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 CalAmp Reports Fourth Quarter and Fiscal Year 2017 Financial Results
   Tuesday, April 18, 2017 4:05:00 PM ET

-- Q4 revenue up 22% year-over-year; FY 2017 revenue up 25% year-over-year

-- Record fiscal 2017 international revenue at $91 million, up 90% year-over-year

-- Q4 gross margin was 41.6%, up from 38.9% in the prior year

CalAmp (CAMP ), a leading provider of Internet of Things (IoT) enablement solutions, today reported results for its fourth quarter and fiscal year ended February 28, 2017.

https://mma.prnewswire.com/media/473237/CalAmp_Logo.jpg

Revenue for the fiscal 2017 fourth quarter was $86.1 million, an increase of 22% from the fourth quarter of fiscal 2016, with LoJack contributing $27.8 million. Excluding last year’s revenue of the Satellite business, which ceased operations effective August 31, 2016, revenue in the latest quarter was up 46% from $58.9 million in the fourth quarter of fiscal 2016.

Michael Burdiek, CalAmp’s President and Chief Executive Officer, said, "As we close out fiscal 2017, we are pleased with the progress we have made on a number of financial and business objectives, which have helped set the stage for long-term growth and profitability. We completed the integration of LoJack, expanded our product and service offerings, and made significant progress with international expansion. In addition, we are pleased that fourth quarter revenue from MRM telematics products grew for the second consecutive quarter, reaching the highest revenue level in over a year."

Gross profit for the fourth quarter of fiscal 2017 was $35.8 million, an increase of $8.2 million over the same quarter last year. Gross margin was 41.6% in the fourth quarter of fiscal 2017, up from 38.9% in the fourth quarter of fiscal 2016.

The GAAP-basis net loss in the fourth quarter of fiscal 2017 was ($3.5) million, or ($0.10) per diluted share, compared to net income of $5.5 million, or $0.15 per diluted share, in the fiscal 2016 fourth quarter. GAAP-basis fourth quarter operating results were impacted by a $6.0 million pre-tax charge, or $0.11 per diluted share, recorded for the recent court ruling in the Omega patent infringement case. Non-GAAP adjusted basis net income for the fiscal 2017 fourth quarter was $9.9 million, or $0.28 per diluted share, compared to non-GAAP adjusted basis net income of $11.7 million, or $0.32 per diluted share, in the fourth quarter of fiscal 2016.

Adjusted EBITDA for the fourth quarter of fiscal 2017 was $12.8 million and Adjusted EBITDA margin was 14.9%, compared to Adjusted EBITDA of $13.7 million and Adjusted EBITDA margin of 19.3% in the fourth quarter of fiscal 2016.

Revenue for fiscal year 2017 was a record $351.1 million, an increase of 25% from fiscal 2016, and included revenue of $117.5 million from LoJack products and services. Excluding the discontinued Satellite business, fiscal 2017 revenue was up 39% year over year.

Gross profit for fiscal 2017 was $143.4 million, an increase of $40.4 million over last year. Gross margin was 40.8% in fiscal 2017, up from 36.7% in fiscal 2016.

The GAAP-basis net loss in fiscal 2017 was ($7.2) million, or ($0.20) per diluted share, compared to net income of $16.9 million, or $0.46 per diluted share, in fiscal 2016. Non-GAAP adjusted basis net income for fiscal 2017 was $38.6 million, or $1.06 per diluted share, compared to non-GAAP adjusted basis net income of $42.4 million, or $1.15 per diluted share, in fiscal 2016.

Adjusted EBITDA for fiscal 2017 was $49.4 million and Adjusted EBITDA margin was 14.1%, compared to Adjusted EBITDA of $49.0 million and Adjusted EBITDA margin of 17.5% in fiscal 2017.

As of February 28, 2017, the company had total cash and marketable securities of $100.4 million and total debt outstanding of $146.8 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 $6.0 million during the fourth quarter and $25.8 million for fiscal 2017 as a whole.

During fiscal 2017, the company purchased and retired 1.8 million shares of its common stock at an aggregate cost of $25 million pursuant to a stock repurchase plan adopted in June 2016. Of these amounts, 0.2 million shares were purchased in the fiscal 2017 fourth quarter at an aggregate cost of $3.1 million.

Business and Financial Highlights

-- Fiscal 2017 international revenue was up 90% year-over-year to $91 million, from $48 million in the prior year.

