CalAmp Reports Fiscal 2021 Second Quarter Financial Results
IRVINE, Calif., Sept. 24, 2020 /PRNewswire/ -- CalAmp (Nasdaq: CAMP), a global technology solutions pioneer transforming the mobile connected economy, today reported financial results for its second quarter ended August 31, 2020.
"Our second quarter results reflect strong sequential growth in our Software and Subscription Services revenue primarily due to increased installation activity across our geographies as automotive dealerships and school districts advanced plans for reopening, and further supported by solid demand for our K-12 fleet management and LoJack International services," said Jeff Gardner, CalAmp's president and chief executive officer. "Additionally, our largest customer, Caterpillar, had a strong quarter as we continue to support their 3G-to-4G LTE upgrade."
Second Quarter Fiscal Year 2021 Financial Overview
-- Consolidated revenue was $83.5 million, up 4.1% sequentially and down
10.4% year-over-year due to a decline in Telematics Systems revenue
largely attributable to the COVID-19 impact on MRM Telematics and LoJack
U.S. SVR (Stolen Vehicle Recovery) product sales.
-- Software & Subscription Services revenue was $33.7 million, up 20.2%
sequentially and 8.0% year-over-year and representing 40.3% of
consolidated revenue.
-- Network & OEM products revenue increased to $17.2 million, due to strong
sequential growth with its largest customer.
-- LoJack U.S. SVR products revenue was $9.1 million, up 37.0%
sequentially, due to an increase in product installations as U.S. auto
dealerships reopened from government-imposed pandemic shutdowns.
-- Gross margin was 36.9%, reflecting the decline in Telematics Systems
revenue as well as a one-time charge for the resolution of a product
performance matter.
-- GAAP net loss was $9.5 million, or a loss of $0.28 per share, with
adjusted basis non-GAAP net loss of $1.0 million, or a loss of $0.03 per
share.
-- Operating cash flow was $8.2 million, with adjusted EBITDA of $5.4
million and an adjusted EBITDA margin of 6.5%.
-- Ended the quarter with $107.1 million in cash and cash equivalents and
approximately $262.6 million in outstanding debt, including $230 million
of the 2.0% Convertible Senior Notes due in August 2025.
Business and Recent Highlights
-- Received OCTANe's Best Consumer Innovation Award for Here Comes The Bus,
as well as the 2020 IoT Evolution Product of the Year Award for CalAmp
iOn Vision((TM)) video intelligence solutions, and CalAmp iOn((TM))
Suite was named to Equipment Today's 2020 Contractors' Top 50 New
Products List.
-- Extended relationship with Caterpillar to accelerate migration of
existing fleets to 4G LTE.
-- Announced an agreement with major Italian dealership, Maldarizzi
Automotive, to install LoJack Connect on all Fiat Chrysler Automobiles
(FCA), BMW and Mercedes-Benz vehicles sold by the dealership.
-- Appointed Amal Johnson as Chair of the Board and added new director,
Kirsten Wolberg, who has extensive technology and operations experience
in the software industry.
-- Released its highly-regarded Bus Guardian, a suite of digital solutions
leveraging contact tracing and hygiene verification to help schools more
safely and confidently return students to classrooms.
Summary Financial Information:
(In thousands
except per share
amounts)
Three Months Ended
Six Months Ended
August 31,
August 31,
Description 2020 2019 2020 2019
---
Revenues:
Software &
Subscription
Services $
33,696 $
31,205 $
61,725 $
56,716
Telematics
Systems
Telematics
Products 40,732 48,934 86,271 100,132
LoJack U.S. SVR
Products 9,109 13,097 15,756 25,458
$
83,537 $
93,236 $
163,752 $
182,306
Gross margin 37 40 38 40
% % % %
Net loss $
(9,478) $
(7,369) $
(23,900) $
(16,062)
Net loss per
diluted share $
(0.28) $
(0.22) $
(0.70) $
(0.48)
Non-GAAP
measures:
Adjusted basis
net income
(loss) $
(1,025) $
4,757 $
(473) $
8,925
Adjusted basis
net income
(loss) per
diluted share $
(0.03) $
0.14 $
(0.01) $
0.26
Adjusted EBITDA $
5,403 $
10,647 $
11,910 $
18,216
Adjusted EBITDA 6
% 11 7
% 10
margin % %
August 31, February 29,
Description 2020 2020
---
Cash and cash
equivalents $
107,145 $
107,404
Working capital 128,284 116,391
Deferred revenue 60,105 62,156
Total debt
(carrying value) 204,466 210,207
Third Quarter Fiscal 2021 Business Outlook
The Company is maintaining its policy of not providing quarterly guidance as visibility into customer demand and product shipments remains uncertain due to the ongoing effects of the COVID-19 pandemic.
