Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo
CalAmp Reports Fiscal 2008 Third Quarter Results
OXNARD, Calif., January 15, 2008--CalAmp Corp. (Nasdaq: CAMP), a leading
provider of wireless products, services, and solutions, today reported
results for its fiscal 2008 third quarter ended November 30, 2007. Key
elements include:
Consolidated third quarter revenues of $32.1 million within
expectations; Wireless DataCom Division revenues of $23.7 million
nearly 70% higher than prior year.
Third quarter GAAP loss from continuing operations of $58.9 million,
or $2.49 per diluted share, includes non-cash pre-tax charge of
$65.7 million for goodwill impairment; Adjusted basis (non-GAAP)
income from continuing operations of $67,000 or $-0- per share
exceeded guidance.
Completed settlement agreeement with key Direct Broadcast Satellite
(DBS) customer.
Fred Sturm, CalAmp's President and Chief Executive Officer, commented,
"Overall, operational performance in the third quarter was within
expectations. I am pleased with our continued progress in executing our
strategy to profitably grow our Wireless DataCom business, which has been
our strategic growth initiative for the past two years. During the third
quarter our Wireless DataCom Division generated record revenues of $23.7
million driven by sequential quarter growth in our public safety, industrial
monitoring and controls and OEM businesses. Additionally, Wireless DataCom
gross margins benefited from higher margin new products introduced in 2007."
Mr. Sturm added, "Reaching a settlement agreement last month with a key DBS
customer was an important step in getting our Satellite Division back to
profitability. The agreement is structured in a way that reduces CalAmp's
future cash requirements, and more closely aligns the interests of our two
companies. We are continuing to work closely with this valued customer to
requalify our products, and we expect increasing revenues throughout fiscal
year 2009."
Mr. Sturm concluded, "The settlement agreement with this key DBS customer
has allowed CalAmp to start meaningful negotiations with our lenders to
address the previously announced noncompliance related to financial
covenants under our credit facility. We are working to resolve this matter
expeditiously, but we do not believe that the current restriction on
borrowing under the credit facility will adversely impact our near term
operations."
Fiscal 2008 Third Quarter Results
Total revenue for the fiscal 2008 third quarter was $32.1 million compared
to $59.1 million for the third quarter of fiscal 2007. Lower sales of
Satellite Division products in the latest quarter were partially offset by
higher Wireless DataCom Division revenues.
Gross profit for the fiscal 2008 third quarter was $10.0 million, or 31.3%
of revenues compared to $12.0 million or 20.4% of revenues for the same
period last year. The reduction in gross profit was primarily the result of
lower sales of Satellite Division products. The improvement in gross margin
percentage was due primarily to a change in product mix favoring increased
sales of higher margin Wireless DataCom products.
Results of operations for the fiscal 2008 third quarter as determined in
accordance with U.S. Generally Accepted Accounting Principles ("GAAP") was a
net loss from continuing operations of $58.9 million, or $2.49 per diluted
share. As a result of a significant decrease in recent business with a key
DBS customer due to a product performance issue, coupled with the
substantial decline in the Company's market capitalization, the Company
conducted an interim goodwill impairment analysis as of November 30, 2007.
This analysis indicated that goodwill in the aggregate amount of $65.7
million was impaired, comprised of impairments in the Satellite and Wireless
DataCom divisions of $43.2 million and $22.5 million, respectively. The
Wireless DataCom Division's revenue and gross profit are higher in the
current three and nine-month periods than the comparable periods of the
prior year. Nontheless, both reporting segments were determined to be
impaired because of the decline in the Company's market capitalization.
The Adjusted Basis (non-GAAP) income from continuing operations for the
fiscal 2008 third quarter was $67,000 or breakeven per diluted share
compared to Adjusted Basis income from continuing operations of $2.3 million
or $0.10 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 the impairment
loss, each net of tax to the extent 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.
Liquidity
At November 30, 2007, the Company had total cash of $5.0 million, with $32.0
million in total outstanding debt. As previously disclosed, the net loss
reported in the first quarter of fiscal 2008 caused the Company to become
noncompliant with the financial covenants under its bank credit agreement,
and as a result the Company cannot borrow under the working capital revolver
of this credit agreement until it 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 $32.0 million outstanding balance of the bank
loan is classified as a current liability in the November 30, 2007 balance
sheet.
Net cash used in operating activities was $4.9 million for the nine months
ended November 30, 2007. Inventory was $27.7 million at the end of the
third quarter, representing annualized turns of approximately 3 times.
Accounts receivable outstanding at the end of the third quarter represents a
60 day average collection period.
