CalAmp Corp. (NASDAQ:CAMP) reported results for its fiscal 2017 third quarter ended November 30, 2016.

Revenue for the third quarter of fiscal 2017 was $83.4 million, an increase of 12% from the third quarter of fiscal 2016. The latest quarter included revenue of $29.9 million from LoJack products and services that was slightly lower than expected, as anticipated orders from two large international licensees were received late in the quarter and could not be fulfilled until early in the fourth quarter.

Michael Burdiek, CalAmp’s President and Chief Executive Officer, said, “In the latest quarter Mobile Resource Management (MRM) telematics product sales reached the highest level of the last four quarters.  We are optimistic about our near-term growth as visibility has improved markedly from earlier in the year when macro factors negatively impacted demand for fleet telematics products in the U.S.  As we look ahead, we see a number of catalysts on the horizon to drive near and long-term growth for our novel portfolio of connected vehicle telematics solutions.”

Gross profit for the third quarter of fiscal 2017 was $35.1 million, an increase of $8.5 million over the same quarter last year. Gross margin was 42% in the fiscal 2017 third quarter, up from 36% in the third quarter of fiscal 2016.

The GAAP-basis net loss in the third quarter of fiscal 2017 was ($1.5) million, or ($0.04) per diluted share, compared to net income of $3.9 million, or $0.11 per diluted share, in the fiscal 2016 third quarter.  Non-GAAP adjusted basis net income for the fiscal 2017 third quarter was $7.6 million, or $0.21 per diluted share, compared to non-GAAP adjusted net income of $11.4 million, or $0.31 per diluted share, in the third quarter of fiscal 2016.  The third quarter earnings were impacted by higher legal expense of approximately $1.6 million over the comparable period last year and foreign currency exchange rate losses of $0.6 million.

Adjusted EBITDA for the third quarter of fiscal 2017 was $10.0 million and Adjusted EBITDA margin was 11.9%.

As of November 30, 2016, the company had total cash and marketable securities of $101 million and total debt outstanding of $145 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 $0.5 million during the third quarter of fiscal 2017.

During the third quarter, the company purchased and retired approximately 975,000 shares of its common stock at an aggregate cost of $13.5 million pursuant to a stock repurchase plan adopted in June 2016.  As of November 30, 2016, the remaining authorization for additional share purchases under this plan is $3.1 million.

Recent Business and Financial Highlights

  • Revenue from international customers reached a record of 28.5% of consolidated quarterly revenues.
  • MRM telematics product sales reached the highest level of the past four quarters with fleet and connected car device revenue at record levels.
  • SaaS revenue grew 6% sequentially, driven by solid fleet subscriber growth and outstanding performance from LoJack Italy.
  • The company announced today that its Executive Vice President, Chief Financial Officer and Corporate Secretary, Rick Vitelle, plans to retire from the company after sixteen years of service. Mr. Vitelle will remain with the company until his successor is recruited and fully on‑boarded, to ensure an orderly and seamless transition.

Business Outlook
The outlook for the fourth quarter ending February 28, 2017 is:

  • Consolidated revenue in the range of $84 to $89 million.
  • GAAP basis net income in the range of $.05 to $0.09 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 $11 to $15 million. (Original Source)

Shares of CalAmp are currently falling 4.64% to $15.00, or down $0.73 in after-market trading Wednesday. CAMP has a 1-year high of $21.35 and a 1-year low of $12.13. The stock’s 50-day moving average is $14.70 and its 200-day moving average is $14.60.

On the ratings front, CalAmp  has been the subject of a number of recent research reports. In a report issued on October 31, Macquarie analyst Andrew Degasperi initiated coverage with a Hold rating on CAMP and a price target of $14, which implies a downside of 10% from current levels. Separately, on September 30, First Analysis’ Howard Smith downgraded the stock to Hold and has a price target of $16.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Andrew Degasperi and Howard Smith have a yearly average loss of -2.7% and a return of 22.1% respectively. Degasperi has a success rate of 40% and is ranked #3123 out of 4291 analysts, while Smith has a success rate of 63% and is ranked #1069.

Overall, 2 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $20.50 which is 31.9% above where the stock opened today.

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 systems.