Exhibit 99.1
CalAmp Reports Fiscal 2017 First Quarter Financial Results
Strong revenue
contribution and earnings leverage from LoJack;
GAAP gross margins of 38%;
Non-GAAP gross margins of 43%;
Adjusted EBITDA of $13.7 million; Adjusted
EBITDA margin of 15%
IRVINE, CA, June 28, 2016 -- CalAmp (NASDAQ: CAMP), a leading provider of wireless products, services and solutions, today reported results for its fiscal 2017 first quarter ended May 31, 2016.
Michael Burdiek, CalAmp's President and Chief Executive Officer, said, “We executed on a number of key business initiatives that set the foundation for long-term revenue growth, margin expansion and earnings leverage. We are very pleased that we are seeing early success with LoJack, which was acquired in mid-March, and was a strong contributor in the quarter on multiple fronts, from revenue growth to operating leverage. The integration of LoJack is going smoothly and we are realizing revenue synergies earlier than expected.”
Revenue for the first quarter of fiscal 2017 was $91.1 million, an increase of 39% from the first quarter of fiscal 2016. Revenue in the fiscal 2017 first quarter included $27.9 million from the LoJack acquisition and $8.4 million from the Satellite segment. Though the Satellite business is currently in the process of winding down, current accounting rules require that the financial results of this business be included with the Company’s continuing operations until the shutdown process is complete.
Gross profit for the first quarter of fiscal 2017 was $34.8 million, an increase of $11.3 million over the same quarter last year. Gross margin was 38.2% in the first quarter of fiscal 2017, up from 36.0% in the first quarter of fiscal 2016. Non-GAAP gross margin was 42.6% in the first quarter of fiscal 2017, compared to 36.0% in the same quarter in fiscal 2016.
GAAP net loss for the first quarter of fiscal 2017 was $2.7 million, or $(0.07) per diluted share, compared to net income of $4.1 million, or $0.11 per diluted share, in the first quarter of fiscal 2016. The GAAP net loss includes costs and expenses associated with LoJack purchase accounting adjustments and other acquisition-related expenses in the aggregate amount of $9.3 million. Non-GAAP adjusted basis net income for the first quarter of fiscal 2017 was $11.1 million, or $0.30 per diluted share, compared to non-GAAP adjusted net income of $9.5 million, or $0.26 per diluted share, in the first quarter of fiscal 2016.
As of May 31, 2016, the Company had total cash and marketable securities of $118 million and total debt outstanding of $141 million, which is the carrying amount of the Company's 1.625% convertible notes in the face amount of $172.5 million. Net cash provided by operating activities was $8.3 million during the first quarter.
| ● |
As announced separately today, CalAmp’s Board of Directors has authorized a $25 million, 12-month share repurchase plan, underscoring confidence in our business prospects. |
| ● |
We completed the acquisition of LoJack, an unrivaled leader in the telematics aftermarket for stolen vehicle recovery offerings, establishing a gateway for CalAmp to deliver a range of novel, high-margin telematics technology subscription services. |
CalAmp Reports Fiscal
2017 First Quarter Financial Results
Page 2 of 7
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We launched our instant crash notification service, or ICN, which can discriminate between different types of crash events and automate damage reporting for a number of connected vehicle markets. |
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Across all of our SaaS and recurring service platforms, we had approximately 589,000 unique subscribers at the end of the first quarter including approximately 100,000 added from the LoJack acquisition, compared to total 482,000 subscribers at the end of the immediately preceding quarter. |
| ● |
In our Telematics Systems business, we made progress expanding our customer base in the first quarter as we commenced shipping products to one of the largest fleet telematics service providers in North America. |
Business Outlook
We remain cautious in the very near term as macro
conditions in North America have resulted in softer than expected demand from
key customers for MRM telematics products. We believe that as certain customers
work off their inventory overhang, this part of our business should see a solid
recovery. We expect the second half of the year to be stronger than the first
half, with consolidated revenue reaching a $100 million quarterly run rate later
in the year.
