Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo
FOR IMMEDIATE RELEASE
CalAmp Reports Fiscal 2007 Fourth Quarter and Full-Year Results
OXNARD, Calif., May 17, 2007--CalAmp Corp. (Nasdaq: CAMP), a leading
provider of wireless communications products, today reported results for
its fiscal 2007 fourth quarter and full year ended February 28, 2007.
Recent key business highlights include:
* Fourth quarter revenues of $57.0 million, GAAP earnings of $0.03 per
diluted share and Adjusted Basis (non-GAAP) earnings of $0.08 per
diluted share.
* Operating cash flow of $5.0 million in the fourth quarter.
* Acquisition in the fiscal 2008 first quarter of AirIQ's Vehicle Tracking
business and SmartLink Radio Networks that significantly expanded CalAmp's
wireless data communications business.
"The operating results we achieved in the fourth quarter were within our
expectations," commented Fred Sturm, CalAmp's President and Chief
Executive Officer. "I am pleased with our progress in growing CalAmp's
position in the wireless data communications market. During fiscal 2007
we generated wireless datacom revenue of approximately $60 million. The
acquisitions of SmartLink Radio Networks and AirIQ's Vehicle Tracking
business after the end of fiscal 2007 further expand our addressable
markets and have added key capabilities. These acquisitions also
strengthen CalAmp's competitive position and enhance our future growth
prospects in the wireless datacom market. Additionally, during the first
quarter of fiscal 2008 we realigned our Products Division into two
operating units - Wireless DataCom and Satellite. This new structure will
provide greater focus on our growing wireless datacom business and provide
our investors with greater visibility."
Mr. Sturm continued, "Our fourth quarter Direct Broadcast Satellite (DBS)
equipment revenues of $37 million were essentially flat on a year-over-
year basis and on a sequential quarter basis reflected the normal lower
seasonal unit demand. The two products that we launched in our fiscal
2007 third quarter to support expanded HDTV programming offerings
significantly contributed to our fiscal 2007 fourth quarter revenue,
accounting for approximately 50% of DBS revenue for this period. We are
encouraged by the recent successes of the DBS service providers to grow
their HDTV subscriber bases. We believe this trend represents a long term
growth opportunity for CalAmp's latest generation products that have
higher average selling prices. We are, however, facing some challenges
near term in our DBS business. We recently filed suit against one of our
suppliers related to a material quality issue that has caused field
performance issues on an older generation DBS product that we shipped
during calendar years 2004 through 2006. We are working closely with our
DBS customer to mitigate the impact of these performance issues and to
identify and implement a corrective action plan. However, we expect that
this matter will adversely affect our sales volume with this customer for
fiscal 2008."
Fourth Quarter and Fiscal Year 2007 Results
- -------------------------------------------
Total revenue for the fiscal 2007 fourth quarter was $57.0 million
compared to $47.8 million for the fourth quarter of fiscal 2006. Growth
in the Company's wireless data communications business, driven by the May
2006 acquisitions of Dataradio and the TechnoCom Mobile Resource
Management (MRM) product line, were partially offset by lower Solutions
Division revenue in the latest quarter.
Net income for the fiscal 2007 fourth quarter was $0.7 million or $0.03
per diluted share compared to net income of $3.5 million or $0.15 per
diluted share for the fourth quarter of last year. Adjusted Basis (non-
GAAP) net income for the fiscal 2007 fourth quarter was $1.9 million or
$0.08 per diluted share compared to Adjusted Basis net income of $3.7
million or $0.15 per diluted share for the same period last year.
Adjusted Basis net income excludes the impact of amortization of
intangible assets, stock-based compensation expense, write-off of acquired
in-process research and development costs and impairment losses, 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 fourth quarter of fiscal 2007 was $11.8 million, or
20.6% of revenues compared to $12.2 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 a shift in DBS product mix, higher warranty
costs and the Company's decision to incur higher freight costs on certain
DBS products in order to meet customer requirements, partially offset by
growth in the Company's higher-margin Wireless DataCom business.
For fiscal 2007 revenue was $222.3 million, up slightly from revenue of
$217.5 million in fiscal 2006. Gross profit in fiscal 2007 was $49.4
million, which is 6% lower than gross profit of $52.7 million in fiscal
2006. The net loss for fiscal 2007 was $31.2 million or $1.34 per diluted
share compared to net income of $14.6 million or $0.62 per diluted share
in fiscal 2006. Adjusted Basis (non-GAAP) net income was $9.2 million or
$0.39 per diluted share in fiscal 2007 compared to $15.8 million or $0.67
per diluted share in fiscal 2006.
Liquidity
- ---------
At February 28, 2007, the Company had total cash of $37.5 million, with
$34.3 million in total outstanding debt. Net cash provided by operating
activities was $5.0 million in the fiscal 2007 fourth quarter and $16.7
million for fiscal 2007 as a whole. Inventory was $25.7 million at the
end of the fourth quarter, representing annualized turns of approximately
8 times. Accounts receivable outstanding at the end of the fourth quarter
represents a 54 day average collection period. In March and April 2007
the Company used cash on hand in the aggregate amount of $27.1 million to
consummate the acquisitions of AirIQ's Vehicle Tracking business and
Smartlink Radio Networks.
