CAMP - Earnings call transcript Q4 2021

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Operator

Welcome to CalAmp’s Fourth 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, Joel Achramowicz, Managing Director of the Shelton Group, CalAmp’s Investor Relations firm. Joel, you may begin.

Joel Achramowicz

Good afternoon and welcome to CalAmp’s fiscal fourth quarter 2021 financial results conference call. Managing Shelton Achramowicz, Relations CalAmp’s Joel firm. am Director Group, of Investor I are Chief President Gardner; us CalAmp’s With today and Financial Kurt and Officer, Executive Binder. Chief Jeff Officer,

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

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

Jeff Gardner

conditions smaller resuming also industry more of setting businesses another regions both patterns, as well in cycle, results more you, demand operations to which global some Caterpillar, XG customer normal fiscal driver the us and of robust fourth and as XXXX year-over-year upgrade Thank gradually Joel. due increasing this due quarterly revenue thank of support customer, accelerate finished to key continuing everyone quarter, ordering saw the was our the continues improving joining today. and and largest as of the record. on with XG We Welcome, reopen. to you for for solid primarily upgrade in TSPs, We footing, to global our because our X%

in in demand finish the our our XX% a revenue sustained which exceeded see total to continue it of fiscal quarter, All in solid SaaS also We all, solutions was operations. continuing year. to from

I made role As this to team course, that been assumed we very look very companies I’m globe have accomplishments to since company. COVID-XX pleased the fiscal we and CalAmp review But over we of progress the a challenging have take backdrop March with the time I for time, to progress the able to due of the made XXXX. across CEO wanted past some been against as pandemic. this has, in it Over back the achieve year, the

dealers public aftermarket we with telematics. sale provider As you the organization, performance the announced the earlier our key out following was drive Canada our first, efforts may margins GPS business. our positive to company this these improve help improvements across actions of to to for of recall, safety the the of which on we transition took increasing to key profitability profitable business the of The to decision while the December, the including was my efforts efforts priorities markets. to EBITDA to sensor-based Esperion, commitment down both automotive decision business leading of recently, by more metrics as customers focusing our improve and very vehicle customers and wind and the to finance of aligns U.S. our second, development SaaS business; a we groups our were: decision revenue, LoJack the most one to as the within X and part overall and made to well on transition in quality strategic the to as a seamlessly

worldwide. efforts to financial to aggressive SaaS initiatives further supports exceptional an our our outcome CalAmp, In it being for strategic addition expand

in have that solutions, contract. objectives. under Diamond, global who customer, his retrofit and we’re team. package examples the Caterpillar includes we our been freight and Aaron the helping begun of that, my over XXX,XXX fulfill year, grown from We’ve who the These we migration over of reflect achieved migration, customers with our and focus progress these evidence been our is Officer, a large we believe customers of XG year building and looking we the these our large in our an particular, the XG navigate the on projects has we’ve devices, key to potential the transport with operations which has making other enhanced relationship at of new their about various one months their key depth customers. when is are plan. with an working the really have sustaining revenue of powerful the accounts of world Chief instrumental and we’ve never joined to building offering to delivery and with with with with a Moreover, XX,XXX than new momentum. past their our business transition are implemented today, ahead. in year trailers we August year after enterprise customers. our sustaining level exciting customers with Revenue programs I to over technology been is top recurring now both cycles The and that engagement ones been has relationships around a revenue important our ago, relationships Recently, have to extension past closer utilize example new engaged areas LTE strategic establishing us them in have growth improve customers telematics Another we transition technology the also past

great focusing promising resources on one As we been verticals. product initiatives progress most priorities, R&D top of my have making another valuable by on the key development our

here insights of in Engineering, the actionable manage fleet, iOn Recently, development his Our solutions. can platform from will release across our the additional an customers. roll provides We’ll with to for unified leading fleet as to team customer of with Senior forward. represents to provides mobile lot performance, who for of look has efficiency Rau. efforts intuitive to on been and new consistent they a concert working best-in-class real-time application family put unique customers team’s result streamline thus into new factor I’m new has snapshot control our This suite The to dynamics, software Product spending innovation a real-time their and updates platform pain points. data utilization this time that of on SVP these telematics cost. a Clark, The workflow a make their of effort lower coming pleased innovative across completed be interface activities software operators Jeff of single we customers so workforces data all work team deal managers very year, of fleet key and VP them this reflected this as level to the after been platform also fleet It’s reports improve satisfaction. solutions they really their all great leading We’ve our geographies functionalities talking operations, of and decisions, here AI-enabled provides to interface this about solutions. key features customers has better understand a alerts as screen our in entire Development, out iOn months of dashboard. operational our our to our enriched more a interface easy-to-use with that and in allowing in to our of of time going providing improved with appreciate for user Anand and resource interactive development a is our and