Conference Call and Webcast
CalAmp is hosting a conference call for analysts and investors to discuss its second quarter fiscal year 2021 results 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 90 days after the call. The conference call can also be accessed by dialing 833-714-0868 (+1-778-560-2625 for international callers) and using the Conference ID # 5650228. Following the call, an audio replay will also be available by calling 800-585-8367 or +1-416-621-4642 and entering the Conference ID# 5650228. The audio replay will be available through October 1, 2020.
About CalAmp
CalAmp (Nasdaq: CAMP) is a global technology solutions pioneer transforming the mobile connected economy. We help reinvent business and improve lives around the globe with technology solutions that streamline complex mobile IoT deployments and bring intelligence to the edge. Our software and subscription-based services, scalable cloud platform and intelligent devices collect and assess business-critical data from mobile assets and their contents. We call this The New How, facilitating efficient decision making, optimizing mobile asset utilization and improving road safety. CalAmp, headquartered in Irvine, California, has been publicly traded since 1983 and has 20 million products installed and over 1.3 million software and services subscribers worldwide. LoJack®, Tracker(TM) and Here Comes The Bus® and Bus Guardian are CalAmp brands. For more information, visit calamp.com, or LinkedIn, Facebook, 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, services 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 management's 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 of 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; the effects of global outbreaks of pandemics or contagious diseases or fear of such outbreaks, such as the recent coronavirus (COVID-19) pandemic; our ability to successfully and timely accomplish our transformation to a SaaS company; our transition out of the automotive vehicle financing business; competitive pressures; pricing declines; demand for our MRM products; rates of growth in our target markets; prolonged disruptions of our contract manufacturers' facilities or other significant operations; the ongoing diversification of our global supply chain; our dependence on outsourced service providers for certain key business services and their ability to execute to our requirements; our ability to improve gross margin; cost-containment measures; legislative, trade, tariff, and regulatory actions; integration, unexpected charges or expenses in connection with our recent acquisitions; the impact of legal proceedings and compliance risks; implementation of our new ERP system; the impact on our business and reputation from information technology system failures, network disruptions or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; 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. More information on these risks and other potential factors that could affect our financial results is included in our filings with the U.S. Securities and Exchange Commission ("SEC"), including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings, which you may obtain for free at the SEC's website at http://www.sec.gov. We undertake no intent or obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise, which speak as of their respective dates except as required by law.
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 measures of financial performance prepared in accordance with GAAP.
In this announcement, we report the non-GAAP financial measures of Adjusted basis net income (loss), Adjusted basis net income (loss) 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, impairment loss and certain other adjustments as detailed in the accompanying non-GAAP reconciliation), and Adjusted EBITDA margin. Adjusted basis net income (loss) excludes the impact of intangible assets amortization expense, stock-based compensation, non-cash interest expense, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation provisions, income tax provision adjustments, impairment loss and certain other adjustments as shown in the non-GAAP reconciliation provided in the table at the end of this announcement. We use these non-GAAP financial measures to provide investors with additional information about our financial performance and future prospects of our core business activities. 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 to help them evaluate our results of ongoing operations and enable additional 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.
CalAmp, LoJack, TRACKER, Here Comes The Bus, Bus Guardian, iOn Vision and associated logos are among the trademarks of CalAmp and/or its affiliates in the United States, certain other countries and/or the EU. Any other trademarks or trade names mentioned are the property of their respective owners.
