CalAmp Corp. (CAMP)

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CalAmp Corp. (CAMP)

Q2 2013 Earnings Call

September 25, 2012 4:30 pm ET



Michael Burdiek - President & Chief Executive Officer

Rick Vitelle - Vice President Finance, Chief Financial Officer and Secretary


Mike Crawford - B.Riley & Company

Matt Ramsay - Canaccord Genuity

Marc Robins - Catalyst Research



Greetings, and welcome to the CalAmp Second Quarter Fiscal 2013 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Lasse Glassen. Thank you, Mr. Glassen. You may begin.

Lasse Glassen

Thank you, operator. Good afternoon and welcome to CalAmp's fiscal 2013 second quarter conference call.

With us today are CalAmp's President and Chief Executive Officer, Michael Burdiek, and Chief Financial Officer, Rick Vitelle.

Before I turn the call over to management, please remember that our prepared remarks and responses to questions may contain forward-looking statements. 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 product demand, competitive pressures and pricing declines in the Company's satellite and wireless markets, the timing of customer approvals of wireless product designs, intellectual property infringement claims, interruptions or failure of our internet based systems used to wirelessly configure and communicate with the tracking and monitoring devices that we sell, the effects of the proposed automatic federal cuts, if the scheduled sequester were to take place early in 2013, and other risks and uncertainties that are described in the Company's annual report on Form 10-K for fiscal 2012 as filed April, 26,2012 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 assurances that expectations will be attained. The company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

With that said, it's now my pleasure to turn the call over to CalAmp's President and CEO, Michael Burdiek.

Michael Burdiek

Thank you, Lasse. Good afternoon and thank you for joining us today to discuss CalAmp's fiscal 2013 second quarter. I will begin today's call with a review of our financial and operational highlights and Rick Vitelle will provide additional details about our second quarter results. I will wrap up with our business outlook and guidance for fiscal 2013 third quarter, along with some concluding remarks. This will be followed by a question-and-answer session.

We continue to experience operating momentum with strong performance once again driven by our Wireless Datacom segment, where revenue grew 34% year-over-year. This record-setting Wireless Datacom revenue was due to growing demand for our Mobile Resource Management, or MRM products and services, significant contributions from our Rail initiative as well as improving fundamentals in public safety. In addition, we continue to be pleased with the performance of our Satellite segment and its contribution to the bottom-line.

Consolidated revenue for the second quarter was $44 million, up 30% compared to the second quarter last year with Wireless Datacom revenue increasing to $34.2 million and Satellite revenue of $9.8 million.

At the bottom line, we earned $0.12 per diluted share on a GAAP basis, and $0.17 on a non-GAAP basis. Both, revenue and EPS results were at the high end of our guidance range for the quarter. Cash flow provided by operating activities was $4 million, and we ended the quarter with the cash balance of $10.2 million.

Now I would like to review our operational highlights for the quarter. The Wireless Datacom segment posted record revenue in the second quarter with continued momentum across multiple market verticals. MRM products and services accounted for two-thirds of total Wireless Datacom revenue with wireless network applications accounting for the remaining third.

Similar to what we've seen in recent quarters, we are continuing to experience strong customer demand for our MRM products and fleet management, asset tracking, stolen vehicle recovery and vehicle finance verticals. In addition, we are gaining traction from international expansion initiatives in our MRM business.

During the quarter, we received type approval for a range of our MRM devices by the Independent Communications Authority of South Africa, and we began product shipments to key South African customers towards the end of the second quarter. South African regional expansion came on the heels of the Navman supply agreement announced earlier in fiscal 2013, which generated approximately $2 million of revenue in the second quarter, almost all outside of North America.

We are also seeing steady growth in Latin America as we support key partners such as Movistar in the rollout of new MRM services across South America. In this past summer, our Dutch partner, Cicada mobile solutions relied on CalAmp's products to provide the efficient and safe transportation of VIPs between venues during the Olympic Games, and to facilitate logistics management and security initiatives.

At the end of the second quarter, we had 1.7 million MRM devices in services with our customers that are supported by CalAmp's COLT cloud based device management platform, which is up from 1.5 million at the end of the first quarter.

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