Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo
FOR IMMEDIATE RELEASE
CalAmp Reports FY 2007 First Quarter Results
OXNARD, Calif., July 13, 2006--CalAmp Corp. (Nasdaq: CAMP), a leading provider
of wireless products and engineering services, today reported results for its
fiscal 2007 first quarter ended May 31, 2006. Key elements include:
* Revenues of $46.3 million within guidance
* Net loss of $34.1 million includes non-cash charges of $36.7 million for in-
process research and development (IPR&D) and goodwill impairment
* Operating cash flow of $4.7 million during first quarter, improved 15% over
prior year
Fred Sturm, CalAmp's President and Chief Executive Officer, commented,
"Overall, operating results from our core business in the first quarter were
solid and within our expectations. During the quarter we benefited from
revenue growth in our wireless data communications product line, which has now
been significantly enhanced with our recent acquisitions of Dataradio and
TechnoCom. Resulting profitability, after adjusting out the effects of non-
cash charges for the IPR&D write-off associated with the Dataradio acquisition
and a goodwill impairment charge related to our Solutions Division, was driven
by solid operating margins and was within expectations."
Sturm added, "We continue to execute on our strategy of building a significant
business in the wireless datacom industry, where we believe there is an
expanding market opportunity for revenue growth at higher gross margins, and
which provides for further customer diversification. Additionally, we are
focused on maintaining our leading position in our core DBS product line.
Steady progress was achieved during the quarter on product development
initiatives in support of customers' requirements for integrated multiple
satellite reception equipment as they roll out expanded service offerings
including HDTV programming. These products are expected to begin shipping
during the second half of fiscal 2007."
Fiscal 2007 First Quarter Results
Revenue in the fiscal 2007 first quarter (14 weeks of operations) was $46.3
million, compared to $47.6 million for the first quarter of last year (13
weeks of operations). The decrease was the result of lower Solutions Division
revenue and DBS product sales in the latest quarter, partially offset by
growth in the Company's wireless data communications business for public
safety and machine-to-machine (M2M) applications.
Gross profit for the first quarter of fiscal 2007 was $10.9 million, or 23.6%
of revenues, compared to $10.7 million, or 22.5% 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.
As previously announced, in late May 2006 the Company acquired Dataradio and
the mobile resource management (MRM) product line of TechnoCom. CalAmp's
results of operations for the fiscal 2007 first quarter include both of these
acquisitions for a one week period. During this period Dataradio generated
revenue of $721,000 and gross profit of $469,000, while the MRM product line
accounted for revenue of $87,000 and gross profit of $37,000. Dataradio and
the MRM product line are included in the Company's Products Division.
Results of operations for the fiscal 2007 first quarter as determined in
accordance with United States Generally Accepted Accounting Principles
("GAAP") was a net loss of $34.1 million, or $1.47 per diluted share. During
the fiscal 2007 first quarter, in connection with the acquisition of
Dataradio, the Company recorded a non-cash charge of $6.9 million for the
write-off of IPR&D and recorded a non-operating gain of $689,000 associated
with foreign currency hedging activities. In addition, as a result of the
annual impairment test of the Solutions Division goodwill conducted during the
fiscal 2007 first quarter, the Company recorded a non-cash impairment charge
of $29.8 million. Excluding the effects of the IPR&D write-off, the foreign
currency hedging gain and the Solutions Division impairment charge, in the
fiscal 2007 first quarter the Company generated net income of $2.2 million, or
$.09 per diluted share ("Adjusted Earnings"), compared to GAAP basis net
income of $2.0 million, or $.09 per diluted share, in the first quarter of
last year. A reconciliation of the adjustments made to GAAP-basis earnings to
compute Adjusted Earnings is contained in the financial tables of this press
release. Results of operations for the fiscal 2007 first quarter on both a
GAAP basis and an Adjusted Earnings basis include stock-based compensation
expense of $260,000 net of tax or $.01 per diluted share, which has been
recorded in the first quarter of fiscal 2007 under the newly adopted Statement
of Financial Accounting Standards No. 123R, "Share-Based Payment".
During the fiscal 2007 first quarter the Company continued to focus on
realizing value from the 2004 Vytek acquisition by transferring the design
engineering services business out of the Solutions Division into the Products
Division, in order to more effectively integrate the product design and
product manufacturing activities. The Company also plans to phase out some
non-strategic portions of the Solutions business during the second quarter in
order to focus on the core Solutions business which now is comprised of the
industry leading TelAlert urgent messaging applications as well as media
download management software.
