Gross Margin increases 280 basis points and Adjusted EBITDA remained strong in the quarter at
The Company’s Board of Directors has decided to explore strategic alternatives
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.
“Over the past few years,
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 | ||||||||
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 | % |
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 |
S&SS Supplemental Information: | 2023 | 2022 | ||||||
Remaining performance obligations | $ | 217,490 | $ | 215,000 | ||||
Subscribers | 1,687 | 1,195 |
Three Months Ended | |||||||||||
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
Second Quarter Fiscal Year 2024 Business Outlook
We expect FY24 Q2 revenues to range between
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
About
Forward-Looking Statements
This announcement contains forward-looking statements (including within the meaning of Section 21E of the
Non-GAAP Financial Measures
“GAAP” refers to financial information presented in accordance with
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.
AT | AT |
SVP & CFO | Corporate Strategy |
ir@calamp.com | ir@calamp.com |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended | |||||||
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 | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
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 | ||||||
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 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Fiscal Year Ended | |||||||
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 | ) | |||
(2,980 | ) | (15,550 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (1,958 | ) | (3,630 | ) | |||
(1,958 | ) | (3,630 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Taxes paid related to net share settlement of vested equity awards | (257 | ) | (425 | ) | |||
(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 | |||
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
(Unaudited)
GAAP refers to financial information presented in accordance with
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 | |||||||
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 | 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
Source:
2023 GlobeNewswire, Inc., source