UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR
15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): | December 21, 2017 |
Exact Name of
Registrant as Specified in Its Charter: |
CALAMP CORP. |
DELAWARE | 0-12182 | 95-3647070 | ||
State or Other Jurisdiction of | Commission | I.R.S. Employer | ||
Incorporation or Organization | File Number | Identification No. |
Address of Principal Executive Offices: | 15635 Alton Parkway, Suite 250 | |
Irvine, CA 92618 | ||
Registrant's Telephone Number, Including | ||
Area Code: | (949) 600-5600 | |
Former Name or Former Address, | ||
if Changed Since Last Report: | Not applicable |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14.a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
The information set forth in Exhibit 99.1 of this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information set forth in Exhibit 99.1 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
On December 21, 2017, CalAmp Corp. issued a press release announcing its financial results for the third quarter ended November 30, 2017. A copy of the press release is attached as Exhibit 99.1.
A conference call with simultaneous webcast to discuss the financial results for the third quarter ended November 30, 2017 will be held today, December 21, 2017 at 4:30 p.m. Eastern Time. After the live webcast of the conference call, an audio replay will remain available until the next quarterly conference call in the Investor Relations section of CalAmp's website at www.calamp.com.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
99.1 | Press release of the Registrant dated December 21, 2017 announcing results of operations for the third quarter ended November 30, 2017. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be filed on its behalf by the undersigned hereunto duly authorized.
CALAMP CORP. | ||||
December 21, 2017 | By: /s/ Kurtis J. Binder | |||
Date | Kurtis J. Binder | |||
Executive Vice President and CFO | ||||
(Principal Financial Officer) |
CalAmp Reports Fiscal 2018 Third Quarter Financial Results
Record Q3 revenue of $93.7 million, up 12% year over year
GAAP net income of $0.33 per
diluted share;
Non-GAAP net income of $0.31 per diluted share
Telematics Systems revenue grew by 15% year over year
IRVINE, CA, December 21, 2017 -- CalAmp (NASDAQ: CAMP), a telematics pioneer leading transformation in a global connected economy, today reported its financial results for the third quarter ended November 30, 2017.
We achieved record consolidated revenue and adjusted EBITDA in the quarter, while continuing to make steady progress on our strategic initiatives," said Michael Burdiek, President and Chief Executive Officer. We expanded our product portfolio and are uniquely positioned in the Connected Vehicle and Industrial Internet of Things market. Our Telematics Systems business sustained its recent strength, building upon our base of blue-chip customers, including Caterpillar. Our software and subscription opportunity pipeline strengthened as we broadened our technology portfolio to expand into highly attractive verticals.
Business and Q3 2018 Financial Highlights
● | Consolidated revenue of $93.7 million, up 12% year over year, and at the high end of our guidance range. |
● | International revenue reached a quarterly record of $26.2 million, representing 28% of consolidated revenue. |
● | GAAP net income was $0.33 per diluted share while non-GAAP net income was $0.31 per diluted share. |
● | Adjusted EBITDA was $13.8 million, a new record for the company, representing 15% of revenue. |
● | Our MRM Telematics product revenue grew 24% year over year and was a key growth driver for the Telematics Systems business. |
● | Caterpillar revenue grew 24% sequentially to $13.2 million, a new quarterly record. |
● | We commenced services on an end-to-end SaaS fleet management solution to a large state government agency that is expected to contribute over 5,000 new subscribers in the next several quarters. |
● | We expanded our channel partners and global sales distribution by announcing the launch of the CalAmp V-Series electronic logging device (ELD) bundle solution available through SYNNEX. |
● | LoJack Italia announced its LoJack Connect, a SaaS fleet management solution targeting car rental agencies and insurance providers throughout Europe, leveraging CrashBoxx, the CalAmp Telematics Cloud and device portfolio. |
● | We received $13.3 million of net proceeds in November 2017 from a legal settlement with a former LoJack battery supplier, contributing to strong operating cash flow of $58.7 million for the nine-month period ended November 30, 2017. We expect to receive approximately $18 million of additional net proceeds over the next three quarters thereby further contributing to our strong free cash flows. |
CalAmp Reports Fiscal
2018 Third Quarter Financial Results
Page 2 of 9
Fiscal 2018 Third Quarter Financial Highlights
Quarterly Financial
Information for the three months ended:
(In thousands except per share amounts)
November 30, | |||||||
Description | 2017 | 2016 | |||||
Revenues: | |||||||
Telematics Systems | $ | 77,775 | $ | 67,463 | |||
Software & Subscription Services | 15,894 | 15,887 | |||||
$ | 93,669 | $ | 83,350 | ||||
Gross margin | 41 | % | 42 | % | |||
Net income (loss) | $ | 11,806 | $ | (1,527 | ) | ||
Net income (loss) per diluted share | $ | 0.33 | $ | (0.04 | ) | ||
Non-GAAP measures: | |||||||
Adjusted basis net income | $ | 11,241 | $ | 7,561 | |||
Adjusted basis net income per diluted share | $ | 0.31 | $ | 0.21 | |||
Adjusted EBITDA | $ | 13,838 | $ | 9,955 | |||
Adjusted EBITDA margin | 15 | % | 12 | % |
At November 30, 2017, we had total cash and marketable securities of $151.2 million and total debt outstanding of $152.4 million, which is the carrying amount of our 1.625% convertible notes in the face amount of $172.5 million.
