Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo
FOR IMMEDIATE RELEASE
CalAmp Reports Fiscal 2008 Second Quarter Results
OXNARD, Calif., October 11, 2007--CalAmp Corp. (Nasdaq: CAMP), a leading
provider of wireless communications products, today reported results for its
fiscal 2008 second quarter ended August 31, 2007. Key elements include:
Second quarter revenues of $32.7 million, GAAP loss from continuing
operations of $0.14 per diluted share and Adjusted Basis (non-GAAP)
loss from continuing operations of $0.08 per diluted share.
Wireless DataCom second quarter revenues of $22.8 million nearly 50%
higher than prior year.
Completed the sale of the TelAlert software business in a transaction
valued at approximately $9.4 million.
"Similar to last quarter, our operating results were driven by the continued
strength of our Wireless DataCom Division, which generated revenues of $22.8
million-a 46% increase compared to the same period last year," commented Fred
Sturm, CalAmp's President and Chief Executive Officer. "During the second
quarter, the Wireless DataCom Division benefited from contributions by the
recent acquisitions of SmartLink Radio Networks and AirIQ's Vehicle Tracking
business. Furthermore, we are pleased that several new wireless
communications products that the Company recently developed and launched
earlier in calendar year 2007 for mobile resource management (MRM)
applications are achieving increased market penetration and are producing
solid revenue growth. We continue to believe that our wireless datacom
business provides significant growth opportunities and enhances CalAmp's
overall profitability and competitiveness."
Regarding the previously announced product performance issues with a key DBS
customer that resulted in the customer suspending orders for new products, Mr.
Sturm stated, "We are still in discussions with this customer working towards
resolution of this matter, and although it is taking longer than previously
anticipated, we expect that we will soon achieve that resolution and resume
making volume shipments to this customer."
Fiscal 2008 Second Quarter Results
Total revenue for the fiscal 2008 second quarter was $32.7 million
compared to $54.6 million for the second quarter of fiscal 2007. Lower
revenue from the Satellite Division in the latest quarter was partially
offset by growth in the Company's Wireless DataCom Division, which was
driven by recent acquisitions and organic growth.
The net loss for the fiscal 2008 second quarter was $4.4 million or $0.19
per diluted share compared to net income of $1.2 million or $0.05 per
diluted share for the second quarter of last year. As noted above, during
the fiscal 2008 second quarter, the Company completed the sale of its
TelAlert software business, the last remaining business within the
Solutions Division, in a transaction valued at approximately $9.4 million.
The operating results of the Solutions Division have been presented in the
accompanying consolidated statement of operations as a discontinued
operation for all periods presented. Excluding the effect of discontinued
operations, the fiscal 2008 second quarter loss from continuing operations
was $3.3 million or $0.14 per diluted share compared to income from
continuing operations of $1.7 million, or $0.07 per diluted share, for the
same period last year.
The Adjusted Basis (non-GAAP) loss from continuing operations for the
fiscal 2008 second quarter was $2.0 million or $0.08 per diluted share
compared to Adjusted Basis income from continuing operations of $2.8
million or $0.12 per diluted share for the same period last year.
Adjusted Basis income (loss) from continuing operations excludes the
impact of amortization of intangible assets, stock-based compensation
expense and write-off of acquired in-process research and development
costs, each net of tax where applicable. A reconciliation of the GAAP
basis income (loss) from continuing operations to Adjusted Basis income
(loss) from continuing operations is provided in the table at the end of
this press release. Excluding the effect of discontinued operations, both
GAAP-basis EPS and Adjusted Basis (non-GAAP) EPS for the fiscal 2008
second quarter would have been within previously announced guidance.
Gross profit for the fiscal 2008 second quarter was $6.3 million, or 19.3%
of revenues compared to $12.7 million or 23.2% of revenues for the same
period last year. The reduction in gross profit and gross margin were
primarily the result of lower sales of Satellite Division products.
