CalAmp Gears Up for Global Growth After a Solid Quarter

By Steve Symington Markets Fool.com

CalAmp Corp.(NASDAQ: CAMP) stock climbed modestly in Tuesday's after-hours trading, when the machine-to-machine communications company announced in-line fiscal fourth-quarter 2017 results. All told, the company is pleased with its performance, which notably included another quarter of solid growth for its core MRM telematics business.

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Let's have a closer look, then, at how CalAmp closed its fiscal year, as well as what investors can expect going forward.


Image source: CalAmp Corp..

CalAmp results: The raw numbers

Metric

Fiscal Q4 2017

Fiscal Q4 2016

Year-Over-Year Growth

Revenue

$86.1 million

$70.8 million

21.6%

GAAP net income (loss)

($3.5 million)

$5.5 million

N/A

GAAP earnings per share (diluted)

($0.10)

$0.15

N/A

Data source: CalAmp Corp.

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What happened with CalAmp this quarter?

  • On an adjusted basis -- which excludes items such as stock-based compensation, acquisition expenses, and a $6 million pre-tax charge (or $0.11 per diluted share) related to a recent negative patent-infringement ruling that CalAmp has promised to appeal -- net income was $9.9 million, or $0.28 per diluted share, down from $11.7 million, or $0.32 per share in the same year-ago period.
  • Quarterly adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 6.6% year over year, to $12.8 million.
  • By comparison, CalAmp's guidance provided last quarter called forrevenue of$84 million to $89 million, adjusted EBITDA of $11 million to $15 million, andadjusted net income per share of $0.25 to $0.31.
  • CalAmp completed its integration of recently acquired vehicle-recovery specialist LoJack.
  • Excluding last year's revenue from the satellite business -- which ceased operations last August -- revenue would have climbed 46%, including $27.8 million from LoJack.
  • Revenue from international customers in fiscal 2017 climbed 90% year over year, to $91 million, or just under 26% of total sales.
  • Recurring revenue last fiscal year increased 39%, to $59.4 million.
  • CalAmp repurchased roughly 200,000 shares during the quarter for $3.1 million.

What management had to say

CalAmp CEO Michael Burdiek stated:

As we close out fiscal 2017, we are pleased with the progress we have made on a number of financial and business objectives, which have helped set the stage for long-term growth and profitability. We completed the integration of LoJack, expanded our product and service offerings, and made significant progress with international expansion. In addition, we are pleased that fourth-quarter revenue from MRM telematics products grew for the second consecutive quarter, reaching the highest revenue level in over a year.

Looking forward

For the current fiscal first quarter of 2018, CalAmp expects revenue of $84 million to $90 million, adjusted EBITDA of $11 million to $14 million, GAAP net income per share of $0.01 to $0.09, and adjusted net income per share of $0.24 to $0.32. By comparison -- and though we don't typically pay attention to Wall Street's demands -- analysts' consensus estimates predicted fiscal Q1 revenue of $88.2 million, slightly above the midpoint of CalAmp's guidance range, and adjusted earnings of $0.28 per share.

In the end, there were no big surprises from CalAmp this quarter. And that's a good thing as this small-cap Internet of Things company continues to position itself to capitalize on its immense growth opportunities going forward. So while the market's muted reaction to these solid results wasn't as exciting as some might have hoped, I think patient, long-term investors should be more than happy with CalAmp today.

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