Fiscal 2018 Fourth
Quarter Business Outlook
(In
thousands except per share amounts)
Range | |||||
Description | Low | High | |||
GAAP financial information: | |||||
Revenues | $ | 91,000 | $ | 96,000 | |
Net income per diluted share | $ | 0.26 | $ | 0.32 | |
Non-GAAP financial information: | |||||
Adjusted EBITDA | $ | 12,000 | $ | 15,000 | |
Adjusted basis net income per diluted share | $ | 0.27 | $ | 0.33 |
Fourth quarter GAAP-basis net income per diluted share above includes approximately $13 million associated with the estimated gain from the expected receipt of the third installment of the legal settlement with a former LoJack battery supplier. This expected fourth quarter gain is excluded from Adjusted basis (Non-GAAP) net income per diluted share above.
CalAmp Reports Fiscal
2018 Third Quarter Financial Results
Page 3 of 9
Conference Call and
Webcast
We are hosting a
conference call for analysts and investors to discuss our fiscal 2018 third
quarter results and outlook for our fourth quarter at 1:30 p.m. Pacific Time
today. Participants can listen in via webcast by visiting the Investor Relations
section of our 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 855-302-8830 (+1-330-871-6073
for international callers) and using the Conference ID# 6197618. Following the
call, an audio replay will also be available by calling 855-859-2056 or
+1-404-537-3406 and entering the Conference ID# 6197618. The audio replay will
be available through January 4, 2018.
About
CalAmp
CalAmp (NASDAQ: CAMP)
is a telematics pioneer leading transformation in a global connected economy. We
help reinvent businesses and improve lives around the globe with technology
solutions that streamline complex IoT deployments and bring intelligence to the
edge. Our software applications, scalable cloud services, and intelligent
devices collect and assess critical data from mobile and fixed assets for
enterprises and consumers. We call this The New How, powering
autonomous IoT interaction, facilitating efficient decision making, optimizing
resource utilization, and improving road safety. We are headquartered in Irvine,
California and have been publicly traded since 1983. LoJack is a wholly owned
subsidiary of CalAmp. For more information, visit calamp.com, or LinkedIn, Twitter, YouTube
or CalAmp Blog.
Forward-Looking
Statements
This announcement
contains forward-looking statements (including within the meaning of Section 21E
of the U.S. Securities Exchange Act of 1934, as amended, and Section 27A of the
U.S. Securities Act of 1933, as amended) concerning CalAmp. These statements
include, but are not limited to, statements that address our expected future
business and financial performance and statements about (i) our plans,
objectives and intentions with respect to future operations and products, (ii)
our competitive position and opportunities, and (iii) other statements
identified by words such as such as may, will, expect, intend, plan,
potential, believe, seek, could, estimate, judgment, targeting,
should, anticipate, predict project, aim, goal, and similar words,
phrases or expressions. These forward-looking statements are based on
managements current expectations and beliefs, as well as assumptions made by,
and information currently available to, management, current market trends and
market conditions, and involve risks and uncertainties, many of which are
outside our control, and which may cause actual results to differ materially
from those contained in forward-looking statements. Accordingly, you should not
place undue reliance on such statements. Particular uncertainties that could
materially affect future results include any risks associated with global
economic conditions and concerns; competitive pressures; pricing declines; rates
of growth in our target markets; prolonged disruptions of our or our contract
manufacturers manufacturing facilities or other significant operations; our
dependence on outsourced service providers for certain key business services and
their ability to execute to our requirements; our ability to maintain or improve
gross margin; our ability to maintain tax concessions in certain jurisdictions;
our ability to protect our intellectual property and the unpredictability of any
associated litigation expenses; any expenses or reputational damage associated
with resolving customer product and warranty and indemnification claims; our
ability to sell to new types of customers and to keep pace with technological
advances; market acceptance of the end products into which our products are designed; and other events
and trends on a national, regional and global scale, including those of a
political, economic, business, competitive, and regulatory nature. Our filings
with the U.S. Securities and Exchange Commission (SEC), which you may obtain
for free at the SECs website at http://www.sec.gov, discuss
some of the important risk factors that may affect our business, results of
operations, and financial condition. We undertake no intent or obligation to
publicly update or revise any these forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by
law.
