CAMP - Earnings call transcript Q3 2021

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Operator

Welcome to CalAmp's Third Quarter 2021 Financial Results Conference Call.

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

Leanne Sievers

Good morning, and welcome to CalAmp's fiscal third quarter 2021 financial results conference call. of CalAmp's President Relations Sievers, Leanne Shelton Investor Group, firm. I'm and today Officer, Officer, are us Chief Kurt CalAmp's Financial With Chief President Executive and Jeff Binder. Gardner;

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

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

Jeff Gardner

Welcome this everyone, you Thank you, call. us on thank Leanne. joining early for and morning

U.S. the represented made Our And strategic And with I strong decision minutes. as in solid begin third margin operations. quarter a another recently about revenue this to results down expansion. release, will morning's indicated of quarter growth LoJack our we few combined speak in more winding this

with results. of adjusted quarter me the $XX with million, third XX%. the let in margin revenue start First, Consolidated EBITDA was

consecutive total We in sheet, over $XX.X with the flow. grew million, ended fourth we revenue quarter both million year-over-year a SaaS sequentially of positive strong or cash XX% and $XX free our to of revenue. generated Our balance cash, including quarter and

quarter. XG-to-XG the which customer's largest we in During performance the from the benefit to upgrade record quarter, ongoing cycle, continued our fueled

particularly press our robust, implemented North The solution Guardian our school And seen in a Additionally, all and Bus highlighting demand offerings. management for subscription our recent Bus Comes release, our that of have for solutions. remains fleet Carolina district Here may you

management on we're customer further already a large and trailer retrofitted. exciting competing had highlight in As their applications I'd quarter by of and Demand order that technologies seen chain key children with some safer freight concerns. the almost buses a we've of like couldn't in contributions pleased To winning and delivery and are of tracking for increase environment transport that more tracking opportunity more shipping third drivers, utilize of to recent addition that for some an our track We're to for smart our cost-effective telematics has been recently. the customer new additional to also trailers the and relationship trailers XXX,XXX successes global recently, wins continues, we the regard world been fleet communities months, this helping global we offerings increasingly of more and stay K-XX all the over light number major tracking. To this moment. begin, more firms. large easing that during offer to could customer cargo We package believe a an a for XX a in in these technology supply CalAmp's important students, about more connected create business XX,XXX districts working on advanced especially asset end, our the in school and for pandemic pandemic features. a were project I'll are working I and and That's safe. in have critical employees' volumes. this comment together proud the asset management over for increasing expanded efficient, proof-of-concept and to our parent's this won be also

continued are the pleased We very potential opportunities this further for progress with of relationship the expansion. and

our revenue support customer its largest record, Caterpillar, a mentioned Additionally, continue and transition. to quarterly we new reached as as ongoing I earlier, XG-to-XG

We subsidiary iOn also customers, the In large even our I'm to lower excited due similar solutions that of trend LoJack vision smaller many smaller with along report tracking benefited Europe. some a other for struggle Tag TSPs, with shipments region, to and from EMEA our began installations at pandemic. installing our our continue Italia though of MRM to across accounts

revolutionize Coastr, emerging and mechanical and And Italy to Dean breakdown. public with order We private also telematics U.K., company with In transportation in the premiums. launched program smarter digital solutions. services to maintenance exciting, easier PluService, we protect the predictive & car vehicle our with make in and vehicles prevent a with maintenance solutions we Grove Europe rental help insurance also to industry to partnered reduce across an partnered

the migrated use developments that managing Suite private on We're integrating XXX And and customers our sector recently development by for platform, with solution our APIs convenient we've provided added vehicle management into our new running cloud. and to application some to platform, customers a suite that recent fuel CalAmp. [indiscernible] over the fleet. AI-based in TSPs applications bar asset iOn application governmental raised iOn powerful the iOn on can telematics new our we Regarding legacy also CalAmp's from platform

