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
- ----------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
CAL AMP REPORTS FISCAL 2006 THIRD QUARTER RESULTS
* Company Achieves 13% Revenue Growth and Earnings of $0.23 Per Diluted Share
* Operating Income Sets New Record
OXNARD, Calif., January 5, 2006--CalAmp Corp. (Nasdaq: CAMP), a leading
provider of wireless products and engineering services, today reported
results for its fiscal 2006 third quarter ended November 30, 2005, which
included record operating income performance.
Fiscal 2006 Third Quarter Results
Revenue in the latest quarter was $64.5 million, a 13% increase compared to
$57.1 million for the third quarter of last year. The increase in revenue
was driven by increased sales of DBS satellite products and 2-way wireless
modules along with the inclusion of the Company's Machine-to-Machine (M2M)
radio product line, which was acquired during the first quarter of fiscal
2006.
Operating income of $8.9 million in the latest quarter is $6 million higher
than the third quarter of last year. Net income in the latest quarter was
$5.4 million or $0.23 per diluted share. This compares favorably to net
income of $1.8 million or $0.08 per diluted share for the third quarter of
last year.
Gross profit for the third quarter of fiscal 2006 was $16.5 million, or 25.5%
of revenues compared to $10.3 million or 18.0% 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 coupled with ongoing actions taken to improve the financial
performance of the Solutions Division.
"During the fiscal third quarter, our performance was exceptionally strong
across the board and we met or exceeded the guidance we provided for our key
financial metrics," commented Fred Sturm, CalAmp's President and Chief
Executive Officer. "These results reflect the steady progress we are making
in improving CalAmp's profitability. While the increase in revenue was
primarily driven by strong demand for our DBS products with higher average
selling prices, our efforts to diversify our customer base and develop new
product offerings are also beginning to take hold as evidenced by improving
revenue contributions from our M2M and other wireless products."
Mr. Sturm continued, "Our operating income of $8.9 million in the latest
quarter substantially surpassed the previous single quarter record of $6.1
million established just one quarter ago, and our earnings per share of $0.23
was better than expected. These achievements reflected increased gross
profit contributed by our higher margin DBS, M2M and other wireless product
offerings. We also benefited from improving operating efficiencies and focus
on selling higher margin software products in our Solutions Division, where
gross margins increased substantially from the same period last year. The
Solutions Division continues to make good progress on the path to operating
profitability."
Liquidity
At November 30, 2005, the Company had total cash of $38.2 million, with $8.4
million in total outstanding debt. During the first nine months of fiscal
2006 total cash and cash equivalents increased by $7.2 million due primarily
to $14.4 million of cash provided from operating activities and $1.3 million
of proceeds from stock option exercises, partially offset by cash used for
the M2M product line acquisition of $4.9 million and debt reductions of $2.2
million. Inventory was $19.8 million at the end of the third quarter,
representing annualized turns of about 9 times. Accounts receivable
outstanding at the end of the third quarter represents a 47 day average
collection period, which is within expectations.
Business Outlook
Commenting on the Company's fiscal 2006 fourth quarter outlook, Mr. Sturm
said, "Based on our current projections, we estimate that fiscal 2006 fourth
quarter revenues will be in the range of $50 to $58 million, and that
earnings will be in the range of $0.13 to $0.18 per diluted share. The
anticipated sequential decline in fourth quarter revenues is due primarily to
the seasonality of DBS industry demand and the planned product transition by
one of our DBS customers. We believe the underlying trends in the DBS
industry remain very positive and that this does not represent a fundamental
change in either the industry's long-term outlook or in our overall share of
the DBS outdoor equipment market. We expect the increasing availability of
HDTV programming and digital video recording technology will continue to
require more advanced satellite TV reception products, which should be key
drivers of our DBS business going forward."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2006 third
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, public safety communications, the healthcare
industry 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", "should",
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-
<page>
CAL AMP CORP.