CalAmp
Reports Fiscal 2018 Third Quarter Financial Results
Page 4 of 9
Non-GAAP Financial
Measures
GAAP" refers to
financial information presented in accordance with U.S. Generally Accepted
Accounting Principles. This announcement includes non-GAAP financial measures,
as defined in Regulation G promulgated by the SEC. We believe that our
presentation of non-GAAP financial measures provides useful supplementary
information to investors. These non-GAAP financial measures are provided in
addition to, and not as a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP.
In this announcement, we report the non-GAAP financial measures of Adjusted Basis net income, Adjusted Basis net income per diluted share, Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization, stock-based compensation, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation provisions, gain from legal settlement and certain other adjustments as detailed in the accompanying non-GAAP reconciliation), and Adjusted EBITDA margin. Adjusted Basis net income excludes the impact of intangible assets amortization expense, stock-based compensation, non-cash interest from amortization of debt discount, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation provisions, gain on legal settlement and certain other adjustments as shown in the non-GAAP reconciliation provided in the table at the end of this press release. We use these non-GAAP financial measures to enhance the investors overall understanding of the financial performance and future prospects of our core business activities. Management does not believe that these items are reflective of our underlying performance. However, internally, these non-GAAP measures are significant measures used by management for purposes of evaluating our core operating performance, establishing internal budgets, calculating return on investment for development programs and growth initiatives, comparing performance with internal forecasts and targeted business models, strategic planning, evaluating and valuing potential acquisition candidates and how their operations compare to our operations, and benchmarking performance externally against our competitors. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate our results of ongoing operations and enable more meaningful period-to-period comparisons. The presentation of these and other similar items in our non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual.
AT CALAMP: | AT NMN ADVISORS: | |
Kurtis Binder | Nicole Noutsios | |
EVP & CFO | (510) 315-1003 | |
ir@calamp.com | nicole@nmnadvisors.com |
CalAmp
Reports Fiscal 2018 Third Quarter Financial Results
Page 5 of 9
CALAMP
CORP.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share
amounts)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
November 30, | November 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues | $ | 93,669 | $ | 83,350 | $ | 271,517 | $ | 264,976 | ||||||||
Cost of revenues | 55,482 | 48,233 | 159,049 | 157,411 | ||||||||||||
Gross profit | 38,187 | 35,117 | 112,468 | 107,565 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 6,296 | 5,297 | 18,853 | 17,273 | ||||||||||||
Selling and marketing | 12,981 | 12,818 | 38,167 | 36,809 | ||||||||||||
General and administrative | 10,993 | 11,352 | 38,159 | 38,619 | ||||||||||||
Intangible asset amortization | 3,710 | 3,857 | 11,278 | 11,203 | ||||||||||||
33,980 | 33,324 | 106,457 | 103,904 | |||||||||||||
Operating income | 4,207 | 1,793 | 6,011 | 3,661 | ||||||||||||
Non-operating income (expense): | ||||||||||||||||
Investment income | 619 | 201 | 1,348 | 1,109 | ||||||||||||
Interest expense | (2,573 | ) | (2,479 | ) | (7,658 | ) | (7,377 | ) | ||||||||
Gain on legal settlement | 13,301 | - | 28,333 | - | ||||||||||||
Other income (expense) | 12 | (587 | ) | 442 | (174 | ) | ||||||||||
11,359 | (2,865 | ) | 22,465 | (6,442 | ) | |||||||||||
Income (loss) before income taxes | ||||||||||||||||
and equity in net loss of affiliate | 15,566 | (1,072 | ) | 28,476 | (2,781 | ) | ||||||||||
Income tax benefit (provision) | (3,351 | ) | (135 | ) | (5,970 | ) | 120 | |||||||||
Income (loss) before equity in net | ||||||||||||||||
