CAMP - Earnings call transcript Q1 2021

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Operator

Welcome to the CalAmp's first quarter 2021 financial results conference call.

As a reminder, this call is being recorded. I would now introduce your host for today's conference, Leanne Sievers, President of Shelton Group, CalAmp's Investor Relations firm. Leanne, you may begin.

Leanne Sievers

Good afternoon and welcome to CalAmp's fiscal first quarter 2021 financial results conference call. President Group, Sievers, firm. Investor Leanne am of CalAmp's Shelton Relations I us President Officer, Chief Interim are Kurt CEO, With CalAmp's and and today Jeff Gardner Binder. Financial

call to we you Before would forward-looking like I that begin, this may contain statements. remind

any filings best provide those outlook, followed reflect begin to uncertainties forward-looking operational call the financial in factors update which These Gardner. that, implied and forward-looking cause by over to While could circumstances. they to and and or results are CEO, and judgment, our with additional risk financial CalAmp's no those Interim forward-looking my reflect then results our and question-and-answer release a are the the current discussed Jeff it's events obligation to periodic Kurt earnings these Jeff Binder company's now differ details today's issued pleasure highlights, President that or available actual statements revise are statements about subject will website. risks will a materially SEC With undertake session. in to the future We from by to projections. call review today, CalAmp's of on turn

Jeff Gardner

XX. and everyone you Leanne. March us second am today. I to for Thank Welcome be conference since thanks and being on President CEO joining call pleased earnings my hosting appointed Interim

am adjusted margin CalAmp COVID-XX pandemic, on the taking revenue a Overall, fiscal were X%. million, across efforts focusing mandate job of requirements. close level their ended have the on with announce been ongoing closures work our past and when at we discussed productivity an against in when already $XX.X solution plan you results just have solid weeks product in from pleased plan. did the to team operating maintaining Consolidated I against especially Our staying EBITDA to executing the largely time the progress over contact I with over I quarter of an account that was the customers a this quarter my home fiscal place high from and and while with first significant on in several efficiency were XX first still our that call. the globe. earnings support considering last into May quarter our made business amazing impact

the Global our FedEx on-time Operations, Fortune elevate First, companies further our global experienced to our recently highly chain XX customers. have solar. It making Nathan supply quality and further and enhanced that such well we of objective supply Honeywell, a efforts, in across accelerate operations Nathan enabled to we will improvements experience Chain products primary services delivery communications emerging and of has help Lowstuter. at chain continued Boeing as appointed operations Supply CalAmp automotive, organization. these and our sales of over between aerospace as companies his large VP senior And and XXX be and and as efficiency, to years

and growth. continued expanding resources to which quality business, improvements towards we SaaS Second, include our the increase our to

release, is business the these I operated as made to financing part press automotive corporate strategic of As in our improving quality business. significantly business. services profitability been efforts of today's out This our and has the gross below mentioned dilutive SaaS This within transition decision enhance vehicle overall the our will and average software of gross margins and subscription margins and our ARPU while targets. action to revenue we

the sales our Also revenue of is the Officer, program newly with actively into organization growth. SaaS has Additionally, market that by company's Arym Revenue appointed aligned Diamond, team driving Chief underpinned the incentive solutions his a increasing new SaaS our objective sales and organic month we our product hardware using our noteworthy, that Plus Connect to model, first this Connect automotive efforts will LoJack sales focus a our large business revenue on LoJack a of are and exclusively as transition our preloading aggressively recurring part SaaS model. a dealer to reenergized

Third, of helping strategically business, progress key our particular, customers we with In a have this we engagements initiated plan XG new are technology the XG have powerful our cycles customers. on elevating telematics through made to side for notable their and migration transition purpose.

Fourth, as have looking over significantly represents portion resources our accounts, efforts support a VP these largest their these is Jeff focus Senior consolidated objective growing is R&D we and key In of enterprise of when to from LTE fact, new our Product my past total grown Management, year at revenue the strategic important our promising the another Leading Clark. migration. on revenue of further customers verticals. plan most

a is of role essential our goods applications transportation time iOn vital this near fleet applications management especially is secure of iOn vital which released will our iOn a at product COVID-XX. of providing and of suite with CalAmp's the Vision, in opportunities including as of software result fall. will a freight, becoming when of term suite One more play safe management be

significant such, integrity and cargo. freight to critical iOn As of Vision who be other to freight should shippers application need interest our of companies the ensure

progress comment to like Lastly, across my our one I of that to would make commitment provide more additional to investors business. transparency part as regarding