Liquidity
At August 31, 2007, the Company had total cash of $8.4 million, with $32.8
million in total outstanding debt. As previously disclosed, the loss
recorded in the first quarter of fiscal 2008 has caused the Company to
become noncompliant with the financial covenants under the Company's bank
credit agreement that preclude additional borrowing under the revolving
credit facility until the Company is able to obtain a waiver from its
lenders and/or an amendment of the credit agreement. The Company is in
discussions with its lenders to resolve the issue. In the near term the
Company believes that it has sufficient liquidity such that the
restriction on borrowing under the revolving credit facility will not
materially affect its operations. However, if the lenders are unwilling
to agree to a waiver or an amendment or exercise their rights to
accelerate borrowings outstanding under the credit agreement, the
inability to borrow under the revolving credit facility and/or the
acceleration of such indebtedness could materially adversely affect the
Company's financial position and operations, including its ability to fund
its currently anticipated working capital and capital expenditure needs.
Because the lenders have the right to call the loan until such time as a
waiver is obtained, the entire $32.8 million outstanding balance of the
bank loan is classified as a current liability in the August 31, 2007
balance sheet.
Net cash used in operating activities was $2.1 million for the six months
ended August 31, 2007. Inventory was $27.0 million at the end of the
second quarter, representing annualized turns of approximately 4 times.
Accounts receivable outstanding of $24.8 million at the end of the second
quarter represents a 67 day average collection period.
Business Outlook
Commenting on the Company's business outlook, Mr. Sturm said, "Based on
our current forecast, we believe fiscal 2008 third quarter consolidated
revenues will be in the range of $32 to $35 million, with a loss from
continuing operations in the range of $0.07 to $0.11 per diluted share.
The Adjusted Basis (non-GAAP) loss from continuing operations for the
second 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 $0.01 to $0.05 per
diluted share. During the third quarter, we expect revenue contributions
from our Wireless DataCom Division in the range of $22 million to $25
million."
Conference Call, Webcast and Form 10-Q Filing
A conference call and simultaneous webcast to discuss fiscal 2008 second
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 a 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, the Company's ability to obtain a waiver from the lenders
under its bank credit agreement of the event of default under the credit
agreement, the Company's ability to successfully requalify with respect to
the sale of newer generation products to one of its key DBS customers, the
risk that the ultimate cost of resolving a product performance issue with
that DBS customer may exceed the amount of reserves established for that
purpose, and other risks or uncertainties that are described in the
Company's fiscal 2007 Annual Report on Form 10-K on May 17, 2007 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 (213) 486-6546
lglassen@frbir.com
-Financial Tables to Follow-
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CAL AMP CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ -----------------
2007 2006 2007 2006
------ ------ ------ ------
Revenues $ 32,668 $ 54,629 $ 79,061 $ 97,586
Cost of revenues 26,353 41,973 78,132 74,842
------- ------- ------- -------
Gross profit 6,315 12,656 929 22,744
Operating expenses:
Research and development 3,795 3,613 8,114 6,119
Selling 2,373 2,067 4,642 2,724
General and administrative 3,457 2,600 6,659 4,655
Intangible asset amortization 1,558 1,150 3,302 1,309
In-process research
and development - - 310 6,850
------- ------- ------- -------
11,183 9,430 23,027 21,657
------- ------- ------- -------
Operating income (loss) (4,868) 3,226 (22,098) 1,087
Non-operating income (expense), net (507) (237) (1,090) 727
------- ------- ------- -------
Income (loss) from continuing
operations before income taxes (5,375) 2,989 (23,188) 1,814
Income tax benefit (provision) 2,117 (1,291) 8,985 (3,525)
------- ------- ------- -------
Income (loss) from continuing
operations (3,258) 1,698 (14,203) (1,711)
Loss from discontinued
operations, net of tax (180) (463) (597) (31,105)(a)
Loss on sale of discontinued
operations, net of tax (935) - (935) -
------- ------- ------- -------
Net income (loss) $ (4,373) $ 1,235 $(15,735) $(32,816)
======= ======= ======= =======
Basic and diluted earnings
(loss) per share:
Income (loss) from continuing
operations $(0.14) $ 0.07 $(0.60) $(0.07)
Loss from discontinued
operations (0.01) (0.02) (0.03) (1.34)
Loss on sale of discontinued
operations (0.04) - (0.04) -
------ ------ ------ ------
Total basic and diluted
earnings (loss) per share $(0.19) $ 0.05 $(0.67) $(1.41)
====== ====== ====== ======
Shares used in per share calculations:
Basic 23,623 22,337 23,612 23,230
Diluted 23,623 23,689 23,612 23,230
(a) Includes a goodwill and intangible asset impairment charge of
$29.8 million on discontinued operations in the quarter ended May 31, 2006.
