Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo
FOR IMMEDIATE RELEASE
CalAmp Reports FY 2007 Third Quarter Results
OXNARD, Calif., January 11, 2007--CalAmp Corp. (Nasdaq: CAMP), a leading
provider of wireless communications products, today reported results for its
fiscal 2007 third quarter ended November 30, 2006. Key highlights of the
latest quarter include:
* Initial shipments of new generation Direct Broadcast Satellite (DBS)
products to support service providers' rollout of high definition television
(HDTV) programming
* Revenues of $61.1 million, GAAP earnings of $0.04 per diluted share and
Adjusted Basis (non-GAAP) earnings of $0.08 per diluted share within
expectations.
"During the fiscal third quarter, our core DBS business continued to generate
solid cash flows, and we made progress executing on our business strategy to
increase our market presence in wireless data communication markets,"
commented Fred Sturm, CalAmp's President and Chief Executive Officer. "On a
sequential quarter basis, CalAmp's increase in revenues was driven by sales
to our Direct Broadcast Satellite (DBS) customers along with growth in
several of our wireless data communications offerings including products for
Mobile Resource Management (MRM)."
Mr. Sturm continued, "CalAmp achieved a number of important operational
milestones during the third quarter, which position the Company for a solid
finish to fiscal 2007. Toward the end of the quarter, we received product
approval from both of our DBS customers and began shipping next generation
outdoor reception equipment. During our fourth quarter, we expect meaningful
revenues from the new DBS products. As an indication of our leadership
position in this market, CalAmp is currently the only company supplying these
latest products to both DBS service providers. In our wireless data
communications business, we continue to aggressively execute our growth
strategy. Dataradio recently won a $1.3 million contract to provide a mobile
data communications system for the police, fire and EMS personnel of Genesee
County, Michigan. Additionally, CalAmp was selected to provide key MRM
components for GE Security's new NavLogix fleet tracking service."
Fiscal 2007 Third Quarter Results
Revenue for the fiscal 2007 third quarter was $61.1 million compared to $64.5
million for the third quarter of fiscal 2006. Growth in the Company's
wireless data communications business, driven by the May 2006 acquisitions of
Dataradio and the MRM product line, partially offset lower DBS product sales
and Solutions Division revenue in the latest quarter.
Net income for the fiscal 2007 third quarter was $0.9 million or $0.04 per
diluted share compared to net income of $5.4 million or $0.23 per diluted
share for the third quarter of last year. Adjusted Basis (non-GAAP) net
income for the fiscal 2007 third quarter was $2.0 million or $0.08 per
diluted share compared to Adjusted Basis net income of $5.7 million or $0.24
per diluted share for the same period last year. Adjusted Basis net income
for the comparable periods exclude the impact of amortization of intangible
assets, stock-based compensation expense, in-process research and development
and impairment loss, each net of tax where applicable. A reconciliation of
GAAP basis net income to Adjusted Basis net income is provided in the table
at the end of this press release.
Gross profit for the third quarter of fiscal 2007 was $12.7 million, or 20.8%
of revenues compared to $16.5 million or 25.5% of revenues for the same
period last year. The reduction in gross profit and gross margin were
primarily the result of higher freight costs and lower margins on final
shipments of end-of-life DBS products. The Company made the decision to
incur higher freight costs to expedite incoming materials in response to
supply chain disruptions and demand volatility in order to meet customer
requirements. The Company expects the higher level of freight costs to
persist through much of the fourth quarter until the supply pipeline for new
DBS products has been filled.
Liquidity
During the nine months ended November 30, 2006, the Company generated operating
cash flow of $11.7 million. At November 30, 2006, the Company had total cash
of $33.3 million, with $34.3 million in total outstanding debt. Inventories
were $20.8 million at the end of the third quarter, representing annualized
turns of 9 times based on cost of sales in the latest quarter. Accounts
receivable outstanding at the end of the third quarter represents a 51 day
average collection period.
Business Outlook
Commenting on the Company's fiscal 2007 fourth quarter outlook, Mr. Sturm
said, "Based on our current estimates, we anticipate fiscal 2007 fourth
quarter revenues will be in the range of $54 to $60 million, with net income
in the range of $0.03 to $0.07 per diluted share. Adjusted Basis (Non-GAAP)
net income for the fourth quarter, which excludes amortization of intangible
assets and stock-based compensation expense - each net of tax - is expected
to be $0.07 to $0.11 per diluted share."
Conference Call, Webcast and 10-Q filing
A conference call and simultaneous webcast to discuss fiscal 2007 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.
The reader is also referred to the Company's quarterly report on Form 10-Q,
filed today with the Securities and Exchange Commission.
About CalAmp Corp.