LoJack out revenue product This line our as quarter, break separate SVR revenue we item. decided to a U.S.

revenue international one value of been As partners challenged to you recurring customers, and perspective has we to from performance similar offers dealer that this a their transitioning significant objectives business to it's and a to many top my model businesses. of model begin that a our this our all business know, of to provide

across progress of Mexico additional enterprises bring these and to LoJack Overhaul improving and of supply chain visibility announced Mexico, our across the and preventing terms security subsidiary between just effectively collaboration that shipments. integrity other an we exciting will business, shipping theft our areas of In

during and uncertain making Our Synovia despite introduced school, solid these parents offerings also support closures school has their recently technology Solutions two nationwide progress help and subsidiary is times. new to children

scalable new trip, to related efforts. trips better is first lasting bus team times a to that revenue. administrators like designed continuing application a shareholder of as help flexible ridership productivity. contact districts today, system in unprecedented And The I as CalAmp remarks Bus these if a driver To kids Guardian that field am a and managing comply as software report on solutions instant is solution mandates. the to COVID-XX will build to or which order and of ill. called actionable and at stay program bus for SaaS and I in sanitation also to particularly through deliver schools a reporting These tracing, designed focus great conclude bring student to social to the distancing is the The the CalAmp based routes to how convinced back growth a my with proud school maintain important while verification high value on positioned fall. becomes sports manage nation monitor powerful, schools full around school value provider of is help help school level unconventional hygiene products to and real-time reiterate serves I second delivers home want delivering recurring remain high return and

plan. place call results to and to With quarter and a over look for continue open our advancing questions. we the have initiatives at closer a in our then will to call solid We financial operating your the now that, Kurt turn fiscal Kurt? team I will strategic first

Kurt Binder

included earnings include my Jeff. is the EBITDA commentary GAAP reference A adjusted measures you and of corresponding basis reconciliation Today, press announcing financial today. earlier fiscal non-GAAP net adjusted that first with these basis margin. quarter Thank to non-GAAP release income, closest in our issued of will XXXX measures EBITDA adjusted full was measures the

pandemic. place to measures future across worldwide particularly remain pleased borrowing we the Additionally, I monitor in implemented cash emphasize confident existing The cash, cost-containment our such the by personnel, fund our performance and these with economic spending, still financial did and are uncertainty the through and as that we available we in uncertain to May we Overall, conditions. sufficient to other created earlier want are quarter this flows continue ongoing COVID-XX all areas are economic operations operations. as I discretionary developments in capacity travel our that considering year, in our

to First last million million quarter compared sequentially. down X% consolidated revenue was $XX.X quarter, $XX.X

first of to enforced when mandate across prior commenced the by fiscal the just was most U.S. shelter XXXX in place states Our quarter

the revenue reached creates international Our driven by enterprise Trimble. XX% in of We of global of point the a company. quarter, record large some customers our customers a larger international revenue believe our consolidated base differentiation scale $XX.X Verizon of million or and and diversified for that Caterpillar, like

million LoJack by consolidated XX% subscription approximately increase representing Synovia year-over-year increase and and or revenue and The services a was revenue Software Mexico. XX% was driven primarily $XX year-over-year. Solutions of

work quarter our Italy last resulting services due COVID system a revenue from particularly from $X.X declined shutdowns Synovia and related LoJack for from subscription sequentially home slowdown and million Solutions million $XX.X and mandates, in installations to subsidiary. Software

scheduled the We fiscal expect to regions second installations increase geographic the U.S. year in are mandates and half the lifted when of like in Italy. our

out we profitability XXX,XXX of revenue efforts auto vehicle transition As Jeff margins business. quarterly SaaS approximately revenue business to as within increasing the million while This of our quality the our strategic in the business about the decision improve and subscribers. part mentioned, financing made to of produces $X.X overall from

next write-off decision the does has below on period the SaaS charge average years existing XX expectations Therefore, for our our customer excess honor the the However, to made our contracts. not $XXX,XXX a of of of the the resulted and stipulated past well corporate over one-time business This to approximately XX principally service transition obsolete gross this for the in out and inventory. months while this business commitment margins quarter, for few in we we business. transition realized meet

legacy to LoJack the decided to subscription-based reportable this from $X.X first prior SVR business as $XX.X from in greater the segment during quarter. was visibility down as we a line into million, we present to aggressively transition separate segment product Additionally, Revenue this model. it million a quarter, business provide the U.S.