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CAL AMP CORP.
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
August 31, August 31,
------------------ -----------------
2007 2006 2007 2006
------ ------ ------ ------
Revenue
Satellite Division $ 9,851 $ 38,955 $ 32,882 $ 73,046
Wireless DataCom Division 22,817 15,674 46,179 24,540
------- ------- ------- -------
Total revenue $ 32,668 $ 54,629 $ 79,061 $ 97,586
======= ======= ======= =======
Gross profit (loss)
Satellite Division $ (1,835)(a)$ 6,123 $(15,751)(a) $ 13,047
Wireless DataCom Division 8,150 6,533 16,680 9,697
------- ------- ------- -------
Total gross profit $ 6,315 $ 12,656 $ 929 $ 22,744
======= ======= ======= =======
Operating income (loss)
Satellite Division $ (3,064)(a)$ 4,232 $(18,295)(a) $ 9,249
Wireless DataCom Division (500)(b) 523 (1,146)(b) (5,351)(c)
Corporate expenses (1,304) (1,529) (2,657) (2,811)
------- ------- ------- -------
Total operating income (loss) $ (4,868) $ 3,226 $(22,098) $ 1,087
======= ======= ======= =======
(a) Includes charges for estimated product warranty and related costs in the
three and six-month periods ended August 31, 2007 of $1.5 million and
$17.8 million, respectively.
(b) Includes a goodwill and intangible asset impairment charge of
$29.8 million on discontinued operations in the quarter ended
May 31, 2006.
(c) Includes a charge of $6.85 million in the quarter ended May 31, 2006
for the write-off of in-process research and development costs
associated with the acquisition of Dataradio.
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CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
August 31, February 28,
2007 2007
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 8,370 $ 37,537
Accounts receivable, net 24,837 38,439
Inventories 26,987 25,729
Deferred income tax assets 1,817 4,637
Prepaid expenses and other current assets 13,124 7,182
-------- --------
Total current assets 75,135 113,524
Equipment and improvements, net 5,952 6,308
Deferred income tax assets, less current portion 6,828 -
Goodwill 100,602 90,001
Other intangible assets, net 27,539 18,643
Other assets 4,550 1,227
-------- --------
$220,606 $229,703
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 32,782 $ 2,944
Accounts payable 14,184 26,186
Accrued payroll and employee benefits 3,194 3,478
Accrured warranty costs 11,449 1,295
Other accrued liabilities 11,193 2,799
Deferred revenue 5,659 1,935
-------- --------
Total current liabilities 78,461 38,637
-------- --------
Long-term debt, less current portion - 31,314
-------- --------
Deferred income tax liabilities - 7,451
-------- --------
Other non-current liabilities 4,701 1,050
-------- --------
Stockholders' equity:
Common stock 236 232
Additional paid-in capital 140,423 139,175
Retained earnings (accumulated deficit) (2,735) 13,000
Accumulated other comprehensive loss (480) (1,160)
-------- --------
Total stockholders' equity 137,444 151,251
-------- --------
$220,606 $229,703
======== ========
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CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Six Months Ended
August 31,
------------------
2007 2006
---- ----
Cash flows from operating activities:
Net loss $(15,735) $(32,816)
Depreciation and amortization 5,201 3,111
Stock-based compensation expense 1,027 1,073
Write-off of in-process research and
and development costs 310 6,850
Impairment loss - 29,848
Excess tax benefit from stock-based compensation (55) (258)
Deferred tax assets, net (14,388) (261)
Loss on sale of discontinued operations,
net of tax 935 -
