Exhibit 99.3
CalAmp Corp.
Pro Forma Condensed Combined Balance Sheet (Unaudited)
February 28, 2006
(In U.S. Dollars)
(In thousands)
<table>
Historical
----------------------
CalAmp Dataradio Pro Forma Pro Forma
Corp. Inc.(A) Adjustments Total
--------- --------- ------------ ---------
<s> <c> <c> <c> <c> <c>
Assets
Current assets:
Cash and cash equivalents $ 45,783 $ 5,419 $ (422) (B) $ 27,489
31,000 (E)
(54,291) (F)
Accounts receivable, net 28,630 2,829 31,459
Inventories, net 18,279 5,729 24,008
Deferred income tax assets 4,042 287 4,329
Prepaid expenses and other current assets 2,502 2,871 5,373
-------- -------- ---------- --------
Total current assets 99,236 17,135 (23,713) 92,658
Equipment and improvements, net 5,438 1,132 6,570
Deferred income tax assets,
less current portion 2,344 387 2,731
Goodwill 91,386 - 21,680 (D) 113,066
Other intangible assets, net 5,304 - 16,590 (C) 21,894
Other assets 638 - 638
-------- -------- --------- --------
$204,346 $ 18,654 $ 14,557 $237,557
======== ======== ========= ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2,168 $ - $ $ 2,168
Accounts payable 12,011 2,163 14,174
Accrued payroll and employee benefits 3,608 855 5,375 (G) 9,838
Other accrued liabilities 2,763 - 2,763
Deferred revenue 1,323 354 1,677
-------- -------- --------- --------
Total current liabilities 21,873 3,372 5,375 30,620
-------- -------- --------- --------
Long-term debt, less current portion 5,511 - 31,000 (E) 36,511
Other non-current liabilities 853 314 1,167
Stockholders' equity:
Common stock 232 9,626 (9,626) (H) 232
Additional paid-in capital 135,022 - 135,022
Less common stock held in escrow (2,532) - (2,532)
Retained earnings 44,188 5,342 (6,850) (C) 37,338
(5,342) (H)
Accumulated other comprehensive loss (801) - (801)
-------- -------- --------- --------
Total stockholders' equity 176,109 14,968 (21,818) 169,259
-------- -------- --------- --------
$204,346 $ 18,654 $ 14,557 $237,557
======== ======== ========= ========
</table>
<page>
CalAmp Corp.
Notes to Pro Forma Condensed Combined Balance Sheet (Unaudited)
(In U.S. Dollars)
(In thousands)
(A) The amounts shown for Dataradio are the historical amounts for Dataradio
as of January 31, 2006 after conversion from Canadian dollars to U.S.
dollars.
(B) To reflect cash paid for direct costs of acquisition $(422)
=====
(C) To record identifiable intangible assets arising from
the acquisition of Dataradio based on the preliminary
purchase price allocation:
Developed/core technology $6,980
In-process research and development 6,850
Tradename 3,880
Customer lists 3,750
Contract backlog 1,480
Non-compete covenants 500
------
23,440
Less write-off of in process research and development (1) (6,850)
------
$16,590
=======
(1) CalAmp recorded an immediate write-off of in-process research and
development costs ("IPR&D") in the amount of $6,850 at the
consummation of acquisition of Dataradio, which is reflected as a
nonrecurring charge in CalAmp's actual statement of operations for
the quarter ended May 31, 2006, the period that includes the closing
of the transaction. IPR&D consists of next generation products for
fixed and mobile wireless applications. For purposes of valuing
IPR&D, it is assumed that: (i) these products would be introduced
in 2007; (ii) annual revenue in 2007 through 2011 would range
between $4.2 million and $12.6 million for fixed wireless products,
and between $6.7 million and $13.9 million for mobile wireless
products; (iii) annual revenues from the fixed wireless products
and mobile wireless products are allocated 75% and 80%,
respectively, to IPR&D and 25% and 20%, respectively, to core
technology; (iv) the gross margin percentage would range between 58%
and 60% for fixed wireless products, and between 61% and 66% for
mobile wireless products ; and (v) the operating margin in years
2007 through 2011 is approximately 26% for fixed wireless products
and 32% for mobile wireless products. The projected after-tax cash
flows were then present valued using a discount rate of 25%.
(D) To reflect as goodwill the excess of cost over the fair
value of assets acquired and liabilities assumed
(see computation at (I) below) $21,680
=======
(E) To record new incremental bank borrowings to fund part
of the Dataradio purchase price $31,000
=======
(F) To reflect cash paid for the Dataradio purchase price $(54,291)
========
(G) To accrue for Dataradio employee bonuses and related employer
payroll taxes paid by Dataradio to its workforce shortly after
consummating the sale of Dataradio to CalAmp $5,375
======
(H) To eliminate historical equity balances of Dataradio.
