CalAmp Reports Fiscal 2008 Second Quarter Results.OXNARD, Calif. -- CalAmp Corp. (Nasdaq:CAMP), a leading provider of wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. products, today reported results for its fiscal 2008 second quarter ended August 31, 2007. Key elements include: * Second quarter revenues of $32.7 million, GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.14 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share and Adjusted Basis (non-GAAP) loss from continuing operations of $0.08 per diluted share. * Wireless DataCom second quarter revenues of $22.8 million nearly 50% higher than prior year. * Completed the sale of the TelAlert software business in a transaction valued at approximately $9.4 million. "Similar to last quarter, our operating results were driven by the continued strength of our Wireless DataCom Division, which generated revenues of $22.8 million--a 46% increase compared to the same period last year," commented Fred Sturm, CalAmp's President and Chief Executive Officer. "During the second quarter, the Wireless DataCom Division benefited from contributions by the recent acquisitions of SmartLink Radio Networks and AirIQ's Vehicle Tracking business. Furthermore, we are pleased that several new wireless communications products that the Company recently developed and launched earlier in calendar year 2007 for mobile resource management (MRM MRM Marketing Resource Management MRM Mobile Resource Management MRM Metabolic Response Modifiers MRM Multiple Reaction Monitoring (mass spectrometry) MRM Mormonism Research Ministry MRM Mechanically Recovered Meat ) applications are achieving increased market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" and are producing solid revenue growth. We continue to believe that our wireless datacom business provides significant growth opportunities and enhances CalAmp's overall profitability and competitiveness." Regarding the previously announced product performance issues with a key DBS (Direct Broadcast Satellite) A one-way TV broadcast service from a communications satellite to a small round or oval dish antenna no larger than 20" in diameter. customer that resulted in the customer suspending orders for new products, Mr. Sturm stated, "We are still in discussions with this customer working towards resolution of this matter, and although it is taking longer than previously anticipated, we expect that we will soon achieve that resolution and resume making volume shipments to this customer." Fiscal 2008 Second Quarter Results Total revenue for the fiscal 2008 second quarter was $32.7 million compared to $54.6 million for the second quarter of fiscal 2007. Lower revenue from the Satellite Division in the latest quarter was partially offset by growth in the Company's Wireless DataCom Division, which was driven by recent acquisitions and organic growth. The net loss for the fiscal 2008 second quarter was $4.4 million or $0.19 per diluted share compared to net income of $1.2 million or $0.05 per diluted share for the second quarter of last year. As noted above, during the fiscal 2008 second quarter, the Company completed the sale of its TelAlert software business, the last remaining business within the Solutions Division, in a transaction valued at approximately $9.4 million. The operating results of the Solutions Division have been presented in the accompanying consolidated statement of operations See Income statement. as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. for all periods presented. Excluding the effect of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , the fiscal 2008 second quarter loss from continuing operations was $3.3 million or $0.14 per diluted share compared to income from continuing operations of $1.7 million, or $0.07 per diluted share, for the same period last year. The Adjusted Basis (non-GAAP) loss from continuing operations for the fiscal 2008 second quarter was $2.0 million or $0.08 per diluted share compared to Adjusted Basis income from continuing operations of $2.8 million or $0.12 per diluted share for the same period last year. Adjusted Basis income (loss) from continuing operations excludes the impact of amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , stock-based compensation expense and write-off of acquired in-process research and development costs, each net of tax where applicable. A reconciliation of the GAAP basis income (loss) from continuing operations to Adjusted Basis income (loss) from continuing operations is provided in the table at the end of this press release. Excluding the effect of discontinued operations, both GAAP-basis EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. and Adjusted Basis (non-GAAP) EPS for the fiscal 2008 second quarter would have been within previously announced guidance. Gross profit for the fiscal 2008 second quarter was $6.3 million, or 19.3% of revenues compared to $12.7 million or 23.2% of revenues for the same period last year. The reduction in gross profit and gross margin were primarily the result of lower sales of Satellite Division products. Liquidity At August 31, 2007, the Company had total cash of $8.4 million, with $32.8 million in total outstanding debt. As previously disclosed, the loss recorded in the first quarter of fiscal 2008 has caused the Company to become noncompliant with the financial covenants under the Company's bank credit agreement that preclude pre·clude tr.v. pre·clud·ed, pre·clud·ing, pre·cludes 1. To make impossible, as by action taken in advance; prevent. See Synonyms at prevent. 