device in dealership In compared from a telematics our Telematics the products MRM network automotive be million substantial MRM that of due increasing last of Revenue the million, proprietary vertical. reflecting impacted to $XX.X business quarter from Cat's from the compared to As quarter upgrade. products discussed solutions to compared $XX.X included portion quarter, the supply to million $XX.X by revenue within worldwide on product first that a as the certain quarter GPS-based challenges Overall, in Further, we million network to revenue quarter. last demand to radio revenue fourth quarter. were factories the compared Cat strong telematics supporting with $XX.X frequency product installations as technology of to affected of COVID $XX.X LTE-based $XX.X call, U.S. the slowdown last to our in products quarter decline the benefited transition China, to to pandemic. the shipments million XG pandemic. incremental the revenue quarter, Cat prompted also million shipment resulted to across shutdown. continues unevenness this Telematics in is related some quarter first OEM $XX.X transition backlog chain last their was continue by to products telematics and from LTE $XX.X the telematics remained due next-generation from was the revenue the from in part million its last million by

another consistent to prior and quarter in the out quarter with of coupled attributed first to the for demand the gross that across our cycle. being and ongoing margin our write-off with margin of is prior and stabilizing, vehicle fiscal global large under strong the Consolidated the top largely COVID-XX XXXX decline telematics We portfolio today gross the the year. of quarter the outbreak into half products driven XG of as due second believe the expect LTE like is differentiation of mainly Revenue to remains year. automotive excess point growth in inventories customers in to by customers these was this fiscal upgrade company. quarter continue Cat financing transition the pressure, although We we revenue our the of XX.X% in second business.

have the devices. these able focused Tier contract to Oxnard, we to working product with facility all that the telematics to Now closure of assembly very and are moved margin completed California the for we we adjusted our enhance the will our leverage margin. $X.X of manufacturing to a was manufacturers, gained Further, manufacturers on model, transitioning experienced which the adjusted efficiencies the profile X help be business base and installed million an Adjusted our margin to device subscription EBITDA also in first an consolidated extensive prior with gross X.X% of X.X% will improve $X.X and in EBITDA margin compared software of quarter. adjusted EBITDA future million EBITDA quarter in

margins well company initiatives declined points, the basis quarter. EBITDA executed XX in its around the savings out cost Although,

decline various approximately closely carefully impacted and to as period been was of in in on T&E, and EBITDA costs, discretionary quarter. resulted timing managing as savings spend adjusted in services professional As continue measures, by marketing, of we spend well in instituted among this revenue, we which telematics the cost-containment the Moreover, manage hiring million focus our personnel products the has including around uncertainty delayed others. of our $X

As such, layoff maintained we have this a or headcount level during instituting employee consistent time, furloughs. relatively without

operating expense growth percentage for manage to we expect we XX% and through was the with operating a revenue as in prior revenue period. consolidated Our quarter of as non-GAAP our navigate current and this expense line

cash of $XXX equivalents first to million $XXX At total position. the and Now, compared we quarter, million turning cash current liquidity to last approximately had end of our the quarter.

approximately and paid notes the $XX.X we our XX. million XXXX remaining May redeemed were outstanding recently which million Our is aggregate of debt on $XXX convertible

net During provided we activities in prior XXXX, million million to of of quarter with $X.X from in by $X.X cash compared the flows activities were operating net first our quarter. operating cash the fiscal pleased also

will fragmented and also the our we focus from that businesses, acquired capacity we believe we available enhance activities. effectively the strong working downturn, to remain target. downturn our of in compete operating balance through finalize credit generated us and said, positioning weather our a across to integration us flows the As enable cash on capital navigate will markets that With order improving potentially facility extended to sheet while through on revolving our

Asia uncertain second at Mexico shipments guidance demand for quarter. time. Southeast the and and from customer this to turning Now, into Visibility suppliers remains product our in

second As business. of quarter. year. are impact effective in order increasing half a providing an managing our revenue result, demand customer in job for team addressing proactively second quarter We the our in the still the this crisis with we not expect doing Overall, second our mitigate the pressure and is fiscal to to guidance

obtain more the overall Jeff guidance. turn providing I to for back we return outlook questions. the customer quarterly comments to final expect regarding call With we call As we to provide demand, clarity up and open that, before over future to the some business

Jeff Gardner

as results plan and continued in you our the progress Thank In closing, our Kurt. I quarter as with well on am pleased operating solid initiatives. our strategic

across business to improvements remain focused our making model. SaaS are transitioning business We on and a our aggressively

focused visibility from company. limited confident call Although up Operator? the to I due we to to pandemic, like as open remains the now feel leaner, With crisis this current that more profitable we more questions. emerge that, a and would will

Operator

[Operator Instructions].