device temperatures well are ahead. smart are to this SC to visibility that deliver using we we that that monitor to software more smart today I Celsius. provides committed single-use software degrees they in years also as regular forward, to and wanted innovative This unveiled consistent XXXX will Going our continue our to new week stack XX value the the the and granular demonstrate as past of CalAmp customers as efficient vaccines higher enhancements increasing minus can device as to mention first growth and anticipated In our for improving great the positioning profitable driving electronics, by first the the of progress team the COVID-XX percentage other XXXX. revenue from with for high-value well various year, another pharmaceuticals shipments perishables a the in of and SaaS half our cargo, made summary, safe has the and also company transport quality over solutions. tracking

total As with revenue, SaaS represents results. to strategic of continue contribution a to the result initiatives, on than overall of our objective increasing revenue XX% more its our execution now

new is our As year, by our we business supported fiscal customer across enter strong levels, near-record at a and geographies. target demand backlog

what globe. the our are shortages supply that keep our impacting times helped companies our to in ability components they’re with the across fully certainly This but impacting suppliers the closely against are the working others cooperation industry We’re lead below increasing to for demand. us also ship certain has manage quoting,

also are We effects the Italy U.K. from schedules, the affecting COVID-XX see that to and still pandemic lingering continue mainly in installation

call With questions. financial open that, we solutions fiscal will and our to for closer results. quarter year improvements now ahead then drive a in performance call year I remain we And and SaaS coming further beyond. seek about want clear and I the Kurt as turn over be full to the at your the our we fourth that optimistic However, look Kurt? will prospects very to expand the in to operating our

Kurt Binder

historical in indicated results quarter full this are measures revised our adjusted Today, measures our North you, included business otherwise, that operations net to together indicated the announcing is as full operations. as basis Revenue income, $XX.X for million. my LoJack increased being year Unless comparison corresponding revenue Jeff. adjusted release sold revenue, $XX.X LoJack our these purposes. press our in was to including margin. of reconciliation increased the commentary financial operations, earnings afternoon. year-over-year adjusted press the and continuing will A release X.X% EBITDA March prior fourth America. of million was results reference fiscal to have the these operations today, financial non-GAAP closest periods measures basis GAAP we accounted from North issued non-GAAP in discontinued from XXXX America continuing to of Thank with reflect $X.X and Esperion discontinued with million, sequentially for EBITDA Quarterly Also, include financial from and that

operations $XX.X X.X% $XXX.X from the continuing from for revenue $XXX.X million total due from impact declined XXXX, million International year the revenues to or full for the global million, pandemic. million $XXX.X mainly quarter, the XX% and the to XX% year. or For totaled

connected the region from United region. $XXX for and for vertical $XX.X and year from States $XX.X from by XXXX, and equipment, million the million LATAM, full market municipalities. breakdown EMEA, Asia from was $XX.X million Canada transportation Pacific million year $X.X $XX.X and $XX.X million combined heavy million revenue revenue the million the For by and The industrial logistics, included car government million from $XX.X from from

and of up and the million $XX.X subscription approximately at revenue from was prior continuing Software consolidated from services slightly represented operations. quarter XX% revenue

an For to announcement, in solutions transformation our investors In today’s This $XXX.X to total. the finance represented business, metrics, automotive performance X.X% our and fiscal done rose effort to was help related track preparing business. subscription earlier full software services SaaS a in subscription year. decided revenue we in progress provided which provider. our to XX% million we these exit excluded software $XXX.X In global and to services vehicle million the from our the of metrics year, earnings we additional and