2. additional borrowing under the revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility until the Company is able to obtain a waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. from its lenders and/or an amendment of the credit agreement. The Company is in discussions with its lenders to resolve the issue. In the near term the Company believes that it has sufficient liquidity such that the restriction on borrowing under the revolving credit facility will not materially affect its operations. However, if the lenders are unwilling to agree to a waiver or an amendment or exercise their rights to accelerate borrowings outstanding under the credit agreement, the inability to borrow under the revolving credit facility and/or the acceleration of such indebtedness could materially adversely affect the Company's financial position and operations, including its ability to fund its currently anticipated working capital and capital expenditure needs. Because the lenders have the right to call the loan until such time as a waiver is obtained, the entire $32.8 million outstanding balance of the bank loan is classified as a current liability in the August 31, 2007 balance sheet. Net cash used in operating activities was $2.1 million for the six months ended August 31, 2007. Inventory was $27.0 million at the end of the second quarter, representing annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. turns of approximately 4 times. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying outstanding of $24.8 million at the end of the second quarter represents a 67 day average collection period. Business Outlook Commenting on the Company's business outlook, Mr. Sturm said, "Based on our current forecast, we believe fiscal 2008 third quarter consolidated revenues will be in the range of $32 to $35 million, with a loss from continuing operations in the range of $0.07 to $0.11 per diluted share. The Adjusted Basis (non-GAAP) loss from continuing operations for the second quarter, which excludes amortization of intangible assets, stock-based compensation expense and write-off of acquired research and development costs--each net of tax--is expected to be $0.01 to $0.05 per diluted share. During the third quarter, we expect revenue contributions from our Wireless DataCom Division in the range of $22 million to $25 million." Conference Call, Webcast and Form 10-Q Form 10-Q See 10-Q. Filing A conference call and simultaneous webcast to discuss fiscal 2008 second quarter financial results and business outlook will be held today at 4:30 p.m. Eastern / 1:30 p.m. Pacific. The live webcast of the call is available on CalAmp's web site at www.calamp.com. Participants are encouraged to visit the web site at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. CalAmp's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Fred Sturm and CFO See Chief Financial Officer. Rick Vitelle will host the conference call. After the live webcast, a replay will remain available until the next quarterly conference call in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of CalAmp's web site. The reader is also referred to the Company's Quarterly Report on Form 10-Q, filed today with the Securities and Exchange Commission. About CalAmp Corp. CalAmp is a leading provider of wireless communications products that enable anytime/anywhere access to critical information, data and entertainment content. With comprehensive capabilities ranging from product design and development through volume production, CalAmp delivers cost-effective high quality solutions to a broad array of customers and end markets. CalAmp is a supplier of Direct Broadcast Satellite (DBS) outdoor customer premise equipment to the U.S. satellite television market. The Company also provides wireless data communication solutions for the telemetry telemetry Highly automated communications process by which data are collected from instruments located at remote or inaccessible points and transmitted to receiving equipment for measurement, monitoring, display, and recording. and asset tracking markets, private wireless networks, public safety communications and critical infrastructure and process control applications. For additional information, please visit the Company's website at www.calamp.com. Forward-Looking Statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements in this press release that are not historical in nature are forward-looking statements, which 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. Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including general and industry economic conditions, product demand, increased competition, competitive pricing and continued pricing declines in the DBS market, the timing of customer approvals of new product designs, operating costs operating costs npl → gastos mpl operacionales , the Company's ability to efficiently and cost-effectively integrate its acquired businesses, the Company's ability to obtain a waiver from the lenders under its bank credit agreement of the event of default under the credit agreement, the Company's ability to successfully requalify with respect to the sale of newer generation products to one of its key DBS customers, the risk that the ultimate cost of resolving a product performance issue with that DBS customer may exceed the amount of reserves established for that purpose, and other risks or uncertainties that are described in the Company's fiscal 2007 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. on May 17, 2007 today with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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