For the second quarter of fiscal 2017 ending August 31, 2016, we expect:
| ● |
Revenue in the range of $90 to $95 million, along with GAAP basis results of operations in the range of ($0.02) net loss to $0.02 net income per diluted share and non-GAAP net income in the range of $0.25 to $0.31 per diluted share. |
| ● |
Adjusted EBITDA in the range of $12 to $16 million. |
The above outlook includes approximately $6 million of revenue and a modest positive contribution to profitability from our Satellite segment.
Conference Call and
Webcast
CalAmp is hosting a
conference call for analysts and investors to discuss its first quarter of 2017
results and outlook for its second quarter of 2017 at 1:30 p.m. Pacific Time
today. Participants can listen in via webcast by visiting the Investor Relations
section of CalAmp's website at www.calamp.com. Please go
to the website at least 15 minutes early to register, download and install any
necessary audio software. A replay of the webcast will be available for 30 days
after the call. The conference call can also be accessed by dialing 877-407-0784
(+1-201-689-8560 for international callers) and using the Conference ID#
13639067. Following the call, an audio replay will also be available by calling
877-870-5176 or +1-858-384-5517 and entering the Conference ID# 13639067. The
audio replay will be available through July 5, 2016.
About CalAmp
CalAmp (NASDAQ: CAMP) is a
pure-play pioneer in the connected vehicle and broader Industrial Internet of
Things marketplace. The Company’s extensive portfolio of intelligent
communications devices, robust and scalable telematics cloud services, and
targeted software applications streamline otherwise complex Machine-to-Machine
(M2M) deployments. These solutions enable customers to optimize their operations
by collecting, monitoring and efficiently reporting business-critical data and
desired intelligence from high-value mobile and remote assets. CalAmp is
headquartered in Irvine, California and has been publicly traded since 1983. For
more information, please visit www.calamp.com.
CalAmp Reports Fiscal
2017 First Quarter Financial Results
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Forward-Looking
Statements
Statements in this
press release that are not historical in nature are forward-looking statements
that, within the meaning of the federal securities laws including the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995,
involve known and unknown risks and uncertainties. Words such as “may”, “will”,
“expect”, “intend”, “plan”, “believe”, “seek”, “could”, “estimate”, “judgment”,
“targeting”, “should”, “anticipate”, “goal” and variations of these words and
similar expressions, are intended to identify forward-looking statements. The
forward-looking statements in this press release address a variety of subjects,
including the outlook for our fiscal 2017 second quarter operating results.
Readers are cautioned that actual results could differ materially from those
implied by such forward-looking statements due to a variety of factors,
including global economic conditions (including Brexit), competitive pressures
and pricing declines, intellectual property infringement claims, and other risks
or uncertainties that are described in Part I, Item 1A of our Annual Report on
Form 10-K for fiscal 2016 as filed on April 20, 2016 with the Securities and
Exchange Commission. Although we believe the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, we can give no
assurances that our expectations will be attained. We undertake no obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Non-GAAP Financial
Measures
“GAAP" refers to
financial information presented in accordance with U.S. Generally Accepted
Accounting Principles. This press release includes historical non-GAAP financial
measures, as defined in Regulation G promulgated by the Securities and Exchange
Commission. CalAmp believes that its presentation of historical non-GAAP
financial measures provides useful supplementary information to investors. The
presentation of historical non-GAAP financial measures is not meant to be
considered in isolation from or as a substitute for results prepared in
accordance with GAAP.
In this press release, CalAmp reports the non-GAAP financial measures of Adjusted Basis net income, Adjusted basis net income per diluted share, non-GAAP gross margin, Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization, Stock-Based Compensation and certain other adjustments as detailed in the accompanying non-GAAP reconciliation), and Adjusted EBITDA margin. Adjusted Basis net income excludes the impact of intangibles amortization expense, stock-based compensation, acquisition and integration expenses, and certain other adjustments as shown in the non-GAAP reconciliation provided in the table at the end of this press release. CalAmp uses these non-GAAP financial measures to enhance the investor's overall understanding of the financial performance and future prospects of CalAmp's core business activities. Specifically, CalAmp believes that the use of these non-GAAP measures facilitates the comparison of results of core business operations between its current and past periods.
