Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo
FOR IMMEDIATE RELEASE
CalAmp Reports Fiscal 2009 Second Quarter Results
OXNARD, Calif., October 7, 2008--CalAmp Corp. (Nasdaq: CAMP), a leading
provider of wireless products, services and solutions, today reported results
for its fiscal 2009 second quarter ended August 31, 2008. Key elements
include:
* Consolidated second quarter revenues of $23.3 million; wireless
datacom revenues of $20.1 million.
* GAAP loss from continuing operations of $1.5 million, or $0.06 loss
per basic and diluted share, within expectations; Adjusted Basis
(non-GAAP) loss from continuing operations of $0.5 million or $0.02
loss per basic and diluted share, also within expectations.
* Consolidated gross margin percentage of 32.0%; wireless datacom gross
margin percentage of 37.5%.
* Unit volumes of Direct Broadcast Satellite (DBS) product shipments to
historically largest customer beginning to ramp up.
Rick Gold, CalAmp's President and Chief Executive Officer, commented,
"Similar to last quarter, our operating results were driven by the continued
strong performance of our wireless datacom business, which generated revenues
of $20.1 million and accounted for 86% of our consolidated revenue. I am
particularly pleased with the contributions from our mobile resource
management-or MRM-product lines that continue to gain customer acceptance in
applications targeted for high value asset tracking and fleet management."
Mr. Gold continued, "Satellite product sales were modest for most of the
second quarter. However, I was encouraged to see unit volumes to our
historically largest DBS customer begin ramping up significantly at the end
of the quarter and we expect this will continue throughout the second half of
fiscal 2009. We are committed to rebuilding our competitive position in the
DBS market and I believe our recent efforts will help us achieve this goal
and return CalAmp to profitability."
Fiscal 2009 Second Quarter Results
Total revenue for the fiscal 2009 second quarter was $23.3 million compared
to $32.7 million for the second quarter of fiscal 2008. The reduction in
revenues was due primarily to significantly lower sales of the Company's
satellite products.
Gross profit for the fiscal 2009 second quarter was $7.5 million, or 32.0% of
revenues compared to gross profit of $6.3 million, or 19.3% of revenue for
the same period last year. The improvement in gross profit and gross margin
percentage in the latest quarter was due primarily to higher MRM revenues and
gross margin, and a charge included in last year's second quarter of $1.5
million for estimated expenses to correct a product performance issue with a
key DBS customer.
Results of operations for the fiscal 2009 second quarter as determined in
accordance with U.S. Generally Accepted Accounting Principles ("GAAP") was a
loss from continuing operations of $1.5 million, or $0.06 loss per basic and
diluted share. This compares to a loss from continuing operations of $3.3
million, or $0.14 loss per basic and diluted share, in the second quarter of
last year. The lower loss in the latest quarter was attributable to higher
gross profit as discussed above.
The Adjusted Basis (non-GAAP) loss from continuing operations for the fiscal
2009 second quarter was $0.5 million, or $0.02 loss per basic and diluted
share compared to an Adjusted Basis loss from continuing operations of $2.0
million or $0.08 loss per basic and 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 in-process research and development, each net of tax. 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 August 31, 2008, the Company had total cash of $4.7 million, with $26.0
million in total outstanding bank debt and a $5 million note payable to a key
DBS customer. Net cash used by operating activities was $1.1 million for the
three months ended August 31, 2008, primarily for working capital. For the
six month period ended August 31, 2008, net cash generated by operating
activities was approximately $700,000. During the latest quarter, bank term
loan principal was paid down by $1.0 million. The bank term loan has a
maturity date of June 30, 2009, and consequently the entire term loan balance
of $26 million is classified as a current liability in the August 31, 2008
balance sheet. The Company has requested an extension of the maturity date,
and is currently in discussions with the banks on this matter.
Business Outlook
Commenting on the Company's business outlook, Mr. Gold said, "Our third
quarter outlook remains cautious due in part to continued uncertainty
surrounding the U.S. economy, which may impact purchase decisions by key
customers. That said, we expect sales of our satellite products to increase
materially compared to the second quarter as unit volumes shipped to our
historically largest DBS customer continue to ramp higher. Based on our
current forecast, we believe fiscal 2009 third quarter consolidated revenues
will be in the range of $26 to $30 million, with a GAAP basis net loss in the
range of $0.03 to $0.07 per diluted share. The Adjusted Basis (non-GAAP)
results of operations for the third quarter, which exclude amortization of
intangible assets and stock-based compensation expense net of tax, are
expected to be in the range of a $0.03 loss to $0.01 income per diluted
share."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2009 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 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 provides wireless communications solutions that enable
anytime/anywhere access to critical data and content. The Company serves
customers in the public safety, industrial monitoring and controls, mobile
resource management, and direct broadcast satellite markets. The Company's
products are marketed under the CalAmp, Dataradio, SmartLink, Aercept,
LandCell and Omega trade names. For more information, please visit
www.calamp.com.
