CalAmp Reports Record Fiscal 2016 Second Quarter Financial Results
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OXNARD, CA -- (Marketwired) -- 10/01/15 -- CalAmp (NASDAQ: CAMP), a leading provider of wireless products, services and solutions, today reported results for its second quarter ended August 31, 2015. Highlights include:
- Consolidated revenue up 18% year-over-year to a record $69.8 million
- Wireless Datacom revenue up 23% year-over-year to a record $61.8 million
- GAAP net income up 7% year-over-year with diluted GAAP EPS of $0.10
- Adjusted Basis (non-GAAP) net income up 30% with diluted non-GAAP EPS of $0.27
- Adjusted EBITDA margin of 16.9% compared to 14.1% in the second quarter last year
- Operating cash flow of $12.4 million compared to $8.7 million in the second quarter last year
- Total cash and marketable securities balance at August 31, 2015 of $218 million
Commenting on the second quarter fiscal 2016 results, Michael Burdiek, CalAmp's President and Chief Executive Officer, said, "We had an outstanding second quarter, posting record revenues of $69.8 million and a 30% year-over-year increase in non-GAAP net income. Our continued operational execution resulted in Adjusted EBITDA of $11.8 million and operating cash flow of $12.4 million. During the quarter we experienced robust demand for our Mobile Resource Management (MRM) products from fleet management and asset tracking customers, along with solid growth in our Wireless Networks business. Our Satellite segment revenues were in-line with expectations while a favorable product mix drove higher gross margins and strong profitability. Our momentum exiting the quarter, coupled with an expanding pipeline of opportunities, is providing CalAmp with a strong tailwind heading into the second half of fiscal 2016."
Fiscal 2016 Second Quarter Results Total revenue for the fiscal 2016 second quarter was a record $69.8 million compared to $59.2 million for the second quarter of fiscal 2015. Wireless Datacom revenue increased to $61.8 million from $50.2 million in the same period last year, while Satellite revenue was $8.0 million in the second quarter compared to $9.0 million in the comparable quarter last year.
Consolidated gross profit for the fiscal 2016 second quarter was $25.3 million, an increase of $4.8 million over the same quarter last year, primarily attributable to higher Wireless Datacom revenue. Consolidated gross margin was 36.2% in the fiscal 2016 second quarter, compared to 34.6% in the second quarter last year.
GAAP net income for the fiscal 2016 second quarter was $3.5 million, or $0.10 per diluted share, compared to net income of $3.3 million, or $0.09 per diluted share, in the second quarter of last year. Although the Company's GAAP-basis effective tax rate of 37.0% in the latest quarter approximates the combined US federal and state statutory tax rate, the Company's pretax income is still largely sheltered from taxation by net operating loss and research and development tax credit carryforwards, and is expected to remain so for the next several years.
Non-GAAP net income for the fiscal 2016 second quarter was $9.8 million, or $0.27 per diluted share, compared to non-GAAP earnings of $7.5 million, or $0.21 per diluted share, for the second quarter last year. Non-GAAP net income excludes the impact of intangibles amortization expense, stock-based compensation expense and non-cash interest expense in the form of debt discount amortization, and includes an income tax provision for cash taxes paid or payable for the period. A reconciliation of the GAAP-basis pretax income to the non-GAAP net income and earnings per diluted share is provided in the table at the end of this press release.
Liquidity As of August 31, 2015, the Company had total cash and marketable securities of $217.7 million and total debt outstanding of $136.7 million. Net cash provided by operating activities was $12.4 million during the second quarter and $28.8 million for the first six months of fiscal 2016, up from $16.1 million for the first six months of fiscal 2015. The unused borrowing capacity on CalAmp's bank revolver at quarter-end was $15 million.
Business Outlook Commenting on the Company's business outlook, Mr. Burdiek said, "Looking at our fiscal 2016 third quarter, we expect to achieve consolidated revenue in the range of $71 to $76 million. We expect our Wireless Datacom and Satellite segment revenues in the third quarter to be solidly higher on both a sequential quarter and year-over-year basis. At the bottom line, we expect third quarter GAAP-basis net income in the range of $0.08 to $0.12 per diluted share and non-GAAP net income in the range of $0.26 to $0.30 per diluted share."
Mr. Burdiek continued, "For our fiscal 2016 full-year outlook, we continue to expect consolidated revenues to gain momentum as the year progresses. Full-year revenues are expected to be in the range of $281 to $289 million, driven by continued growth in our Wireless Datacom segment and a much stronger second half in our Satellite segment. Our increasing scale, impressive roster of global enterprise customers and ongoing strategic investments position us well to sustain our momentum into fiscal 2017 and beyond."