Liquidity
At May 31, 2006, the Company had total cash of $30.8 million, with $38 million
in total outstanding debt. Net cash provided by operating activities was $4.7
million during the first quarter, up 15% over the prior year. Inventories
were $30.6 million at the end of the first quarter, which includes $5.5
million associated with Dataradio. Accounts receivable outstanding at the end
of the first quarter represents a 43 day average collection period.
Business Outlook
Commenting on the Company's fiscal 2007 second quarter outlook, Mr. Sturm
said, "Based on our most recent projections, which include contributions for
the full quarter from our recent acquisitions of Dataradio and the MRM
product line, we estimate that fiscal 2007 second quarter revenues will be in
the range of $55 to $60 million, with earnings in the range of $0.05 to $0.09
per diluted share which includes an estimate of $800,000 for amortization of
intangible assets related to the recent acquisitions of Dataradio and the MRM
product line, FAS 123R stock option expense of $370,000 net of tax, and net
interest expense of $300,000, versus net interest income of $301,000 in the
fiscal 2007 first quarter."
Conference Call, Webcast and 10-Q filing
A conference call and simultaneous webcast to discuss fiscal 2007 first
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.
The reader is also referred to the Company's quarterly report on Form 10-Q as
filed today with the Securities and Exchange Commission.
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, private wireless networks, public safety
communications and critical infrastructure and process control 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.
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
- Financial Tables to Follow-
<page>
CAL AMP CORP.
Consolidated Statements of Operations and
Reconciliation of Non-GAAP Adjustments
(unaudited, in thousands except per share amounts)
<table>
Three months ended May 31, 2006(a)
--------------------------------- Three
GAAP Non-GAAP Adjusted months ended
Basis Adjustments Basis May 31, 2005
------- ----------- -------- ------------
<s> <c> <c> <c> <c>
Revenues $ 46,313 $46,313 $ 47,580
Cost of revenues 35,386 35,386 36,882
------- ------ ------
Gross profit 10,927 10,927 10,698
------- ------ ------
Operating expenses:
Research and development 2,565 2,565 2,197
Selling 1,771 1,771 1,872
General and administrative 2,813 2,813 2,614
Intangible asset amortization 401 401 443
In-process research and development 6,850 $ (6,850) (b) - 293
Impairment loss 29,848 (29,848) (c) - -
------- ------- ------- ------
44,248 (36,698) 7,550 7,419
------- ------- ------- ------
Operating income (loss) (33,321) 36,698 3,377 3,279
Non-operating income (expense), net:
Interest income (expense), net 301 301 68
Other, net 660 (689) (d) (29) (25)
------- -------- ------ ------
961 (689) 272 43
------- -------- ------ ------
Income (loss) before income taxes (32,360) 36,009 3,649 3,322
Income tax provision (1,691) 276 (e) (1,415) (1,345)
------- ------- ------ ------
Net income (loss) $(34,051) $ 36,285 $ 2,234 $ 1,977
======= ======= ======= ======
Net income (loss) per share:
Basic $ (1.47) $ 0.10 $ 0.09
Diluted $ (1.47) $ 0.09 $ 0.09
Shares used in per share
calculations:
Basic 23,131 23,131 22,492
Diluted 23,131 23,747 22,910
</table>
Business Segment Information:
<table>
Three months ended May 31, 2006(a)
--------------------------------- Three
GAAP Non-GAAP Adjusted months ended
Basis Adjustments Basis May 31, 2005
------- ----------- -------- ------------
<s> <c> <c> <c> <c>
Revenue
Products Division $ 42,957 $ 42,957 $ 41,168
Solutions Division 3,356 3,356 6,412
------- ------- -------
Total revenue $ 46,313 $ 46,313 $ 47,580
======= ======= =======
Gross profit
Products Division $ 10,087 $ 10,087 $ 8,810
Solutions Division 840 840 1,888
------- ------- -------
Total gross profit $ 10,927 $ 10,927 $ 10,698
======= ======= =======
Operating income (loss)
Products Division $ (857) $ 6,850 (b) $ 5,993 $ 5,356
Solutions Division (31,182) 29,848 (c) (1,334) (1,143)
Corporate Expenses (1,282) (1,282) (934)
------- ------- ------- -------
Total operating income (loss) $(33,321) $36,698 $ 3,377 $ 3,279
======= ====== ======= =======
</table>
(a) Because of the Company's 52-53 week fiscal year, the three month periods
ended May 31, 2006 and 2005 contain 14 weeks and 13 weeks, respectively.