Forward-Looking Statements
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 risk that the
ultimate cost of resolving a product performance issue with one of the
Company's key DBS customers may exceed the amount of reserves established for
that purpose, the length and extent of the U.S. market downturn stemming from
the recent tightening of credit markets that may impact the Company's
business and that of its customers and which may constrain the Company's
ability to refinance its bank term loan, and other risks or uncertainties
that are described in the Company's fiscal 2008 Annual Report on Form 10-K as
filed with the Securities and Exchange Commission on May 15, 2008. 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 Six Months Ended
August 31, August 31,
------------------ -----------------
2008 2007 2008 2007
------- ------- ------- -------
Revenues $ 23,308 $ 32,668 $ 51,209 $ 79,061
Cost of revenues 15,840 26,353 34,312 78,132
------- ------- ------- -------
Gross profit 7,468 6,315 16,897 929
Operating expenses:
Research and development 3,131 3,795 6,331 8,114
Selling 1,647 2,373 3,919 4,642
General and administrative 3,266 3,457 6,362 6,659
Intangible asset amortization 1,240 1,558 2,572 3,302
In-process research
and development - - - 310
------- ------- ------- -------
9,284 11,183 19,184 23,027
------- ------- ------- -------
Operating loss (1,816) (4,868) (2,287) (22,098)
Non-operating expense, net (334) (507) (750) (1,090)
------- ------- ------- -------
Loss from continuing operations
before income taxes (2,150) (5,375) (3,037) (23,188)
Income tax benefit 652 2,117 1,042 8,985
------- ------- ------- -------
Loss from continuing operations (1,498) (3,258) (1,995) (14,203)
Loss from discontinued
operations, net of tax - (1,115) - (1,532)
------- ------- ------- -------
Net loss $ (1,498) $ (4,373) $ (1,995) $(15,735)
======= ======= ======= =======
Basic and diluted loss per share:
Loss from continuing
operations $(0.06) $(0.14) $(0.08) $(0.60)
Loss from discontinued
operations - (0.05) - (0.07)
------ ------ ------ ------
Total basic and diluted
loss per share $(0.06) $(0.19) $(0.08) $(0.67)
====== ====== ====== ======
Shares used in per share
calculations:
Basic 24,737 23,623 24,720 23,612
Diluted 24,737 23,623 24,720 23,612
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CAL AMP CORP.
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Six Months Ended
August 31, August 31,
-------------------- ------------------
2008 2007 2008 2007
------ ------ ------ ------
Revenue
Satellite $ 3,176 $ 9,851 $ 10,817 $ 32,882
Wireless DataCom 20,132 22,817 40,392 46,179
------- ------- ------- -------
Total revenue $ 23,308 $ 32,668 $ 51,209 $ 79,061
======= ======= ======= =======
Gross profit (loss)
Satellite $ (81) $ (1,835) $ 652 $(15,751)
Wireless DataCom 7,549 8,150 16,245 16,680
------- ------- ------- -------
Total gross profit $ 7,468 $ 6,315 $ 16,897 $ 929
======= ======= ======= =======
Operating income (loss)
Satellite $ (1,324) $ (3,064)(a)$ (1,656) $(18,295)(a)
Wireless DataCom 916(b) (500)(c) 1,973(b) (1,146)(c)
Corporate expenses (1,408) (1,304) (2,604) (2,657)
------- ------- ------- -------
Total operating loss $ (1,816) $ (4,868) $ (2,287) $(22,098)
======= ======= ======= =======
(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 intangible asset amortization expense in the three and six-
month periods ended August 31, 2008 of $1.2 million and $2.6 million,
respectively.
(c) Includes intangible asset amortization expense in the three and six-
month periods ended August 31, 2007 of $1.6 million and $3.3 million,
respectively.
