Exhibit 99.1
NEWS BULLETIN
FROM:
CalAmp Logo
FOR IMMEDIATE RELEASE
CalAmp Reports Fiscal 2009 Third Quarter Results
OXNARD, Calif., January 13, 2009--CalAmp Corp. (Nasdaq: CAMP), a leading
provider of wireless products, services and solutions, today reported results
for its fiscal 2009 third quarter ended November 30, 2008. Key elements
include:
* Consolidated third quarter revenues of $25.8 million up 11% on a sequential
quarter basis driven by the shipment ramp of Direct Broadcast Satellite (DBS)
products.
* GAAP loss from continuing operations of $1.8 million, or $0.07 loss per
basic and diluted share, within expectations; Adjusted Basis (non-GAAP) loss
from continuing operations of $0.7 million or $0.03 loss per basic and
diluted share, also within expectations.
* Consolidated gross margin percentage of 29.6%; wireless datacom gross
margin percentage of 40.0%.
* Positive third quarter operating cash flow; positive cash flow from
operations of $3.3 million for the first nine months of fiscal 2009.
Rick Gold, CalAmp's President and Chief Executive Officer, commented, "I'm
encouraged to see sequential growth in revenue during this latest quarter
despite the tough macroeconomic conditions. This growth was driven by the
resumption of volume shipments of satellite products to what has historically
been our largest DBS customer. We are currently rebuilding our competitive
position in the DBS market with revenue of $7.4 million in the third quarter,
more than two times higher than the previous quarter. However, similar to
most of our peers and customers, the global economic downturn is impacting
the top line results of our wireless datacom business. Midway through our
fiscal third quarter, we started seeing sluggishness in short-term demand
with some customers delaying contracts and postponing orders. That said, I
continue to be encouraged with our operating execution and our ability to
make steady progress within a challenging economic environment. Our recent
product development activities have enabled us to extend our portfolio of
wireless datacom products and improved our ability to serve existing
customers and reach adjacent vertical markets. In addition, we continue to
expand our market reach by developing partners and indirect channels.
Finally, our intensified focus on inventory management has improved our
liquidity position and helped generate $3.3 million in cash flow from
operating activities through the first nine months of fiscal 2009."
Mr. Gold continued, "In response to current economic challenges, last week we
took certain actions to realign the cost structure of our wireless datacom
business. We have reorganized our Public Safety Mobile and Industrial
Monitoring and Controls business units by combining the research and
development groups, merging sales management and consolidating manufacturing
operations. As part of this restructuring we have reduced our work force by
8%, which is expected to yield annualized savings of approximately $2.5
million. This will result in a charge of approximately $800,000 in the
fourth quarter. We believe these changes will streamline operations and
allow the Company to become more responsive to changing market dynamics and
customer demand."
Mr. Gold concluded, "Subsequent to the end of the quarter, we announced the
out-of-court settlement of litigation with Rogers Corporation, resulting in a
$9 million cash payment to CalAmp. The dispute related to product
performance issues involving laminate supplied by Rogers that was included in
certain products manufactured by CalAmp and sold to a DBS customer. I am
pleased that we have reached a satisfactory resolution of this matter. This
settlement significantly improves CalAmp's financial strength and we believe
is the best outcome for our shareholders."
Fiscal 2009 Third Quarter Results
Total revenue for the fiscal 2009 third quarter was $25.8 million compared to
$32.1 million for the third quarter of fiscal 2008. The reduction in
revenues was due primarily to lower sales of the Company's wireless datacom
products.
Gross profit for the fiscal 2009 third quarter was $7.6 million, or 29.6% of
revenues compared to gross profit of $10.0 million, or 31.3% of revenue for
the same period last year. The reduction in gross profit and gross margin
percentage in the latest quarter was due primarily to lower wireless datacom
revenues. Wireless datacom gross margin percentage in the latest quarter was
40.0%.
