Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo
CalAmp Reports Fiscal 2008 Fourth Quarter and Full-Year Results
OXNARD, Calif., May 8, 2008--CalAmp Corp. (Nasdaq: CAMP), a leading provider of
wireless products, services, and solutions, today reported results for its
fiscal 2008 fourth quarter and full-year ended February 28, 2008. Information
reported herein is consistent with preliminary results described in a press
release issued by the Company on April 22, 2008. Key elements include:
* Consolidated fourth quarter revenues of $29.8 million; Wireless DataCom
Division revenues of $20.5 million, 14% higher than prior year.
* Fourth quarter GAAP loss from continuing operations of $9.2 million, or $0.37
per diluted share, includes non-cash pretax charge of $5.5 million for goodwill
impairment; Adjusted basis (non-GAAP) loss from continuing operations of $2.7
million or $0.11 per diluted share.
* Fourth quarter net cash provided by operations of $2.6 million; cash and cash
equivalents balance increased to $6.6 million.
* Announced amendment of credit agreement with lenders that eliminates previous
default conditions and establishes new financial covenants.
Rick Gold, CalAmp's President and Chief Executive Officer, commented, "Fiscal
2008 presented CalAmp with extraordinary financial and operational challenges,
but I am encouraged by recent accomplishments. The requalification of our
products with a key DBS customer and the amendment to our credit agreement with
our lenders provide us with added momentum and enhanced financial flexibility.
In my new role as CEO, I look forward to leading CalAmp's dedicated team as we
build on our strong foundation and work to return CalAmp to profitability."
Mr. Gold added, "Consolidated fourth quarter revenues of $29.8 million were
within our original expectations and I am pleased to report that we generated
net cash from operating activities of $2.6 million in the quarter. These
results were driven by the Wireless DataCom Division, which recorded revenues
of $20.5 million, a 14% increase over the same quarter last year. The critical
mass we have achieved in Wireless DataCom gives us a competitive advantage that
most other players cannot match in the markets we serve. CalAmp is in the
enviable position of having vertically integrated capabilities coupled with a
broad range of technology platforms. This gives CalAmp the ability to provide
our customers with high value, end-to-end solutions for their mission-critical
wireless communications requirements."
Mr. Gold concluded, "With the product requalification having been obtained from
our historically largest DBS customer, the production lines for these products
have been restarted, and we anticipate that our shipments to this customer will
resume by the end of this month. We expect to be shipping a mix of both
revenue-generating new units and refurbished units that were returned by the
customer for rework under the product warranty. We look forward to re-
establishing a profitable commercial relationship with this important
customer."
Fiscal 2008 Fourth Quarter Results
Total revenue for the fiscal 2008 fourth quarter was $29.8 million compared to
$55.0 million for the fourth 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 fourth quarter was $7.5 million, or 25.3% of
revenues compared to $10.7 million or 19.4% 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 Division products.
Results of operations for the fiscal 2008 fourth quarter as determined in
accordance with U.S. Generally Accepted Accounting Principles ("GAAP") was a
loss from continuing operations of $9.2 million, or $0.37 per diluted share.
The loss includes a $5.5 million pretax goodwill impairment charge comprised of
impairments in the Satellite and Wireless DataCom divisions of $1.2 million and
$4.3 million, respectively. This goodwill impairment charge resulted from the
second phase of the impairment test and is in addition to the impairment
charges recorded during the third quarter of fiscal 2008. The fourth quarter
of fiscal 2008 also includes a pretax charge of $850,000 for expenses
associated with the departure of the Company's former chief executive officer.
The Adjusted Basis (non-GAAP) loss from continuing operations for the fiscal
2008 fourth quarter was $2.7 million, or $0.11 per diluted share compared to
Adjusted Basis income from continuing operations of $2.8 million or $0.11 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 February 28, 2008, the Company had total cash of $6.6 million, with $27.5
million in total outstanding bank debt and a $5 million note payable to a key
DBS customer. As previously disclosed, during the fiscal fourth quarter, the
Company announced the amendment of its credit agreement with its lenders.
Under the terms of the amended credit agreement, the lenders agreed to waive
the financial covenant violations that existed for the first three quarters of
fiscal 2008. In addition, financial covenants contained in the original credit
agreement, including a fixed charge coverage ratio, a leverage ratio and
minimum net worth requirement, have been eliminated and replaced with new
covenants that require minimum levels of consolidated earnings before interest,
taxes, depreciation and amortization (EBITDA) and Wireless DataCom Division
revenues. The credit agreement as amended will have a maturity date of June
30, 2009, with financial incentives to repay all borrowings by December 31,
2008. Further details of the terms and conditions of this credit agreement
amendment are provided in the Company's Form 8-K that was filed with the
Securities and Exchange Commission on March 3, 2008.
