Exhibit 99.2
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
- ----------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
CalAmp Reports FY 2006 Fourth Quarter and Year-End Results
* Company Achieves Record Full Year EPS of $0.62, Up 72% Over Prior Year
* Fourth Quarter Revenues of $47.8M and $0.15 EPS
OXNARD, Calif., May 9, 2006--CalAmp Corp. (Nasdaq: CAMP), a leading provider
of wireless products and engineering services, today reported results for its
fiscal 2006 full year and fourth quarter ended February 28, 2006.
Fourth Quarter and Fiscal Year 2006 Results
Revenue in the fiscal 2006 fourth quarter was $47.8 million compared to $67.1
million for the fourth quarter of last year. Sales in last year's fourth
quarter were benefited by the launch of a new product by one of the Direct
Broadcast Satellite (DBS) service providers for which CalAmp was the sole
supplier at that time.
Gross profit for the fourth quarter of fiscal 2006 was $12.2 million, or
25.5% of revenues, compared to $12.5 million, or 18.6% of revenues, for the
same period last year. The increase in gross margin was primarily the result
of improved operating efficiencies and increased sales of higher margin
products of the Products Division.
Operating income of $5.6 million in the quarter is $0.6 million higher than
the fourth quarter of last year, despite lower revenue. Net income in the
quarter was $3.5 million or $0.15 per diluted share, compared to net income
of $3.2 million or $0.14 per diluted share for the fourth quarter of last
year.
For the year ended February 28, 2006 revenue was $217 million, essentially
flat with the prior year. Gross profit of $52.7 million represented a year-
over-year improvement of $11.3 million, or 27%. Net income during fiscal
2006 was $14.6 million, which is an 80% increase over the prior year.
Diluted EPS increased 72% from $0.36 in fiscal 2005 to $0.62 in fiscal 2006,
which is a record for the Company.
"I continue to be quite pleased with our operating execution. Gross margins
remained very strong and the Company generated record cash flow from
operations in fiscal 2006," commented Fred Sturm, CalAmp's President and
Chief Executive Officer. "Our revenue for the fourth quarter reflected the
seasonally lower market demand for DBS products. This market continues to
provide unique opportunities as our customers roll-out additional services
including HDTV while seeking to control subscriber acquisition costs and
inventories. We are already seeing some shifts in our product demand. This
has resulted in new product development initiatives for our customers that
are intended to further integrate our products and thereby lower overall
equipment costs. We anticipate submitting initial samples of our next
generation products to our customers by the end of our fiscal 2007 first
quarter for their review, and following-up with qualification samples in our
second quarter. We expect our DBS customers to closely manage their
inventories of existing products in order to minimize their costs and bring
these newer, more cost-effective products to market faster."
Liquidity
At February 28, 2006, the Company had total cash of $45.8 million, with $7.7
million in total outstanding debt. Net cash provided by operating activities
was $22.4 million during the most recent fiscal year, up 79% over the prior
year. Inventory was $18.3 million at the end of the fourth quarter,
representing annualized turns of about 9 times. Accounts receivable
outstanding at the end of the fourth quarter represents a 48 day average
collection period.
Acquisition of Dataradio, Inc.
Earlier today, CalAmp announced that it had signed a definitive agreement to
acquire Dataradio, Inc., a privately held Canadian company that is a leading
provider of mobile and fixed wireless data communication solutions used in
public safety, critical infrastructure and industrial control applications.
This acquisition provides CalAmp with the opportunity to expand its wireless
data communications business for machine-to-machine (M2M) and public safety
applications. It also furthers CalAmp's strategic goals of diversifying its
customer base and expanding its product offerings into higher-margin growth
markets. For the 12 month period ended April 30, 2006, Dataradio had
unaudited revenues of approximately U.S. $32 million. During this period,
Dataradio generated gross margins in excess of 50%. Dataradio has
approximately 175 employees at facilities located in Montreal, Minnesota and
Georgia.
The acquisition agreement provides for a cash payment of Canadian $60.1
million (approximately U.S. $54.6 million at the current Canadian Dollar to
U.S. Dollar exchange rate of 1.10). CalAmp plans to finance the transaction
using a combination of cash on hand and bank debt. The transaction is
subject to customary closing conditions and is expected to be completed in
the next several weeks.