| AT CALAMP: | AT NMN ADVISORS: | |
| Garo Sarkissian | Nicole Noutsios | |
| SVP, Corporate Development | (510) 315-1003 | |
| (949) 600-5600 | nicole@nmnadvisors.com |
CalAmp Reports Fiscal 2017
First Quarter Financial Results
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CAL AMP
CORP.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands except per share
amounts)
| Three Months Ended | ||||||||
| May 31, | ||||||||
| 2016 | 2015 | |||||||
| /---------(Unaudited)----------/ | ||||||||
| Revenues | $ | 91,147 | $ | 65,429 | ||||
| Cost of revenues | 56,313 | 41,903 | ||||||
| Gross profit | 34,834 | 23,526 | ||||||
| Operating expenses: | ||||||||
| Research and development | 6,091 | 4,565 | ||||||
| Selling | 11,308 | 5,498 | ||||||
| General and administrative | 15,983 | 4,775 | ||||||
| Intangible asset amortization | 3,490 | 1,644 | ||||||
| 36,872 | 16,482 | |||||||
| Operating income (loss) | (2,038 | ) | 7,044 | |||||
| Non-operating income (expense): | ||||||||
| Investment income | 453 | 28 | ||||||
| Interest expense | (2,424 | ) | (648 | ) | ||||
| Other income (expense) | 543 | (11 | ) | |||||
| (1,428 | ) | (631 | ) | |||||
| Income (loss) before income taxes and | ||||||||
| equity in net loss of affiliate | (3,466 | ) | 6,413 | |||||
| Income tax benefit (provision) | 1,119 | (2,354 | ) | |||||
| Income (loss) before equity in net | ||||||||
| loss of affiliate | (2,347 | ) | 4,059 | |||||
| Equity in net loss of affiliate | (312 | ) | - | |||||
| Net income (loss) | $ | (2,659 | ) | $ | 4,059 | |||
| Earnings (loss) per share: | ||||||||
| Basic | $ | (0.07 | ) | $ | 0.11 | |||
| Diluted | $ | (0.07 | ) | $ | 0.11 | |||
| Shares used in computing earnings (loss) per share: | ||||||||
| Basic | 36,699 | 35,964 | ||||||
| Diluted | 36,699 | 36,666 | ||||||
| BUSINESS SEGMENT INFORMATION | ||||||||
| (Unaudited, in thousands) | ||||||||
| Three Months Ended | ||||||||
| May 31, | ||||||||
| 2016 | 2015 | |||||||
| Revenues | ||||||||
| Wireless DataCom | $ | 82,750 | $ | 57,826 | ||||
| Satellite | 8,397 | 7,603 | ||||||
| Total revenues | $ | 91,147 | $ | 65,429 | ||||
| Gross profit | ||||||||
| Wireless DataCom | $ | 32,510 | $ | 21,588 | ||||
| Satellite | 2,324 | 1,938 | ||||||
| Total gross profit | $ | 34,834 | $ | 23,526 | ||||
| Operating income (loss) | ||||||||
| Wireless DataCom | $ | 1,492 | $ | 7,298 | ||||
| Satellite | 953 | 812 | ||||||
| Corporate expenses | (4,483 | ) | (1,066 | ) | ||||
| Total operating income (loss) | $ | (2,038 | ) | $ | 7,044 | |||
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CalAmp Reports Fiscal 2017
First Quarter Financial Results
Page 5 of 7
CAL AMP
CORP.