CalAmp is a leading provider of wireless communications products 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 data communication 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, the
timing of customer approvals of new product designs, operating costs, 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
(Unaudited, in thousands except per share amounts)
Three Months Ended Nine Months Ended
November 30, November 30,
------------------ ----------------
2006 2005 2006 2005
----- ------ ----- -----
Revenues $61,092 $64,463 $165,339 $169,704
Cost of revenues 48,390 47,999 127,699 129,127
------- ------- ------- -------
Gross profit 12,702 16,464 37,640 40,577
Operating expenses:
Research and development 4,099 2,585 10,456 7,142
Selling 2,614 1,914 7,390 5,582
General and administrative 3,308 2,679 9,638 7,900
Intangible asset amortization 1,229 403 2,905 1,375
In-process research and development - - 6,850 320
Impairment loss - - 29,848 -
------ ------- ------- -------
11,250 7,581 67,087 22,319
------ ------- ------- -------
Operating income (loss) 1,452(a) 8,883 (29,447)(a) 18,258
Non-operating income (expense), net (141) 162 574 231
------ ------- ------- -------
Income (loss) before income taxes 1,311 9,045 (28,873) 18,489
Income tax provision (415) (3,606) (3,047) (7,392)
------ ------- ------- -------
Net income (loss) $ 896 $ 5,439 $(31,920) $ 11,097
====== ======= ======= =======
Net income (loss) per share:
Basic $0.04 $0.24 $(1.37) $0.49
Diluted $0.04 $0.23 $(1.37) $0.48
Shares used in per share calculations:
Basic 23,414 22,580 23,290 22,520
Diluted 23,679 23,592 23,290 23,272
(a) Operating income (loss) for the three and nine months ended November 30,
2006 includes share-based compensation expense pursuant to FAS123R of
$541 and $1,614, respectively. Such expense is included in the
following captions of the Statement of Operations:
Three Months Nine Months
Ended Ended
Nov. 30, 2006 Nov. 30, 2006
------------- -------------
Statement of Operations Caption
-------------------------------
Cost of revenues $ 39 $ 112
Research and development expense 55 166
Selling expense 65 191
General and administrative 382 1,145
----- ------
$ 541 $1,614
===== ======
<page>
CAL AMP CORP.
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands except per share amounts)
Three Months Ended Nine Months Ended
November 30, November 30,
----------------- --------------------
2006 2005 2006 2005
----- ------ ----- -----
Revenue
Products Division $59,484 $59,565 $157,784 $153,331
Solutions Division 1,608 4,898 7,555 16,373
------- ------- ------- -------
Total revenue $61,092 $64,463 $165,339 $169,704
======= ======= ======= =======
Gross profit
Products Division $11,983 $14,441 $ 34,714 $ 34,975
Solutions Division 719 2,023 2,926 5,602
------- ------- ------- -------
Total gross profit $12,702 $16,464 $ 37,640 $ 40,577
======= ======= ======= =======
Operating income (loss)
Products Division $ 3,819 $10,406 $ 7,336 $ 23,453
Solutions Division (779) (373) (32,384) (2,029)
Corporate expenses (1,588) (1,150) (4,399) (3,166)
------- ------- ------- -------
Total operating income (loss) $ 1,452(a) $ 8,883 $(29,447)(a) $ 18,258
======= ======= ======= =======
(a) Operating income (loss) for the three and nine months ended November
30, 2006 includes share-based compensation expense pursuant to FAS123R
of $541 and $1,614, respectively. Such expense is included in the
operating income(loss) of the reporting segments as follows:
Three Months Nine Months
Ended Ended
Nov. 30, 2006 Nov. 30, 2006
------------- -------------
Reporting Segment
-----------------
Products Division $ 141 $ 531
Solutions Division 105 296
Corporate expenses 295 787
----- ------
$ 541 $1,614
===== ======
<page>
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
November 30, February 28,
2006 2006
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 33,284 $ 45,783
Accounts receivable, net 30,274 28,630
Inventories 20,821 18,279
Deferred income tax assets 4,139 4,042
Prepaid expenses and other current assets 8,443 2,502
-------- --------
Total current assets 96,961 99,236
Equipment and improvements, net 6,571 5,438
Deferred income tax assets - 2,344
Goodwill 89,835 91,386
Other intangible assets, net 19,872 5,304
Other assets 1,399 638
-------- --------
$214,638 $204,346
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2,215 $ 2,168
Accounts payable 12,820 12,011
Accrued payroll and employee benefits 3,431 3,608
Other accrued liabilities 4,954 2,763
Deferred revenue 1,313 1,323
-------- --------
Total current liabilities 24,733 21,873
-------- --------
Long-term debt, less current portion 32,048 5,511
-------- --------