-- Fiscal 2017 recurring revenue was $59.4 million, up 39% year-over-year.

-- In Q4 MRM telematics product sales grew 4% sequentially and 13% year-over-year, reaching the highest revenue level of the past five quarters.

-- In January 2017, CalAmp announced the nationwide availability of the first LoJack-branded telematics services, LotSmart and SureDrive, a significant milestone in the evolution of this venerable Stolen Vehicle Recovery brand.

-- In March 2017, the company also announced the availability of AssetOutlook(TM), developed on CalAmp’s Telematics Cloud service platform as a customized solution for the construction industry to enhance equipment management, improve operating efficiency and help prevent unauthorized use and theft.

Business Outlook The outlook for the fiscal 2018 first quarter ending May 31, 2017 is:

-- Consolidated revenue in the range of $84 to $90 million.

-- GAAP basis net income in the range of $0.01 to $0.09 per diluted share and non-GAAP net income in the range of $0.24 to $0.32 per diluted share.

-- Adjusted EBITDA in the range of $11 to $14 million.

Conference Call and Webcast CalAmp is hosting a conference call for analysts and investors to discuss its fourth quarter and fiscal year 2017 results and outlook for its fiscal 2018 first quarter 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 855-302-8830 (+1-330-871-6073 for international callers) and using the Conference ID# 94872270. 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# 94872270. The audio replay will be available through April 25, 2017.

About CalAmp CalAmp (CAMP ) is a pure-play pioneer in the connected vehicle and broader Industrial IoT marketplace. The company’s extensive portfolio of intelligent communications devices, robust and scalable telematics cloud services, and targeted software applications streamline otherwise complex IoT 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.

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 2018 first 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, competitive pressures and pricing declines, intellectual property infringement claims, and other risks or uncertainties that are described in our filings 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 non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission. CalAmp believes that its presentation of non-GAAP financial measures provides useful supplementary information to investors. The presentation of 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, 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 intangible assets 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.