Business Outlook
- ----------------
Commenting on the Company's business outlook, Mr. Sturm said, "Based on
our current estimates, we anticipate fiscal 2008 first quarter
consolidated revenues will be in the range of $44 to $47 million, with a
net loss in the range of $0.06 to $0.09 per diluted share, which includes
an estimated $1 million write-off of in-process research and development
associated with the acquisition of Smartlink Radio Networks. Adjusted
Basis (non-GAAP) net income for the first quarter, which excludes
amortization of intangible assets, stock-based compensation expense and
write-off of acquired research and development costs-each net of tax-is
expected to be $0.00 to $0.02 per diluted share. Included in our first
quarter estimates are revenue contributions from our wireless datacom
business in the range of $21 million to $23 million."
Conference Call, Webcast and 10-K filing
- ----------------------------------------
A conference call and simultaneous webcast to discuss fiscal 2007 fourth
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 Annual Report on Form 10-K,
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",
"anticipate", "goal" 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, product demand, increased competition, competitive
pricing and continued pricing declines in the DBS market, 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 or uncertainties that are described in the
Company's fiscal 2007 Annual Report on Form 10-K filed today 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 Year Ended
February 28 (a) February 28 (a)
------------------ ----------------
2007 2006 2007 2006
------ ------ ------ ------
Revenues $57,000 $47,789 $222,339 $217,493
Cost of revenues 45,239 35,620 172,938 164,747
------- ------- ------- -------
Gross profit 11,761 12,169 49,401 52,746
Operating expenses:
Research and development 4,559 1,967 15,015 9,109
Selling 2,767 1,381 10,157 6,963
General and administrative 2,739 2,800 12,377 10,700
Amortization of intangible assets 1,230 396 4,135 1,771
Write-off of acquired in-process
research and development - (10) 6,850 310
Impairment loss - - 29,848 -
------ ------- ------- -------
11,295 6,534 78,382 28,853
------ ------- ------- -------
Operating income (loss) 466(b) 5,635 (28,981)(b) 23,893
Non-operating income (expense), net - 305 574 536
------ ------- ------- -------
Income (loss) before income taxes 466 5,940 (28,407) 24,429
Income tax benefit (provision) 266 (2,475) (2,781) (9,867)
------ ------- ------- -------
Net income (loss) $ 732 $ 3,465 $(31,188) $ 14,562
====== ======= ======= =======
Net income (loss) per share:
Basic $0.03 $0.15 $(1.34) $0.64
Diluted $0.03 $0.15 $(1.34) $0.62
Shares used in per share calculations:
Basic 23,548 22,857 23,353 22,605
Diluted 23,868 23,843 23,353 23,415
(a) The Company uses a 52-53 week fiscal year ending on the Saturday
closest to February 28, which for fiscal years 2007 and 2006 fell
on March 3, 2007 and February 25, 2006, respectively. In this press
release, the fiscal year end for both years is shown as February 28 for
clarity of presentation. Fiscal 2007 consisted of 53 weeks and fiscal
year 2006 consisted of 52 weeks. The fourth quarters of fiscal years
2007 and 2006 both consisted of 13 weeks.
(b) Operating income (loss) for the three months and year ended February 28,
2007 includes share-based compensation expense pursuant to FAS123R of
$599 and $2,213, respectively. Such expense is included in the
following captions of the Statement of Operations:
Three Months
Ended Year Ended
Feb. 28, 2007 Feb. 28, 2007
------------- -------------
Statement of Operations Caption
-------------------------------
Cost of revenues $ 2 $ 114
Research and development expense 99 265
Selling expense 72 263
General and administrative 426 1,571
----- ------
$ 599 $2,213
===== ======
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CAL AMP CORP.