loss of affiliate | 12,215 | (1,207 | ) | 22,506 | (2,661 | ) | ||||||||||
Equity in net loss of affiliate | (409 | ) | (320 | ) | (1,122 | ) | (1,004 | ) | ||||||||
Net income (loss) | $ | 11,806 | $ | (1,527 | ) | $ | 21,384 | $ | (3,665 | ) | ||||||
Earnings (loss) per share: | ||||||||||||||||
Basic | $ | 0.33 | $ | (0.04 | ) | $ | 0.61 | $ | (0.10 | ) | ||||||
Diluted | $ | 0.33 | $ | (0.04 | ) | $ | 0.59 | $ | (0.10 | ) | ||||||
Shares used in computing earnings | ||||||||||||||||
(loss) per share: | ||||||||||||||||
Basic | 35,347 | 35,731 | 35,206 | 36,196 | ||||||||||||
Diluted | 36,247 | 35,731 | 36,064 | 36,196 |
- more -
CalAmp Reports Fiscal 2018 Third Quarter Financial Results
Page 6 of 9
CALAMP CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
November 30, | February 28, | |||||||
2017 | 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents |
$ | 138,095 | $ | 93,706 | ||||
Short-term marketable securities |
13,144 | 6,722 | ||||||
Accounts receivable, net |
70,190 | 67,403 | ||||||
Inventories |
39,115 | 29,279 | ||||||
Prepaid expenses and other current assets |
11,433 | 9,595 | ||||||
Total current assets |
271,977 | 206,705 | ||||||
Property, equipment and improvements, net | 21,217 | 21,162 | ||||||
Deferred income tax assets | 35,923 | 27,504 | ||||||
Goodwill | 72,980 | 72,980 | ||||||
Other intangible assets, net | 56,098 | 67,223 | ||||||
Other assets | 17,203 | 12,565 | ||||||
$ | 475,398 | $ | 408,139 | |||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable |
$ | 42,399 | $ | 30,266 | ||||
Accrued payroll and employee benefits |
8,831 | 7,955 | ||||||
Deferred revenue |
15,843 | 14,662 | ||||||
Other current liabilities |
31,398 | 24,958 | ||||||
Total current liabilities |
98,471 | 77,841 | ||||||
1.625% convertible senior unsecured notes | 152,378 | 146,827 | ||||||
Other non-current liabilities | 23,471 | 20,229 | ||||||
Stockholders' equity: | ||||||||
Common stock |
356 | 353 | ||||||
Additional paid-in capital |
215,541 | 211,187 | ||||||
Accumulated deficit |
(14,692 | ) | (47,757 | ) | ||||
Accumulated other comprehensive loss |
(127 | ) | (541 | ) | ||||
Total stockholders' equity |
201,078 | 163,242 | ||||||
$ | 475,398 | $ | 408,139 |
- more -
CalAmp Reports Fiscal 2018 Third Quarter Financial Results
Page 7 of 9
CALAMP CORP.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Amounts in thousands)
(Unaudited)
Nine Months Ended | ||||||||
November 30, | ||||||||
2017 | 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) |
$ | 21,384 | $ | (3,665 | ) | |||
Depreciation expense |
5,953 | 6,034 | ||||||
Intangible assets amortization expense |
11,278 | 11,203 | ||||||
Stock-based compensation expense |
6,664 | 5,669 | ||||||
Tax benefits on vested and exercised equity awards |
328 | - | ||||||
Amortization of convertible debt issue costs and discount |
5,551 | 5,221 | ||||||
Unrealized foreign currency transaction gains |
(404 | ) | - | |||||
Deferred tax assets, net |
2,873 | (511 | ) | |||||
Equity in net loss of affiliate |
1,122 | 1,004 | ||||||
Impairment of internal use software |
- | 1,364 | ||||||
Other |
59 | (12 | ) | |||||
Changes in assets and liabilities |
3,923 | (6,512 | ) | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 58,731 | 19,795 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Proceeds from maturities of marketable securities |
11,273 | 88,742 | ||||||
Purchases of marketable securities |
(17,209 | ) | (25,699 | ) | ||||
Capital expenditures |
(5,970 | ) | (5,818 | ) | ||||
Acquisition of LoJack, net of cash acquired |
- | (116,982 | ) | |||||
Advances to affiliate |
(1,312 | ) | (1,401 | ) | ||||
Other |
(152 | ) | (51 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES | (13,370 | ) | (61,209 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Repurchases of common stock |
- | (21,923 | ) | |||||
Taxes paid related to net share settlement of vested equity awards |
(2,452 | ) | (1,614 | ) | ||||
Proceeds from exercise of stock options |
145 | 834 | ||||||
NET CASH USED IN FINANCING ACTIVITIES | (2,307 | ) | (22,703 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGE ON CASH | 1,335 | (124 | ) | |||||
Net change in cash and cash equivalents | 44,389 | (64,241 | ) | |||||