Conference Call and Webcast A conference call and simultaneous webcast to discuss the fiscal 2016 second quarter financial results and business outlook will be held today at 4:30 p.m. Eastern / 1:30 p.m. Pacific. CalAmp's President and CEO Michael Burdiek and CFO Rick Vitelle will host the conference call. 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# 13617853. 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# 13617853. The audio replay will be available through October 8, 2015.
About CalAmp CalAmp (NASDAQ: CAMP) is a proven leader in providing wireless communications solutions to a broad array of vertical market applications and customers. CalAmp's extensive portfolio of intelligent communications devices, robust and scalable cloud service platform, 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. 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. 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 and uncertainties in the geopolitical environment, product demand, competitive pressures and pricing declines in our Wireless Datacom and Satellite segments, fluctuations in product demand from a key OEM customer in the heavy equipment industry, the timing and acceptance of customer approvals of new product designs, intellectual property infringement claims, interruption or failure of our Internet-based systems used to wirelessly configure and communicate with the tracking and monitoring devices that we sell, changes in wireless transmission standards and technologies including 3G and 4G standards, dependence on third-party manufacturers and component suppliers in foreign countries, and other risks or uncertainties that are described in our Annual Report on Form 10-K filed on April 21, 2015 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.
CAL AMP CORP.
CONSOLIDATED INCOME STATEMENTS
(Unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
August 31, August 31,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
Revenues $ 69,808 $ 59,210 $ 135,237 $ 118,191
Cost of revenues 44,505 38,714 86,408 77,476
---------- ---------- ---------- ----------
Gross profit 25,303 20,496 48,829 40,715
---------- ---------- ---------- ----------
Operating expenses:
Research and development 4,995 5,016 9,560 10,134
Selling 5,847 4,921 11,345 10,098
General and administrative 4,908 3,892 9,683 7,529
Intangible asset
amortization 1,655 1,634 3,299 3,317
---------- ---------- ---------- ----------
17,405 15,463 33,887 31,078
---------- ---------- ---------- ----------
Operating income 7,898 5,033 14,942 9,637
---------- ---------- ---------- ----------
Non-operating income
(expense):
Interest income (expense),
net (2,323) 5 (2,943) (96)
Other income (expense) (18) (9) (29) 5
---------- ---------- ---------- ----------
(2,341) (4) (2,972) (91)
---------- ---------- ---------- ----------
Income before income taxes 5,557 5,029 11,970 9,546
Income tax provision (2,058) (1,751) (4,412) (3,575)
---------- ---------- ---------- ----------
Net income $ 3,499 $ 3,278 $ 7,558 $ 5,971
========== ========== ========== ==========
Earnings per share:
Basic $ 0.10 $ 0.09 $ 0.21 $ 0.17
Diluted $ 0.10 $ 0.09 $ 0.21 $ 0.16
Shares used in computing
earnings per share:
Basic 36,135 35,732 36,049 35,652
Diluted 36,716 36,472 36,691 36,498
BUSINESS SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Six Months Ended
August 31, August 31,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
Revenues
Wireless DataCom $ 61,819 $ 50,204 $ 119,645 $ 98,051
Satellite 7,989 9,006 15,592 20,140
---------- ---------- ---------- ----------
Total revenues $ 69,808 $ 59,210 $ 135,237 $ 118,191
========== ========== ========== ==========
Gross profit
Wireless DataCom $ 23,098 $ 18,047 $ 44,686 $ 35,362
Satellite 2,205 2,449 4,143 5,353
---------- ---------- ---------- ----------
Total gross profit $ 25,303 $ 20,496 $ 48,829 $ 40,715
========== ========== ========== ==========
Operating income
Wireless DataCom $ 7,917 $ 4,657 $ 15,215 $ 8,325
Satellite 1,169 1,300 1,981 3,156
Corporate expenses (1,188) (924) (2,254) (1,844)
---------- ---------- ---------- ----------
Total operating income $ 7,898 $ 5,033 $ 14,942 $ 9,637
========== ========== ========== ==========
CAL AMP CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands)
August 31, February 28,
2015 2015
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 100,098 $ 34,184
Short-term marketable securities 104,984 10,177
Accounts receivable, net 45,802 47,917
Inventories 22,572 18,666
Deferred income tax assets 11,489 11,367