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands except per share amounts)
Three Months Ended Year Ended
February 28 February 28
---------------- ------------------
2007 2006 2007 2006
------ ------ ------ ------
Revenue
Products Division $55,420 $43,577 $213,204 $196,908
Solutions Division 1,580 4,212 9,135 20,585
------- ------- ------- -------
Total revenue $57,000 $47,789 $222,339 $217,493
======= ======= ======= =======
Gross profit
Products Division $10,823 $10,614 $ 45,537 $ 45,589
Solutions Division 938 1,555 3,864 7,157
------- ------- ------- -------
Total gross profit $11,761 $12,169 $ 49,401 $ 52,746
======= ======= ======= =======
Operating income (loss)
Products Division $ 2,464 $ 7,908 $ 9,800 $ 31,361
Solutions Division (544) (1,161) (32,928) (3,190)
Corporate expenses (1,454) (1,112) (5,853) (4,278)
------- ------- ------- -------
Total operating income (loss) $ 466(a) $ 5,635 $(28,981)(a) $ 23,893
======= ======= ======= =======
(a) Operating income (loss) for the three months and year ended February
28, 2007 includes share-based compensation expense pursuant to FAS123R
of $599 and $2,213, respectively. Such expense is included in the
operating income (loss) of the reporting segments as follows:
Three Months
Ended Year Ended
Feb. 28, 2007 Feb. 28, 2007
------------- -------------
Reporting Segment
-----------------
Products Division $ 195 $ 726
Solutions Division 109 405
Corporate expenses 295 1,082
----- ------
$ 599 $2,213
===== ======
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CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
February 28, February 28,
2007 2006
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 37,537 $ 45,783
Accounts receivable, net 38,439 28,630
Inventories 25,729 18,279
Deferred income tax assets 4,637 4,042
Prepaid expenses and other current assets 7,182 2,502
-------- --------
Total current assets 113,524 99,236
Equipment and improvements, net 6,308 5,438
Deferred income tax assets, less current portion - 2,344
Goodwill 90,001 91,386
Other intangible assets, net 18,643 5,304
Other assets 1,227 638
-------- --------
$229,703 $204,346
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2,944 $ 2,168
Accounts payable 26,186 12,011
Accrued payroll and employee benefits 3,478 3,608
Other accrued liabilities 4,094 2,763
Deferred revenue 1,935 1,323
-------- --------
Total current liabilities 38,637 21,873
-------- --------
Long-term debt, less current portion 31,314 5,511
-------- --------
Deferred income tax liabilities 7,451 -
-------- --------
Other non-current liabilities 1,050 853
-------- --------
Stockholders' equity:
Common stock 236 232
Additional paid-in capital 139,175 135,022
Common stock held in escrow - (2,532)
Retained earnings 13,000 44,188
Accumulated other comprehensive loss (1,160) (801)
-------- --------
Total stockholders' equity 151,251 176,109
-------- --------
$229,703 $204,346
======== ========
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CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Year Ended
February 28,
------------------
2007 2006
---- ----
Cash flows from operating activities:
Net income (loss) $(31,188) $ 14,562
Depreciation and amortization 6,920 4,372
Stock-based compensation expense 2,213 -
Write-off of in-process R&D 6,850 310
Impairment loss 29,848 -
Stock option income tax benefits - 1,158
Excess tax benefit from stock-based compensation (496) -
Deferred tax assets, net 1,485 6,236
Changes in operating working capital 1,006 (4,301)
Other 85 43
-------- -------
Net cash provided by operating activities 16,723 (a) 22,380
-------- -------
Cash flows from investing activities:
Capital expenditures (2,828) (2,296)
Proceeds from sale of property and equipment 16 146
Acquisition of Dataradio net of cash acquired (48,053) -
Acquisition of TechnoCom product line (2,486) -
Proceeds from Vytek escrow distribution 480 -
Acquisition of Skybility assets - (4,897)
Other (240) -
-------- -------
Net cash used in investing activities (53,111) (7,047)
-------- -------
Cash flows from financing activities:
Proceeds from long-term debt 38,000 -
Debt repayments (11,421) (2,888)
Proceeds from stock option exercises 1,397 2,290
Excess tax benefit from stock-based compensation 496 -
-------- -------
Net cash provided (used) by financing activities 28,472 (598)
-------- -------
Effect of exchange rate changes on cash (330) -
-------- -------
Net change in cash and cash equivalents (8,246) 14,735
Cash and cash equivalents at beginning of period 45,783 31,048
-------- -------
Cash and cash equivalents at end of period $ 37,537 $ 45,783
======== =======
(a) Net cash provided by operating activities for the year ended
February 28, 2007 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:
Three Months
Ended Year Ended
February 28, February 28,
------------- -------------
2007 2006 2007 2006
----- ----- ----- -----
GAAP basis net income (loss) $ 732 $3,465 $(31,188) $14,562
Adjustments to reconcile to
non-GAAP net income:
Amortization of intangible assets,
net of tax 771 236 2,593 1,056
Stock-based compensation expense,
net of tax 376 - 1,388 -
In-process research and development,
net of tax in fiscal 2006 - (6) 6,850 185
Impairment loss - goodwill - - 29,012 -
Impairment loss - intangible
assets, net of tax - - 524 -
------ ------ ------ -------
$ 1,879 $3,695 $ 9,179 $15,803
====== ===== ====== =======
Adjusted Basis net income $ 0.08 $ 0.15 $ 0.39 $ 0.67
Weighted average common shares
outstanding on diluted basis 23,868 23,843 23,742 23,415
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 the 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:
Year Ended
February 28,
------------------
2007 2006
---- ----
Pretax income (loss) as reported $(28,407) $ 24,429
Add back nondeductible items:
In process research and development in fiscal 2007 6,850 -
Impairment loss - goodwill 29,012 -
------- -------
Pretax income before nondeductible items 7,455 24,429
Income tax provision as reported 2,781 9,867
------- -------
Year-to-date effective income tax rate as adjusted 37.3% 40.4%
======= =======
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