$XX.X subscriptions, represents ARR, $XX.X up a which point The million XX.X% recorded installation. ARR device first was or with year. metric, that prior upon revenue, or revenue excludes in the is application customer revenue million arrangement hardware fiscal from in in from a at annual time bundled recurring from to the the in XXXX recurring

contracted sequentially XX.X% deferred of continued rose demand XXX,XXX and year-over-year XX.X% to XG especially metric, customers. the from revenue from our remaining in strong prior end $XX.X Another key products million year-over-year to to XXXX our with the all contracted is at X% at or total revenue, but fiscal to related $XXX.X up Telematics in bundled RPO, primarily at to cycle, due $XXX.X quarter million revenue formats X.X% fourth million, was year. active and the end to XG grew upgrade revenue the of contracts larger XXXX. XXX,XXX subscribers customers. obligations, unbilled the including to compared finally, RPO And

the products For million million the revenue X.X% of America. $XXX.X $XXX.X from year, in to pandemic, impact due declined to the Telematics primarily full North

prior million reporting XX.X% in quarter. Products Caterpillar, segment, products our from revenue Telematics year-over-year and $XX.X OEM increased to million the $XX.X record Within increased $XX.X the network sequentially to primarily million, which revenue to and due largest XX.X% XX.X% from customer,

full year, revenue to $XX.X the year. For million CAT the increased million $XX.X from in and XX% prior

basis Consolidated solid other customers to of the also with expect XX.X% mix quarter, XXX from CAT services of from and points this improvement basis margin And subscription XX.X% along our with in XG. last XXXX. engaged to with pivotal remainder in demand many year our calendar increased gross is points the XX% due margin for in for to increased along quarter gross fourth the in XX.X% XX in to transition reduction revenue gross continue the full year, business, margin to benefit the We from telematics and to software certain the compared initiatives. cost increase

to an XXX impact offset the or cost margin adjusted we’re some EBITDA in customers While to that additional supply revenue, in EBITDA XX% that to to our increases points improvement $X.X could million we shortages The of to of initiatives mentioned. margin margin gross compared have of increases are prior was be with suppliers, seeing are in increase EBITDA increase an in from coupled to in these price adjusted XX% the to quarter fourth Adjusted our previously the we pass-through to EBITDA are of over EBITDA as supply XXX due short-term gross $X.X time, by the adjusted margins We with provide the such primarily is until million which expect benefit able and the as in time suppliers. between and quarter. resulted margin, the adjusted costs continued normalize our recent shortages able to we basis anticipate to. the working

net we in million million the to year continued a or compared to of cash for due decline cash performance free prior free adjusted XX% The is primarily free million expenditures improvements of fiscal million or improvement in XXXX, declined XXXX. year. The $XX.X and generated revenue is resolution For million full from we capital due a $XX.X outflow approximately the EBITDA in of the revenue flow annual the from reduced year that earlier product reduced flow $XX.X to revenue of total year to $XX.X capital the matter in of total operations XX% Also, addressed year. cash compared to in XXXX. $XX working and

fourth XXXX. quarter percentage for operating and non-GAAP revenue a as Our expense the of full year was XX% approximately the

this cost With a operations, initiatives result sale internal the North to with further cost business to help our within to LoJack should consolidated with measures service accelerated business and over the the reduction ongoing been operating will align sale our time. our improvement have margin in America agreement certain transition incorporated of operating Experion. that various the believe related structure to leading solid We transaction in model SaaS-based efficiencies, coupled

$X.X compared cash quarter from LoJack estimated million adjustments of position, working the liquidity had the Now, of million turning for received $XX.X the million current end approximately we to related to including we North our Subsequent operations. sale America as cash fourth total and at quarter, the to quarter. capital, end, to of equivalents last $XX.X Esperion,

of will $XXX XXXX, Our product call lingering are shipments over for for senior of both before I call from million forward. due $XXX provide supply not open working final to significant aggregate quarterly With outstanding reference COVID-XX visibility some XXXX. million, outlook, is and guidance debt we remains the including a the maintaining the questions. quarter to convertible to we the pandemic. to notes of shortages, expects Jeff strong providing financial and CalAmp global as maintain back first August turn our approximately going policy comments for effects up capital our the position continue due In balance into to sheet cash with the X% uncertain that, to the

Jeff Gardner

forward Kurt. across the the bar to am progress look our initiatives team raising New in pleased have you, organization. I with strategic Year we Thank but on execute the as our made, to the CalAmp continues

to squarely to our now business are efforts our to up profitability level Our potential. be and will driving SaaS the would cash force that, growth, of like the Operator? generating open where call on I a questions. With set driving

Operator

Thank from you. first line Mike comes of from Walkley question Your [Operator the Canaccord. Instructions]

is open. line Your

Mike Walkley

results Thanks congrats strong on Great. the questions for and and taking my margins.