So monitoring CalAmp increasing there great be benefit assets continues progress the around to across of the from to recovering remains high tracking, our as for well-positioned being value a globe. need and business made lot

over of wind morning. U.S. operations. we our decided LoJack Now, After to to consideration various we months, released turning down the additional several this alternatives the past news extensive

business, invest also enable to areas that Recognizing our decision provided that growth higher automotive frequencies longer model. SaaS a we more business operate and core I our of importance on recovery a will the Company's provided allocated the margins and business higher were products, know, by the domestic want law FCC there products continue As The our business, for to core enforcement, as services further revenue position supporting to profitability of we it to is a and to for sufficient key on the stolen refine model expand that as continue us LoJack in SaaS public strategy. months Company. to orchestrate intend I our the make higher of as subscription-based many important further you and in the our consolidated allows six as aligns telematics is business, streams. well this the to related the offering for well-aligned transition on our growth to rates SaaS reason to most the allow which and operating predominantly drive will in These LoJack radio focus hardware-based operates vehicle will as customers no wind we rates manner historically this focus grow International down responsible and business. a emphasize a software-based better will down the the dealerships. brand, transition. a generate dealer as XX financially this in months, predictable in an effort promote believe decision wind we will business, for be Ultimately, be period time safety, business and although And to and Company for

years. critical like very of to dedicated personally our Lastly, supply fleet I'd continue to hard remarks, operations, With conclude who flow and third a their profitability continued initiatives of real-time the telematics over have customers their mobile I last business, support. results, to sales and our our as quarter worked higher extend status we as I'll four personnel, solutions focused is further software and our chain the look want the U.S. on revenue the We management the higher for margins, LoJack now operating and questions. our SaaS for at fiscal expand further strategic thank of the for of we and the execution quality decisions. this expect the turn will refinement appreciation team then prepared With to drive And platform on call the CalAmp improve my open customers Company. help call financial over closer believe our remains as expand value take Kurt? offering knowledge to members time that, their all technology. increasingly overall team, will and telematics to to assets to and hallmark our To of Kurt to our well my cash our

Kurt Binder

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

revenue or solid of our X.X% with the pleased to revenue As strong was sequentially Jeff results, million. $XX again XX% revenue. we mentioned, in are quarter totaling quarter International which, $XX.X million increased once in consolidated third

Going verticals, discussing logistics, specific region, forward, transportation on and continue global expansion our we as than our as will International business within execute including by connected initiatives core begin EMEA, countries, to such industrial car. well rather APAC, LatAm and we our by market heavy and equipment

and customer, the well from product the to compared bus and last Products school represented transition increased X.X% quarter. sequentially increase million. sequentially subscribers, in Subscription $XX.X sequentially increased due international year-over-year United as municipalities is to million The revenue. large from in revenue as and XG-to-XG Services services, year-over-year Software XX.X% to which to million Subscription revenue $XX.X Network an recovery grew of million MRM end sequentially our million, X.X% and Telematics Revenue Telematics products grew million, growth increased revenue customers. The the was in for K-XX quarter with MRM OEM $XX.X the transition $XX.X revenue and last in our demand OEM XX.X% region. EMEA Caterpillar, and Services X.X% strong million Telematics to and both to due to $XX government approximately continued largest to primarily year-over-year occurring products driven X% record sequentially in XX% and particularly our by $XX.X Software categories. LTE the from X.X% markets XX.X% and $XX.X revenue particularly our States, consolidated

essential pandemic. We million will XXX auto as increase our large down engaged in LoJack minute. wind increased to Consolidated business discuss more points solid reflecting basis to quarter, in from coming $X.X along in in as Revenue about this installations, details from in demand a the business this last $X.X during the quarter. open compared of XX.X% remained the was in quarter margin CAT quarter, compared second product quarter the other to dealerships XX.X% U.S. third transition. in a sequential U.S. expect the XG-to-XG customers I gross telematics million the continued this quarter with also

or COGS of to quarter's As you last with a the a to performance of $X.X gross related million charge XXX resolution recall, basis product customer. included approximately points may large margin one-time matter a margin

$X.X of one-time took charges The a the adjusted to prior of gross EBITDA to X.X% the adjusted quarter represents $X.X margin quarter, margin operating third and our improved level compared primarily margin was more in of margin and prior EBITDA due gross in adjusted a that consolidated for marked was target. million Adjusted increase long-term we of an towards XX% the and absence increased EBITDA improvement margin in Third revenue quarter in adjusted coupled quarter. with with leverage. normalized EBITDA an EBITDA million the business, the