CONSOLIDATED BALANCE
SHEETS
(In
thousands)
| May 31, | February 29, | |||||||
| 2016 | 2016 | |||||||
| Assets | (Unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 67,490 | $ | 139,388 | ||||
| Short-term marketable securities | 50,140 | 88,718 | ||||||
| Accounts receivable, net | 69,390 | 49,432 | ||||||
| Inventories | 27,650 | 16,731 | ||||||
| Prepaid expenses and other current assets | 7,221 | 4,498 | ||||||
| Total current assets | 221,891 | 298,767 | ||||||
| Property, equipment and improvements, net | 19,306 | 11,225 | ||||||
| Deferred income tax assets | 28,076 | 30,213 | ||||||
| Goodwill | 66,880 | 16,508 | ||||||
| Other intangible assets, net | 78,740 | 17,010 | ||||||
| Other assets | 10,696 | 10,640 | ||||||
| $ | 425,589 | $ | 384,363 | |||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 36,141 | $ | 24,938 | ||||
| Accrued payroll and employee benefits | 10,833 | 6,814 | ||||||
| Deferred revenue | 16,823 | 9,438 | ||||||
| Other current liabilities | 18,843 | 8,375 | ||||||
| Total current liabilities | 82,640 | 49,565 | ||||||
| 1.625% convertible senior unsecured notes | 141,499 | 139,800 | ||||||
| Other non-current liabilities | 12,624 | 5,551 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 367 | 367 | ||||||
| Additional paid-in capital | 231,704 | 229,159 | ||||||
| Accumulated deficit | (42,512 | ) | (39,853 | ) | ||||
| Accumulated other comprehensive loss | (733 | ) | (226 | ) | ||||
| Total stockholders' equity | 188,826 | 189,447 | ||||||
| $ | 425,589 | $ | 384,363 | |||||
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CalAmp Reports Fiscal 2017
First Quarter Financial Results
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CAL AMP
CORP.
CONSOLIDATED CASH
FLOW STATEMENTS
(In thousands)
| Three Months Ended | ||||||||
| May 31, | ||||||||
| 2016 | 2015 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (2,659 | ) | $ | 4,059 | |||
| Depreciation expense | 1,821 | 792 | ||||||
| Intangible assets amortization expense | 3,490 | 1,644 | ||||||
| Stock-based compensation expense | 1,984 | 1,220 | ||||||
| Amortization of convertible debt issue costs and discount | 1,699 | 450 | ||||||
| Deferred tax assets, net | (1,494 | ) | 2,181 | |||||
| Equity in net loss of affiliate | 312 | - | ||||||
| Impairment of internal use software | 1,364 | - | ||||||
| Changes in operating working capital | 1,805 | 5,982 | ||||||
| Net cash provided by operating activities | 8,322 | 16,328 | ||||||
| Cash flows from investing activities: | ||||||||
| Proceeds from maturities of marketable securities | 38,578 | 4,389 | ||||||
| Purchases of marketable securities | - | (87,084 | ) | |||||
| Capital expenditures | (1,620 | ) | (1,264 | ) | ||||
| Acquisition of Crashboxx | - | (1,500 | ) | |||||
| Acquisition of LoJack, net of cash acquired | (116,982 | ) | - | |||||
| Advances to unconsolidated subsidiary | (737 | ) | - | |||||
| Other | (20 | ) | - | |||||
| Net cash used in investing activities | (80,781 | ) | (85,459 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of convertible notes | - | 172,500 | ||||||
| Payments of debt issuance costs | - | (5,276 | ) | |||||
| Purchase of convertible note hedges | - | (31,343 | ) | |||||
| Proceeds from issuance of warrants | - | 15,991 | ||||||
| Payment of acquisition-related note and contingent consideration | - | (625 | ) | |||||
| Taxes paid related to net share settlement of vested equity awards | (160 | ) | (7 | ) | ||||
| Proceeds from exercise of stock options | 721 | 137 | ||||||
| Net cash provided by financing activities | 561 | 151,377 | ||||||
| Net change in cash and cash equivalents | (71,898 | ) | 82,246 | |||||
| Cash and cash equivalents at beginning of period | 139,388 | 34,184 | ||||||
| Cash and cash equivalents at end of period | $ | 67,490 | $ | 116,430 | ||||
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CalAmp Reports Fiscal 2017
First Quarter Financial Results
Page 7 of 7
CAL AMP
CORP.
RECONCILIATION OF
NON-GAAP MEASURES TO GAAP
(Unaudited)
"GAAP" refers to financial information presented in accordance with U.S. Generally Accepted Accounting Principles. This press release includes historical non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission. CalAmp believes that its presentation of historical non-GAAP financial measures provides useful supplementary information to investors. The presentation of historical non-GAAP financial measures is not meant to be considered in isolation from or as a substitute for results prepared in accordance with GAAP.