XG amount Caterpillar a extended revenue your for upgrade cycle sustainable agreement, have term any help a But cycle. XG way can is to strong XG generate I maybe about what’s from question segregate have the the upgrade organic your you know Any growth relationship First a And long-term annual way me longer cycle? think of you us you relationship? maybe can to on you just think versus post Caterpillar, for particularly there.

Jeff Gardner

This is same – doubt demand we cycle Yes, there XG their the the is Yes. seeing Mike. But Caterpillar helped for really are side. has on at Thanks increasing upgrade question. business. we the that time, XG Thanks the Jeff. no to as

If the you and delivering really they was in more on today. are early think about their outlook pandemic, affected product business their

pretty think over the our have them. do change – But time. we with opportunity over that we months it’s great bullish all are us. for Caterpillar XX will at look I a we next to I the And as on mix think So,

Kurt Binder

medium-sized orders to we into for rebounding XG coming evidence pandemic, are after building than probably on close And the a Mike, highlight now of XG lot all we momentum in is XX% demand customers LTE the our from it’s our come I of and that XG. of about just mean, XG, have more which to Cat, recently broader the to the seen obviously, to right XX% product, that small the are are to sunset.

internationally. wanted are So, increased additionally, that. highlight I And to also demand seeing just we

for markets customers our United in it, Because States, although starting sunset transition the of purpose. well, as we that current some of highlight demand. just resides of think most another which the to the selling just outside tried at we the of is we opportunity U.S. are primarily that as that we into so look wave And are

Mike Walkley

is sounds here. a It there quite maybe go. just like still switching Jeff, follow-up helpful. That’s question tail gears for to my

business Just team subscription recurring lots revenue transforming your the your progress end, higher services. to ARPU on of model

With the with etcetera. areas you new iOn family you opportunities low-temperature us growth about you and after telematics market is as are the Thanks. of create kind up and in capabilities more And of going solutions, are you with excited that monitoring, of most more what Can a terms share adding such aggressive the for acquired, with company? new low-temperature area and maybe an does being like your set? cold open that opportunity really solutions, these chain even solution are [indiscernible] for and

Jeff Gardner

Thanks. Yes.

are way – the in year We focusing this those done the business have Mike, terms really with that think, you what most of are I on what with about promising. pleased we talked verticals

look good progress. rollout of team the and I we puts compete new suite iOn the with with think very interface, position in new the making areas, As is our of number a in us a to forward, user product good

So, I government are of and very going to excited municipal to I mean, in terms sector. I think the in we am areas about, continue well do most

internationally device, That’s market like end business think the look cold strong. around CalAmp opportunity. we is and chain very transportation to the a the the is market. car a But announcement ton there very and can connected And platform bring big of Our few and there overall, companies package The that is our logistics today. full solution when you do. at today,

focused. is And really our where so that’s team

the only but product on also there, the sales on and side, investing are R&D We not side.

proven we and ourselves already have those in spaces. – So

clearly markets. that large the customer board, demonstrate can complex look very we our we list at very You serve can and across

I that. So, about would that’s what say

Mike Walkley

that, I the Okay. And on and will line. just pass a follow-up

some short-term think and or – guidance, slow Kurt or in but providing any are steady about not in sharing the areas forward I a potentially these seasonality opportunities just close. should you might we with time growth subscription can that are in expect Just new long RPO, and growth trajectory? that new but these any we to revenue services going it trends quite should metrics, there those take know of ARR are

Kurt Binder

those highlighting how as showing SaaS metrics we, transforming the are confident for good We metrics. of to right are Well, SaaS feel indicators pretty thanks, now global enterprise an Mike, a that enterprise.

we metrics. right time was So, highlight those felt like to the this

growth In and – of Obviously, telematics coming fiscal the the this of impacted a has our upcoming that couple terms services in we are lows and of business. play. out our things are pandemic, year telematics principally in of coming beyond, device the

that’s a driver additionally, growth. big So obviously move to the XG. of And

one first we them to onetime transition have out as to of As move hardware base package And of customers things XG believe agreements bundle sales strategy to those our XG bring solution our working effectively. strategy transaction, subscription can We talked has been the we overall that or with trying past, about deploy to is customer in onetime key we enterprise work is with that step to from the in transaction that of play. our closely do of arrangements. into services the a and to

growth it’s in of us into of allow factors So, that combination ‘XX. that a which I momentum are fiscal to play ride think here, should

Mike Walkley

you. Thank Okay.