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

discuss today's Now, of implications operations U.S. LoJack wind decision. as more and let our the to the of details down financial me provide

write-down in the one-time intangibles third non-cash First, long-lived an charge quarter, for million and $XX of the assets. other we took goodwill,

public part further months secular to achieve three down, structure the annually offset we product result $XX anticipating cost time. LoJack technology fiscal beacon cash down over months. over In of achieved to believe safety. and to tracking As responsible quarters the decline in sales SVR revenues of of the range the operating the quarter, the on to our costs. the operates $X we a our these over model, execute beginning overtime. our XXXX. will to related to frequencies expenses These $XX from de To expect consolidated the million by are that non-recurring to six will margin part will savings expect expected for be reduction personnel in solid of million the FCC we wind coming fourth million be the should U.S. manner impact in legacy orchestrate radio we cost accelerate incrementally year the $X.X that to various our minimis, allocated to wind improvement revenues, volume declining declines will necessary a the as savings align in next million we activity as maintain overhead in of actions in business operating cost a Longer-term, charge declining, SaaS-based severance leading to as in order help We measures commitment

third of quarter. and equivalent turning $XX.X paying Now, to $XXX.X position. cash to cash liquidity At That quarter, after credit current the total had of our revolving on facility. last million the million our million, $XX down end we approximately compares

very growth the with strong and outlook debt our prior our we time, maintaining million, achieved of CalAmp our August as position to we $XXX increase for business cash suppliers. pandemic. in quarter, guidance quarterly working global for there is over the we another solid challenges a free XXXX. remain It the flows the Though continues could notes due reference including balance the significant and expect of customers that both forward. million pleased this quarter and positive outstanding approximately with to the sheet our X% $XXX policy fourth amount the In aggregate during demand the of maintain convertible achieved Our a million, uncertainties capital resiliency not on be is cash we notable financial posed related continued are $X.X ongoing we the in due for of to sequential changing to representing quarter. of going senior have supply dynamics pressures chain, providing

our quarter, been available the rapid of supply. supply imbalances due to in we be by very growth, Jeff and that have space been nature situation New are questions. are comments improvements reporting, that we have As there the across I'll further recent the effectiveness adjustments pleased Overall, Chinese seasonal number monitoring. chain, that the pandemic, This final companies over recognize a we global us of open there the fourth back supply to includes many recently enabled have the had dynamics before for broader compounded but across have semiconductor made we could provide our the our some to closely turn support call resulted with to we are that, in Year. With which that call market up

Jeff Gardner

and the to which performance improve continues with quality achieved strategic overall the very team our action Kurt. to down longer-term Today's becoming across to in our in I'm execute critical the very growth pleased profitability you, step Thank leader I'm of revenue, takes organization. tracking, to mobile closer U.S. business. us contributing LoJack business with initiatives of operations on the our as our the and wind global third quarter, CalAmp to the we've pleased increased continued our SaaS in of one goal is monitoring recovery in our assets. success

the pandemic, increasing SaaS chain globe on our strategic challenges to due initiatives let's our our shareholders. value to executing that, remain and we and customers supply With offerings optimistic and and focused questions. the expanding take drive remain ongoing the across to Although, cautiously

Operator

questions would take At to this for Our Scott is we time, Searle [Operator may you with question like us ROTH today. Instructions] Capital. have from first any

line is Your open.

Scott Searle

period. your Hey, my time taking quarter, this teams Thanks are morning. guys. questions. I you, safe during for your and hope family good Nice

Kurt Binder

Scott. Thanks,

Scott Searle

a the U.S. going so, And clarify, it discontinued make in accelerate I that? by at is in do sales to zero, in to LoJack to front Just contribution to heard product the XX-month some operation, in of sure time SVR the of quarters? terms that want market, period next tail the -- forward? the I exit, of six-month in in you that's on of going on the is correctly, be are end the kind of terms from with Or that's then, you U.S.? to couple the SVR expect And going long there associated

Kurt Binder

is this question. Scott. appreciate Kurt. the Thanks, Yes, I

discontinued say treatment, show me of until down, shut accounting you effectively So, discontinued guidance that, allow first the business doesn't to off, the for as business in operations. let the the terms you unfortunately operations

broken some as important, to execute see you That's we if couple in segment. actually providing a you SVR segment. statements, we financial our remember, you wind put quarters as we the form make of reporting a of U.S. a out separate if look a you'll to information wanted decision management it However, business were so reporting LoJack that because ago, see sure therefore, on the comparative can made actually And down.

indicated next, be the have this months over going down wind plan. we're say, executing We or six that on so, to

ops that wind discontinued So, treatment. have is we complete, down won't until period

you. to So makes sense hopefully, that

that In business. LoJack there very this some we understand answer is very will terms technology will the of and important that longer-term for that be cover cost tail, that believe incidental to just We the brand the I'll question. is have We important.