Gain on sale of investment (331) -
Changes in operating working capital 20,934 (7,636)
Other (2) 58
-------- --------
Net cash used in operating activities (2,104) (31)
-------- --------
Cash flows from investing activities:
Capital expenditures (920) (1,382)
Proceeds from sale of property and equipment 4 16
Proceeds from sale of investment 1,045 -
Proceeds from sale of discontinued operations 4,000 -
Acquisition of Aircept (19,315) -
Acquistion of SmartLink (7,944) -
Cash restricted for repayment of debt (3,309) -
Acquisition of Dataradio net of cash acquired - (48,038)
Acquisition of TechnoCom product line - (2,478)
Proceeds from Vytek escrow distribution - 480
-------- --------
Net cash used in investing activities (26,439) (51,402)
-------- --------
Cash flows from financing activities:
Proceeds from long-term debt - 38,000
Debt repayments (1,476) (7,658)
Proceeds from stock option exercises 157 533
Excess tax benefit from stock-based compensation 55 258
-------- --------
Net cash provided (used) by financing activities (1,264) 31,133
-------- --------
Effect of exchange rate changes on cash 640 2
-------- --------
Net change in cash and cash equivalents (29,167) (20,298)
Cash and cash equivalents at beginning of period 37,537 45,783
-------- --------
Cash and cash equivalents at end of period $ 8,370 $ 25,485
======== ========
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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 reports the non-GAAP financial measures of
Adjusted Basis Income (Loss) from Continuing Operations and Diluted Income
(Loss) from Continuing Operations Per Share. CalAmp uses these non-GAAP
financial measures to enhance the investor's overall understanding of the
financial performance and future prospects of CalAmp's core business activities.
Specifically, CalAmp believes that a report of Adjusted Basis Income (Loss) from
Continuing Operations and Diluted Income (Loss) from Continuing Operations 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 the GAAP Basis Income (Loss) from Continuing Operations to
Adjusted Basis Income (Loss) from Continuing Operations is as follows:
Three Months Six Months
Ended Ended
August 31, August 31,
------------- -------------
2007 2006 2007 2006
----- ----- ----- -----
GAAP Basis Income (Loss) from
Continuing Operations $(3,258) $1,698 $(14,203) $(1,711)
Adjustments to reconcile to
Adjusted Basis Income (Loss)
from Continuing Operations:
Amortization of intangible assets,
net of tax 954 682 2,022 776
Stock-based compensation expense,
net of tax 331 387 629 636
In-process R&D, net of tax
in fiscal 2008 - - 190 6,850
------- ------- ------- -------
Adjusted Basis Income (Loss)
from Continuing Operations $(1,973) $ 2,767 $(11,362) $ 6,551
======= ======= ======= =======
Adjusted Basis Income (Loss)
from Continuing Operations
per diluted share $ (0.08) $ 0.12 $ (0.48) $ 0.28
Weighted average common shares
outstanding on diluted basis 23,623 23,689 23,612 23,230
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)
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:
Six Months Ended
August 31,
------------------
2007 2006
---- ----
Income (Loss) from Continuing Operations Before
Income Taxes, as reported $(23,188) $ 1,814
Add back nondeductible items:
In-process research and development in fiscal 2007 - 6,850
------- -------
Pretax income before nondeductible items (23,188) 8,664
Income tax benefit (provision) as reported 8,985 (3,525)
------- -------
Year-to-date effective income tax rate as adjusted 38.8% 40.7%
======= =======
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