Walkley question line Your Mike of Canaccord first from the of comes Genuity.

Your line is open.

Mike Walkley

tough my for questions results and congratulations the environment. Great. taking on a in Thank strong you

Jeff Gardner

Mike. Thanks

Mike Walkley

the out synergies margins theft and about car guidance and by longer First trend clearly contract question talked talk gross just some not for term. giving you me, from are then also, of improving to gross about manufacturers hardware where can saving margin. you mean, could scale And they QX. gross I you But margins for business?

So margin guidance, half starts term as we think of without near in the about kind targets the year gross and term? how second business should longer to recover giving of

Kurt Binder

under Yes. guidance. Mike, the year, margins I continue pressure. our impact future telematics you out, COVID-XX would quarter, revenue we to a half so be the for impacted this second factor. looking that will aren't say that as giving systems we noted this was of pointed which any Primarily

we closed vehicle took we say we finally finance to fact impacted on Additionally, I out pleased California are Oxnard, with inventory excess But made the the quarter. we the transition facility. $XXX,XXX our auto that move pretty that as will of this hit and

moving gain now efficiencies will we working Tier in these margins. contract X improve are us manufacturers, which with to We think help

transition think and more as we our that subscription help continue margins I Additionally, to up. drive will to hard work software to services,

we that pressure of just impact remain have to costs the the expand we come to And under some so half will will of initiatives particular the have range. of But second in to of ultimately I margins we taken there allow out this above margins measures are the COVID-XX, and of these as of year, a us are believe the this, year terms and place. say then that XX% in number in that

Mike Walkley

Okay.

Jeff Gardner

Lowstuter. going on-time add is just, just SVP other us more Chain has Yes. to margin that experience supply Nathan head contract Global that. in in focused I to-date, job, Mike, I member pleased help And of of time, team our the then really get really business one management like and chain. to to terms to I our hire think and part our was quality deep been thing the very And a on Supply Nathan our manufacturers. were able key He we to on has more focus over much delivery managing of

Mike Walkley

then Got it. over installations, theft not but we you. that for was the the drop the car thinking roll-off should headwind guidance, as I services. of a think recovery later to this contract? some Thank and with I year? know And how period, in think the about come tailwinds just installations quarter, timing onboard I as Understood. of think, versus you about on maybe the due two-year providing software some are the the

Jeff Gardner

business, as a couple on. Yes. Kurt One, that's pretty of There is going described. things a small

commitments. In addition to to going honor that, are we existing service

half it's is a that management focus business this and affected business, our business. the long we the We to revenue think quarter growth critical So as know some fairly very term improvement, the of the chain down quarter expect SaaS it in slow last year fleet logistics our back installations in were us all allows on you installations some to more talked more improve SaaS that we the manageable Synovia said, slowed -- see about really in about or of the particular terms it's and wind there. supply continued that and of across to in and

think things I focus us we all investors real organically rather So that. And gradually number will on away, importantly, on I got offset than a really for. it our kind going get the in of looking focus drivers that revenue of can the that to sales what help that think are addition I of of growth more have think business focused moving allows to on be

Mike Walkley

and I for Last line. me Great. past question will the

the Just feedback in do is your with business you customer the How we U.S. the think and business, in as what you more Thank but break think terms revenue talking LoJack base what's your that of helping timing recurring transition revenue? hardware as that to you on that should you. down that about of piece recurring modeling your overall out from business line?