(I) The Company has not yet obtained all information required to complete the
purchase price allocation related to the Dataradio acquisition. Following
is a preliminary purchase price allocation assuming the Dataradio
acquisition was consummated as of January 31, 2006:
Purchase price paid in cash $54,291
Direct costs of acquisition 422
-------
54,713
-------
Fair value of net assets acquired:
Current assets 17,135
Property and equipment 1,132
Intangible assets:
Developed/core technology $6,980
In-process research and development 6,850
Tradename 3,880
Customer lists 3,750
Contract backlog 1,480
Non-compete covenants 500
------
Total intangible assets 23,440
Other assets 387
Current liabilities (including (G) above) (8,747)
Long-term liabilities (314)
-------
Total fair value of net assets acquired 33,033
-------
Goodwill $21,680
=======
(2) This goodwill amount differs from the $18,679 goodwill amount
included in CalAmp's May 31, 2006 consolidated balance sheet that
relates to the Dataradio acquisition. The difference arises because
the accompanying Pro Forma Condensed Combined Balance Sheet assumes
the Dataradio acquisition was consummated as of January 31, 2006,
the effective date of the Dataradio amounts included in this pro
forma balance sheet (see note (a) above), while the May 31, 2006
consolidated balance sheet that is included in CalAmp's Form 10-Q
for the quarter then ended reflects goodwill computed as of the
actual acquisition date of May 26, 2006.
<page>
CalAmp Corp.
Pro Forma Condensed Combined Statement of Income (Unaudited)
Year Ended February 28, 2006
(In U.S. Dollars)
(In thousands except per share amounts)
<table>
Historical
----------------------
CalAmp Dataradio Pro Forma Pro Forma
Corp. Inc.(A) Adjustments Total
--------- --------- ----------- ---------
<s> <c> <c> <c> <c> <c>
Revenues $217,493 $30,061 $ $247,554
Cost of revenues 164,747 13,273 178,020
-------- ------- ---------- --------
Gross profit 52,746 16,788 69,534
-------- ------- ---------- --------
Operating expenses:
Research and development 9,109 4,279 13,388
Selling 6,963 5,217 12,180
General and administrative 10,700 3,176 13,876
Intangible asset amortization 1,771 - 3,138 (B) 4,909
In-process research and development 310 - 310
-------- ------- ---------- --------
Total operating expenses 28,853 12,672 3,138 44,663
-------- ------- ---------- --------
Operating income 23,893 4,116 (3,138) 24,871
Non-operating income (expense), net 536 (561) (1,977) (C) (2,002)
-------- ------- ---------- --------
Income before income taxes 24,429 3,555 (5,115) 22,869
Income tax provision (9,867) (1,170) 791 (D) (10,246)
-------- ------- ---------- --------
Net income $ 14,562 $ 2,385 $ (4,324) $ 12,623
======== ======= ========== ========
Earnings per share:
Basic $0.64 $0.56
Diluted $0.62 $0.54
Shares used in computing basic and
diluted earnings per share:
Basic 22,605 22,605
Diluted 23,415 23,415
<page>
CalAmp Corp.
Notes to Pro Forma Condensed Combined Statement of Income (Unaudited)
(In U.S. Dollars)
(In thousands)
(A) The amounts shown for Dataradio are the historical Dataradio amounts for
the 12 months ended January 31, 2006. Such amounts were determined by
adding the interim results of operations for the six months ended January
31, 2006 to the results of operations for the fiscal year ended July 31,
2005, and subtracting the interim results of operations for the six
months ended January 31, 2005 after conversion from Canadian dollars to
U.S. dollars
(B) To record intangible asset amortization expense for
the 12 month period, as follows:
Life
Amount (Yrs.)
------ ----
Developed/core technology $6,980 7 $ 997
Customer lists $3,750 7 536
Contract backlog $1,480 1 1,480
Non-compete covenants $ 500 4 125
------
$3,138
======
(C) To record amortization of debt issue costs and
interest expense on new incremental borrowings
to fund part of the Dataradio purchase price:
Life
Amount (Yrs.)
------ ----
Debt issue costs $ 133 5 $ 27
Interest expense on $31 million (1) $31,000 1,950
------
$1,977
======
(1) The pro forma interest expense on incremental variable rate debt
assumes an interest rate based on the effective interest rate of
6.29% at the date of consummating the Dataradio acquisition. A 1/8%
variance in interest rates would have an effect of changing pro
forma net income by $23.
(D) To record the income tax effect of the pro forma
adjustment for the deductible amortization of debt
issue cost and interest expense computed in (C) above.
The intangible asset amortization expense in (B) above
is not deductible for income tax purposes. $791
====