believe it's critical infrastructure activity think, partners them the off. of their over do tower cost allow as support tails to But maintaining our job device we continue to will our And that that so, minimis effectively technology. we law for utilizing to de to enforcement us time become say,

So tail, On regarding can de the we do will Software last a expect think and some we cost, and it. be we point revenue. manage Services Subscription minimis your it but

effort streams. and more goal initiatives, really on focused our we're because to whole in to growth is ensure key, high that driving predictable have Our we more this want revenue profitable quality

our that And in drive realigned solutions to to and materialize, the will the XX six around allow believe growth, over say, better timeline we next so, telematics expect months focus us that key software our businesses at we subscription will of terms months.

Jeff Gardner

U.S. we day, doing and know, were we our revenue to to decline, the that our in really and long EBITDA make of end putting conversion business, margins. LoJack could, believe different, said, telematics run been in seamless, multi-channels. as business Kurt, this been is focused Kurt top-line investors If But and on margins, and we're hard a just our on it's something will business it's has and to to be trying continue the The quick And SaaS secular and growth very the pressure at this accretive year both our that to the be all that on which in going a were Yes. I of very as was the International offering.

rental and model. have SaaS all companies, to companies as of So many dealers, And know, in we we as that's you financial have well. addition OEMs

think good long those verticals we in So, as and best a we the it's the I have for focus decision profitability on the run think Company, growth that potential.

Scott Searle

either is some lastly, in the how It seems on kind geographically asset the any maybe, And quantify Thanks you big now? lot LoJack accretion going the differential also of curious in terms those could the then in maybe got to tracking quarter, like to what Italy wondering you've U.S. gross where the bit of quickly Jeff, between in so terms that front, of other the going that breakout? Could there, on products? And front, right just the MRM Synovia. that business, or a SaaS how you've components follow-up of margins. activity margin or got gross that's mix of provide color of, kind I'm that sustainability just end CAT, got much. the of markets? you And you've little on is, huge there's a and the

Jeff Gardner

Yes.

Kurt Binder

me first the to [indiscernible]. one You take want the on

Jeff Gardner

yes. Sure,

Kurt Binder

execute we will that improving thing sure performance in plan EBITDA We margin, remarks, if want that to profile. pre-recorded one make margin or this be our performance. on about cost qualified overall gross and is drive we that we to more overall So savings this our EBITDA will quarter accretive on believe improve Scott, is, can either our neutral focus our on we've our that and decision the the

time, right some us focus over wind again, So, need But on this -- in to to as to growth the and revenue EBITDA interim, there work is do, plan. proceed decision will allow down we this margin be the we'll believe improvement. we down

touch CAT? want to You on

Jeff Gardner

for business very customer. strategic I very I sure. very Yes, part consider long the been our a Caterpillar. near-term the on that is outlook an -- important time. has that relationship. of a We're strong mean, in Caterpillar focused for They

their to expect aggressive rollout of we So, conversion. XG-to-XG continue

performance good proud pretty a feeling to working we're improve all and that. of quality business, that about maintaining the good So, time with that our very and hard relationship company very and

margins I'd best business just of one are of margins, in Italy, U.S. XX% LoJack ever over off the to Italy. we're International of coming car on terms we've quarters In that say, contrasting connected other you space, things the the our terms in had. well the know,

had mix, business and and -- said I you high business different very as traction fleet by very transportation overall, asked was good very, driven really it channel, this our our very to in which So, very attractive us. we about K-XX management business makes strong. When quarter, logistics

I large well. talked we company, and about did call, or on the additional logistics transportation markets perform continue a business renew to sign As with international the very then

Scott Searle

Great, Happy holidays. guys. thanks

Jeff Gardner

too. you Yes,

Kurt Binder

Take Thank care. you, Scott.

Operator

Your next Capital. question Mike Northland is from with Latimore

line is Your open.