(b) In-process research and development write-off arising from the
acquisition of Dataradio based on the preliminary purchase price
allocation.
(c) Solutions Division estimated goodwill impairment charge pursuant to step
one of the annual goodwill impairment test as of April 30, 2006. Step two
of the impairment test is expected to be completed in the fiscal 2007
second quarter, at which time the amount of the goodwill impairment
charge will be finalized.
(d) Foreign currency hedging gain realized in connection with the acquisition
of Dataradio.
(e) Tax expense associated with the foreign currency hedging gain.
"GAAP" refers to financial information presented in accordance with Generally
Accepted Accounting Principles in the United States.
This press release includes historical non-GAAP financial measures, as defined
in Regulation G promulgated by the Securities and Exchange Commission, with
repect to the three months ended May 31, 2006. 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 accounting principles
generally accepted in the United States.
In this press release, CalAmp reported the non-GAAP financial measures of
Adjusted Basis net income and diluted earnings per share. CalAmp uses these
non-GAAP financial measures to enhance the investor's overall understanding of
the financial performance and prospects for the future of CalAmp's core
business activities. Specifically, CalAmp believes that a report of Adjusted
Basis net income and diluted earnings per share provides consistency in its
financial reporting and facilitates the comparison of results of core business
operations between its current, past and future periods.
<page>
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
May 31, February 28,
2006 2006
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 30,779 $ 45,783
Accounts receivable, net 28,498 28,630
Inventories 30,557 18,279
Deferred income tax assets 5,132 4,042
Prepaid expenses and other current assets 8,198 2,502
-------- --------
Total current assets 103,164 99,236
Equipment and improvements, net 6,772 5,438
Deferred income tax assets 1,891 2,344
Goodwill 84,315 91,386
Other intangible assets, net 21,443 5,304
Other assets 1,205 638
-------- --------
$218,790 $204,346
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 775 $ 2,168
Accounts payable 18,091 12,011
Accrued payroll and employee benefits 8,344 3,608
Other accrued liabilities 5,826 2,763
Deferred revenue 1,799 1,323
-------- --------
Total current liabilities 34,835 21,873
-------- --------
Long-term debt, less current portion 37,253 5,511
-------- --------
Other non-current liabilities 968 853
-------- --------
Stockholders' equity:
Common stock 233 232
Additional paid-in capital 136,051 135,022
Common stock held in escrow - (2,532)
Retained earnings 10,137 44,188
Accumulated other comprehensive loss (687) (801)
-------- --------
Total stockholders' equity 145,734 176,109
-------- --------
$218,790 $204,346
======== ========
<page>
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Three Months Ended
May 31,
------------------
2006 2005
---- ----
Cash flows from operating activities:
Net income (loss) $(34,051) $ 1,977
Depreciation and amortization 1,119 1,080
Stock-based compensation 420 -
Write-off of in-process R&D 6,850 293
Goodwill impairment writedown 29,848 -
Excess tax benefit from stock-based compensation (199) -
Deferred tax assets, net 441 818
Changes in operating working capital 264 (62)
Other 31 9
-------- -------
Net cash provided by operating activities 4,723 4,115
-------- -------
Cash flows from investing activities:
Capital expenditures (798) (373)
Proceeds from sale of property and equipment 17 -
Acquisition of Dataradio net of cash acquired (47,999) -
Acquisition of TechnoCom product line (2,478) -
Proceeds from Vytek escrow distribution 480 -
Acquisition of Skybility assets - (4,886)
-------- -------
Net cash used in investing activities (50,778) (5,259)
-------- -------
Cash flows from financing activities:
Proceeds from long-term debt 38,000 -
Debt repayments (7,651) (731)
Proceeds from stock option exercises 389 13
Excess tax benefit from stock-based compensation 199 -
-------- -------
Net cash provided (used) in financing activities 30,937 (718)
-------- -------
Effect of exchange rate changes on cash 114 -
-------- -------
Net change in cash (15,004) (1,862)
Cash at beginning of period 45,783 31,048
-------- -------
Cash at end of period $ 30,779 $ 29,186
======== =======