Operator

Your comes of the Jefferies. next Notter George from line question from

is open. line Your

George Notter

you Hi to guess, I the metrics I on you for guidance. add the much. my congrats and guys. of very Thank of about and thank more on kind also guess ARR RPO. additional ask wanted results lack I providing will you I

recurring I time, the think now. the obviously, said you issues. backlog, component think, in record or You same got we business of then a cited, higher lack near guys also mix But and backlog obviously, of and visibility record have I at

So and you of I Thanks. color square why us more statements on some could hoping give ongoing I guess those guidance? of am no kind kind

Jeff Gardner

when Really, – big it’s like you really look George, semiconductor companies driven it’s more have across to related by issue seen the companies. automotive global shortages it, Yes. you at supply this about world. chain

of We with some have problems our components.

only we forward. and will hesitating will is have really are on backlog be guidance – at – going I that’s are Kurt that’s that great And really good. reason our And got But we good customers a news the and a we that take that. really and in products, that the look so interested are our

be say, but kind look quarter now, going each that’s saying case the pretty Right will for not through. that uncertainty are time. whole forward. – just a take level I But at We is to just we providing I play as more at comfortable look is the we guidance said, going where would at it of will not the feel a year, there as we the at we

George Notter

Got follow-up. then a just it. And as

Kurt Binder

Well, the SaaS is true, provider other I I to will on we you thing order And is like the our in add that that’s activate the transact predictability since any visibility have George, our into we although business. have, service just, SaaS to and highlighted to mean, services, the one installation. device, challenge have we telematics and have

chain, with combination in uncertainty. some creates that, So the supply obviously,

but that it I evaluate providing think we very don’t will Jeff and So, to off are to quarter-to-quarter it’s I pointed we out, be back going think far as guidance.

George Notter

some you in Got in of us you was the you up. impact give just as revenue that COVID of it. of you have Is is on how terms then had amount And Could Anything then because a gross held can installation revenue shortages? about impact us And to or margins? getting that the component held even quarter could any metric-wise, issues understand much could up help may on impact there point just talk follow-up. quick installations? you

Kurt Binder

Sure.

MRM combination in we the past our impact I the been I of only you been at the things. range. as So are a pandemic low have million talked just about also the I of $XX working we look specifics. And a bit to to challenges. space. of you, couple challenges million It’s think around highlight some and business, in is, give that’s that a rate chain in would some that very the to hard this still the not run quarterly supply of But but $XX on it’s But of pandemic, will through business the historically has a say what

XX-K to if a in really if think at are that’s I highlight we record quarter, we backlog, our near, $XX our at hardware it a to perspective, about million perspective, look not as So current the in we why historical presented a you from from which backlog. felt a right the level. million was important now $XX And is

George Notter

Okay. you. Thank

Operator

Your question line of from comes from Revich Jerry Sachs. Goldman next the

Your line is open.

Jerry Revich

afternoon. good Hi, Yes.

Jeff Gardner

Jerry, how Hi you? are

Jerry Revich

congratulations are quarter. cadence talk Thank that seeing the well. year-over-year you. And we cadence vehicle could whether thus in rate, far Can if of there run would on helpful. folks on growth strong am finance be the the quarter? comments you wondering growth here. just talk Doing the the has about continued in progress subscriber you I about Any excluding

Kurt Binder

right. Well,

X% terms presented. the That continue Jerry, car tracking fleet, out grew new services will as referenced see, about services. that connected within we monitoring both our well that that provide we has want come Year-over-year, So We services, to overall to we And as you the, was correct. and of of in within recovery growth. we our what give we transportation our highlight as metrics logistics and key that X% call core to subs have to as our subscribers. the which internally businesses, Obviously, quarterly increased we information, we primarily one that or be highlight that will information. financial are you

that in subscriber So trend broad expect continue. We – based. growth it’s can to think be

we So optimistic are very about that.