CAL AMP CORP.
CONSOLIDATED INCOME STATEMENTS
(Unaudited - in thousands except per share amounts)
                                                                       Three Months Ended              Year Ended
                                                                       February 28,    February 29,    February 28,    February 29,
                                                                       2017            2016            2017            2016
Revenues                                                               $      86,126   $      70,807   $      351,102  $      280,719
Cost of revenues                                                              50,339          43,251          207,750         177,760
Gross profit                                                                  35,787          27,556          143,352         102,959
Operating expenses:
Research and development                                                      4,732           5,122           22,005          19,803
Selling                                                                       12,235          6,060           49,044          23,380
General and administrative                                                    17,282          10,180          55,901          25,065
Intangible asset amortization                                                 3,858           1,664           15,061          6,626
                                                                              38,107          23,026          142,011         74,874
Operating income (loss)                                                       (2,320)         4,530           1,341           28,085
Non-operating income (expense):
Investment income                                                             582             1,448           1,691           1,871
Interest expense                                                              (2,519)         (2,415)         (9,896)         (7,595)
Other income (expense)                                                        73              3               (101)           (20)
                                                                              (1,864)         (964)           (8,306)         (5,744)
Income (loss) before income taxes and equity in net loss of affiliate         (4,184)         3,566           (6,965)         22,341
Income tax benefit (provision)                                                978             2,443           1,098           (4,572)
Income (loss) before equity in net  loss of affiliate                         (3,206)         6,009           (5,867)         17,769
Equity in net loss of affiliate                                               (280)           (503)           (1,284)         (829)
Net income (loss)                                                      $      (3,486)  $      5,506    $      (7,151)  $      16,940
Earnings (loss) per share:
Basic                                                                  $      (0.10)   $      0.15     $      (0.20)   $      0.46
Diluted                                                                $      (0.10)   $      0.15     $      (0.20)   $      0.46
Shares used in computing earnings (loss) per share:
Basic                                                                         35,066          36,607          35,917          36,448
Diluted                                                                       35,066          37,082          35,917          36,950
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
                                                                       Three Months Ended              Year Ended
                                                                       February 28,    February 29,    February 28,    February 29,
                                                                       2017            2016            2017            2016
Revenues
Wireless DataCom                                                       $      86,126   $      58,900   $      336,033  $      241,387
Satellite                                                                     -               11,907          15,069          39,332
Total revenues                                                         $      86,126   $      70,807   $      351,102  $      280,719
Gross profit
Wireless DataCom                                                       $      35,787   $      23,874   $      139,623  $      91,976
Satellite                                                                     -               3,682           3,729           10,983
Total gross profit                                                     $      35,787   $      27,556   $      143,352  $      102,959
Operating income (loss)
Wireless DataCom                                                       $      (1,088)  $      5,112    $      8,155    $      26,501
Satellite                                                                     -               2,453           1,547           8,064
Corporate expenses                                                            (1,232)         (3,035)         (8,361)         (6,480)
Total operating income (loss)                                          $      (2,320)  $      4,530    $      1,341    $      28,085
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands)
                                           February 28,     February 29,
                                           2017             2016
Assets
Current assets:
Cash and cash equivalents                  $      93,706    $      139,388
Short-term marketable securities                  6,722            88,718
Accounts receivable, net                          67,403           49,432
Inventories                                       29,279           16,731
Prepaid expenses and other current assets         9,595            4,498
Total current assets                              206,705          298,767
Property, equipment and improvements, net         21,162           11,225
Deferred income tax assets                        27,039           30,213
Goodwill                                          72,980           16,508
Other intangible assets, net                      67,223           17,010
Other assets                                      12,565           10,640
                                           $      407,674   $      384,363
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable                           $      30,266    $      24,938
Accrued payroll and employee benefits             7,955            6,814
Deferred revenue                                  14,662           9,438
Other current liabilities                         23,740           8,375
Total current liabilities                         76,623           49,565
1.625% convertible senior unsecured notes         146,827          139,800
Other non-current liabilities                     20,229           5,551
Stockholders’ equity:
Common stock                                      353              367
Additional paid-in capital                        211,187          229,159
Accumulated deficit                               (47,004)         (39,853)
Accumulated other comprehensive loss              (541)            (226)
Total stockholders’ equity                        163,995          189,447
                                           $      407,674   $      384,363
                         CAL AMP CORP.
                         CONSOLIDATED CASH FLOW STATEMENTS
                         (Unaudited - in thousands)
                                                                                             Year Ended
                                                                                             February 28,      February 29,
                                                                                             2017              2016
Cash flows from operating activities:
                         Net income (loss)                                                   $      (7,151)    $      16,940
                         Depreciation expense                                                       8,408             3,582
                         Intangible assets amortization expense                                     15,061            6,626
                         Stock-based compensation expense                                           7,833             5,854
                         Amortization of convertible debt issue costs and discount                  7,027             5,201
                         Deferred tax assets, net                                                   (2,270)           4,122
                         Gain on investment in LoJack common stock                                  -                 (1,416)
                         Equity in net loss of affiliate                                            1,284             829
                         Impairment of internal use software                                        1,364             -
                         Changes in operating working capital                                       (5,728)           5,728
                         Other                                                                      (32)              (66)
                         Net cash provided by operating activities                                  25,796            47,400
Cash flows from investing activities:
                         Proceeds from maturities of marketable securities                          114,426           71,991
                         Purchases of marketable securities                                         (32,430)          (150,532)
                         Capital expenditures                                                       (7,962)           (4,317)
                         Acquisition of Crashboxx                                                   -                 (1,500)
                         Acquisition of LoJack, net of cash acquired                                (116,982)         (4,050)
                         Advances to unconsolidated subsidiary                                      (2,636)           (2,156)
                         Other                                                                      (2)               (110)
                         Net cash used in investing activities                                      (45,586)          (90,674)
Cash flows from financing activities:
                         Proceeds from issuance of convertible notes                                -                 172,500
                         Payments of debt issuance costs                                            -                 (5,291)
                         Purchase of convertible note hedges                                        -                 (31,343)
                         Proceeds from issuance of warrants                                         -                 15,991
                         Payment of acquisition-related note and contingent consideration           -                 (2,037)
                         Repurchases of common stock                                                (25,000)          -
                         Taxes paid related to net share settlement of vested equity awards         (1,780)           (2,625)
                         Proceeds from exercise of stock options                                    961               1,283
                         Net cash provided (used) by financing activities                           (25,819)          148,478
Effect of exchange rate changes on cash                                                             (73)              -
Net change in cash and cash equivalents                                                             (45,682)          105,204
Cash and cash equivalents at beginning of period                                                    139,388           34,184