Jeff Gardner

Yes.

on business. because quarter took specifically to manager as business, think year, commitment transparency action investors right. of the a the this And I part more that providing general this oversee attention, we needed also a it appointed LoJack believe we our to last to across we business

in the our goal our is is, of terms partners, there so business changing. And dealer

legacy delivers the having to the primarily their a We moving telematics. will we we that be SVR product post still connected more more, think customers our the more sale. RF allow And will to different frequency with to much a operates to And that have have to on a them product will value in capability and customer SVR addition mobile have that really offering been world's frequency. opposed as we lot

help customer from does a perspective management them important. the only engaging not with really, sale but really this it point is lot So

top concentrated it. really upon to is you be it's pretty partners at going when incumbent our a what's to So business, dealer convince and us look

a as very being quarter we the as of can convert solution. that are in to telematics aggressive we them many So on to

Kurt Binder

and on that, to now, is while asked certainly the in there it. think just Jeff, for Jeff, I with timeframe. a place a about This add from here the Mike been leadership And heightened to transition focus has you little but new guidance

for timeframe we XX full the XX realistically out low-end much that transition could actually as there take, be at but could as this months be may look probably the effect. speaking, to As take months, as it much

Mike Walkley

taking my for best wishes for the year. and Thanks questions Okay.

Jeff Gardner

Thank you.

Operator

comes line question next Our Searle ROTH Scott of from the of Capital.

Your line is open.

Scott Searle

operating quarter. terms questions afternoon. so the for inability in to seems you a out, availability ship quarter was what that in are Maybe normalize nice Thanks that sort very catch-up product the fourth help run monthly maybe very seeing calibrating couple can it of of understand of for in on questions. to like was MRM to the had rate component the quarter. you Good Hi. quarter, taking just around that us the due guys, of step-up. a tough a of environment. my what in a maybe Could one-time Part linearity basis as MRM real we catch-up MRM? for Nice

Jeff Gardner

Sure. Scott, question. thanks for the

that some I perspective timeframe. and we that the So at that out just time And point this back did time. million in revenue. clearly that, of We we in fourth to give backlog. we $X a that our backlog products earnings in impact shipped our had of think laid you large quarter, portion May at incremental impact announcement or approximately result that quarter MRM helped that this do of a In indicated that had as unshipped we believe

impacted that it by out and revenue up pointed that. partially item was line at I least sequentially that believe was You

on there I QX is, remains think now right still our focus pressure.

lift impact on bit. things first will As be of half second highly a said really we this the the will half of will COVID-XX, we have be start and concentrated believe to timeframe the year when before, the

we product would impact currently, portion of did revenue. and a large So backlog MRM I shipped, it say, that our

Scott Searle

sounds it Very maybe product LoJack step step follow-up then million down the like. the then managed $X to SVR big A and And side. just down helpful. this quarter, on to change,

different is related specific thinking because period? with it to transition, dealer And you to you LoJack some along a what M frequencies the base what how of more type ARPUs solution process out? Or LTE you could are like now onboard your conductivity, product you couple in LoJack quarter ARPU, types target will wondering referenced you a once am that maybe thought existing maybe XX installed that or months more an zero? where more get thinking I then the To to terms So or XX month the of is offer the what are to over comments base that solutions and versus about million of the are sounds XX, what? CAT within standards-based So expectation to is there? about that, XX that XX,

Kurt Binder

So of Scott, I that a will There there. break of down. questions question sort was lot

let off business saying, me first the impacted in think, answer was shelter obviously the just by place mandate I LoJack by for business products quarter. or LoJack the shutdowns, the

do not and has We So also through zero. the this to in we that will that being All that that do been believe to the baseline next sale that telematics business quarters. days, the say, focus rapidly of let's our legacy persist more early see or expect out that you we step-down expect Still been but on solution there forth is Jeff That transitioning here a milestone run revenue said, expectations do the expect for a couple will happen set realized to that that progress. LoJack products. can be that team. that's has this obviously, we this and quarter aground is that not said, beyond,

base of we the have right of that, now a ARPU terms In growing subscribers. with associated

that like consistent businesses. well we fairly and you very is, Scott, we we have are an We monthly know our $X which the the in Mexico, in international replicate is with with we And done believe range had in a to can of what ARPU here places now U.S. $X Italy in have targeting say, that success the basis on that

the more got at and our telematics to just partners sale aggressive have them solution. dealer from We educate a be to transitioning hardware

Scott Searle

you. helpful. And if Thanks. Got last I could. multipart question, Very one

would on like software all of was elements the equation, place? or at there. like Thanks. Looking if shelter going churn there front? I or looking there to and the installation the SaaS that of bogey in some that And with Synovia terms What been what's services if the headwinds were of on deactivations, we in early a Was wondering there the months? or some the XX am given shortfall like are looks where what mix thoughts have where pause at XX the you were side it other is as look

Jeff Gardner

Yes.

