CalAmp Reports Fiscal 2021 Second Quarter Financial Results

Rhea-AI Summary

CalAmp (CAMP) reported its second quarter fiscal 2021 results, revealing consolidated revenue of $83.5 million, a 4.1% sequential increase but a 10.4% decrease year-over-year. The decline was driven by lower Telematics Systems revenue, impacted by COVID-19. Software & Subscription Services revenue rose 20.2% sequentially to $33.7 million, accounting for 40.3% of total revenue. Net loss was $9.5 million, or $0.28 per share. The company maintains a cautious outlook due to ongoing pandemic effects, with no quarterly guidance provided.

Positive

• Software & Subscription Services revenue increased 20.2% sequentially and 8.0% year-over-year.
• LoJack U.S. SVR products revenue grew 37.0% sequentially.

Negative

• Consolidated revenue declined 10.4% year-over-year.
• Net loss of $9.5 million, resulting in a loss of $0.28 per share.
• Gross margin decreased to 36.9% due to lower Telematics Systems revenue.

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^™ video intelligence solutions, and CalAmp iOn^™ 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 margin		6	%			11	%			7	%			10	%
	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™ 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.

 

 

View original content to download multimedia:http://www.prnewswire.com/news-releases/calamp-reports-fiscal-2021-second-quarter-financial-results-301137845.html

SOURCE CalAmp

FAQ

What were CalAmp's Q2 2021 financial results for CAMP?

CalAmp reported Q2 2021 consolidated revenue of $83.5 million, down 10.4% year-over-year, with a net loss of $9.5 million or $0.28 per share.

How did CalAmp's Software & Subscription Services perform in Q2 2021?

Software & Subscription Services revenue rose 20.2% sequentially to $33.7 million, representing 40.3% of total revenue.

What is CalAmp's guidance for the third quarter of fiscal 2021?

CalAmp has not provided quarterly guidance for Q3 2021 due to uncertainty in customer demand related to COVID-19.

What impact did COVID-19 have on CalAmp's revenues in Q2 2021?

COVID-19 significantly impacted Telematics Systems revenue, contributing to a decline in overall consolidated revenue.

What are CalAmp's debt levels as of Q2 2021?

As of Q2 2021, CalAmp reported approximately $262.6 million in outstanding debt, including $230 million of Convertible Senior Notes.