CalAmp Reports Fiscal 2017 First Quarter Financial Results
Michael Burdiek,
Revenue for the first quarter of fiscal 2017 was
Gross profit for the first quarter of fiscal 2017 was
GAAP net loss for the first quarter of fiscal 2017 was
As of
Business and Financial Highlights
- As announced separately today,
CalAmp's Board of Directors has authorized a\\$25 million , 12-month share repurchase plan, underscoring confidence in our business prospects. - We completed the acquisition of LoJack, an unrivaled leader in the telematics aftermarket for stolen vehicle recovery offerings, establishing a gateway for
CalAmp to deliver a range of novel, high-margin telematics technology subscription services. - We launched our instant crash notification service, or ICN, which can discriminate between different types of crash events and automate damage reporting for a number of connected vehicle markets.
- Across all of our SaaS and recurring service platforms, we had approximately 589,000 unique subscribers at the end of the first quarter including approximately 100,000 added from the LoJack acquisition, compared to total 482,000 subscribers at the end of the immediately preceding quarter.
- In our Telematics Systems business, we made progress expanding our customer base in the first quarter as we commenced shipping products to one of the largest fleet telematics service providers in
North America .
Business Outlook
We remain cautious in the very near term as macro conditions in
For the second quarter of fiscal 2017 ending
- Revenue in the range of
\\$90 to \\$95 million , along with GAAP basis results of operations in the range of(\\$0.02) net loss to\\$0.02 net income per diluted share and non-GAAP net income in the range of\\$0.25 to \\$0.31 per diluted share. - Adjusted EBITDA in the range of
\\$12 to \\$16 million .
The above outlook includes approximately
Conference Call and Webcast
About
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 2017 second 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 (including Brexit), competitive pressures and pricing declines, intellectual property infringement claims, and other risks or uncertainties that are described in Part I, Item 1A of our Annual Report on Form 10-K for fiscal 2016 as filed on
Non-GAAP Financial Measures
"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
In this press release,
CAL AMP CORP. | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(In thousands except per share amounts) | |||||||||
Three Months Ended | |||||||||
May 31, | |||||||||
2016 | 2015 | ||||||||
/----(Unaudited)----/ | |||||||||
Revenues | \\$ | 91,147 | \\$ | 65,429 | |||||
Cost of revenues | 56,313 | 41,903 | |||||||
Gross profit | 34,834 | 23,526 | |||||||
Operating expenses: | |||||||||
Research and development | 6,091 | 4,565 | |||||||
Selling | 11,308 | 5,498 | |||||||
General and administrative | 15,983 | 4,775 | |||||||
Intangible asset amortization | 3,490 | 1,644 | |||||||
36,872 | 16,482 | ||||||||
Operating income (loss) | (2,038 | ) | 7,044 | ||||||
Non-operating income (expense): | |||||||||
Investment income | 453 | 28 | |||||||
Interest expense | (2,424 | ) | (648 | ) | |||||
Other income (expense) | 543 | (11 | ) | ||||||
(1,428 | ) | (631 | ) | ||||||
Income (loss) before income taxes and equity in net loss of affiliate | (3,466 | ) | 6,413 | ||||||
Income tax benefit (provision) | 1,119 | (2,354 | ) | ||||||
Income (loss) before equity in net loss of affiliate | (2,347 | ) | 4,059 | ||||||
Equity in net loss of affiliate | (312 | ) | - | ||||||
Net income (loss) | \\$ | (2,659 | ) | \\$ | 4,059 | ||||
Earnings (loss) per share: | |||||||||
Basic | \\$ | (0.07 | ) | \\$ | 0.11 | ||||
