CalAmp (Nasdaq: CAMP), a connected intelligence
company that helps organizations monitor, track and protect their
vital assets, today reported financial results for its first
quarter of fiscal year 2024 ended May 31, 2023.
First Quarter Fiscal Year 2024 Financial
Overview
- Total revenue was $70.9 million in the quarter, a $7.6 million
decline sequentially and $6.2 million increase year over year.
- Software and Subscription Services (S&SS) revenue was $45.0
million in the quarter, down $6.4 million sequentially and up $5.4
million year over year.
- Telematics Products revenue was $25.9 million, including a
strong quarter from a large Industrial customer. This represented a
$1.2 million decline sequentially and $0.8 million increase year
over year.
- Recurring Application Subscription revenues were $19.2 million,
representing a $0.1 million sequential growth, and $1.1 million
decline year over year.
- Quarter End Remaining Performance Obligations (RPO) of $217.5
million, down sequentially by $20 million, driven by a few
customers making contract modifications.
- Telematics Products backlog was at $20 million, down
sequentially by $9 million, reflecting improved supply.
- Gross margin in the quarter increased 280 basis points
sequentially to 38.2% as product mix shifted to higher
margins.
- Adjusted EBITDA was flat sequentially at $6.0 million in the
quarter, or approximately 9% of revenue, driven by improved gross
margins and cost control.
- GAAP net loss from continuing operations was $4.0 million, or a
loss of $0.11 per share, a sequential improvement from loss of $8
million or $0.22 per share.
- Ended the quarter with $35.0 million in cash and cash
equivalents; have $35.6 million of undrawn line availability
subject to customary covenant tests.
Jeff Gardner, CalAmp’s CEO, commented: “First
quarter revenues came in at $70.9 million, up 10% year over year,
and we recognized another sequential increase in gross margin and
cost efficiencies from our continued expense management efforts
which all contributed to a solid first quarter Adjusted EBITDA of
$6.0 million. Strategically, we have converted the installed base
to a subscription model, focused the sales organization on selling
full stack solutions, stood up a customer success team to drive
retention and upselling, and restructured the business to improve
cash flow and profitability. With the recent release of exciting
new products—such as our next generation Video Dash Camera—CalAmp
is positioned to drive high-margin recurring revenue growth from
direct fleet customers.”
“Over the past few years, CalAmp has been
executing a strategy to create shareholder value as an independent
company. In the past weeks, we have received unsolicited inbound
inquiries, as a result of which the Board of Directors has engaged
advisors and formed a special committee to help us explore all
strategic alternatives.”
Business and Recent
Highlights
- Completed the active conversion effort of transferring legacy
device customers to subscription models.
- Signed multiple new enterprise fleet customers, including a
deal with R&L Carriers that added ~18,000 subscribers post FY24
Q1 close.
- Released the next gen CalAmp Vision solution, which includes a
dual facing dash cam and AI-based software; have already sold units
and will continue to execute towards closing additional
opportunities from a growing sales pipeline.
Summary Financial Information From
Continuing Operations: (In thousands except per share
amounts)
|
|
Three Months
Ended |
|
|
|
May 31, |
|
Description |
|
2023 |
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
Software & Subscription Services (S&SS) |
|
$ |
44,952 |
|
|
$ |
39,557 |
|
Telematics
Products |
|
|
25,939 |
|
|
|
25,169 |
|
|
|
$ |
70,891 |
|
|
$ |
64,726 |
|
Gross
profit |
|
|
27,061 |
|
|
|
25,647 |
|
|
|
|
|
|
|
|
Gross
margin |
|
|
38 |
% |
|
|
40 |
% |
|
|
|
|
|
|
|
Net
loss |
|
$ |
(4,032 |
) |
|
$ |
(12,173 |
) |
Net loss per
diluted share |
|
$ |
(0.11 |
) |
|
$ |
(0.34 |
) |
Non-GAAP
measures: |
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
6,045 |
|
|
$ |
1,856 |
|
Adjusted
EBITDA margin |
|
|
9 |
% |
|
|
3 |
% |
|
|
May
31, |
|
|
February
28, |
|
Description |
|
2023 |
|
|
2023 |
|
Cash and cash equivalents |
|
$ |
34,960 |
|
|
$ |
41,928 |
|
Working
capital |
|
|
68,748 |
|
|
|
68,295 |
|
Deferred
revenue |
|
|
35,291 |
|
|
|
36,552 |
|
Total debt
(carrying value) |
|
|
227,966 |
|
|
|
228,121 |
|
|
|
May 31, |
|
S&SS Supplemental Information: |
|
2023 |
|
|
2022 |
|
Remaining performance obligations |
|
$ |
217,490 |
|
|
$ |
215,000 |
|
Subscribers |
|
|
1,687 |
|
|
|
1,195 |
|
|
Three Months
Ended |
|
|
May 31, 2023 |
|
|
May 31, 2022 |
|
|
Feb 28, 2023 |
|
Revenue by type of goods and services: |
|
|
|
|
|
|
|
|
Telematics devices and accessories |