Additionally, equivalent those rate. subscription when that And monthly also we was we services. information what gave the an just focused we saw overall highlight our increase in to do metrics, want to new application were I on close ARPU in

specific But that know fiscal this our growth any growth But guidance. think XXXX. and we at we point, all element hardware there’s that can are that, provide Jerry, of not to incorporate, you continue ARPU So to arrangements. as a that into subscriber going doesn’t expect to

Jeff Gardner

we from services added did ARPU on simplified is in Jerry, value what the managing business of I transactions software mean, our growth, with X to metrics; we continuing the key deliver the subscriber this and whole focused that have team stack year after is, especially then is attrition.

So, we customers. our hang to on

we And feel lot this going the overall, going you look forward. really story simpler to be are businesses I is when like And that so feel a at in growing.

people have product We team, verticals. each of people R&D great sales these and great got on

and in we yes, metrics. three optimistic the improvements about in So driving future are those growth

Jerry Revich

And that you us and on excludes revenue fiscal growth course in the new here into the year growth terms finance. help of per the cadence of Can understand vehicle the of over new cadence subscriber well? quarter of the definition as that ARPU the

Kurt Binder

Yes.

So quarter. or information we is – would guidance of our bring intention continue our quarter. some similar to each of Joe, expect to provide cadence, I terms metrics in each to think If our

Jerry Revich

year-over-year the have what’s finance. meant other sequential you on the momentum metric. into on words, excluding I vehicle Kurt, sorry, Yes, New folks performance In metric, Year built ARPU that that

Kurt Binder

So growth that year-over-year And our continue growth, fiscal think to overall, Jerry, we XXXX. was I X%. ARPU into would expect ARPU

As of sequential number top head. that growth, to the it relates don’t my have on I

Jerry Revich

Okay. hand, quarter the can just on of telematics And shipments hand. shortages within systems, color. demand their is terms then the – on about we other about to date, but I on the obviously, you is like what first talk appreciate know chain all in one very strong looking based that supply

can can magnitude growth a supply we of the at point where us are in see the shipment just calibrate you Or year-over-year chain we shortages? So the quarter? on

Kurt Binder

$XX high telematics right that $XX which right is record say the near can is device now million, all that million is us. Well, our to now I a backlog within for base

chain the we’re terms the of working for a in ship to In position our to give we’re supply that not through. quarter, guidance challenges ability given first

Jeff Gardner

most possible, challenging might you but of it customers, really a environment. our to deliver fourth imagine quarter. covered as that, for that in the is our doing And everything been it’s relates team to Yes. We

probably think we’re I for the that’s to fight be going of just battle so And a going couple next to quarters.

Jerry Revich

mean… I Okay.

Jeff Gardner

are our products. understand XG XG And to news, effect. great transitions the backlog. taking want customers that Jerry, the is they The They

business is And for us. so there that

Jerry Revich

you And a headwind supply lastly, that Okay, chain until it. we margin that the magnitude chain Or that relieved? expect the got supply current shortages are of mentioned quarter? issues. the headwind can is fourth about from the Was the comment

Kurt Binder

that, to give that points. margin We of with that on to mentioned, impact XXX were XX% basis Well, quarters. we of XXXX, as expect demand. fourth spot And customer I we Those over shortage the a execute in in next factors to component some quarter. areas pause do look performance quarter. and to pleased us the number couple over the result extremely of could were a for as fiscal order there are us fourth two two forced the to meet to pressure downward Obviously, the XXX try being in we we’re buys the

of for are half out it right upcoming that our given important think and like of QX that will the ‘XX. risk some a probably bit felt we there, in second was half signs may the We now, highlight subside. of for seeing strength to there year that the But risk of we reside that fiscal is fiscal first

Jerry Revich

appreciate I the Okay. you. Thank discussion.

Kurt Binder

Thank Sure. you.

Operator

ROTH of the from Your Instructions] comes from question Searle next Scott line [Operator Capital.

Your line is open.

Scott Searle

afternoon. guys. questions. quarter, good Nice taking Hey, Thanks my for

Jeff Gardner

Thank you.