Diluted | \\$ | (0.07 | ) | \\$ | 0.11 | ||||
Shares used in computing earnings (loss) per share: | |||||||||
Basic | 36,699 | 35,964 | |||||||
Diluted | 36,699 | 36,666 | |||||||
BUSINESS SEGMENT INFORMATION | |||||||||
(Unaudited, in thousands) | |||||||||
Three Months Ended | |||||||||
May 31, | |||||||||
2016 | 2015 | ||||||||
Revenues | |||||||||
Wireless DataCom | \\$ | 82,750 | \\$ | 57,826 | |||||
Satellite | 8,397 | 7,603 | |||||||
Total revenues | \\$ | 91,147 | \\$ | 65,429 | |||||
Gross profit | |||||||||
Wireless DataCom | \\$ | 32,510 | \\$ | 21,588 | |||||
Satellite | 2,324 | 1,938 | |||||||
Total gross profit | \\$ | 34,834 | \\$ | 23,526 | |||||
Operating income (loss) | |||||||||
Wireless DataCom | \\$ | 1,492 | \\$ | 7,298 | |||||
Satellite | 953 | 812 | |||||||
Corporate expenses | (4,483 | ) | (1,066 | ) | |||||
Total operating income (loss) | \\$ | (2,038 | ) | \\$ | 7,044 | ||||
CAL AMP CORP. | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(In thousands) | |||||||||
May 31, | February 29, | ||||||||
2016 | 2016 | ||||||||
Assets | (Unaudited) | ||||||||
Current assets: | |||||||||
Cash and cash equivalents | \\$ | 67,490 | \\$ | 139,388 | |||||
Short-term marketable securities | 50,140 | 88,718 | |||||||
Accounts receivable, net | 69,390 | 49,432 | |||||||
Inventories | 27,650 | 16,731 | |||||||
Prepaid expenses and other current assets | 7,221 | 4,498 | |||||||
Total current assets | 221,891 | 298,767 | |||||||
Property, equipment and improvements, net | 19,306 | 11,225 | |||||||
Deferred income tax assets | 28,076 | 30,213 | |||||||
Goodwill | 66,880 | 16,508 | |||||||
Other intangible assets, net | 78,740 | 17,010 | |||||||
Other assets | 10,696 | 10,640 | |||||||
\\$ | 425,589 | \\$ | 384,363 | ||||||
Liabilities and Stockholders' Equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | \\$ | 36,141 | \\$ | 24,938 | |||||
Accrued payroll and employee benefits | 10,833 | 6,814 | |||||||
Deferred revenue | 16,823 | 9,438 | |||||||
Other current liabilities | 18,843 | 8,375 | |||||||
Total current liabilities | 82,640 | 49,565 | |||||||
1.625% convertible senior unsecured notes | 141,499 | 139,800 | |||||||
Other non-current liabilities | 12,624 | 5,551 | |||||||
Stockholders' equity: | |||||||||
Common stock | 367 | 367 | |||||||
Additional paid-in capital | 231,704 | 229,159 | |||||||
Accumulated deficit | (42,512 | ) | (39,853 | ) | |||||
Accumulated other comprehensive loss | (733 | ) | (226 | ) | |||||
Total stockholders' equity | 188,826 | 189,447 | |||||||
\\$ | 425,589 | \\$ | 384,363 | ||||||
CAL AMP CORP. | |||||||||
CONSOLIDATED CASH FLOW STATEMENTS | |||||||||
(In thousands) | |||||||||
Three Months Ended | |||||||||
May 31, | |||||||||
2016 | 2015 | ||||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | \\$ | (2,659 | ) | \\$ | 4,059 | ||||
Depreciation expense | 1,821 | 792 | |||||||
Intangible assets amortization expense | 3,490 | 1,644 | |||||||
Stock-based compensation expense | 1,984 | 1,220 | |||||||
Amortization of convertible debt issue costs and discount | 1,699 | 450 | |||||||
Deferred tax assets, net | (1,494 | ) | 2,181 | ||||||
Equity in net loss of affiliate | 312 | - | |||||||
Impairment of internal use software | 1,364 | - | |||||||
Changes in operating working capital | 1,805 | 5,982 | |||||||
Net cash provided by operating activities | 8,322 | 16,328 | |||||||
Cash flows from investing activities: | |||||||||
Proceeds from maturities of marketable securities | 38,578 | 4,389 | |||||||
Purchases of marketable securities | - | (87,084 | ) | ||||||
Capital expenditures | (1,620 | ) | (1,264 | ) | |||||
Acquisition of Crashboxx | - | (1,500 | ) | ||||||