Prepaid expenses and other current assets 4,011 5,110
------------ ------------
Total current assets 288,956 127,421
Long-term marketable securities 12,569 -
Property, equipment and improvements, net 11,349 10,525
Deferred income tax assets, less current portion 18,740 23,455
Goodwill 16,508 15,483
Other intangible assets, net 20,297 22,596
Other assets 3,969 3,137
------------ ------------
$ 372,388 $ 202,617
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 97 $ 688
Accounts payable 33,499 24,012
Accrued payroll and employee benefits 4,884 5,522
Deferred revenue 9,099 10,748
Other current liabilities 6,139 6,035
------------ ------------
Total current liabilities 53,718 47,005
------------ ------------
Long-term debt 136,557 -
Other non-current liabilities 5,781 4,227
Stockholders' equity:
Common stock 366 362
Additional paid-in capital 225,266 207,881
Accumulated deficit (49,235) (56,793)
Accumulated other comprehensive loss (65) (65)
------------ ------------
Total stockholders' equity 176,332 151,385
------------ ------------
$ 372,388 $ 202,617
============ ============
CAL AMP CORP.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited - In thousands)
Six Months Ended
August 31,
------------------------
2015 2014
----------- -----------
Cash flows from operating activities:
Net income $ 7,558 $ 5,971
Depreciation and amortization 4,974 4,640
Stock-based compensation expense 2,609 1,756
Amortization of debt discount and issuance costs 2,019 280
Deferred tax assets, net 4,106 3,384
Other 7 42
Changes in operating working capital 7,489 (8)
----------- -----------
Net cash provided by operating activities 28,762 16,065
----------- -----------
Cash flows from investing activities:
Purchases of marketable securities, net of
redemptions (107,376) (4,572)
Capital expenditures (2,576) (3,367)
Acquisition of Crashboxx (1,500) -
----------- -----------
Net cash used in investing activities (111,452) (7,939)
----------- -----------
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 (1,262) (1,591)
Taxes paid related to net share settlement of
vested equity awards (2,478) (3,013)
Proceeds from exercise of stock options 487 541
----------- -----------
Net cash provided (used) by financing
activities 148,604 (4,063)
----------- -----------
Net change in cash and cash equivalents 65,914 4,063
Cash and cash equivalents at beginning of period 34,184 19,233
----------- -----------
Cash and cash equivalents at end of period $ 100,098 $ 23,296
=========== ===========
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 Interest, Taxes, Depreciation,
Amortization and Stock-Based Compensation), 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 Pretax Income to Adjusted Basis (non-
GAAP) Net Income is as follows (in thousands except per share amounts):
Three Months Ended Six Months Ended
August 31, August 31,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
GAAP basis pretax income $ 5,557 $ 5,029 $ 11,970 $ 9,546
Amortization of intangible
assets 1,655 1,634 3,299 3,317
Stock-based compensation
expense 1,389 936 2,609 1,756
Non-cash interest expense
from amortization of debt
discount 1,353 - 1,736 -
---------- ---------- ---------- ----------
Pretax income (non-GAAP
basis) 9,954 7,599 19,614 14,619
Income tax provision (non-
GAAP basis) (a) (116) (65) (287) (190)
---------- ---------- ---------- ----------
Adjusted Basis net income $ 9,838 $ 7,534 $ 19,327 $ 14,429
========== ========== ========== ==========
Adjusted Basis net income per
diluted share $ 0.27 $ 0.21 $ 0.53 $ 0.40
Weighted average common
shares outstanding
on diluted basis 36,716 36,472 36,691 36,498
(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 pretax income, the most directly comparable GAAP
financial measure, 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,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
GAAP basis pretax income $ 5,557 $ 5,029 $ 11,970 $ 9,546
Interest expense (income),
net 2,323 (5) 2,943 96
Depreciation expense 883 748 1,675 1,323
Amortization of intangible
assets 1,655 1,634 3,299 3,317
Stock-based compensation
expense 1,389 936 2,609 1,756
---------- ---------- ---------- ----------
Adjusted EBITDA $ 11,807 $ 8,342 $ 22,496 $ 16,038
========== ========== ========== ==========
Revenue $ 69,808 $ 59,210 $ 135,237 $ 118,191
EBITDA Margin 16.9% 14.1% 16.6% 13.6%
AT CALAMP: Garo Sarkissian SVP, Corporate Development (805) 987-9000 AT ADDO COMMUNICATIONS: Lasse Glassen (424) 238-6249 Email Contact
Source: CalAmp Corp.
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