$ |
46,291 |
|
|
$ |
39,395 |
|
|
$ |
50,461 |
|
Rental
income and other services |
$ |
5,434 |
|
|
|
4,270 |
|
|
$ |
8,623 |
|
Recurring
application subscriptions (1) |
$ |
19,166 |
|
|
|
21,061 |
|
|
$ |
19,422 |
|
Total |
$ |
70,891 |
|
|
$ |
64,726 |
|
|
$ |
78,506 |
|
|
|
|
|
|
|
|
|
|
Recurring
application subscriptions, excluding Automotive Vehicle Finance
Business (1) |
$ |
19,166 |
|
|
$ |
20,280 |
|
|
$ |
19,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Recurring application
subscriptions includes $0.0 million, $0.8 million, and $0.3 million
during the three months ended May 31, 2023, May 31, 2022, and
February 28, 2023, respectively, attributable to the auto vehicle
finance business which has been completely wound down.
Second Quarter Fiscal Year 2024 Business
Outlook
We expect FY24 Q2 revenues to range between $67
and $73 million with adjusted EBITDA between $5 and $9 million.
A reconciliation of non-GAAP guidance financial
measures to corresponding GAAP guidance financial measures is not
available on a forward-looking basis without unreasonable effort
due to the uncertainty and potential variability of expenses, such
as stock-based compensation expense-related charges, that may be
incurred in the future and cannot be reasonably determined or
predicted at this time. It is important to note that these factors
could be material to our results of operations computed in
accordance with GAAP.
Conference Call and Webcast
CalAmp is hosting a conference call for analysts
and investors to discuss its first quarter fiscal year 2024 results
at 2:00 p.m. Pacific Time today. Participants can listen in via
webcast by visiting the Investor Relations section of its 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
833-470-1428 (+1-404-975-4839 for international callers) and using
the Conference ID #597090. Following the call, an audio replay will
also be available by calling 866-813-9403 or 1-929-458-6194 and
entering the Replay ID # 915253. The audio replay will be available
through July 17, 2023.
About CalAmp
CalAmp (Nasdaq: CAMP) provides flexible
solutions to help organizations worldwide monitor, track and
protect their vital assets. Our unique combination of software,
devices, and platform enables over 14,000 commercial and government
organizations worldwide to increase efficiency, safety and
transparency while accommodating the unique ways they do business.
With over 10 million active edge devices and 275+ issued or pending
patents, CalAmp is the telematics leader organizations turn to for
innovation and dependability. For more information, visit
calamp.com, or LinkedIn, 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, (iii) our comprehensive
review of strategic alternatives focused on enhancing shareholder
value, and (iv) 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 outcome of our comprehensive
review of strategic alternatives, including the availability of any
strategic alternatives that are worthwhile to pursue; the effects
of global outbreaks of pandemics or contagious diseases or fear of
such outbreaks, such as the recent coronavirus (COVID-19) pandemic;
global component shortages due to supply chain constraints caused
by the COVID-19 pandemic; disruptions in sales, operations,
relationships with customers, suppliers, employees; our ability to
successfully and timely accomplish our transformation to a SaaS
solutions provider; our transition out of the automotive vehicle
financing business; competitive pressures; pricing declines; demand
for our telematics products; rates of growth in our target markets;
prolonged disruptions of our contract manufacturers’ facilities or
other significant operations; force majeure or force-majeure-like
events at our contract manufacturers’ facilities including
component shortages; 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
acquisitions; the impact of legal proceedings and compliance risks;
the impact on our business and reputation from information
technology system failures, network disruptions, cyber-attacks, 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 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 and legal expenses, impairment losses and
certain other adjustments as detailed in the accompanying non-GAAP
reconciliation), and Adjusted EBITDA margin. 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, CrashBoxx and associated logos are among the
trademarks of CalAmp and/or its affiliates in the United States,
certain other countries and/or the EU. Spireon acquired the LoJack®
U.S. Stolen Vehicle Recovery (SVR) business from CalAmp and holds
an exclusive license to the LoJack mark in the United States and
Canada. Any other trademarks or trade names mentioned are the
property of their respective owners.