Acquisition of LoJack, net of cash acquired | (116,982 | ) | - | ||||||
Advances to unconsolidated subsidiary | (737 | ) | - | ||||||
Other | (20 | ) | - | ||||||
Net cash used in investing activities | (80,781 | ) | (85,459 | ) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from issuance of convertible notes | - | 172,500 | |||||||
Payments of debt issuance costs | - | (5,276 | ) | ||||||
Purchase of convertible note hedges | - | (31,343 | ) | ||||||
Proceeds from issuance of warrants | - | 15,991 | |||||||
Payment of acquisition-related note and contingent consideration | - | (625 | ) | ||||||
Taxes paid related to net share settlement of vested equity awards | (160 | ) | (7 | ) | |||||
Proceeds from exercise of stock options | 721 | 137 | |||||||
Net cash provided by financing activities | 561 | 151,377 | |||||||
Net change in cash and cash equivalents | (71,898 | ) | 82,246 | ||||||
Cash and cash equivalents at beginning of period | 139,388 | 34,184 | |||||||
Cash and cash equivalents at end of period | \\$ | 67,490 | \\$ | 116,430 | |||||
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
In this press release,
The reconciliation of the GAAP basis net income (loss) to Adjusted basis (non-GAAP) net income is as follows (in thousands except per share amounts):
Three Months Ended | |||||||
May 31, | |||||||
2016 | 2015 | ||||||
GAAP basis net income (loss) | \\$ | (2,659 | ) | \\$ | 4,059 | ||
Intangible assets amortization expense | 3,490 | 1,644 | |||||
Stock-based compensation expense | 1,984 | 1,220 | |||||
Non-cash interest expense from amortization of debt discount | 1,507 | 383 | |||||
GAAP basis income tax provision (benefit) | (1,119 | ) | 2,354 | ||||
Equity in net loss of affiliate | 312 | - | |||||
Acquisition and integration expenses | 3,539 | - | |||||
Non-cash cost of sales arising from fair value write-up of LoJack inventory | 4,010 | - | |||||
Legal arbitration expenses for LoJack battery claim | 380 | - | |||||
Adjusted basis income before income taxes | 11,444 | 9,660 | |||||
Income tax provision (non-GAAP basis) (a) | (384 | ) | (171 | ) | |||
Adjusted basis net income | \\$ | 11,060 | \\$ | 9,489 | |||
Adjusted basis net income per diluted share | \\$ | 0.30 | \\$ | 0.26 | |||
Weighted average common shares outstanding on diluted basis | 37,173 | 36,666 |
(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 | |||||||
May 31, | |||||||
2016 | 2015 | ||||||
GAAP basis net income (loss) | \\$ | (2,659 | ) | \\$ | 4,059 | ||
Investment income | (453 | ) | (28 | ) | |||
Interest expense | 2,424 | 648 | |||||
GAAP basis income tax provision (benefit) | (1,119 | ) | 2,354 | ||||
Depreciation expense | 1,821 | 792 | |||||
Intangible assets amortization expense | 3,490 | 1,644 | |||||
Stock-based compensation expense | 1,984 | 1,220 | |||||
Equity in net loss of affiliate | 312 | - | |||||
Acquisition and integration expenses | 3,539 | - | |||||
Non-cash cost of sales arising from fair value write-up of LoJack inventory | 4,010 | - | |||||
Legal arbitration expenses for LoJack battery claim | 380 | - | |||||
Adjusted EBITDA | \\$ | 13,729 | \\$ | 10,689 | |||
Revenue | \\$ | 91,147 | \\$ | 65,429 | |||
Adjusted EBITDA margin | 15.1 | % | 16.3 | % | |||
The calculation of non-GAAP gross margin is as follows (dollars in thousands):
Three Months Ended | |||||||
May 31, | |||||||
2016 | 2015 | ||||||
GAAP basis gross profit | \\$ | 34,834 | \\$ | 23,526 | |||
Non-cash cost of sales arising from fair value write-up of LoJack inventory | 4,010 | - | |||||
Non-GAAP gross profit | \\$ | 38,844 | \\$ | 23,526 | |||
Revenue | \\$ | 91,147 | \\$ | 65,429 | |||
Non-GAAP gross margin | 42.6 | % | 36.0 | % | |||
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