Mike Latimore

Yes, quarter there. the Great, congratulations thanks. on

some grew backlog seasonality business there sequentially? it I business, should is to SaaS the grow guess, fill from or last quarter, sequentially of kind continue this this despite any On in the

Jeff Gardner

and fourth EMEA bit fourth of Yes. probably bit seasonality our slow a is encompasses our you the business as Christmas in to Mike, particular, Italy, particularly a -- the the in in UK there tends with quarter, the region, holiday. in because quarter business, know, little the

ebb pleased. So, can is, I of One a there terms mean, bit seen have mean, I very that's Overall, highlights. growth, you flow seen -- were in our subscriber we quarter. a we driven year-over-year of and give we growth. little had subscriber sequential is and of fourth the I in couple

that we business. past, finance our managing watching we've closely One in you of are the vehicle items very to about where is talked and the

to past, subscribers XX% here, at about of about we've to X% and down business pretty that quickly quarters. As historically that XXX,XXX we in the couple you mentioned dropped running over came the last was

continue. about trend would we subscribers we offset, X%, an that -- seasonality that do even year-over-year that out, with in X% expect sequential QX. around But we a and will little to addressing as growth about our our be was have taken so So

Mike Latimore

it your -- I EBITDA would expect or Got That's what's in mean, it. how looks almost continues that in were that? your to you quarter. the invest And R&D? overtime growth business a driving sustainable grow like is are some Or and -- SaaS almost And, then, bit. margins margin in the little EBITDA more marketing XX% on to there? sales

Kurt Binder

Yes.

first team, So all, margin I matters. the of to always say gross

margin the obviously as things our grow But And our had so, continues the investing gross revenue it our business as watching in carefully a but that business down the spending and check margin. [ph] margin, to business. Subscription optimized our R&D. as and close margin will course, of at and And expand, I keep us that ensure the margin continue EBITDA EBITDA and now our really in Software in our that that and expand the is area growth, around right And been like connection in us G&A. continues so our overall to that, marketing objective look of to it's with of our SaaS-based is, sure take on to especially help OpEx to But sales think model. driving gross Services focus down right of well to wind will In for LoJack, to on expanding roll OpEx, and down addition around we with in just bring just we're make terms to to reallocate COVID-XX, more that places. not not to trying it down, in

Jeff Gardner

a And -- helps really us one refine add thing as the Kurt about to of verticals, number our I on the I our strategy with like we future. we're also continue would for which smaller platform focused R&D. I that and get Suite, that in on think some there is, the iOn investments, of in our terms doing talked focusing script, is things of

software, in think, higher position invest ourselves our to better avail it those to longer-term continue to And to margins. puts I so, us in a

Mike Latimore

of just you those education on sense your for the are markets. Do I And point? guess, a and applications U.S. -- the opportunity penetrated municipal what percent this at have Great. markets in

Kurt Binder

the somewhere year the speak When was more more at a potential, we so ago acquired attractive space, and is of penetration. one was We the that XX% say, have that in municipality we looking Synovia the, at and over did there why a because that the they the real had, estimated key lot focused to Well, time, we K-XX data couple we can that directly XX%, around, in of were on a upon business K-XX. players and market say, a strong market reasons based it Synovia were space.

what we momentum gained year last we then, the that think and over estimated we've that's actually So, back additional we've taking and been share.

Mike Latimore

Okay, great. Thanks a lot.

Operator

question next is Goldman from Jerry Revich Sachs. with Your

is line open. Your

Jerry Revich

was portfolio? we good Hi, reaching talk morning, LoJack. X% on order Yes. through if wondering the can everyone. decision range are step that overall, platforms the year-over-year. driving And growth? on and Kurt, about congratulations on just subscription maybe And Jeff, So a I'm vehicle the growth excluding of growth rank you're in Can seeing the finance we curve? the growth mentioned, had slower that you what's

Kurt Binder

Yes. Sure, Jerry.

order first So, when subscriber growth, asked rank -- looking at you year-over-year it. to

EMEA the Italy was subscriber highest by foremost, that grew year-over-year growth, region and about XX%. far and First

to solutions have space probably management third in actually that in that I subscriber year-over-year. And here our LatAm say, U.S. fleet Second, base was grew, the then, the X% place. grew the about

dropped about XXX,XXX I we of automotive outside subscribers to was peak did, down, the about that So subscribers. of XXX,XXX we mentioned, as from

make that over trending. so, headwind be we'll information you give time, bit subscribers And adequate will of so accordingly. trying that of and that sure a manage we understand can portfolio is a kind you we're But of to that how

Jerry Revich

terms terms that that the what And Can sense you be in that's you're -- running pilots it. then that key in with about, or talk I and you you Okay, the about like Jeff. shipping spoke investment for of should testing signpost appreciate of their about, you company we how the have rough decision? timeline a Do of looks going? milestones major thinking