AT CALAMP: |
AT CALAMP: |
Jikun
Kim |
Logan
Lucas |
SVP &
CFO |
Corporate
Strategy |
ir@calamp.com |
ir@calamp.com |
CALAMP CORP. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in
thousands, except per share amounts)
(Unaudited)
|
Three Months
Ended |
|
|
May 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
70,891 |
|
|
$ |
64,726 |
|
Cost of
revenues |
|
43,830 |
|
|
$ |
39,079 |
|
Gross
profit |
|
27,061 |
|
|
|
25,647 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research and development |
|
5,842 |
|
|
$ |
7,000 |
|
Selling and marketing |
|
11,023 |
|
|
$ |
11,478 |
|
General and administrative |
|
11,354 |
|
|
$ |
15,162 |
|
Intangible asset amortization |
|
1,222 |
|
|
$ |
1,342 |
|
Total
operating expenses |
|
29,441 |
|
|
|
34,982 |
|
Operating
loss |
|
(2,380 |
) |
|
|
(9,335 |
) |
Non-operating income (expense): |
|
|
|
|
|
|
|
Investment income |
|
207 |
|
|
$ |
(114 |
) |
Interest expense |
|
(1,678 |
) |
|
$ |
(1,533 |
) |
Other expense, net |
|
(129 |
) |
|
$ |
(942 |
) |
Total
non-operating expenses |
|
(1,600 |
) |
|
|
(2,589 |
) |
Loss from
operations before income taxes |
|
(3,980 |
) |
|
|
(11,924 |
) |
Income tax
provision |
|
(52 |
) |
|
$ |
(249 |
) |
Net
loss |
$ |
(4,032 |
) |
|
$ |
(12,173 |
) |
Loss per
share - continuing operations: |
|
|
|
|
|
|
|
Basic |
$ |
(0.11 |
) |
|
$ |
(0.34 |
) |
Diluted |
$ |
(0.11 |
) |
|
$ |
(0.34 |
) |
Earnings per
share - discontinued operations: |
|
|
|
|
|
|
|
Basic |
$ |
- |
|
|
$ |
- |
|
Diluted |
$ |
- |
|
|
$ |
- |
|
Shares used
in computing earnings (loss) per share: |
|
|
|
|
|
|
|
Basic |
|
36,632 |
|
|
|
35,723 |
|
Diluted |
|
36,632 |
|
|
|
35,723 |
|
|
|
|
|
|
|
|
|
CALAMP CORP. CONDENSED
CONSOLIDATED BALANCE SHEETS (Amounts in
thousands) (Unaudited)
|
|
May
31, |
|
|
February
28, |
|
|
|
2023 |
|
|
2023 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
34,960 |
|
|
$ |
41,928 |
|
Accounts receivable, net |
|
|
85,033 |
|
|
|
82,946 |
|
Inventories |
|
|
24,336 |
|
|
|
23,902 |
|
Prepaid expenses and other current assets |
|
|
23,848 |
|
|
|
26,019 |
|
Total current assets |
|
|
168,177 |
|
|
|
174,795 |
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
|
31,526 |
|
|
|
32,832 |
|
Operating
lease right-of-use assets |
|
|
11,632 |
|
|
|
12,293 |
|
Deferred
income tax assets |
|
|
3,624 |
|
|
|
3,275 |
|
Goodwill |
|
|
94,708 |
|
|
|
94,214 |
|
Other
intangible assets, net |
|
|
25,695 |
|
|
|
26,633 |
|
Other
assets |
|
|
36,872 |
|
|
|
36,078 |
|
Total assets |
|
$ |
372,234 |
|
|
$ |
380,120 |
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
276 |
|
|
$ |
705 |
|
Accounts payable |
|
|
47,904 |
|
|
|
52,716 |
|
Accrued payroll and employee benefits |
|
|
11,583 |
|
|
|
11,766 |
|
Deferred revenue |
|
|
22,143 |
|
|
|
25,448 |
|
Other current liabilities |
|
|
17,523 |
|
|
|
15,865 |
|
Total current liabilities |
|
|
99,429 |
|
|
|
106,500 |
|
|
|
|
|
|
|
|
|
|
Long-term
debt, net of current portion |
|
|
227,690 |
|
|
|
227,416 |
|
Operating
lease liabilities |
|
|
11,277 |
|
|
|
12,314 |
|
Other
non-current liabilities |
|
|
21,394 |
|
|
|
19,583 |
|
Total liabilities |
|
|
359,790 |
|
|
|
365,813 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock |
|
|
375 |
|
|
|
374 |
|
Additional paid-in capital |
|
|
186,592 |
|
|
|
184,672 |
|
Accumulated deficit |
|
|
(172,848 |
) |
|
|
(168,816 |
) |
Accumulated other comprehensive loss |
|
|
(1,675 |
) |
|
|
(1,923 |