Results of operations for the fiscal 2009 third quarter as determined in
accordance with Generally Accepted Accounting Principles ("GAAP") was a loss
from continuing operations of $1.8 million, or $0.07 loss per basic and
diluted share. This compares to a loss from continuing operations of $58.9
million, or $2.49 loss per basic and diluted share, in the third quarter of
last year. The lower loss in the current quarter was primarily attributable
to a $65.7 million goodwill pretax impairment charge in the third quarter of
last year.
The Adjusted Basis (non-GAAP) loss from continuing operations for the fiscal
2009 third quarter was $0.7 million, or $0.03 loss per basic and diluted
share. This compares to Adjusted Basis (non-GAAP) income from continuing
operations of $47,000, or zero cents per basic and diluted share, in the same
period last year. Adjusted Basis income (loss) from continuing operations
excludes the impact of amortization of intangible assets, stock-based
compensation expense, in-process research and development and impairment
charges, each net of tax to the extent applicable. A reconciliation of the
GAAP basis 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, 2008, the Company had total cash of $5.7 million, with $25.2
million in total outstanding bank debt and a $4.5 million note payable to a
key DBS customer. Net cash provided by operating activities was $2.5 million
for the three months ended November 30, 2008. For the nine month period
ended November 30, 2008, net cash generated by operating activities was
approximately $3.3 million. During the latest quarter, the principal on the
Company's bank term loan was paid down by $750,000 and the principal on the
note payable to the DBS customer was paid down by $528,000.
The Company was not in compliance with one of its financial covenants at the
end of December 2008 that requires a minimum level of Wireless DataCom
revenues on a rolling three-month basis. The Company has requested a waiver
of this covenant violation and is currently in discussions with the banks,
but thus far the banks have not waived this noncompliance. Consequently,
the Company has classified the entire term loan balance as a current
liability in the consolidated balance sheet at November 30, 2008.
On January 12, 2009, the Company received a cash payment of $9 million from
Rogers Corporation in an out-of-court litigation settlement. Under the terms
of the Company's bank credit agreement as amended, the Company is obligated
to pay 50% of the net cash proceeds of this legal settlement, or $4.1
million, to the banks as a reduction of the term loan balance. After giving
effect to this principal payment, the balance of the term loan is
approximately $20.3 million. The Company is continuing to seek a waiver of the
covenant violation referred to above, and expects that it will ultimately
refinance the bank debt from the proceeds of an asset-based loan at or before
the December 31, 2009 maturity date.
Business Outlook
Commenting on the Company's business outlook for the fourth quarter of fiscal
2009, Mr. Gold said, "We expect to see sequential growth in our satellite
business but expect our wireless datacom business to remain sluggish as a
result of the difficult economic conditions. We continue to experience
customer delays including a postponement of our recently announced driverless
train project in Australia. Based on our current forecast, we believe fiscal
2009 fourth quarter consolidated revenues will be in the range of $22 to $26
million, with GAAP basis net income in the range of $0.06 to $0.10 per
diluted share. The Adjusted Basis (non-GAAP) results of operations for the
fourth quarter, which exclude amortization of intangible assets and stock-
based compensation expense net of tax, are expected to be net income of $0.10
to $0.14 per diluted share. The GAAP and non-GAAP expected results for the
fourth quarter include per share income net of tax of approximately $0.20
attributable to the $9 million legal settlement and the workforce reduction
charge of $800,000. We expect to continue generating positive operating cash
flow in the fourth quarter, even without the benefit of the Rogers legal
settlement."
Conference Call and Webcast
A conference call and simultaneous webcast to discuss fiscal 2009 third
quarter financial results and business outlook will be held today at 4:30
p.m. Eastern / 1:30 p.m. Pacific. CalAmp's President and CEO Rick Gold and
CFO Rick Vitelle will host the conference call. Participants can dial into
the live conference call by calling 800-219-6110 or 303-205-0033. An audio
replay will be available through January 20, 2009, by calling 800-405-2236 or
303-590-3000, and entering pass code 11124755.