Scott Searle

quick clarifications. couple a just of Hey,

number into of Given going OpEx that the the normalized reporting or fully here, we forward? along modifying there is events continuing OpEx we be the that spray it, should that goes and direction that sale correct? so of either operations, are the now any to this a reflective going of should off OpEx be quarter in So of is LoJack is working that first one-time the with

Kurt Binder

hey, Well, Scott.

that the reasonable carried services portion conclusion agreement. indirect some as bit And then costs. of at LoJack are going by portion is classify fact a next or, our had The of cost, forward. because to but expect characterize we work that executed to with in we indirect what that service way costs So was OpEx there in have agreement reduce those say, some, we on still transition of been I I to so a characterize would to to operations. our Esperion direct would that to absorb all of agreement costs we would That because said, fiscal costs as to the the ‘XX, be fiscal would into level carry our a of more that being longer are of with a what we have normalized have additionally, will the relationship those until by be little that to I going and we’re continue OpEx. for carried business would year ends level over optimizing the a going business should I a fact been we’ve And of them, that the Esperion, able discontinued to have continue which able yes, them. transition the the

G&A really Our up matters, it to where R&D. really market sale and reducing focus on in cost that is moving which is

of And but a to so still little optimistic And I’m the we’ve embarked there. do bit that on a number on there we’ve progress is of far, happen. so [Technical Difficulty] work pretty to made make

Scott Searle

helpful. Very it. Got

Just to clarify Kurt. though,

going are couple those normalized terms them just are otherwise? OpEx? or of any in the to into see to So costs over next charges we be quarters, of one-time indirect out you Or going rolled expect that netting of to

Kurt Binder

Yes.

into agreement would for think it likely I when time most OpEx normalized we’re service held of servicing with to be the being period typical transition a our So Esperion.

Scott Searle

could, you for And Caterpillar it. front, if record Got I guys. quarter

them and business not what the component like but to looks of without given that this at cycle? XG then business. I’m of XG it very Caterpillar a you the Is was of there cycle wondering to it’s the cycle through it something non-network rest XG for is Because as saw kind to going well? upgrade Was that I’m is grows, to component the the quarter And it I’m specifically OEM upgrade business. the depressed flattish? sure big wondering MRM in constraints, the strong extending XG outlook there. commented the like to levels. in the ballpark in the the relatively the year? is as if relates Sounds book of what your upgrade on you Or it backlog terms of visibility of actually year, still

that growth could Any for room there. is would color there helpful. provide front you So be on

Jeff Gardner

just – closely Yes, as Scott. work on at continuing them. that we’re say I very with Caterpillar, bullish we’re On would we the year, look to

our quality with improving them. We’re

of talked lot a I example that script to the in think, gotten closer we’ve our are that great of is my a we’ve so one they customers I We’re really, about customers.

So you the good to any give is but the of relationships very in outlook in and can terms is positive there. – see trend a direction I good want specific spot. very don’t

on focus So to to them we’re forward. going continue going

that balance to the these the reflects really to smaller fact starting I more move transition. XG some that the respect need with of now to backlog TSPs are business, think to of For they XG the quickly really our understand

our feel backlog. it I throughout that So like we’ve our it’s you’re it more year. in with broad-based of because no, show large now the up But customers kind seeing seen now,

million reasons a a backlog, for talked is I Kurt we’re – the us. which one about think that’s record $XX of

Scott Searle

Got But to clarify Jeff to quarter as it. revenue. that opposed backlog fourth

to reported didn’t quarter? see you’re So actually the starting see in we it, it the but in numbers just

Jeff Gardner

fair. That’s

Scott Searle

the if to or this side if LoJack broaden with lastly, at related it’s overall it? do whether [indiscernible] right, of I’m the cropping about? as base I just to is in announcements Jeff, related fit of Thanks. some they SaaS has on these And M that if composition etcetera, there, gain. at the You’re industrial kind any of there portfolio, business. that that And Are look be a XG? connected a markets? networks, subs, business into I up? car, product X, private days? sub and look if could, XXX,XXX mix of been could talking Synovia business concerned But of wondering, kind the we customers of end CAT And discussion starting to you you in how Historically, and the of the the seeing different interest in Are of iOn Okay. terms well, where cold or the across about expect the back thoughts to on to some year end

