Cempra Inc (NASDAQ:CAMP), a leading provider of wireless products, services and solutions, today reported results for its fiscal 2017 first quarter ended May 31, 2016.
Michael Burdiek, CalAmp’s President and Chief Executive Officer, said, “We executed on a number of key business initiatives that set the foundation for long-term revenue growth, margin expansion and earnings leverage. We are very pleased that we are seeing early success with LoJack, which was acquired in mid-March, and was a strong contributor in the quarter on multiple fronts, from revenue growth to operating leverage. The integration of LoJack is going smoothly and we are realizing revenue synergies earlier than expected.”
Revenue for the first quarter of fiscal 2017 was $91.1 million, an increase of 39% from the first quarter of fiscal 2016. Revenue in the fiscal 2017 first quarter included $27.9 million from the LoJack acquisition and $8.4 million from the Satellite segment. Though the Satellite business is currently in the process of winding down, current accounting rules require that the financial results of this business be included with the Company’s continuing operations until the shutdown process is complete.
Gross profit for the first quarter of fiscal 2017 was $34.8 million, an increase of $11.3 million over the same quarter last year. Gross margin was 38.2% in the first quarter of fiscal 2017, up from 36.0% in the first quarter of fiscal 2016. Non-GAAP gross margin was 42.6% in the first quarter of fiscal 2017, compared to 36.0% in the same quarter in fiscal 2016.
GAAP net loss for the first quarter of fiscal 2017 was $2.7 million, or $(0.07) per diluted share, compared to net income of $4.1 million, or $0.11 per diluted share, in the first quarter of fiscal 2016. The GAAP net loss includes costs and expenses associated with LoJack purchase accounting adjustments and other acquisition-related expenses in the aggregate amount of $9.3 million. Non-GAAP adjusted basis net income for the first quarter of fiscal 2017 was $11.1 million, or $0.30 per diluted share, compared to non-GAAP adjusted net income of $9.5 million, or $0.26 per diluted share, in the first quarter of fiscal 2016.
As of May 31, 2016, the Company had total cash and marketable securities of $118 million and total debt outstanding of $141 million, which is the carrying amount of the Company’s 1.625% convertible notes in the face amount of $172.5 million. Net cash provided by operating activities was $8.3 million during the first quarter.
Business and Financial Highlights
- As announced separately today, CalAmp’s Board of Directors has authorized a $25 million, 12-month share repurchase plan, underscoring confidence in our business prospects.
- We completed the acquisition of LoJack, an unrivaled leader in the telematics aftermarket for stolen vehicle recovery offerings, establishing a gateway for CalAmp to deliver a range of novel, high-margin telematics technology subscription services.
- We launched our instant crash notification service, or ICN, which can discriminate between different types of crash events and automate damage reporting for a number of connected vehicle markets.
- Across all of our SaaS and recurring service platforms, we had approximately 589,000 unique subscribers at the end of the first quarter including approximately 100,000 added from the LoJack acquisition, compared to total 482,000 subscribers at the end of the immediately preceding quarter.
- In our Telematics Systems business, we made progress expanding our customer base in the first quarter as we commenced shipping products to one of the largest fleet telematics service providers in North America.
We remain cautious in the very near term as macro conditions in North America have resulted in softer than expected demand from key customers for MRM telematics products. We believe that as certain customers work off their inventory overhang, this part of our business should see a solid recovery. We expect the second half of the year to be stronger than the first half, with consolidated revenue reaching a $100 million quarterly run rate later in the year.
For the second quarter of fiscal 2017 ending August 31, 2016, we expect:
- Revenue in the range of $90 to $95 million, along with GAAP basis results of operations in the range of ($0.02)net loss to $0.02 net income per diluted share and non-GAAP net income in the range of $0.25 to $0.31 per diluted share.
- Adjusted EBITDA in the range of $12 to $16 million.
The above outlook includes approximately $6 million of revenue and a modest positive contribution to profitability from our Satellite segment. (Original Source)
Shares of Calamp closed today at $16.28, up $0.23 or 1.43%. CAMP has a 1-year high of $21.35 and a 1-year low of $13.59. The stock’s 50-day moving average is $14.66 and its 200-day moving average is $16.89.
On the ratings front, Calamp has been the subject of a number of recent research reports. In a report issued on May 3, Aegis Capital Corp. analyst Michael Rindos maintained a Buy rating on CAMP, with a price target of $20, which represents a potential upside of 44.2% from where the stock is currently trading. Separately, on April 20, Canaccord Genuity’s Michael Walkley maintained a Buy rating on the stock and has a price target of $25.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Rindos and Michael Walkley have a total average return of 20.2% and 12.3% respectively. Rindos has a success rate of 50.0% and is ranked #910 out of 3967 analysts, while Walkley has a success rate of 54.7% and is ranked #35.
The street is mostly Bullish on CAMP stock. Out of 4 analysts who cover the stock, 3 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $22.00, which represents a potential upside of 58.6% from where the stock is currently trading.
CalAmp Corp. develops and markets wireless communications solutions that deliver data, voice and video for critical networked communications and other applications. The company operates in two business segments: Wireless DataCom and Satellite. The Wireless DataCom segment offers solutions to address the markets for Machine-to-Machine or M2M, communications, Mobile Resource Management, or MRM, applications and other emerging applications that require anytime and everywhere connectivity. Its broad portfolio of wireless communications products includes asset tracking devices, targeted telematics platforms, fixed and mobile wireless gateways and full-featured, multi-mode wireless routers. The Satellite segment develops, manufactures and sells direct-broadcast satellite outdoor customer premise equipment and whole home video networking devices for digital and high definition satellite television services. Its satellite products are sold primarily to EchoStar, an affiliate of Dish Network, for incorporation into complete subscription satellite television system.