Business Outlook
Commenting on the Company's business outlook, Mr. Sturm said, "Based on our
current projections, we believe fiscal 2008 fourth quarter consolidated
revenues will be in the range of $29 to $33 million, with a GAAP basis loss
from continuing operations in the range of ($0.06) to ($0.10) per diluted
share. The Adjusted Basis (non-GAAP) loss from continuing operations for
the fourth quarter, which excludes amortization of intangible assets and
stock-based compensation expense net of tax, is expected to be ($0.01) to
($0.05) per diluted share. During the fourth quarter, we expect revenue
contributions from our Wireless DataCom Division in the range of $20 million
to $24 million."
Conference Call, Webcast and Form 10-Q Filing
A conference call and simultaneous webcast to discuss fiscal 2008 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
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 an amendment of its bank credit agreement to eliminate the event of
default under the credit agreement, the Company's ability to successfully
requalify certain newer generation products and resume selling these
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 filed on May 17, 2007 with the Securities and Exchange
Commission (SEC) and the Quarterly Report on Form 10-Q filed today with the
SEC. 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-
<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,
------------------ -----------------
2007 2006 2007 2006
------ ------ ------ ------
Revenues $ 32,061 $ 59,103 $111,122 $156,689
Cost of revenues 22,033 47,062 100,165 121,904
------- ------- ------- -------
Gross profit 10,028 12,041 10,957 34,785
Operating expenses:
Research and development 3,868 3,404 11,982 9,523
Selling 2,577 1,959 7,219 4,683
General and administrative 3,498 2,762 10,157 7,417
Intangible asset amortization 1,558 1,077 4,860 2,386
In-process research
and development - - 310 6,850
Impairment loss 65,745 - 65,745 -
------- ------- ------- -------
77,246 9,202 100,273 30,859
------- ------- ------- -------
Operating income (loss) (67,218) 2,839 (89,316) 3,926
Non-operating income (expense), net (622) (136) (1,712) 591
------- ------- ------- -------
Income (loss) from continuing
operations before income taxes (67,840) 2,703 (91,028) 4,517
Income tax benefit (provision) 8,909 (1,264) 17,894 (4,789)
------- ------- ------- -------
Income (loss) from continuing
operations (58,931) 1,439 (73,134) (272)
Loss from discontinued
operations, net of tax - (543) (597) (31,648)
(a)
Loss on sale of discontinued
operations, net of tax - - (935) -
------- ------- ------- -------
Net income (loss) $(58,931) $ 896 $(74,666) $(31,920)
======= ======= ======= =======
Basic and diluted earnings
(loss) per share:
Income (loss) from continuing
operations $(2.49) $ 0.06 $(3.10) $(0.01)
Loss from discontinued
operations - (0.02) (0.06) (1.36)
------ ------ ------ ------
Total basic and diluted
earnings (loss) per share $(2.49) $ 0.04 $(3.16) $(1.37)
====== ====== ====== ======
Shares used in per share calculations:
Basic 23,640 23,414 23,621 23,290
Diluted 23,640 23,679 23,621 23,290
(a) Includes a goodwill and intangible asset impairment charge of
$29.8 million on discontinued operations in the quarter ended May 31, 2006.
<page>
CAL AMP CORP.
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands except per share amounts)
Three Months Ended Nine Months Ended
November 30, November 30,
------------------- ---------------------
2007 2006 2007 2006
------ ------ ------ ------
Revenue
Satellite Division $ 8,353 $ 45,045 $ 41,235 $118,091
Wireless DataCom Division 23,708 14,058 69,887 38,598
------- ------- ------- -------
Total revenue $ 32,061 $ 59,103 $111,122 $156,689
======= ======= ======= =======
Gross profit (loss)
Satellite Division $ 221 $ 6,514 $(15,530)(a) $ 19,561
Wireless DataCom Division 9,807 5,527 26,487 15,224
------- ------- ------- -------
Total gross profit $ 10,028 $ 12,041 $ 10,957 $ 34,785
======= ======= ======= =======
Operating income (loss)
Satellite Division $(44,061)(a) $ 5,154 $(62,356)(a) $ 14,812
(b) (b)
Wireless DataCom Division (21,842)(c) (727) (22,988)(c) (6,487)
Corporate expenses (1,315) (1,588) (3,972) (4,399)
------- ------- ------- -------
Total operating income (loss)$(67,218) $ 2,839 $(89,316) $ 3,926
======= ======= ======= =======
(a) Includes charges for estimated product warranty and related costs in the
three and nine-month periods ended November 30, 2007 of $0.1 million and
$17.9 million, respectively.
(b) Includes a Satellite Division goodwill impairment charge of
$43.2 million.
(c) Includes a Wireless DataCom Division goodwill impairment charge
Of $22.5 million.