<page>
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
August 31, February 28,
2008 2008
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 4,697 $ 6,588
Accounts receivable, net 16,612 20,043
Inventories 23,977 25,097
Deferred income tax assets 4,698 5,306
Prepaid expenses and other current assets 10,213 9,733
-------- --------
Total current assets 60,197 66,767
Equipment and improvements, net 4,398 5,070
Deferred income tax assets, less current portion 16,289 14,802
Goodwill 28,224 28,520
Other intangible assets, net 21,852 24,424
Other assets 3,491 3,458
-------- --------
$134,451 $143,041
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 31,030 $ 5,343
Accounts payable 9,708 10,875
Accrued payroll and employee benefits 3,535 4,218
Accrued warranty costs 4,867 3,818
Other accrued liabilities 10,198 11,800
Deferred revenue 3,085 4,005
-------- --------
Total current liabilities 62,423 40,059
-------- --------
Long-term debt, less current portion - 27,187
Other non-current liabilities 1,090 2,375
Stockholders' equity:
Common stock 252 250
Additional paid-in capital 144,252 144,318
Accumulated deficit (73,144) (71,149)
Accumulated other comprehensive income (loss) (422) 1
-------- --------
Total stockholders' equity 70,938 73,420
-------- --------
$134,451 $143,041
======== ========
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CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Six Months Ended
August 31,
------------------
2008 2007
---- ----
Cash flows from operating activities:
Net loss $ (1,995) $(15,735)
Depreciation and amortization 3,770 5,201
Stock-based compensation expense 361 1,027
Write-off of in-process research
and development costs - 310
Excess tax benefit from stock-based compensation - (55)
Deferred tax assets, net (1,046) (14,388)
Loss on sale of discontinued operations,
net of tax - 935
Gain on sale of investment - (331)
Changes in operating working capital (376) 20,934
Other - (2)
-------- --------
Net cash provided (used) by
operating activities 714 (2,104)
-------- --------
Cash flows from investing activities:
Capital expenditures (561) (920)
Earn-out payments on Technocom acquisition (872) -
Proceeds from sale of discontinued operations 420 4,000
Proceeds from sale of property and equipment - 4
Proceeds from sale of investment - 1,045
Acquisition of Aercept - (19,315)
Acquistion of SmartLink, net of refunds from
escrow fund 296 (7,944)
Cash restricted for repayment of debt - (3,309)
-------- --------
Net cash used in investing activities (717) (26,439)
-------- --------
Cash flows from financing activities:
Debt repayments (1,500) (1,476)
Proceeds from stock option exercises - 157
Excess tax benefit from stock-based compensation - 55
-------- --------
Net cash used in financing activities (1,500) (1,264)
-------- --------
Effect of exchange rate changes on cash (388) 640
-------- --------
Net change in cash and cash equivalents (1,891) (29,167)
Cash and cash equivalents at beginning of period 6,588 37,537
-------- --------
Cash and cash equivalents at end of period $ 4,697 $ 8,370
======== ========
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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 Loss from Continuing Operations and Adjusted Basis Loss from
Continuing Operations Per Diluted 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
(non-GAAP) Loss from Continuing Operations and Adjusted Basis Loss from
Continuing Operations Per Diluted 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 Loss from Continuing Operations
to Adjusted Basis (non-GAAP) Loss from Continuing Operations is as follows:
Three Months Six Months
Ended Ended
August 31, August 31,
------------- -------------
2008 2007 2008 2007
----- ----- ----- -----
GAAP Basis Loss from
Continuing Operations $(1,498) $(3,258) $(1,995) $(14,203)
Adjustments to reconcile to
Adjusted Basis Loss from
Continuing Operations:
Amortization of intangible assets,
net of tax 815 955 1,690 2,024
Stock-based compensation expense,
net of tax 231 315 237 597
In-process R&D, net of tax - - - 190
------- ------- ------- -------
Adjusted Basis Loss from
Continuing Operations $ (452) $(1,988) $ (68) $(11,392)
======= ======= ======= =======
Adjusted Basis Loss from
Continuing Operations
per Diluted Share $ (0.02) $ (0.08) $ - $ (0.48)
Weighted average common shares
outstanding on diluted basis 24,737 23,623 24,720 23,612
The reconciling items above are tax effected using the year-to-date effective
tax rate. The computation of the year-to-date effective income tax rate is
as follows:
Six Months Ended
August 31,
---------------------
2008 2007
---- ----
Pretax loss from continuing operations
as reported $ (3,037) $(23,188)
Income tax benefit, as reported 1,042 8,985
------- -------
Effective income tax rate 34.3% 38.7%
======= =======