Jeff Gardner

timeframe month unlock, particular, they as at excited what to and think, our just And to say, In lock end it month adding and smart I the door are, Jerry, looking do are like general, growing today, in kind relates going logistics. in features user. general control, I'd six trailer. on really on what's important near-term, sensing, things and temperature cargo already We're to those is XX we in we're something quickly, to Yes. features that really transportation very very of

is So, a very continued I that's team to looking and forward space growth that pretty on think near-term. The there. focused

Jerry Revich

is tell? that tough to a of terms in sorry, spoke is evaluation specific programs there you of And about, the date a or pilot it mind the in

Jeff Gardner

It's hard early to Yes. for pretty days that. tell, it's

we'll keep we is I think transportation our convey point want we're So, updated. everybody the that capabilities in logistics. continuing importantly around more And invest that to to that

Kurt Binder

And existing earlier remarks, the current additional XX,XXX we add close out is, add subscribers XX,XXX as pointed them in only I subscribers our there to to program. did relationship mean, our trailer Jeff to thing under I'd his with

that time. much as effort good these when relationship want takes large about programs identify so, with And type they you collaborative it's pilot is enterprises, solution you're know, a the So it are global that very direction. in and of trending a these bit the to right and of Jerry, working holistically,

mentioned XX So, timeframe think that month Jeff I month six that seems to reasonable.

Jerry Revich

Thanks. appreciate discussion. Terrific, the I

Operator

is question George next Jefferies. Notter with Your from

Your open. is line

George Notter

the it to very SVR next you maybe other business structure, those that you the that million then, guided? have to opportunity guys. Was to cutting just you a is any or maybe SVR I cost Thanks. And start, sell costs any did or quarters, of $XX of about coming structure you something And guys sell mentioned of over out couple wanted on the the that I to clear, just entity? also just to are as in cost Hi, think, the Thanks assets talking a -- of guess, to much. handful the other ask business then, questions the be about of but costs million was areas the Company I business $XX on exit. well?

Jeff Gardner

all reputable let to part with take cost Kurt and to including Yes, he we million sale, the million considered adviser. worked a I'll mentioned. Yes. that $XX and $XX we speak George, number alternatives a potential financial first the

that stay not of was -- -- something lot wanted away from seamless, complexity. swift do to was objective primary be and we Our didn't a to we would

the the But all our best did we at day, was So this down wind opportunities. absolutely of explore end those option.

Kurt Binder

question. cost the to George, And

So, let to me clarify. trying just

So, in best holistic is way perspective. to a it describe

$XX cost accretive. say, $XX run as which of XX% trending, direct on I indirect what variable that So annual and Of indirect million cost represent to wind rate $XX million let's million maybe or let's basis. neutral revenue declines. that the that entire fixed supports then to to means, to about go the would decision margin and cost. we as at this to down XX% this XX% base, business business pull And costs, remaining believe away an the if call revenue out it fixed EBITDA can XX% direct structure, The will will we represents revenue that is million that structure portion, cost that say, of be $XX

for that's So, savings. kind how expense million million target $XX number we to of $XX the qualified

George Notter

Got it.

much. very Thanks that's Okay, helpful.

Jeff Gardner

you. Thank

Operator

next Genuity. Our with Canaccord Instructions] question [Operator Mike from is Walkley

is line open. Your

Mike Walkley

Great. holiday and I the healthy. a stay hope happy has on everybody call

Just the a on follow-up LoJack. question

just the unwinding revenue. U.S. For of the the on trajectory,

zero you to late clarify, there'll pretty to quarters. just any a decline this? up steady to customers three as do buying be may we stock call it, next, wanted two have should Just be over on the think Or

Kurt Binder

Yes, is uncertain. doing? good Mike. imagine a a How as so, can little it's -- are this And, you question. Yes, you

business that conversations kind say, overall know this three the $X.X make running XX% We with million here. we COVID-adjusted, dealers. of, at are with And larger kind now, contemporaneously know next, $X the customers, that more larger those down sure has so We SVR is dealers products. with to feeling with our having want this notice But we'll that about solution, on a focus seamless replacement public revenue provide customers. our right been is base, our million. is months the in those the to winding we six associated the to and/or Of with of exit months this with about

down the in these decline and by the to next zero. continuous base after probably down somewhere then to and We to in quarter two the three a XX%, notices, over XX% between first expect that wind quarters the revenue followed

really we six of secular will wind the experiencing, we've believe and over months months three decline that accelerate been so. kind that down or to do So