Jeff Gardner

Yes.

the all end as our We’ve look had connected those. we good our very over in the car we connected car, about logistics, business last transportation muni, for see outlook markets, years. of so talk And and you at growth gov few is positive

So that I like with verticals the company feel future. provide I done we’ve in growth is the us mean, can focused kind of think on we’ve what the we

our good I both potential subscriber all So growth feel terms their verticals deliver of in of about and to ARPU.

that, do really is anything to all right? about relates what are it business yet. our in It’s meaningful we talking XG, about generated M As I that. customers – enables not to that. But It’s CAT we mean, the

And job so great CAT team our the across products delivering team engineering a and has product done world. M

And throughout of so a that’s ours XXXX. been focus

Kurt Binder

around And of part subscribers. Scott, of of your mix one was question the your first just

connected services, which car that with you tracking for fiscal monitoring the It as ‘XX. XX% split mix subscriber us recovery municipalities. into or aligned govern services overall from our an for ARPU. impact is XX% a XX-XX mix, and has because because a services coming mix was into We important impacts ARPU and look see that bit. monthly coming fleet our closely at fiscal that, So from probably and ‘XX XX, really about do shifting the it to going and on It’s

municipality key accelerating of are in we So hard market transportation, an the areas, logistics, space from working key government number in that and end monitoring but not recovery, and In make our to areas. the the those we’re tracking increase standpoint, industrial our growth sure equipment. subscribers decrease necessarily heavy

Scott Searle

Great. Thanks so much.

Jeff Gardner

Scott. Thanks,

Kurt Binder

Thanks, Scott.

Operator

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

line Your is open.

Unidentified Analyst

of Mike Aditya Latimore. is behalf this on Hi,

talk prospects the the opportunities more mean, there school? I you are around you around replacement the greenfield So could school? about see or

Jeff Gardner

question. Yes. Thanks for the Yes.

And pandemic in that the good all we’ve telematics a The we’re well. despite quite innovating our strength some features, a the few that space relevant have year-long there don’t. done doing market, during that team think although I that large year many is of has adding job districts in the business that were ones very equipment, real seen K-XX this particularly and new pandemic. with nice still

pipeline business. there. support a our continue that year to a great great We’ve We’ve into going very got – got there, very XXXX. about team we nice team sales fiscal excited XXXX be So a

Unidentified Analyst

so this Fine. for quarter? Alright. And in restrictions it and UK, of Italy particular countries terms revenue does much regarding Alright. in the in how as such Europe, affect

Kurt Binder

terms quarter? of fourth In the

Unidentified Analyst

Yes.

Kurt Binder

yes. Well,

Okay.

bit In in is is space terms international the consistent. is to recover the our did it. a connected of we into it January-February Relative of the last QX. seasonality there that But at was you QX dip when if which the the pandemic fourth to car fourth started looked year impact quarter, And time in feel quarter, really see going fairly think you typically of from – we frame. time, fourth this a quarter recall, in I

installations, say, nowhere the March, limitations May experienced time some, but we would We in are I but frame. seeing near on that magnitude some limited, back April,

of feeling our remainder office not we and think that be forward, relates totally has of throughout this beginning we there think, that and there things some COVID-XX indicated the pretty to. that about woods still UK, generally, aware that to sensitive good of be we’re should business. feeling look the we I to be beyond the as think pandemic. that I the just it have of ‘XX. as fiscal The QX we’re we’re are We So But out in

Unidentified Analyst

Alright. Alright. Thanks. you. That’s it. Thank

Jeff Gardner

Thank you.

Operator

There are call this over no to further I’ll the back questions Jeff turn time. Mr. Gardner. at

Jeff Gardner

and Media the Yes. you Conference CalAmp. attending XX. call upcoming for interest continued the and final Virtual One your thank on be us on in joining will today for note, Tech Well, Needham we May

quarter or first for our may request a the disconnect Relations you progress to our today. call. you. joining in us like I the Group, discussing June. Operator, Needham Thanks Shelton to during Thank If Investor contact now continued fiscal you’d call please meeting, our look forward firm.

Operator

conference for call. Thank today’s concludes participating. you This

You may disconnect. now

CalAmp (CAMP) 23 Apr 212021 Q4 Earnings call transcript