CALAMP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
August 31,
August 31,
2020 2019 2020 2019
Revenues
$ 83,537
$ 93,236
$ 163,752
$ 182,306
Cost of revenues 52,727 55,566 101,889 109,225
Gross profit 30,810 37,670 61,863 73,081
Operating expenses:
Research and development 6,989 7,924 13,313 14,810
Selling and marketing 13,493 15,868 26,379 30,515
General and administrative 13,899 12,893 27,568 30,377
Intangible asset amortization 1,844 3,318 3,736 6,358
Restructuring 551 2,272 2,459 2,272
Impairment loss 286 4,575
37,062 42,275 78,030 84,332
Operating loss (6,252) (4,605) (16,167) (11,251)
Non-operating income (expense):
Investment income 680 1,256 698 3,337
Interest expense (3,857) (5,555) (7,934) (11,011)
Other expense 217 193 9 (206)
(2,960) (4,106) (7,227) (7,880)
Loss before income taxes and
impairment loss in investment of
affiliate (9,212) (8,711) (23,394) (19,131)
Income tax benefit (provision) (266) 1,342 (506) 3,599
Loss before impairment loss in
investment of affiliate (9,478) (7,369) (23,900) (15,532)
Impairment loss in investment of
affiliate (530)
Net loss
$ (9,478)
$ (7,369)
$ (23,900)
$ (16,062)
Loss per share:
Basic
$ (0.28)
$ (0.22)
$ (0.70)
$ (0.48)
Diluted
$ (0.28)
$ (0.22)
$ (0.70)
$ (0.48)
Shares used in computing loss per
share:
Basic 34,256 33,568 34,140 33,475
Diluted 34,256 33,568 34,140 33,475
- more -
CALAMP CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
August 31, February 29,
2020 2020
Assets
Current assets:
Cash and cash equivalents
$ 107,145
$ 107,404
Accounts receivable, net 68,387 72,273
Inventories 31,495 36,778
Prepaid expenses and other current assets 24,274 21,411
Total current assets 231,301 237,866
Property and equipment, net 53,640 55,878
Operating lease right-of-use assets 23,428 20,626
Deferred income tax assets 4,565 4,437
Goodwill 102,162 106,335
Other intangible assets, net 41,404 45,895
Other assets 25,032 24,768
$ 481,532
$ 495,805
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt
$ 5,184
$ 33,119
Accounts payable 31,214 28,450
Accrued payroll and employee benefits 10,599 9,049
Deferred revenue 35,001 34,704
Other current liabilities 21,019 16,153
Total current liabilities 103,017 121,475
Long-term debt, net of current portion 199,282 177,088
Operating lease liabilities 25,225 24,279
Other non-current liabilities 35,030 35,044
Stockholders' equity:
Common stock 350 343
Additional paid-in capital 226,368 220,482
Accumulated deficit (105,565) (81,531)
Accumulated other comprehensive loss (2,175) (1,375)
Total stockholders' equity 118,978 137,919
$ 481,532
$ 495,805
- more -
CALAMP CORP.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Amounts in thousands)
(Unaudited)
Six Months Ended
August 31,
2020 2019
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$ (23,900)
$ (16,062)
Depreciation 9,983 9,036
Intangible asset amortization
expense 3,736 6,358
Stock-based compensation expense 6,469 5,726
Amortization of debt issue costs
and discount 5,219 7,606
Impairment losses 4,575 1,210
Noncash operating lease cost 2,588 3,100
Revenue assigned to factors (3,349) (3,109)
Deferred tax assets, net (105) (3,437)
Other 301 986
Changes in operating assets and
liabilities 8,604 (11,794)
NET CASH PROVIDED BY (USED
IN) OPERATING ACTIVITIES 14,121 (380)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from maturities and sale
of marketable securities 6,264 27,340
Purchases of marketable securities (6,264) (17,617)
Capital expenditures (7,563) (10,720)
Acquisition, net of cash acquired (60,634)
Other (527)
NET CASH USED IN INVESTING
ACTIVITIES (7,563) (62,158)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from Paycheck Protection
Program Loan 10,000
Repayment of Paycheck Protection
Program Loan (10,000)
Proceeds from revolving credit
facility 20,000
Repayment of 2020 Convertible Notes (27,599)
Payments of issuance cost of the
revolving credit facility (56)
Taxes paid related to net share
settlement of vested equity awards (1,485) (1,729)
Proceeds from exercise of stock
options and contributions to ESPP 909 995
NET CASH USED IN FINANCING
ACTIVITIES (8,231) (734)
EFFECT OF EXCHANGE RATE
CHANGE ON CASH 1,414 456
