Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo CalAmp Corp.
1401 N. Rice Avenue
Oxnard, CA 93030
Nasdaq: CAMP
For Further Information:
AT THE COMPANY: AT FINANCIAL RELATIONS BOARD:
Rick Vitelle Lasse Glassen
Chief Financial Officer General Information
(805)987-9000 (310)854-8313
lglassen@financialrelationsboard.com
Amy Cozamanis
Investor/Analyst Information
(310)854-8314
acozamanis@financialrelationsboard.com
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FOR IMMEDIATE RELEASE
CAL AMP REPORTS FISCAL 2006 SECOND QUARTER RESULTS
* Q2 Net Income More than Doubles Driven by Gross Margin Improvements
* Operating Income Reaches Record Level
OXNARD, Calif., October 6, 2005--CalAmp Corp. (Nasdaq: CAMP), a leading
provider of wireless products and engineering services, today reported
results for its fiscal 2006 second quarter ended August 31, 2005.
Fiscal 2006 Second Quarter Results
Revenue for the fiscal 2006 second quarter was $57.7 million, a 13.4%
increase compared to $50.8 million for the second quarter of fiscal 2005.
In addition to the improved revenue from our DBS satellite products, the
increase is attributable to sales of 2-way wireless modules and to the
inclusion of our Machine-to-Machine (M2M) radios product line, which was
acquired during the first quarter of fiscal 2006.
Net income for the fiscal 2006 second quarter was $3.7 million or $0.16 per
diluted share compared to net income of $1.7 million or $0.08 per diluted
share for the second quarter of last year.
Gross profit for the second quarter of fiscal 2006 was $13.4 million, or
23.3% of revenues compared to $10.3 million or 20.3% of revenues for the
same period last year. The increases in gross profit and gross margin were
primarily the result of increased sales of higher-margin products of the
Products Division and ongoing actions taken to improve the financial
performance of the Solutions Division.
"We are very pleased with the improvements in profitability achieved during
the latest quarter," commented Fred Sturm, CalAmp's President and Chief
Executive Officer. "Our operating income of $6.1 million established a
record for a single quarter and earnings per share of $0.16 was higher than
our expected EPS range of $0.10 to $0.14. These results were driven by
improved gross margins in both the Products and Solutions Divisions."
Mr. Sturm continued, "During the quarter we benefited from increased
revenues in our higher margin M2M and other wireless product offerings. The
Solutions Division is also showing improved results as we continued to alter
its cost structure and focus our efforts on higher margin opportunities.
Although the Solutions Division experienced a decline in revenues as a
result of our decision to forego non-strategic and marginally profitable
business, gross margins increased to 34% in the latest quarter, from 23%
gross margins in the same period last year. We can now shift our focus to
growing the Solutions Division top line, which is an important factor in
meeting our target of achieving operating profitability by the fiscal 2006
fourth quarter."
Liquidity
At August 31, 2005, the Company had total cash of $33.1 million, with $9.1
million in total outstanding debt. During the first six months of fiscal
2006 total cash and cash equivalents increased by $2 million due primarily
to $9.1 million of cash provided from operating activities, partially offset
by cash used for the M2M product line acquisition of $4.9 million and debt
reductions of $1.5 million. Inventory was $21.3 million at the end of the
second quarter, representing annualized turns of about 8 times. Accounts
receivable outstanding at the end of the second quarter represents a 38 day
average collection period, which is within expectations.
Business Outlook
Commenting on the Company's fiscal 2006 third quarter outlook, Mr. Sturm
said, "Based on our current projections, we estimate that fiscal 2006 third
quarter revenues will be in the range of $60 to $68 million, and that
earnings will be in the range of $0.17 to $0.21 per diluted share. We expect
revenue for the full year of fiscal 2006 will grow approximately 10% over
last year."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2006 second
quarter financial results and business outlook will be held today at 4:30
p.m. Eastern / 1:30 p.m. Pacific. The 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.
CalAmp's President and CEO Fred Sturm and CFO Rick Vitelle will host the
conference call. 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 is a leading provider of wireless equipment, engineering services and
software that enable anytime/anywhere access to critical information, data
and entertainment content. With comprehensive capabilities ranging from
product design and development through volume production, CalAmp delivers
cost-effective high quality solutions to a broad array of customers and end
markets. CalAmp is the leading supplier of Direct Broadcast Satellite (DBS)
outdoor customer premise equipment to the U.S. satellite television market.
The Company also provides wireless connectivity solutions for the telemetry
and asset tracking markets, healthcare industry, enterprise-class Wi-Fi
networks and digital multimedia delivery applications. For additional
information, please visit the Company's website at www.calamp.com.
Forward-Looking Statement
Statements in this press release that are not historical in nature are
forward-looking statements, which involve known and unknown risks and
uncertainties. Words such as "may," "will," "expect," "intend," "plan,"
"believe," "seek," "could," "estimate," "judgment," "targeting," 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 general and industry economic conditions, competition,
development factors, operating costs, the Company's ability to eliminate
operating losses in its Solutions Division and make this business segment
profitable, and other risks and uncertainties that are detailed from time to
time in the Company's filings 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-
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CAL AMP CORP.