) |
Total stockholders’ equity |
|
|
12,444 |
|
|
|
14,307 |
|
Total liabilities and stockholders’ equity |
|
$ |
372,234 |
|
|
$ |
380,120 |
|
|
|
|
|
|
|
|
|
|
CALAMP CORP. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in
thousands) (Unaudited)
|
Fiscal Year
Ended |
|
|
May 31, |
|
|
2023 |
|
|
2022 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net loss |
$ |
(4,032 |
) |
|
$ |
(12,173 |
) |
|
|
|
|
|
|
|
|
Depreciation expense |
|
4,328 |
|
|
|
4,156 |
|
Intangible asset amortization |
|
1,222 |
|
|
|
1,342 |
|
Stock-based compensation |
|
2,178 |
|
|
|
2,960 |
|
Amortization of debt issuance costs and discount |
|
281 |
|
|
|
304 |
|
Non-cash operating lease cost |
|
842 |
|
|
|
893 |
|
Revenue assigned to factors |
|
(436 |
) |
|
|
(784 |
) |
Deferred tax assets, net |
|
(304 |
) |
|
|
109 |
|
Other |
|
22 |
|
|
|
- |
|
Changes in operating assets and liabilities of continuing
operations |
|
(7,081 |
) |
|
|
(12,357 |
) |
NET CASH
USED IN OPERATING ACTIVITIES |
|
(2,980 |
) |
|
|
(15,550 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Capital expenditures |
|
(1,958 |
) |
|
|
(3,630 |
) |
NET CASH
USED IN INVESTING ACTIVITIES |
|
(1,958 |
) |
|
|
(3,630 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Taxes paid related to net share settlement of vested equity
awards |
|
(257 |
) |
|
|
(425 |
) |
NET CASH
USED IN FINANCING ACTIVITIES |
|
(257 |
) |
|
|
(425 |
) |
|
|
|
|
|
|
|
|
EFFECT OF
EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
(1,773 |
) |
|
|
(576 |
) |
Net change
in cash and cash equivalents |
|
(6,968 |
) |
|
|
(20,181 |
) |
Cash and
cash equivalents at beginning of year |
|
41,928 |
|
|
|
79,221 |
|
Cash and
cash equivalents at end of year |
$ |
34,960 |
|
|
$ |
59,040 |
|
|
|
|
|
|
|
|
|
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 non-GAAP financial measures, as defined
in Regulation G promulgated by the Securities and Exchange
Commission. We believe that our presentation of non-GAAP financial
measures provides useful supplementary information to investors.
The presentation of 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 EBITDA (earnings before investment
income, interest expense, taxes, depreciation, amortization,
stock-based compensation 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 current and past periods.
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 |
|
|
May 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
GAAP basis net loss |
$ |
(4,032 |
) |
|
$ |
(12,173 |
) |
|
|
|
|
|
|
|
|
Investment
(income) loss |
|
(207 |
) |
|
|
114 |
|
Interest
expense |
|
1,678 |
|
|
|
1,533 |
|
Income tax
provision |
|
52 |
|
|
|
249 |
|
Depreciation
and amortization |
|
5,550 |
|
|
|
5,498 |
|
Stock-based
compensation |
|
2,178 |
|
|
|
2,960 |
|
Litigation
and non-recurring legal expenses |
|
175 |
|
|
|
3,131 |
|
Restructuring |
|
- |
|
|
|
- |
|
Costs
incurred in transition of LoJack North America business to acquiror
(a) |
|
36 |
|
|
|
752 |
|
Other |
|
615 |
|
|
|
(208 |
) |
Adjusted
EBITDA |
$ |
6,045 |
|
|
$ |
1,856 |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
70,891 |
|
|
$ |
64,726 |
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin |
|
9 |
% |
|
|
3 |
% |
|
|
|
|
|
|
|
|
(a) Costs incurred in transition of
business to acquiror are attributable to the wind-down and transfer
of the LoJack North America business to Spireon.
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