churn. on So, in big in didn't there. of the we It is in churn quarter SaaS access And to revenue, see From particularly those installations. cases. buses a the some a affected was not affected yes, the by school normal the we by it of get being able any more were predominantly perspective, spike to districts

Some LoJack SaaS in remember. also were am second as Italy part U.K. do as well businesses the Mexico as the our there question, you of and that recall? to affected I And category of well. Kurt, then the trying

Kurt Binder

the of repeat second can you you Scott, but? I that? half know asked about churn,

Scott Searle

No, over just of in terms of your overall the SaaS next couple out focus we years. look for the company as

Arym. brought have on You

and more in recurring in with the DNA management bringing obviously around solutions. are team You

wondering thoughts am to would level So the that you are? I what be? high Where of kind like

Jeff Gardner

level Arym more great team seen to But does get think aspirational already Yes. think rolled trying we quarter. and sending have are customers that a were of we agreements what record in Preliminarily, fact a them and terms this I able process job, to as we of out few have that with our I strategic things do discussion. pleased I salespeople and revenue XX%. to been we term, we better we I term saying, more been engagement revenue get really enterprise there think, thinking. customers, product with in drives this, for the rewards with have to longer go really our have the out much level versus One, compensation on have some than new Longer SaaS system done and have things. their one, his in a of A that.

as introduce are are relates to XG in and drive very going very here, revenues. made seem over it we can initiative. to and software but the those to and our there there strategic is opportunity We inside company, up they be core little so some SaaS the that's going more the new on to of moves on And a this company big to the team may great we sales again, aligned proactively think focus these be XG time, products I

Scott Searle

you. Great. Thank

Operator

And of of from line George Jefferies. question comes Notter next the our

Your line is open.

George Notter

to explains I something Hi number guess services here. revenue that not recurring that there that sequentially guys. it's expected am here? and the about more Thanks delayed. have very in I guess understand of consistent a I quarter access February the much. the step missing I model But with software would installs to getting business. given subscription step-down more curious down be I vehicles I and function this Is having am

Kurt Binder

Sure. me stab that revenue significantly installations. were at a of is associated well the especially a thing lack in LoJack Synovia that. the I lines of the first that There George, to which business the the guess of installation. as the product recurring keep is with the was with business, probably upfront impacted Italy value mind take component let is arrangement oftentimes by the most actual hardware that as recognized

impact did that in quarter. so have And the an

example used in instances, device LoJack specific hardware LoJack a In revenue we U.S. way, are that's especially aspects that as other and coupled subscription of arrangement. the then values, business, standalone and as to upfront. required a another because sell record we said here good with So a our those

access may you by are have like has of pretty impact. customer, the Italy the say, a like LoJack sizable any pandemic impacted get devices, although that when it installation to can't that So ALD arrangement, with to customer a continuous vehicles enterprise requires or hardware you an a

subscription and really the the to So It explanation. contracts. the element hardware anyway, recognize around inability associated the that's revenue installations of with those is

George Notter

a number third? much Is a revenue how Got curiosity. it. installation? that it? could And a hardware give then Is out it of to sense of for this out is us that much Just you for is quarter, tied curiosity, just half? of it How

Kurt Binder

Great Yes. question. best typical answer And the just is the me of for contract. type in terms to way that

the go management to that the installation have overall XX% between, contract a to say, would actual hardware be depending and that say, of in a type they of you to If XX could $XX. to anywhere let's a devices may hardware low-end allocated range of the that ultimately see expect XX from service over device we higher-end And months, something for ARPU arrangement. on on an service, may that of with fleet XX% the high-end we the contract, be $XX tend

George Notter

it. Got

you. Okay. Great. Thank

Kurt Binder

Sure.

Operator

Goldman the Jerry comes our Sachs. Revich line from And with of question next

Your line open. is

Jerry Revich

Synovia you Hi. if Jerry am could afternoon. here. versus what nice hear count. just we businesses? subscriber to at am you is Yes. I it Revich you And Can the from us about us the an international wondering you glad how This LoJack It's subscriber Good was on other are all quarter-end? well. update by all. tracked count versus doing talk I give tell can

Kurt Binder

Sure.