Additionally, a 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. 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, 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 Company's ability to
obtain a waiver from its banks under its Credit Agreement of an event of
default arising from a financial covenant violation that arose at the end of
December 2008, 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 Annual Report on Form 10-K for fiscal
2008 and Form 10-Q for the fiscal 2009 third quarter as filed with the
Securities and Exchange Commission on May 15, 2008 and January 13, 2009,
respectively. 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,
------------------ -----------------
2008 2007 2008 2007
------- ------- ------- -------
Revenues $ 25,834 $ 32,061 $ 77,043 $111,122
Cost of revenues 18,193 22,033 52,505 100,165
------- ------- ------- -------
Gross profit 7,641 10,028 24,538 10,957
Operating expenses:
Research and development 3,199 3,868 9,530 11,982
Selling 2,656 2,577 6,575 7,219
General and administrative 2,990 3,498 9,352 10,157
Intangible asset amortization 1,240 1,558 3,812 4,860
In-process research
and development - - - 310
Impairment loss - 65,745 - 65,745
------- ------- ------- -------
10,085 77,246 29,269 100,273
------- ------- ------- -------
Operating loss (2,444) (67,218) (4,731) (89,316)
Non-operating expense, net (522) (622) (1,272) (1,712)
------- ------- ------- -------
Loss from continuing operations
before income taxes (2,966) (67,840) (6,003) (91,028)
Income tax benefit 1,128 8,909 2,170 17,894
------- ------- ------- -------
Loss from continuing operations (1,838) (58,931) (3,833) (73,134)
Loss from discontinued
operations, net of tax - - - (1,532)
------- ------- ------- -------
Net loss $ (1,838) $(58,931) $ (3,833) $(74,666)
======= ======= ======= =======
Basic and diluted loss per share:
Loss from continuing
operations $(0.07) $(2.49) $(0.15) $(3.10)
Loss from discontinued
operations - - - (0.06)
------ ------ ------ ------
Total basic and diluted
loss per share $(0.07) $(2.49) $(0.15) $(3.16)
====== ====== ====== ======
Shares used in per share
calculations:
Basic 24,809 23,640 24,750 23,621
Diluted 24,809 23,640 24,750 23,621
<page>
CAL AMP CORP.
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Nine Months Ended
November 30, November 30,
-------------------- ------------------
2008 2007 2008 2007
------ ------ ------ ------
Revenue
Satellite $ 7,384 $ 8,353 $ 18,201 $ 41,235
Wireless DataCom 18,450 23,708 58,842 69,887
------- ------- ------- -------
Total revenue $ 25,834 $ 32,061 $ 77,043 $111,122
======= ======= ======= =======
Gross profit (loss)
Satellite $ 253 $ 221 $ 905 $(15,530)
Wireless DataCom 7,388 9,807 23,633 26,487
------- ------- ------- -------
Total gross profit $ 7,641 $ 10,028 $ 24,538 $ 10,957
======= ======= ======= =======
Operating income (loss)
Satellite $ (838) $(44,061)(a)(b)$ (2,494) $(62,356)(a)(b)
Wireless DataCom (293)(d) (21,842)(c)(e) 1,680 (d) (22,988)(c)(e)
Corporate expenses (1,313) (1,315) (3,917) (3,972)
------- ------- ------- -------
Total operating loss $ (2,444) $(67,218) $ (4,731) $(89,316)
======= ======= ======= =======
(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 segment goodwill impairment charge of $43.2
million.
(c) Includes a Wireless DataCom segment goodwill impairment charge of
$22.5 million.
(d) Includes intangible asset amortization expense in the three and nine-
month periods ended November 30, 2008 of $1.2 million and $3.8 million,
respectively.
(e) Includes intangible asset amortization expense in the three and nine-
month periods ended November 30, 2007 of $1.6 million and $4.9 million,
respectively.
