CAMP

SaaS Strength Couldn't Save CalAmp This Time

Stock market numbers with red and green arrows indicating direction

CalAmp (NASDAQ: CAMP) announced fiscal third-quarter 2019 results on Thursday after the market closed. The machine-to-machine communications leader detailed a difficult period in which -- just as management warned would be the case just over a week ago -- its performance was plagued by supply disruptions related to its ongoing transition away from manufacturers with facilities in China. CalAmp is making the move in response to recent trade and tarriff concerns between the U.S and the Middle Kingdom.

With shares down more than 14% in after-hours trading as of this writing however, it seems the bad news didn't end there. So let's have a closer look at what CalAmp had to say.

CalAmp results: The raw numbers

DATA SOURCE: CALAMP. *FOR THE QUARTER ENDED OCT. 31, 2018. GAAP = GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

What happened with CalAmp this quarter?

  • On an adjusted (non- GAAP ) basis -- which excludes items like stock-based compensation and restructuring expenses -- CalAmp generated net income of $8.9 million, or $0.25 per share, down from $0.31 per share in the same year-ago period.
  • Adjusted EBITDA declined 17.5% to $11.4 million.
  • These results were within the revised guidance ranges CalAmp offered only just last week, which called for revenue of $88 million to $89 million, adjusted EBITDA of $10.5 million to $11.5 million, and adjusted earnings per share of $0.23 to $0.25.
  • Telematics systems segment revenue fell 11.9% to $68.6 million, driven by lower legacy LoJack SVR product sales.
  • Software and subscription segment revenue grew 25.5% to $19.9 million, driven by new freight transport subscribers and LoJack subscription services.
  • CalAmp entered into a multimillion-dollar software-as-a-service (SaaS) contract with a public cloud service provider revolving around high-value asset tracking.
  • Struck a global supply agreement with Telefonica to provide smart telematics devices for fleet and asset management applications in Mexico, as well as other Latin American markets and Europe going forward.
  • After Splunk reduced its outlook last week, the company also announced a new $20 million share-repurchase authorization.

What management had to say

CalAmp CEO Michael Burdiek stated:

Looking forward

For the fiscal fourth quarter, CalAmp expects revenue in the range of $86 million to $92 million, adjusted EBITDA of $10 million to $14 million, and adjusted net income per share of $0.23 to $0.29. Here again, however, most analysts were modeling even higher earnings of $0.30 per share on revenue closer to $96 million.

In the end, CalAmp's current weakness should prove temporary as it resolves its supply chain disruptions. But given the negative impact these issues are having on its top and bottom lines in the meantime, it's no surprise to see CalAmp continuing to fall right now.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends CalAmp. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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