Mike Walkley

do when to to the any on that you've talking there done these model, think or type these regions of you subscription you're thanks. and Great, all U.S., for model? a Jeff dealer follow-up partners other may -- And convert then, chance like is with across some the a with Italy have that that

Jeff Gardner

be today. responsive with our opportunities and to that's this very do we announcement trying Yes, transition some why is there, there hope to we're

We with on to really part dealers these with to a have SaaS model. relationships of do an them and around world, business the we're business for looking some continue large all who good opportunity

Mike Walkley

it you the of follow-up of then And that six question the does will more sense there, an you trying Do two how grow, months? And Caterpillar XG-to-XG are once year get a have it any what a strong continue of another a business model into period? to of that very on for Is is Just Great. upgrade? be that to -- or state how tail you might for Caterpillar results. XG-to-XG this far three-year steady done? idea just call

Jeff Gardner

Thanks, Mike. Yes.

well. heavy well, think, we with equipment, on, that but exceptional years, just relationship and to been that say, I one, and several relationship other their the expanding off, categories past first need been product say them, that's is CAT over with where not working I an into just portfolio, we've the going are the within

thing customers are and the XG-to-XG, out largest In terms customers, great XG-to-XG our about is around most our is, I mean, of they globally. one and sophisticated the transition of CAT CAT momentum rolling the

regions the outside like being LatAm of with regions. products are U.S., and into we them places the APAC So, sold seeing

then, so, We least really the from portfolio expect at That to to that and of momentum year part big well. to for as our our to there next penetrate continue is goal or grow their a continue was we about well. product September strategy. been growing a About product priced line higher that so, them, I to lower and ago very them, Telematics started product has volume-oriented sell a year, or a guess, to year to when

sized So, do with other momentum, customers move bit the then we to seeing or highlight customers, this to also making continue And next start the has expect then, to expand for we'll from year of been focused some But trends delayed. rapidly. I as quarters. into internationally. will their an pick here we're think, And be there, want what a so, that pretty areas the customers. are that in domestically. we on terms opportunity we pace up next experiencing Again, and of stay But portfolio. it smaller-to-medium for will use XG-to-XG are our here in to other then two larger to the the I

business was our look at most our International around you XG. and I LatAm, of was big LatAm in growth A to as that pointed XX% prerecorded international If the expansion of that revenue. of growth, out grew part in in our remarks,

mandate the driven next by in although the date. sunset in the So, U.S. year is here the

globally, We of are in and growth the the seeing that of companies direction outside a potential lot U.S. moving

Mike Walkley

about you the when environment and And little me, sell busy Great, last just what remind us thanks. that sounds runs helpful. helped of on the is on congrats win, Can And versus or can like maybe a deal a win logistics you the customer? just That's that time, one? within higher one-time hardware, in that nature with expanding competitive question services you customer. you bit pretty, customer, just over revenue additional pretty talk that from bundled this kind through is this important

Jeff Gardner

a fleet with the we're definitely SaaS a entire strategic component. there. relationship it's providing visibility No, across Yes. product This that bundled is the

well think, So, we're I suited.

as really think, lot of we're in about investment a engineering offers really bring situations trailer initiative. got make we very the prowess, to their remarks, of market, comfort. looking gives And to scaled out continued that in leadership We've platform our a our one smarter talk to you highly our my customers. there competing like the I when that that things is visibility product, great heard me

Mike Walkley

Great. wishes thanks New for my Best taking for And the Year. questions.

Jeff Gardner

you. Yes. Same Thanks. to

Kurt Binder

Happy Thanks, holidays. Mike.

Mike Walkley

Thanks.

Operator

And further to no I turn at there the remarks. Gardner closing are back call time. questions for Jeff this

Jeff Gardner

attending with January today, CalAmp. Okay. us joining Needham I XX. Well, on combined in the a interest On Conference be and -- Thursday, -- final thank a note, virtual Needham Growth Kurt for and will continued you conference your

please request to forward to like or you'd have a happy talking safe there, contact and the And to meeting throughout today. season, And Shelton holiday we Thank If everyone. day look investors The a Needham you. our Group.

Operator

today's concludes This conference.

now may disconnect. You

CalAmp (CAMP) 17 Dec 202021 Q3 Earnings call transcript