<page>
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
November 30, February 28,
2008 2008
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 5,703 $ 6,588
Accounts receivable, net 15,337 20,043
Inventories 19,368 25,097
Deferred income tax assets 3,574 5,306
Prepaid expenses and other current assets 8,122 9,733
-------- --------
Total current assets 52,104 66,767
Equipment and improvements, net 3,897 5,070
Deferred income tax assets, less current portion 18,995 14,802
Goodwill 28,224 28,520
Other intangible assets, net 20,612 24,424
Other assets 3,375 3,458
-------- --------
$127,207 $143,041
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 29,752 $ 5,343
Accounts payable 7,560 10,875
Accrued payroll and employee benefits 3,336 4,218
Accrued warranty costs 3,921 3,818
Other accrued liabilities 9,858 11,800
Deferred revenue 3,014 4,005
-------- --------
Total current liabilities 57,441 40,059
-------- --------
Long-term debt, less current portion - 27,187
Other non-current liabilities 1,023 2,375
Stockholders' equity:
Common stock 252 250
Additional paid-in capital 144,527 144,318
Accumulated deficit (74,982) (71,149)
Accumulated other comprehensive income (loss) (1,054) 1
-------- --------
Total stockholders' equity 68,743 73,420
-------- --------
$127,207 $143,041
======== ========
<page>
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Nine Months Ended
November 30,
------------------
2008 2007
---- ----
Cash flows from operating activities:
Net loss $ (3,833) $(74,666)
Depreciation and amortization 5,552 7,469
Stock-based compensation expense 838 1,605
Write-off of in-process research
and development costs - 310
Impairment loss - 65,745
Excess tax benefit from stock-based compensation - (64)
Deferred tax assets, net (2,371) (23,296)
Loss on sale of discontinued operations,
net of tax - 935
Gain on sale of investment - (331)
Changes in operating working capital 3,065 18,080
Other - 25
-------- --------
Net cash provided (used) by
operating activities 3,251 (4,188)
-------- --------
Cash flows from investing activities:
Capital expenditures (650) (1,106)
Earn-out payments on Technocom acquisition (1,183) (703)
Proceeds from sale of discontinued operations 420 4,000
Proceeds from sale of property and equipment - 8
Proceeds from sale of investment - 1,045
Acquisition of Aercept - (19,315)
Acquisition of SmartLink, net of refunds from
escrow fund 296 (7,944)
Cash restricted for repayment of debt - (3,340)
-------- --------
Net cash used in investing activities (1,117) (27,355)
-------- --------
Cash flows from financing activities:
Debt repayments (2,778) (2,210)
Proceeds from stock option exercises - 206
Excess tax benefit from stock-based compensation - 64
-------- --------
Net cash used in financing activities (2,778) (1,940)
-------- --------
Effect of exchange rate changes on cash (241) 982
-------- --------
Net change in cash and cash equivalents (885) (32,501)
Cash and cash equivalents at beginning of period 6,588 37,537
-------- --------
Cash and cash equivalents at end of period $ 5,703 $ 5,036
======== ========
<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 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 Nine Months
Ended Ended
November 30, November 30,
------------- -------------
2008 2007 2008 2007
----- ----- ----- -----
GAAP Basis Loss from
Continuing Operations $ (1,838) $(58,931) $ (3,833) $(73,134)
Adjustments to reconcile to
Adjusted Basis Loss from
Continuing Operations:
Amortization of intangible assets,
net of tax 792 952 2,434 2,968
Stock-based compensation expense,
net of tax 305 333 535 928
In-process R&D, net of tax - - - 189
Impairment charge - 57,693 - 57,693
------- ------- ------- -------
Adjusted Basis Income (Loss) from
Continuing Operations $ (741) $ 47 $ (864) $(11,356)
======= ======= ======= =======
Adjusted Basis Loss from
Continuing Operations
per Diluted Share $ (0.03) $ - $ (0.03) $ (0.48)
Weighted average common shares
outstanding on diluted basis 24,809 23,640 24,750 23,621
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:
Nine Months Ended
November 30,
---------------------
2008 2007
---- ----
Pretax loss from continuing operations
as reported $ (6,033) $(91,028)
Add back nondeductible portion of impairment loss - 45,056
------- -------
Pretax loss from continuing operations before
nondeductible item (6,033) (45,972)
Income tax benefit, as reported 2,170 17,894
------- -------
Effective income tax rate 36.2% 38.9%
======= =======