CalAmp Corp. (CAMP) Earnings Call Transcript: 2015 Q3 Results

Michael Burdiek, President and CEO, CalAmp

Thank you, Lasse. We saw strong sequential growth in both revenue and earnings in our fiscal third quarter with consolidated gross margin expansion driven by strength in our Wireless DataCom segment.

Specialized telematics device shipments to a key OEM customer in the heavy equipment industry boosted our third quarter results and are expected to be a significant growth catalyst for CalAmp over the next several quarters.

In addition, important wins for fleet management SaaS solutions as well as robust demand for fleet management and asset tracking products are expected to drive near-term growth. In our satellite segment, revenues were in line with expectations with meaningful contribution to our bottom line profitability and operating cash flow.

Looking at our third quarter results in more detail, consolidated revenue was $63.2 million with Wireless DataCom revenue up 10% to $54.6 million which represents a single quarter record for that segment while satellite revenue in the quarter was $8.6 million; down 37% year-over-year.

At the bottom-line, we achieved GAAP-basis earnings of $0.11 per diluted share in the third quarter with non-GAAP earnings of $0.25 per diluted share. Strong operating cash flow of $5.1 million helped push our cash, cash equivalents and marketable securities balance upto $40 million at quarter end with zero bank debt.

Now, I would like to review our operational highlights for the third quarter.

Our Wireless DataCom segment posted another record quarter as we continue to gain traction from some of our newer strategic initiatives along with healthy customer demand for our core products and services.

In our transportation vertical, the third quarter highlight was the commencement of volume production shipments of our telematics products to Caterpillar for both our OEM factory install and dealer retrofit programs. Overall product demand from Caterpillar has exceeded our earlier expectations with revenues in excess of $5 million in the third quarter.

The revenue ramp of this customer is expected to continue into the fourth quarter and into fiscal 2016. We remain optimistic with this and other opportunities within the heavy equipment industry could become significant growth drivers for CalAmp Corp. (NASDAQ:CAMP) over the coming quarters and years.

In the energy vertical, we saw robust activity from both domestic and international customers along with sustained demand from our solar power OEM customer. Based on our current backlog, we anticipate strong demand from this customer continuing into our next fiscal year.