Net change in cash and cash
equivalents (259) (62,816)
Cash and cash equivalents at
beginning of period 107,404 256,500
Cash and cash equivalents at
end of period
$ 107,145
$ 193,684
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 announcement 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 announcement, we report the non-GAAP financial measures of Adjusted basis net income (loss), Adjusted basis net income (loss) per diluted share, Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization and stock-based compensation, impairment loss and other adjustments as identified below), and Adjusted EBITDA margin. We use these non-GAAP financial measures to provide investors with an 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 loss to Adjusted basis (non-GAAP) net income (loss) is as follows (in thousands except per share amounts):
Three Months Ended
Six Months Ended
August 31,
August 31,
2020 2019 2020 2019
GAAP basis net loss
$ (9,478)
$ (7,369)
$ (23,900)
$ (16,062)
Intangible assets
amortization expense 1,844 3,318 3,736 6,358
Stock-based
compensation expense 2,846 3,183 5,594 5,726
Non-cash interest
expense 2,466 3,863 5,219 7,606
GAAP basis income tax
provision (benefit) 266 (1,342) 506 (3,599)
Acquisition and
integration related
expenses 46 1,190
Litigation and non-
recurring legal
expenses 170 777 963 4,584
Impairment loss 286 4,575
Restructuring 551 2,272 2,459 2,272
Other 174 459 655 1,450
Adjusted basis income
(loss) before income
taxes (875) 5,207 (193) 9,525
Income tax provision
(non-GAAP basis) (a) (150) (450) (280) (600)
Adjusted basis net
income (loss)
$ (1,025)
$ 4,757
$ (473)
$ 8,925
Adjusted basis net
income (loss) per
diluted share
$ (0.03)
$ 0.14
$ (0.01)
$ 0.26
Weighted average common
shares outstanding on
a diluted basis 34,256 33,799 34,140 33,766
Other favorable
(unfavorable) impacts
to Adjusted basis net
income (loss) (b)
Deferred revenue
purchase accounting
adjustment
$ (816)
$ (2,524)
$ (1,757)
$ (5,198)
Resolution of a product
performance matter (1,400) (1,400)
Inventory excess and
obsolescence (596)
Total other favorable
(unfavorable) impacts
to Adjusted basis net
income (loss)
$ (2,216)
$ (2,524)
$ (3,753)
$ (5,198)
The reconciliation of GAAP-basis net loss to Adjusted EBITDA and the calculation of Adjusted EBITDA margin are as follows (dollars in thousands):
Three Months Ended
Six Months Ended
August 31,
August 31,
2020 2019 2020 2019
GAAP basis net income
(loss)
$ (9,478)
$ (7,369)
$ (23,900)
$ (16,062)
Investment income (680) (1,256) (698) (3,337)
Interest expense 3,857 5,555 7,934 11,011
Income tax provision
(benefit) 266 (1,342) 506 (3,599)
Depreciation and
amortization 6,917 8,509 13,719 15,394
Stock-based
compensation 2,846 3,183 5,594 5,726
Acquisition and
integration related
expenses 46 1,190
Litigation and non-
recurring legal
expenses 170 777 963 4,584
Impairment loss 286 4,575
Restructuring 551 2,272 2,459 2,272
Other 668 272 758 1,037
Adjusted EBITDA
$ 5,403
$ 10,647
$ 11,910
$ 18,216
Other favorable
(unfavorable) impacts
to Adjusted EBITDA (b)
Deferred revenue
purchase accounting
adjustment
$ (816)
$ (2,524)
$ (1,757)
$ (5,198)
Resolution of a product
performance matter (1,400) (1,400)
Inventory excess and
obsolescence (596)
Total other favorable
(unfavorable) impacts
to Adjusted EBITDA
$ (2,216)
$ (2,524)
$ (3,753)
$ (5,198)
Revenue
$ 83,537
$ 93,236
$ 163,752
$ 182,306
Adjusted EBITDA margin 6 11 7 10
% % % %
(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.
(b) Other favorable (unfavorable)
impacts to Adjusted basis net
income (loss) and Adjusted EBITDA
represent financial impacts that
cannot be included in these Non-
GAAP measures, but management
believes can provide insights into
underlying operational earnings
for the periods presented above.
These items include deferred
revenue purchase accounting
adjustment resulting from business
acquisitions which reduces revenue
and gross profit, resolution of a
product performance matter with a
customer and inventories related
to the automotive vehicle
financing business that are
obsolete or in excess of demand
forecast.
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SOURCE CalAmp