Deferred income tax liability 7,109 -
-------- --------
Other non-current liabilities 1,034 853
-------- --------
Stockholders' equity:
Common stock 235 232
Additional paid-in capital 138,199 135,022
Common stock held in escrow - (2,532)
Retained earnings 12,268 44,188
Accumulated other comprehensive loss (988) (801)
-------- --------
Total stockholders' equity 149,714 176,109
-------- --------
$214,638 $204,346
======== ========
<page>
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Nine Months Ended
November 30,
------------------
2006 2005
---- ----
Cash flows from operating activities:
Net income (loss) $(31,920) $ 11,097
Depreciation and amortization 5,027 3,305
Stock-based compensation 1,614 -
Write-off of in-process R&D 6,850 320
Goodwill impairment writedown 29,848 -
Stock option income tax benefits - 678
Excess tax benefit from stock-based compensation (392) -
Deferred tax assets, net 3,555 5,431
Changes in operating working capital (2,973) (6,485)
Other 84 16
-------- -------
Net cash provided by operating activities (A) 11,693 14,362
-------- -------
Cash flows from investing activities:
Capital expenditures (2,112) (1,555)
Proceeds from sale of property and equipment 16 143
Acquisition of Dataradio net of cash acquired (48,047) -
Acquisition of TechnoCom product line (2,478) -
Proceeds from Vytek escrow distribution 480 -
Acquisition of Skybility assets - (4,897)
-------- -------
Net cash used in investing activities (52,141) (6,309)
-------- -------
Cash flows from financing activities:
Proceeds from long-term debt 38,000 -
Debt repayments (11,416) (2,178)
Proceeds from stock option exercises 1,130 1,282
Excess tax benefit from stock-based compensation 392 -
-------- -------
Net cash provided (used) in financing activities 28,106 (896)
-------- -------
Effect of exchange rate changes on cash (157) -
-------- -------
Net change in cash and cash equivalents (12,499) 7,157
Cash and cash equivalents at beginning of period 45,783 31,048
-------- -------
Cash and cash equivalents at end of period $ 33,284 $ 38,205
======== =======
(A) Net cash provided by operating activities for the nine months ended
November 30, 2006 is net of the payment of $5,355,000 of accrued
incentives paid by Dataradio to its workforce shortly after the
acquisition of CalAmp. These incentives were recorded as an expense in
Dataradio's pre-acquisition income statement.
<page>
CAL AMP CORP.
NON-GAAP EARNINGS RECONCILIATION
(Unaudited, in thousands except per share amounts)
Non-GAAP Earnings Reconciliation
- --------------------------------
"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. 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 and past periods.
The reconciliation of GAAP basis net income (loss) to Adjusted Basis net
income is as follows:
<table>
Three Months Ended Nine Months Ended
November 30, November 30,
----------------- --------------------
2006 2005 2006 2005
----- ----- ----- -----
<c> <c> <c> <c> <c>
GAAP basis net income (loss) $ 896 $ 5,439 $(31,920) $ 11,097
Adjustments to reconcile to non-GAAP net income:
Amortization of intangible assets, net of tax 693 242 1,638 825
Stock-based compensation expense, net of tax 305 - 910 -
In-process R&D, net of tax in fiscal 2006 - - 6,850 192
Impairment loss - goodwill - - 29,012 -
Impairment loss - intangible assets, net of tax - - 472 -
------ ------ ------- -------
$ 1,894 $5,681 $ 6,962 $ 12,114
====== ===== ======= =======
Adjusted Basis net income $ 0.08 $ 0.24 $ 0.29 $ 0.52
Weighted average common shares
outstanding on diluted basis 23,679 23,592 23,701 23,272
</table>
Reconciling items that are not treated as tax deductible in computing the
GAAP basis income tax provision (in-process research and development in
fiscal 2007 and goodwill impairment loss) are not tax effected in the non-
GAAP Earnings Reconciliation. The remaining reconciling items are tax-
effected using an adjusted year-to-date effective income tax rate that is
computed by excluding from pretax income(loss) those reconciling items that
are not treated as tax deductible in computing the GAAP basis income tax
provision. The computation of the adjusted year-to-date effective income tax
rate is as follows:
Nine Months Ended
November 30,
------------------
2006 2005
---- ----
Pretax income (loss) as reported $(28,873) $ 18,489
Add back nondeductible items:
In process research and development in fiscal 2007 6,850 -
Impairment loss - goodwill 29,012 -
------- -------
Pretax income before nondeductible items 6,989 18,489
Income tax provision as reported 3,047 7,392
------- -------
Year-to-date effective income tax rate as adjusted 43.6% 40.0%
======= =======