Net cash provided by operating activities was $2.6 million for the three months
ended February 28, 2008. For the year ended February 28, 2008, net cash used
by operating activities was $1.5 million. Inventory was $25.1 million at the
end of the fourth quarter, representing annualized turns of approximately 3
times. Accounts receivable outstanding at the end of the fourth quarter
represents a 55 day average collection period.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said, "While I am
pleased with our recent progress, our first quarter outlook is cautious due in
part to continued uncertainty surrounding the U.S. economy, which could impact
purchase decisions by key customers. Based on our current forecast, we believe
fiscal 2009 first quarter consolidated revenues will be in the range of $29 to
$32 million, with a GAAP basis net loss in the range of $0.05 to $0.08 per
diluted share. The Adjusted Basis (non-GAAP) results of operations for the
first quarter, which exclude amortization of intangible assets and stock-based
compensation expense net of tax, are expected to be in the range of breakeven
to a $0.03 loss per diluted share."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2008 fourth
quarter and full-year 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 Rick Gold 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.
About CalAmp Corp.
CalAmp is a leading provider of high value mission-critical wireless
communications solutions that enable anytime/anywhere access. CalAmp's
Wireless DataCom Division services the public safety, industrial monitoring and
controls, and mobile resource management market segments with wireless
solutions built on communications technology platforms that include proprietary
licensed narrowband, standards-based unlicensed broadband and cellular
networks. CalAmp's Satellite Division supplies outdoor customer premise
equipment to the U.S. Direct Broadcast Satellite (DBS) market. For additional
information, please visit www.calamp.com
Forward-Looking Statement
Statements in this press release that are not historical in nature are forward-
looking statements, that 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 resume shipments of certain 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 and the Quarterly Reports on Form 10-Q for the first three quarters
of fiscal 2008, all as filed 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-
<page>
CAL AMP CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three Months Ended Year Ended
February 28, February 28,
------------------ -----------------
2008 2007 2008 2007
------ ------ ------ ------
Revenues $ 29,785 $ 55,025 $140,907 $211,714
Cost of revenues 22,247 44,375 122,412 166,279
------- ------- ------- -------
Gross profit 7,538 10,650 18,495 45,435
Operating expenses:
Research and development 3,728 3,466 15,710 12,989
Selling 3,414 2,082 10,633 6,765
General and administrative 4,809 2,375 14,966 9,792
Intangible asset amortization 1,558 1,077 6,418 3,463
In-process research
and development - - 310 6,850
Impairment loss 5,531 - 71,276 -
------- ------- ------- -------
19,040 9,000 119,313 39,859
------- ------- ------- -------
Operating income (loss) (11,502) 1,650 (100,818) 5,576
Non-operating income (expense), net (760) - (2,472) 591
------- ------- ------- -------
Income (loss) from continuing
operations before income taxes (12,262) 1,650 (103,290) 6,167
Income tax benefit (provision) 3,046 73 20,940 (4,716)
------- ------- ------- -------
Income (loss) from continuing
operations (9,216) 1,723 (82,350) 1,451
Loss from discontinued
operations, net of tax - (991) (597) (32,639)
(a)
Loss on sale of discontinued
operations, net of tax (267) - (1,202) -
------- ------- ------- -------
Net income (loss) $ (9,483) $ 732 $(84,149) $(31,188)
======= ======= ======= =======
Basic and diluted earnings
(loss) per share:
Income (loss) from continuing
operations $(0.37) $ 0.07 $(3.45) $ 0.06
Loss from discontinued
operations (0.01) (0.04) (0.08) (1.40)
------ ------ ------ ------
Total basic and diluted
earnings (loss) per share $(0.38) $ 0.03 $(3.53) $(1.34)
====== ====== ====== ======
Shares used in per share calculations:
Basic 24,660 23,548 23,881 23,353
Diluted 24,660 23,868 23,881 23,353
(a) Includes a goodwill and intangible asset impairment charge of
$29.8 million on discontinued operations in the fiscal 2007 quarter.
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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,
-------------------- ------------------
2008 2007 2008 2007
------ ------ ------ ------
Revenue
Satellite Division $ 9,255 $ 37,036 $ 50,490 $155,127
Wireless DataCom Division 20,530 17,989 90,417 56,587
------- ------- ------- -------
Total revenue $ 29,785 $ 55,025 $140,907 $211,714
======= ======= ======= =======
Gross profit (loss)
Satellite Division $ 722 $ 3,841 $(14,808)(a) $ 23,402
Wireless DataCom Division 6,816 6,809 33,303 22,033
------- ------- ------- -------
Total gross profit $ 7,538 $ 10,650 $ 18,495 $ 45,435
======= ======= ======= =======
Operating income (loss)
Satellite Division $ (1,568)(a) $ 2,505 $(63,924)(a) $ 17,317
(b) (b)
Wireless DataCom Division (7,485)(c) 599 (30,473)(c) (5,888)(d)
Corporate expenses (2,449) (1,454) (6,421) (5,853)
------- ------- ------- -------
Total operating income (loss)$(11,502) $ 1,650 $(100,818) $ 5,576
======= ======= ======= =======
(a) Includes charges for estimated product warranty and related costs in the
three months and year ended February 28, 2008 of $-0- million and
$17.9 million, respectively.
(b) Includes a Satellite Division goodwill impairment charge in the three
months and year ended February 28, 2008 of $1.2 million and
$44.4 million, respectively.