Cash and cash equivalents at beginning of period | 93,706 | 139,388 | ||||||
Cash and cash equivalents at end of period | $ | 138,095 | $ | 75,147 |
CalAmp Reports Fiscal 2018 Third Quarter Financial Results
Page 8 of 9
CALAMP 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. We believe that our 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, we report the non-GAAP financial measures of Adjusted basis net income, Adjusted basis net income per diluted share, Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization and Stock-Based Compensation, gain on legal settlement and other adjustments as identified below), and Adjusted EBITDA margin. We use these non-GAAP financial measures to enhance the investor's overall understanding of the financial performance and future prospects of our core business activities. Specifically, we believe 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 GAAP basis net income (loss) to Adjusted basis (non-GAAP) net income is as follows (in thousands except per share amounts):
Three Months Ended | Nine Months Ended | |||||||||||||||
November 30, | November 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
GAAP basis net income (loss) | $ | 11,806 | $ | (1,527 | ) | $ | 21,384 | $ | (3,665 | ) | ||||||
Intangible assets amortization expense | 3,710 | 3,857 | 11,278 | 11,203 | ||||||||||||
Stock-based compensation expense | 2,620 | 2,064 | 6,664 | 5,669 | ||||||||||||
Non-cash interest expense from amortization of debt discount | 1,661 | 1,562 | 4,924 | 4,631 | ||||||||||||
GAAP basis income tax provision (benefit) | 3,351 | 135 | 5,970 | (120 | ) | |||||||||||
Equity in net loss of affiliate | 409 | 320 | 1,122 | 1,004 | ||||||||||||
Acquisition and integration expenses | - | 630 | - | 4,169 | ||||||||||||
Non-cash cost of sales and depreciation on markup of LoJack inventory and fixed assets |
159 | 186 | 514 | 4,867 | ||||||||||||
Gain on legal settlement | (13,301 | ) | - | (28,333 | ) | - | ||||||||||
Litigation provision | 324 | - | 6,810 | - | ||||||||||||
Legal expense for LoJack battery performance issue | 652 | 196 | 1,579 | 1,656 | ||||||||||||
Adjusted basis income before income taxes | 11,391 | 7,423 | 31,912 | 29,414 | ||||||||||||
Income tax provision (non-GAAP basis) (a) | (150 | ) | 138 | (700 | ) | (709 | ) | |||||||||
Adjusted basis net income | $ | 11,241 | $ | 7,561 | $ | 31,212 | $ | 28,705 | ||||||||
Adjusted basis net income per diluted share | $ | 0.31 | $ | 0.21 | $ | 0.87 | $ | 0.78 | ||||||||
Weighted average common shares outstanding on diluted basis | 36,247 | 36,087 | 36,064 | 36,651 |
(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 losses and tax credit carryforwards.
CalAmp Reports Fiscal 2018 Third Quarter Financial Results
Page 9 of 9
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 | Nine Months Ended | |||||||||||||||
November 30, | November 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
GAAP basis net income (loss) | $ | 11,806 | $ | (1,527 | ) | $ | 21,384 | $ | (3,665 | ) | ||||||
Investment income | (619 | ) | (201 | ) | (1,348 | ) | (1,109 | ) | ||||||||
Interest expense | 2,573 | 2,479 | 7,658 | 7,377 | ||||||||||||
Income tax provision (benefits) | 3,351 | 135 | 5,970 | (120 | ) | |||||||||||
Depreciation | 1,970 | 2,002 | 5,953 | 6,034 | ||||||||||||
Amortization of intangible assets | 3,710 | 3,857 | 11,278 | 11,203 | ||||||||||||
Stock-based compensation | 2,620 | 2,064 | 6,664 | 5,669 | ||||||||||||
Equity in net loss of affiliate | 409 | 320 | 1,122 | 1,004 | ||||||||||||
Acquisition and integration expenses | - | 630 | - | 4,169 | ||||||||||||
Non-cash COGS from inventory fair value write-up | - | - | - | 4,319 | ||||||||||||
Legal expense for LoJack battery performance issue | 652 | 196 | 1,579 | 1,656 | ||||||||||||
Litigation provision | 324 | - | 6,810 | - | ||||||||||||
Gain on legal settlement | (13,301 | ) | - | (28,333 | ) | - | ||||||||||
Other | 343 | - | 583 | - | ||||||||||||
Adjusted EBITDA | $ | 13,838 | $ | 9,955 | $ | 39,320 | $ | 36,537 | ||||||||
Revenue | $ | 93,669 | $ | 83,350 | $ | 271,517 | $ | 264,976 | ||||||||
Adjusted EBITDA margin | 15 | % | 12 | % | 14 | % | 14 | % |