nine Months Ended November 30, ---------------------------- 2012 2011 ------------- ------------- Cash flows from operating activities: Net income $ 11,996 $ 3,576 Depreciation and amortization 1,995 1,899 Stock-based compensation expense 2,292 1,737 Amortization of debt issue costs and discount 248 733 Write-off of cumulative foreign currency translation account - 801 Changes in operating working capital (5,723) (1,248) Other 15 1 ------------- ------------- Net cash provided by operating activities 10,823 7,499 ------------- ------------- Cash flows from investing activities: Capital expenditures (1,396) (681) Navman Wireless asset purchase agreement (1,000) - Collections on note receivable 430 431 Other (8) (1) ------------- ------------- Net cash used in investing activities (1,974) (251) ------------- ------------- Cash flows from financing activities: Repayments of bank line of credit - (4,013) Debt proceeds (repayments) (960) 3,000 Repayment of subordinated notes payable - (5,000) Payment of debt issue costs - (65) Payment of withholding taxes on vested employee equity awards (2,551) (1,032) Proceeds from exercise of stock options and warrants 2,621 14 ------------- ------------- Net cash used in financing activities (890) (7,096) ------------- ------------- Net change in cash and cash equivalents 7,959 152 Cash and cash equivalents at beginning of period 5,601 4,241 ------------- ------------- Cash and cash equivalents at end of period $ 13,560 $ 4,393 ============= ============= CAL AMP CORP. NON-GAAP EARNINGS RECONCILIATION (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 and Adjusted Basis Net Income 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 Income and Adjusted Basis Net Income 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 Income to Adjusted Basis (non-GAAP) Net Income is as follows (in thousands except per share amounts): Three Months Ended Nine Months Ended November 30, November 30, -------------------- -------------------- 2012 2011 2012 2011 --------- --------- --------- --------- GAAP basis pretax income $ 4,174 $ 1,728 $ 12,041 $ 3,619 Amortization of intangible assets 475 310 1,267 972 Stock-based compensation expense 620 638 2,292 1,737 Write-off of cumulative foreign currency translation account - - 801 --------- --------- --------- --------- Pretax income (non-GAAP basis) 5,269 2,676 15,600 7,129 Income tax provision (non-GAAP basis) (a) (19) (28) (45) (43) --------- --------- --------- --------- Adjusted Basis net income $ 5,250 $ 2,648 $ 15,555 $ 7,086 ========= ========= ========= ========= Adjusted Basis net income per diluted share $ 0.17 $ 0.09 $ 0.52 $ 0.25 Weighted average common shares outstanding on diluted basis 30,096 28,800 29,684 28,445 (a) The non-GAAP income tax provision reflects the income taxes paid/payable (or received/receivable) based on the non-GAAP pretax income for the period. The Company has net operating loss carryforwards to offset the pre-tax book income for the three- and nine-month periods ended November 30, 2012 and 2011. AT CALAMP: Garo Sarkissian VP, Corporate Development (805) 987-9000 AT ADDO COMMUNICATIONS: Lasse Glassen (424) 238-6249 [email protected] Source: CalAmp Corp. |