(c) Includes a charge of $6.8 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)
November 30, February 28,
2007 2007
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 5,036 $ 37,537
Accounts receivable, net 21,715 38,439
Inventories 27,744 25,729
Deferred income tax assets 7,638 4,637
Prepaid expenses and other current assets 13,166 7,182
-------- --------
Total current assets 75,299 113,524
Equipment and improvements, net 5,461 6,308
Deferred income tax assets, less current portion 9,949 -
Goodwill 35,039 90,001
Other intangible assets, net 25,982 18,643
Other assets 4,288 1,227
-------- --------
$156,018 $229,703
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 32,048 $ 2,944
Accounts payable 10,990 26,186
Accrued payroll and employee benefits 3,207 3,478
Accrured warranty costs 9,551 1,295
Other accrued liabilities 10,601 2,799
Deferred revenue 4,626 1,935
-------- --------
Total current liabilities 71,023 38,637
-------- --------
Long-term debt, less current portion - 31,314
Deferred income tax liabilities - 7,451
Other non-current liabilities 5,469 1,050
Stockholders' equity:
Common stock 236 236
Additional paid-in capital 141,058 139,175
Retained earnings (accumulated deficit) (61,666) 13,000
Accumulated other comprehensive loss (102) (1,160)
-------- --------
Total stockholders' equity 79,526 151,251
-------- --------
$156,018 $229,703
======== ========
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CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Nine Months Ended
November 30,
------------------
2007 2006
---- ----
Cash flows from operating activities:
Net loss $(74,666) $(31,920)
Depreciation and amortization 7,469 5,027
Stock-based compensation expense 1,605 1,614
Write-off of in-process research and
and development costs 310 6,850
Impairment loss 65,745 29,848
Excess tax benefit from stock-based compensation (64) (392)
Deferred tax assets, net (23,296) 3,555
Loss on sale of discontinued operations,
net of tax 935 -
Gain on sale of investment (331) -
Changes in operating working capital 18,080 (2,973)
Other 25 84
-------- --------
Net cash provided (used) by
operating activities (4,188) 11,693
-------- --------
Cash flows from investing activities:
Capital expenditures (1,106) (2,112)
Proceeds from sale of property and equipment 8 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 (3,340) -
Acquisition of Dataradio net of cash acquired - (48,047)
Acquisition of TechnoCom product line (703) (2,478)
Proceeds from Vytek escrow distribution - 480
-------- --------
Net cash used in investing activities (27,355) (52,141)
-------- --------
Cash flows from financing activities:
Proceeds from long-term debt - 38,000
Debt repayments (2,210) (11,416)
Proceeds from stock option exercises 206 1,130
Excess tax benefit from stock-based compensation 64 392
-------- --------
Net cash provided (used) by financing activities (1,940) 28,106
-------- --------
Effect of exchange rate changes on cash 982 (157)
-------- --------
Net change in cash and cash equivalents (32,501) (12,499)
Cash and cash equivalents at beginning of period 37,537 45,783
-------- --------
Cash and cash equivalents at end of period $ 5,036 $ 33,284
======== ========
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 Nine Months
Ended Ended
November 30, November 30,
------------- -------------
2007 2006 2007 2006
----- ----- ----- -----
GAAP Basis Income (Loss) from
Continuing Operations $(58,931) $1,439 $(73,134) $ (272)
Adjustments to reconcile to
Adjusted Basis Income (Loss)
from Continuing Operations:
Amortization of intangible assets,
net of tax 952 623 2,968 1,381
Stock-based compensation expense,
net of tax 353 313 980 934
In-process R&D, net of tax
in fiscal 2008 - - 189 6,850
Impairment loss, net of tax
on deductible portion 57,693 - 57,693 -
------- ------- ------- -------
Adjusted Basis Income (Loss)
from Continuing Operations $ 67 $ 2,375 $(11,304) $ 8,893
======= ======= ======= =======
Adjusted Basis Income (Loss)
from Continuing Operations
per diluted share $ - $ 0.10 $ (0.48) $ 0.38
Weighted average common shares
outstanding on diluted basis 23,640 23,679 23,621 23,290
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 nondeductible portion of the impairment charge in fiscal 2008) 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,
------------------
2007 2006
---- ----
Pretax income (loss) from continuing operations
as reported $(91,028) $ 4,517
Add back nondeductible items:
In-process research and development in fiscal 2007 - 6,850
Nondeductible portion of impairment loss 45,056 -
------- -------
Pretax income (loss) from continuing operations
before nondeductible items (45,972) 11,367
Income tax benefit (provision) as reported 17,894 (4,789)
------- -------
Year-to-date effective income tax rate as adjusted 38.9% 42.1%
======= =======