CONSOLIDATED INCOME STATEMENTS
(Unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ----------------
2005 2004 2005 2004
----- ------ ----- -----
Revenues $57,661 $50,827 $105,241 $95,824
Cost of revenues 44,246 40,503 81,128 77,199
------- -------- ------- -------
Gross profit 13,415 10,324 24,113 18,625
Operating expenses:
Research and development 2,360 2,068 4,557 3,875
Selling 1,796 1,732 3,668 2,804
General and administrative 2,607 3,179 5,221 5,624
Intangible asset amortization 529 461 972 721
In-process research and development 27 - 320 471
------ ------ ------- ------
7,319 7,440 14,738 13,495
------ ------ ------- ------
Operating income 6,096 2,884 9,375 5,130
Non-operating income (expense), net 26 (75) 69 (139)
------ ------ ------- ------
Income before income taxes 6,122 2,809 9,444 4,991
Income tax provision (2,441) (1,063) (3,786) (1,936)
------ ------ ------- ------
Net income $3,681 $1,746 $5,658 $ 3,055
======= ======= ======= =======
Net income per share:
Basic $0.16 $0.08 $0.25 $0.15
Diluted $0.16 $0.08 $0.24 $0.14
Shares used in per share calculations:
Basic 22,490 22,292 22,491 20,524
Diluted 23,314 22,809 23,112 21,224
Business Segment Information
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ----------------
2005 2004 2005 2004
----- ------ ----- -----
Revenue
Products Division $52,598 $43,056 $93,766 $83,555
Solutions Division 5,063 7,771 11,475 12,269
------- ------- ------- -------
Total revenue $57,661 $50,827 $105,241 $95,824
======= ======= ======== =======
Gross profit
Products Division $11,724 $ 8,503 $20,534 $15,769
Solutions Division 1,691 1,821 3,579 2,856
------- ------- ------- -------
Total gross profit $13,415 $10,324 $24,113 $18,625
======= ======= ======= =======
Operating income (loss)
Products Division $ 7,691 $ 6,036 $13,047 $10,670
Solutions Division (513) (2,083) (1,656) (3,592)
Corporate expenses (1,082) (1,069) (2,016) (1,948)
------- ------- ------- -------
Total operating income $ 6,096 $ 2,884 $ 9,375 $ 5,130
======= ======= ======= =======
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CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
August 31, February 28,
2005 2005
Assets ---- ----
Current assets:
Cash and cash equivalents $ 33,099 $ 31,048
Accounts receivable, net 25,571 27,027
Inventories 21,264 21,465
Deferred income tax assets 4,944 6,118
Prepaid expenses and other current assets 2,358 2,876
-------- --------
Total current assets 87,236 88,534
Equipment and improvements, net 5,490 5,383
Deferred income tax assets 4,211 5,285
Goodwill 92,595 92,834
Other intangible assets, net 6,235 4,028
Other assets 550 691
-------- --------
$196,317 $196,755
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2,857 $ 2,897
Accounts payable 13,384 18,389
Accrued payroll and employee benefits 2,915 3,652
Other accrued liabilities 4,492 3,127
Deferred revenue 1,256 1,597
-------- --------
Total current liabilities 24,904 29,662
-------- --------
Long-term debt, less current portion 6,250 7,679
-------- --------
Other non-current liabilities 1,116 1,126
-------- --------
Stockholders' equity:
Common stock 227 227
Additional paid-in capital 131,885 131,784
Common stock held in escrow (2,548) (2,548)
Retained earnings 35,284 29,626
Accumulated other comprehensive loss (801) (801)
-------- --------
Total stockholders' equity 164,047 158,288
-------- --------
$196,317 $196,755
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CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Six Months Ended
August 31,
----------
2005 2004
---- ----
Cash flows from operating activities:
Net income $ 5,658 $ 3,055
Depreciation and amortization 2,299 2,075
Write-off of in-process R&D 320 471
Equipment impairment writedowns - 201
Deferred tax assets, net 2,248 1,657
Changes in operating working capital (1,492) (1,875)
Other 42 143
-------- -------
Net cash provided by operating activities 9,075 5,727
-------- -------
Cash flows from investing activities:
Capital expenditures (1,060) (1,243)
Proceeds from sale of assets 141 627
Acquisition of Skybility business (4,897) -
Acquisition of Vytek Corp., net of cash acquired - (1,727)
-------- -------
Net cash used in investing activities (5,816) (2,343)
-------- -------
Cash flows from financing activities:
Debt repayments, net of borrowings (1,460) (1,557)
Proceeds from stock option exercises 252 556
-------- -------
Net cash used in financing activities (1,208) (1,001)
-------- -------
Net change in cash and cash equivalents 2,051 2,383
Cash and cash equivalents at beginning of period 31,048 22,885
-------- -------
Cash and cash equivalents at end of period $ 33,099 $25,268
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