CONSOLIDATED INCOME STATEMENTS
(Unaudited, in thousands except per share amounts)
Three Months Ended Nine Months Ended
November 30, November 30,
------------------ ----------------
2005 2004 2005 2004
----- ------ ----- -----
Revenues $64,463 $57,066 $169,704 $152,890
Cost of revenues 47,999 46,767 129,127 123,966
------- ------- ------- -------
Gross profit 16,464 10,299 40,577 28,924
Operating expenses:
Research and development 2,585 2,315 7,142 6,190
Selling 1,914 1,847 5,582 4,651
General and administrative 2,679 2,786 7,900 8,410
Intangible asset amortization 403 486 1,375 1,207
In-process research and development - - 320 471
------ ------- ------- -------
7,581 7,434 22,319 20,929
------ ------- ------- -------
Operating income 8,883 2,865 18,258 7,995
Non-operating income (expense), net 162 8 231 (131)
------ ------- ------- -------
Income before income taxes 9,045 2,873 18,489 7,864
Income tax provision (3,606) (1,086) (7,392) (3,022)
------ ------- ------- -------
Net income $5,439 $ 1,787 $11,097 $ 4,842
======= ======= ======= =======
Net income per share:
Basic $0.24 $0.08 $0.49 $0.23
Diluted $0.23 $0.08 $0.48 $0.22
Shares used in per share calculations:
Basic 22,580 22,356 22,520 21,135
Diluted 23,592 23,113 23,272 21,891
Business Segment Information
Three Months Ended Nine Months Ended
November 30, November 30,
------------------ ----------------
2005 2004 2005 2004
----- ------ ----- -----
Revenue
Products Division $59,565 $50,425 $153,331 $133,980
Solutions Division 4,898 6,641 16,373 18,910
------- ------- ------- -------
Total revenue $64,463 $57,066 $169,704 $152,890
======= ======= ======== =======
Gross profit
Products Division $14,441 $ 8,737 $ 34,975 $ 24,506
Solutions Division 2,023 1,562 5,602 4,418
------- ------- ------- -------
Total gross profit $16,464 $10,299 $ 40,577 $ 28,924
======= ======= ======= =======
Operating income (loss)
Products Division $10,406 $ 6,191 $ 23,453 $ 16,861
Solutions Division (373) (2,379) (2,029) (5,971)
Corporate expenses (1,150) (947) (3,166) (2,895)
------- ------- ------- -------
Total operating income $ 8,883 $ 2,865 $ 18,258 $ 7,995
======= ======= ======= =======
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CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
November 30, February 28,
2005 2005
Assets ---- ----
Current assets:
Cash and cash equivalents $ 38,205 $ 31,048
Accounts receivable, net 36,164 27,027
Inventories 19,806 21,465
Deferred income tax assets 3,225 6,118
Prepaid expenses and other current assets 2,227 2,876
-------- --------
Total current assets 99,627 88,534
Equipment and improvements, net 5,383 5,383
Deferred income tax assets 2,747 5,285
Goodwill 92,605 92,834
Other intangible assets, net 5,807 4,028
Other assets 473 691
-------- --------
$206,642 $196,755
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2,425 $ 2,897
Accounts payable 16,720 18,389
Accrued payroll and employee benefits 3,623 3,652
Other accrued liabilities 4,366 3,127
Deferred revenue 1,297 1,597
-------- --------
Total current liabilities 28,431 29,662
-------- --------
Long-term debt, less current portion 5,964 7,679
-------- --------
Other non-current liabilities 1,091 1,126
-------- --------
Stockholders' equity:
Common stock 230 227
Additional paid-in capital 133,536 131,784
Common stock held in escrow (2,532) (2,548)
Retained earnings 40,723 29,626
Accumulated other comprehensive loss (801) (801)
-------- --------
Total stockholders' equity 171,156 158,288
-------- --------
$206,642 $196,755
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<page>
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Nine Months Ended
November 30,
----------
2005 2004
---- ----
Cash flows from operating activities:
Net income $ 11,097 $ 4,842
Depreciation and amortization 3,305 3,218
Write-off of in-process R&D 320 471
Equipment impairment writedowns - 241
Tax benefit of option exercises 678 224
Deferred tax assets, net 5,432 2,609
Changes in operating working capital (6,486) (3,375)
Other 16 (128)
-------- -------
Net cash provided by operating activities 14,362 8,102
-------- -------
Cash flows from investing activities:
Capital expenditures (1,555) (1,970)
Proceeds from sale of assets 143 835
Acquisition of Skybility business (4,897) -
Acquisition of Vytek Corp., net of cash acquired - (1,727)
-------- -------
Net cash used in investing activities (6,309) (2,862)
-------- -------
Cash flows from financing activities:
Debt repayments, net of borrowings (2,178) (2,300)
Proceeds from stock option exercises 1,282 703
-------- -------
Net cash used in financing activities (896) (1,597)
-------- -------
Net change in cash and cash equivalents 7,157 3,643
Cash and cash equivalents at beginning of period 31,048 22,885
-------- -------
Cash and cash equivalents at end of period $ 38,205 $26,528
======== =======