So question just to answer part of way. this that

So last in was quarter, our X.XXX. somewhere the subscriber of range count

count the the that That category. of remain Most X.XXX. mentioned I our other it quarter, the decline XXX,XXX about the this finance quarter. board, subscriber had in fairly the bit across as most of to for category, was declined decline earlier that in that, consistent did vehicle of This businesses. remarks, about automotive of area a subscribers Outside prepared and

to don't is probably of international to As third have international, a calculated. may would domestic. quarter I the it be it with the probably exact say, being rest a number relates I

Jerry Revich

you. from other performance this your of expand And the globally. Thank here? was impressed a you quarter, drivers on transition? with shutdowns production much given Okay. talk about in how benefit of you Can MRM LTE your performance then I Just have

Jeff Gardner

the in definitely the have very right, going the Yes. networks growth. matter XG is Jerry, from transition transitioned these customers. not, good fact We be our are COVID-XX especially short we on of Whether saw order. some we benefited of big to or that

our very nice to a and our So solve talk the as them the can to this directly go his to the large with Kurt data with team with best in script, we customers. enabling multi-year team how sales product success, in we And a customers job did working customers, mentioned have arrangement.

advantage in we as have to balance internationally think the very helped a that quarter real that and when it are fragmented the industry, year believe. customers of this our I who definitely the for focused think about this will well, fact us I and we some is do business good

Kurt Binder

Yes.

you some give to Jerry. Just perspective,

In revenue was products. terms of purchase XX% composition, to practically the generated of from XX% LTE our overall MRM

Jerry Revich

hardware it existing possible XX% LTE, out say, how parse that of to versus XX%, tell? And Kurt, of it out replacement new that's specifically to hardware? on is was because something much to that that's possible on Is

Kurt Binder

available right that we have something now. not It's

We We out they so, enterprises out and experience, these number that that year program. have Trimble, marketplace do I the or over where move. a well of our like are in number been Connect, Caterpillar, or to type as they are might their that the just upon and overall the last at customers to know, potential our devices assessing as more Verizon available pointed as the quick are looking much they in stand just customers of especially existing the at larger enterprises pattern customers based as that have in upgrade of there looking data that's

have flow However, bit change. the seeing move, service telematics particular our implications are the lot in of smaller because and been we a of medium-sized to that customers providers, a slower or TSPs, that cash the probably of

our more Jeff us are can with having to being an have a that strategically to don't is their ensure we right the in it we what as So meet rush sunset handle engaged we as understand trying effort mad said, that to do fashion. now mentioned, orchestrated needs upon in and those customers to a and had conversations

Jerry Revich

ago a can Okay. business thing, year before If please the negative challenges. obviously this some you facing expand on LoJack define And decline SVR? EBITDA was could even U.S. last the you quarter, and

And of for wondering splitting cost support separate am you you because here strategic signal a are as a what's legacy product the that Can that forward that's on the well? have the to So discussion? if you just it segment, still know, the fact have path I as base? evaluating part out a the expand you

Jeff Gardner

strategy the as third will we this Yes. drive were transform are quite How what with look to time time -- said think that business. time doing? we a you that pressure Listen, to probably that on I but see, some focused differences, sense alternatives is the the take to addition need good we I focus are there? got the shot. a quarter think we can at you At and and we end that we end have think we fourth customers. think of Thanks short that have for team job good Jerry. additional we of for quarter, some our in are specific to continue been opportunities run or can saying expense. to convert and time, out But frames it second and quarter evaluate going really okay, this have to at How I got of to getting makes really right, so the doing it's do same doing milestones long we path telematics. business, we we been down are looking The And the the front a under really we a about our large the whether evaluate in the in other end of for the

been always very have We there. cautious

are right. You

But I still can there. think milestones some the really, maintain we make business. our have think but fact in are the general of got investors, I a charge are now infrastructure of the legacy products importantly that manager we difference to these and have some we You that for progress the for

we on throughout fiscal how each XXXX. are year are very each focused doing We quarter very, month and

Jerry Revich

cost lot the the because not just problem at is absorb it to going business like Jeff, the gross And for that feels to line. overhead is margin a be really

base? running having a about revenue path of for million year. you looks like high revenue looks here. network just business are significantly $X this cost business $XX trouble cut the forward are in am I at cost per the million a ago, $X Can SG&A quarter and year out what that million It like extremely overhead We seeing

Jeff Gardner

you would side, network we the please? on done have the of some about Kurt, talk things Yes.