In this press release, CalAmp reports the non-GAAP financial measures of Adjusted basis net income, Adjusted basis net income per diluted share, non-GAAP gross margin, Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization and Stock-Based Compensation and other adjustments as identified below), and Adjusted EBITDA margin. CalAmp uses these non-GAAP financial measures to enhance the investor's overall understanding of the financial performance and future prospects of CalAmp's core business activities. Specifically, CalAmp believes that the use of these non-GAAP measures facilitates the comparison of results of core business operations between its current and past periods.
The reconciliation of the GAAP basis net income (loss) to Adjusted basis (non-GAAP) net income is as follows (in thousands except per share amounts):
| Three Months Ended | ||||||||
| May 31, | ||||||||
| 2016 | 2015 | |||||||
| GAAP basis net income (loss) | $ | (2,659 | ) | $ | 4,059 | |||
| Intangible assets amortization expense | 3,490 | 1,644 | ||||||
| Stock-based compensation expense | 1,984 | 1,220 | ||||||
| Non-cash interest expense from amortization of debt discount | 1,507 | 383 | ||||||
| GAAP basis income tax provision (benefit) | (1,119 | ) | 2,354 | |||||
| Equity in net loss of affiliate | 312 | - | ||||||
| Acquisition and integration expenses | 3,539 | - | ||||||
| Non-cash cost of sales arising from fair value write-up of LoJack inventory | 4,010 | - | ||||||
| Legal arbitration expenses for LoJack battery claim | 380 | - | ||||||
| Adjusted basis income before income taxes | 11,444 | 9,660 | ||||||
| Income tax provision (non-GAAP basis) (a) | (384 | ) | (171 | ) | ||||
| Adjusted basis net income | $ | 11,060 | $ | 9,489 | ||||
| Adjusted basis net income per diluted share | $ | 0.30 | $ | 0.26 | ||||
| Weighted average common shares outstanding on diluted basis | 37,173 | 36,666 | ||||||
| (a) | The non-GAAP income tax provision represents cash taxes paid or payable for the period after giving effect to the utilization of net operating loss and tax credit carryforwards. |
The reconciliation of GAAP basis net income (loss) to Adjusted EBITDA, and the calculation of Adjusted EBITDA margin, are as follows (dollars in thousands):
| Three Months Ended | ||||||||
| May 31, | ||||||||
| 2016 | 2015 | |||||||
| GAAP basis net income (loss) | $ | (2,659 | ) | $ | 4,059 | |||
| Investment income | (453 | ) | (28 | ) | ||||
| Interest expense | 2,424 | 648 | ||||||
| GAAP basis income tax provision (benefit) | (1,119 | ) | 2,354 | |||||
| Depreciation expense | 1,821 | 792 | ||||||
| Intangible assets amortization expense | 3,490 | 1,644 | ||||||
| Stock-based compensation expense | 1,984 | 1,220 | ||||||
| Equity in net loss of affiliate | 312 | - | ||||||
| Acquisition and integration expenses | 3,539 | - | ||||||
| Non-cash cost of sales arising from fair value write-up of LoJack inventory | 4,010 | - | ||||||
| Legal arbitration expenses for LoJack battery claim | 380 | - | ||||||
| Adjusted EBITDA | $ | 13,729 | $ | 10,689 | ||||
| Revenue | $ | 91,147 | $ | 65,429 | ||||
| Adjusted EBITDA margin | 15.1 | % | 16.3 | % | ||||
| The calculation of non-GAAP gross margin is as follows (dollars in thousands): | ||||||||
| Three Months Ended | ||||||||
| May 31, | ||||||||
| 2016 | 2015 | |||||||
| GAAP basis gross profit | $ | 34,834 | $ | 23,526 | ||||
| Non-cash cost of sales arising from fair value write-up of LoJack inventory | 4,010 | - | ||||||
| Non-GAAP gross profit | $ | 38,844 | $ | 23,526 | ||||
| Revenue | $ | 91,147 | $ | 65,429 | ||||
| Non-GAAP gross margin | 42.6 | % | 36.0 | % | ||||
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