Cash and cash equivalents at end of period                                                   $      93,706     $      139,388
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, 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 GAAP basis net income (loss) to Adjusted basis (non-GAAP) net income is as follows (in thousands except per share amounts):
                                                                                                 Three Months Ended                                                                                                Year Ended
                                                                                                 February 28,                                             February 29,                                             February 28,                                             February 29,
                                                                                                 2017                                                     2016                                                     2017                                                     2016
GAAP basis net income (loss)                                                                     $                                               (3,486)  $                                               5,506    $                                               (7,151)  $                                               16,940
Intangible assets amortization expense                                                                                                           3,858                                                    1,664                                                    15,061                                                   6,626
Stock-based compensation expense                                                                                                                 2,164                                                    1,643                                                    7,833                                                    5,854
Non-cash interest expense from amortization of debt discount                                                                                     1,601                                                    1,507                                                    6,232                                                    4,613
GAAP basis income tax provision (benefit)                                                                                                        (978)                                                    (2,443)                                                  (1,098)                                                  4,572
Equity in net loss of affiliate                                                                                                                  280                                                      503                                                      1,284                                                    829
Acquisition and integration expenses                                                                                                             344                                                      1,980                                                    4,513                                                    1,980
Non-cash cost of sales and depreciation on markup of
                                                LoJack inventory and fixed assets                                                                206                                                      -                                                        5,073                                                    -
Legal arbitration expenses for LoJack battery claim                                                                                              292                                                      -                                                        1,948                                                    -
Litigation provision                                                                                                                             6,026                                                    2,900                                                    6,026                                                    2,900
Gain on investment in LoJack common stock                                                                                                        -                                                        (1,364)                                                  -                                                        (1,416)
Adjusted basis income before income taxes                                                                                                        10,307                                                   11,896                                                   39,721                                                   42,898
Income tax provision, non-GAAP basis (a)                                                                                                         (455)                                                    (155)                                                    (1,164)                                                  (499)
Adjusted basis net income                                                                        $                                               9,852    $                                               11,741   $                                               38,557   $                                               42,399
Adjusted basis net income per diluted share                                                      $                                               0.28     $                                               0.32     $                                               1.06     $                                               1.15
Weighted average common shares outstanding on diluted basis                                                                                      35,577                                                   37,082                                                   36,397                                                   36,950
(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                                                                                                Year Ended
                                                                                                 February 28,                                             February 29,                                             February 28,                                             February 29,
                                                                                                 2017                                                     2016                                                     2017                                                     2016
GAAP basis net income (loss)                                                                     $                                               (3,486)  $                                               5,506    $                                               (7,151)  $                                               16,940
Investment income                                                                                                                                (582)                                                    (1,448)                                                  (1,691)                                                  (1,871)
Interest expense                                                                                                                                 2,519                                                    2,415                                                    9,896                                                    7,595
GAAP basis income tax provision (benefit)                                                                                                        (978)                                                    (2,443)                                                  (1,098)                                                  4,572
Depreciation expense                                                                                                                             2,374                                                    974                                                      8,408                                                    3,582
Intangible assets amortization expense                                                                                                           3,858                                                    1,664                                                    15,061                                                   6,626
Stock-based compensation expense                                                                                                                 2,164                                                    1,643                                                    7,833                                                    5,854
Equity in net loss of affiliate                                                                                                                  280                                                      503                                                      1,284                                                    829
Acquisition and integration expenses                                                                                                             344                                                      1,980                                                    4,513                                                    1,980
Non-cash cost of sales on markup of LoJack inventory                                                                                             20                                                       -                                                        4,339                                                    -
Legal arbitration expenses for LoJack battery claim                                                                                              292                                                      -                                                        1,948                                                    -
Litigation provision                                                                                                                             6,026                                                    2,900                                                    6,026                                                    2,900
Adjusted EBITDA                                                                                  $                                               12,831   $                                               13,694   $                                               49,368   $                                               49,007
Revenue                                                                                          $                                               86,126   $                                               70,807   $                                               351,102  $                                               280,719
Adjusted EBITDA margin                                                                                                                           14.9%                                                    19.3%                                                    14.1%                                                    17.5%

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/calamp-reports-fourth-quarter-and-fiscal-year-2017-financial-results-300441308.html

SOURCE CalAmp

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