Kurt Binder

Yes. tower do legacy you over are carefully. cost rationalize to at mean that as we Sure. some systems, meaning I based to time. technology, we services the critical that costs RF the the Obviously, infrastructure it's technology. cellular you the like move start those that have But I attributes a do out. maintaining and customers things is to a dissipate can mean looking think the great on point Jerry, are something there we

identifying disrupt the So we customers, that's more a to subscription to out the telematics business, in move more enterprise. strip way those costs partners, telematics but dealer way the we it we our number it the we to our cost-effective believe two, model lot that that will the are looking rapidly bringing, but do model, as to space. once we get at our in us one, And that a can present opportunities business to in tense, be of value a an delivering doesn't

I going additional that very in a topics are Jeff as that those closely. accountable say appointed we looking transparency at am that we are so there So pleased to mentioned, to to effort execute. have us we providing we assisting are general manager to And be that and hold

Jerry Revich

Thank discussion. the appreciate I you. Okay.

Kurt Binder

Sure.

Jeff Gardner

welcome. are You

Operator

Instructions]. [Operator

line Latimore Capital. comes Mike next Your the Northland of of question from

line Your open. is

Mike Latimore

pattern then throughout stabilization? the Yes, of sort about month big step-down first a that and a been Hi. kind on of subscription by the has of just the the just quarter? month it curious Or Was kind in of Thanks. declining and for software business, month the there quarter.

Jeff Gardner

quarter But were day our our it reach kind was installs, customers. one markets of so the that around up. the every it mean of the as in sales our team we to out to and thing struggle. drags was we around in a better got got was I installers, really pending of the opened the that talking the Well, terms to the as later mentioned where at more in list working of, quarter country of installation looking as we with

end, you the pace region on at but get the across you the And that state. on you different better opening taking when at look depending know did know a so the the place at going what's still it or is country,

still of do all through day. that. got quarter, this enter manage as There some better That's think of getting to are feeling but there, drag about had I getting into we we access. it we better. so be But And felt prospects our we And will each better better.

Kurt Binder

particular in the know northern And big to just pretty you would was add, of concentrated a all our that The that a that part I part in country and is, is Italy. significantly Italy listening Italy. business media only as is impacted think on in of Mike, of

QX, look mind as you quarter. that especially was impact, in into So an there going in months. keep are to summer early the And we

pick is business And hope up. will so that our the are

be given of However, QX seasonality still it, into with impacted that some the seasonality the by will little the summer bit normal goes months. a

Mike Latimore

guess point? to commentary, at Great. I we of be customers do they And more hey, are kind installs. are giving We know school reopen. going on have district your know this you signaled to then we What the will that, school commentary we able

Jeff Gardner

Yes.

We we proceeding access. get still with installs as are

we that. So as building we are have momentum with And had good just mentioned, I success have there.

they to As next it year, yet. relates have all don't the answers

looks subscription buses of on model, as the talked they country, As knows? walk ways determined still a for in versus that. two school of this could remains hosted distancing. is it's across think you team that board one customers And I offer they revenue our opportunities meeting the advisory various to day number a a still run a unclear. investors be who like. to our it us. with through It the that so a lot And up, about social am recurring happy to look when what sales to a because open And I some know, for next you customer could leading kind year of space remind our remains that very Software-as-a-Service routes just

issues. I has support through they customers exactly rolling are still out up think fairly as services open year. and But to going the team uncertain COVID-XX our how next so it's innovative been And they these adapting to navigate new

very and with work partner through be a that process. to trying them just are We good

Mike Latimore

Yes.

way makes OEM, and either the It so sense. right that Network million? sure here. I Great. Okay. wanted make $XX.X number was to just

Kurt Binder

sorry. The I hardware? am actual

Mike Latimore

Yes.

Kurt Binder

Yes. About $XX.X for quarter. million the

Mike Latimore

you. Thank right. All Great. Okay.

Kurt Binder

Thanks Mike.

Operator

to closing Gardner, point, this at like And to the back call turn I CEO, any would you. Thank over for remarks. President and Jeff

Jeff Gardner

And your you. continued today the note. us for Thank and in final CalAmp. joining for interest on thank you One all call

Both Conference participating the in that schedule second Please the first or are meeting virtual call. will us, Conference Global Canaccord Industrials in week fiscal in to with disconnect Shelton to August. be representative those Operator, schedule. a in the of call forward discussing to our late Jefferies the and second continued to For would September. our you we the like contact if August scheduled like I events. the look sales now week quarter meeting be would during your you added progress may Group of our

Operator

Thank you. This does conclude today's conference call.

disconnect. now may You

CalAmp (CAMP) 25 Jun 202021 Q1 Earnings call transcript