(c) Includes a Wireless DataCom Division goodwill impairment charge in the
three months and year ended February 28, 2008 Of $4.3 million and
$26.9 million, respectively.
(d) Includes a charge of $6.8 million in the fiscal 2007 first quarter
for the write-off of in-process research and development costs
associated with the acquisition of Dataradio.
<page>
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
February 28, February 28,
2008 2007
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 6,588 $ 37,537
Accounts receivable, net 20,043 38,439
Inventories 25,097 25,729
Deferred income tax assets 5,306 4,637
Prepaid expenses and other current assets 9,733 7,182
-------- --------
Total current assets 66,767 113,524
Equipment and improvements, net 5,070 6,308
Deferred income tax assets, less current portion 14,802 -
Goodwill 28,520 90,001
Other intangible assets, net 24,424 18,643
Other assets 3,458 1,227
-------- --------
$143,041 $229,703
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 5,343 $ 2,944
Accounts payable 10,875 26,186
Accrued payroll and employee benefits 4,218 3,478
Accrued warranty costs 3,818 1,295
Other accrued liabilities 11,800 2,799
Deferred revenue 4,005 1,935
-------- --------
Total current liabilities 40,059 38,637
-------- --------
Long-term debt, less current portion 27,187 31,314
Deferred income tax liabilities - 7,451
Other non-current liabilities 2,375 1,050
Stockholders' equity:
Common stock 247 236
Additional paid-in capital 144,321 139,175
Retained earnings (accumulated deficit) (71,149) 13,000
Accumulated other comprehensive income(loss) 1 (1,160)
-------- --------
Total stockholders' equity 73,420 151,251
-------- --------
$143,041 $229,703
======== ========
<page>
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Year Ended
February 28,
------------------
2008 2007
---- ----
Cash flows from operating activities:
Net loss $(84,149) $(31,188)
Depreciation and amortization 9,681 6,920
Stock-based compensation expense 2,238 2,213
Write-off of in-process research and
and development costs 310 6,850
Impairment loss 71,276 29,848
Excess tax benefit from stock-based compensation (65) (496)
Deferred tax assets, net (20,784) 1,485
Loss on sale of discontinued operations,
net of tax 1,202 -
Gain on sale of investment (331) -
Changes in operating working capital 19,087 1,006
Other (6) 85
-------- --------
Net cash provided (used) by
operating activities (1,541) 16,723
-------- --------
Cash flows from investing activities:
Capital expenditures (1,359) (2,828)
Proceeds from sale of property and equipment 7 16
Proceeds from sale of investment 1,045 -
Proceeds from sale of discontinued operations 4,420 -
Acquisition of Aircept (19,318) -
Acquistion of SmartLink (7,845) -
Acquisition of Dataradio net of cash acquired - (48,053)
Acquisition of TechnoCom product line (985) (2,486)
Proceeds from Vytek escrow distribution - 480
Other - (240)
-------- --------
Net cash used in investing activities (24,035) (53,111)
-------- --------
Cash flows from financing activities:
Proceeds from long-term debt - 38,000
Debt repayments (6,728) (11,421)
Proceeds from stock option exercises 213 1,397
Excess tax benefit from stock-based compensation 65 496
-------- --------
Net cash provided (used) by financing activities (6,450) 28,472
-------- --------
Effect of exchange rate changes on cash 1,077 (330)
-------- --------
Net change in cash and cash equivalents (30,949) (8,246)
Cash and cash equivalents at beginning of period 37,537 45,783
-------- --------
Cash and cash equivalents at end of period $ 6,588 $ 37,537
======== ========
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
Ended Year Ended
February 28, February 28,
------------- -------------
2008 2007 2008 2007
----- ----- ----- -----
GAAP Basis Income (Loss) from
Continuing Operations $(9,216) $1,723 $(82,350) $ 1,451
Adjustments to reconcile to
Adjusted Basis Income (Loss)
from Continuing Operations:
Amortization of intangible assets,
net of tax 953 687 3,925 2,208
Stock-based compensation expense,
net of tax 387 312 1,317 1,153
In-process R&D, net of tax
in fiscal 2008 - - 190 6,850
Impairment loss, net of tax
on deductible portion 5,069 - 62,776 -
------- ------- ------- -------
Adjusted Basis Income (Loss)
from Continuing Operations $(2,807) $ 2,722 $(14,142) $11,662
======= ======= ======= =======
Adjusted Basis Income (Loss)
from Continuing Operations
per diluted share $ (0.11) $ 0.11 $ (0.59) $ 0.50
Weighted average common shares
outstanding on diluted basis 24,660 23,868 23,881 23,353
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:
Year Ended
February 28,
---------------------
2008 2007
---- ----
Pretax income (loss) from continuing operations
as reported $(103,290) $ 6,167
Add back nondeductible items:
In-process research and development in fiscal 2007 - 6,850
Nondeductible portion of impairment loss 49,397 -
------- -------
Pretax income (loss) from continuing operations
before nondeductible items (53,893) 13,017
Income tax benefit (provision) as reported 20,940 (4,716)
------- -------
Year-to-date effective income tax rate as adjusted 38.9% 36.2%
======= =======