Business Outlook
Commenting on the Company's fiscal 2007 first quarter outlook, Mr. Sturm
said, "Based on our current forecasts, we estimate that fiscal 2007 first
quarter revenues will be in the range of $44 to $48 million, with earnings in
the range of $0.09 to $0.13 per diluted share. This earnings estimate
includes the implementation of accounting for stock compensation expense
under provisions of FAS 123R, which we expect to reduce first quarter
earnings by approximately $0.01 per share. The earnings estimate does not
include the impact of the planned Dataradio acquisition."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2006 fourth
quarter and full year financial results, business outlook and the Dataradio
acquisition 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, the Company's ability to efficiently and cost-effectively
integrate its acquired businesses, 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 Year Ended
February 28, February 28,
------------------ ----------------
2006 2005 2006 2005
----- ------ ----- -----
Revenues $47,789 $67,137 $217,493 $220,027
Cost of revenues 35,620 54,683 164,747 178,649
------- ------- ------- -------
Gross profit 12,169 12,454 52,746 41,378
Operating expenses:
Research and development 1,967 2,130 9,109 8,320
Selling 1,381 1,746 6,963 6,397
General and administrative 2,800 3,089 10,700 11,499
Intangible asset amortization 396 436 1,771 1,643
In-process research and development (10) - 310 471
------ ------- ------- -------
6,534 7,401 28,853 28,330
------ ------- ------- -------
Operating income 5,635 5,053 23,893 13,048
Non-operating income (expense), net 305 11 536 (120)
------ ------- ------- -------
Income before income taxes 5,940 5,064 24,429 12,928
Income tax provision (2,475) (1,830) (9,867) (4,852)
------ ------- ------- -------
Net income $3,465 $ 3,234 $14,562 $ 8,076
======= ======= ======= =======
Net income per share:
Basic $0.15 $0.14 $0.64 $0.38
Diluted $0.15 $0.14 $0.62 $0.36
Shares used in per share calculations:
Basic 22,857 22,438 22,605 21,460
Diluted 23,843 23,101 23,415 22,193
Business Segment Information
Three Months Ended Year Ended
February 28, February 28,
------------------ ----------------
2006 2005 2006 2005
----- ------ ----- -----
Revenue
Products Division $43,577 $60,855 $196,908 $194,835
Solutions Division 4,212 6,282 20,585 25,192
------- ------- ------- -------
Total revenue $47,789 $67,137 $217,493 $220,027
======= ======= ======== =======
Gross profit
Products Division $10,614 $11,259 $ 45,589 $ 35,765
Solutions Division 1,555 1,195 7,157 5,613
------- ------- ------- -------
Total gross profit $12,169 $12,454 $ 52,746 $ 41,378
======= ======= ======= =======
Operating income (loss)
Products Division $ 7,908 $ 8,455 $ 31,361 $ 25,316
Solutions Division (1,161) (2,080) (3,190) (8,051)
Corporate expenses (1,112) (1,322) (4,278) (4,217)
------- ------- ------- -------
Total operating income $ 5,635 $ 5,053 $ 23,893 $ 13,048
======= ======= ======= =======
<page>
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
Feb.28, Feb. 28,
2006 2005
Assets ---- ----
Current assets:
Cash and cash equivalents $ 45,783 $ 31,048
Accounts receivable, net 28,630 27,027
Inventories 18,279 21,465
Deferred income tax assets 4,042 6,118
Prepaid expenses and other current assets 2,502 2,876
-------- --------
Total current assets 99,236 88,534
Equipment and improvements, net 5,438 5,383
Deferred income tax assets 2,344 5,285
Goodwill 91,386 92,834
Other intangible assets, net 5,304 4,028
Other assets 638 691
-------- --------
$204,346 $196,755
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2,168 $ 2,897
Accounts payable 12,011 18,389
Accrued payroll and employee benefits 3,608 3,652
Other accrued liabilities 2,763 3,127
Deferred revenue 1,323 1,597
-------- --------
Total current liabilities 21,873 29,662
-------- --------
Long-term debt, less current portion 5,511 7,679
-------- --------
Other non-current liabilities 853 1,126
-------- --------
Stockholders' equity:
Common stock 232 227
Additional paid-in capital 135,022 131,784
Common stock held in escrow (2,532) (2,548)
Retained earnings 44,188 29,626
Accumulated other comprehensive loss (801) (801)
-------- --------
Total stockholders' equity 176,109 158,288
-------- --------
$204,346 $196,755
======== ========
<page>
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Year Ended
February 28,
------------
2006 2005
---- ----
Cash flows from operating activities:
Net income $ 14,562 $ 8,076
Depreciation and amortization 4,372 4,340
Write-off of in-process R&D 310 471
Equipment impairment writedowns - 241
Tax benefit of option exercises 1,158 388
Deferred tax assets, net 6,236 4,201
Changes in operating working capital (4,301) (5,105)
Other 43 (76)
-------- -------
Net cash provided by operating activities 22,380 12,536
-------- -------
Cash flows from investing activities:
Capital expenditures (2,296) (2,359)
Proceeds from sale of assets 146 1,749
Acquisition of Skybility business (4,897) -
Acquisition of Vytek Corp., net of cash acquired - (1,776)
-------- -------
Net cash used in investing activities (7,047) (2,386)
-------- -------
Cash flows from financing activities:
Debt repayments, net of borrowings (2,888) (3,043)
Proceeds from stock option exercises 2,290 1,056
-------- -------
Net cash used in financing activities (598) (1,987)
-------- -------
Net change in cash and cash equivalents 14,735 8,163
Cash and cash equivalents at beginning of period 31,048 22,885
-------- -------
Cash and cash equivalents at end of period $ 45,783 $31,048
======== =======