Investor Presentation

Transcription

1 Investor Presentation Presented by: Michael Burdiek Chief Executive Officer & President Kurtis Binder EVP & Chief Financial Officer November 8, 2017

2 Forward Looking Statements This presentation may contain forward-looking statements and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of These forward-looking statements include, but are not limited to, future strategic plans and other statements that describe our business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future operating or financial performance. Factors that could affect the outcome of forward-looking statements are uncertain and to some extent unpredictable, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in such forward-looking statements. Any forward-looking statement is based on current plans and expectations of our management, expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that anticipated results will be achieved. More information on factors that could cause actual results to differ materially from those anticipated is included in the Risk Factors section of our most recent Annual Report on Form 10-K, and other documents filed from time to time with the Securities and Exchange Commission. The forward-looking statements included in this presentation speak only as of the date hereof, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 1

3 Company Overview CalAmp is a telematics pioneer leading transformation in a global connected economy $351M revenue in FY17 20% 5-year CAGR Nasdaq CAMP Irvine, CA headquarters ~850 Employees 29% SaaS revenue growth 5-year CAGR International Revenue growth 90% Y/Y to $91M in FY17 Q Q Revenue* 7.1% Y/Y *Excluding revenue from Satellite segment, which ceased operations effective August 31, 2016 Gross Margin 41.0% Adjusted EBITDA Margin 13.7% 2

4 CalAmp Evolution A company well-positioned for long-term growth and profitability FY10 $112M Revenue Gross Margin 20% FY14 $236M Revenue Gross Margin 34% FY17 $351M Revenue Gross Margin 41% Connected asset ecosystem solutions Long-Term Model +10% Y/Y Revenue Growth Gross Margin ~50% Global data & SaaS solutions Global telematics products & services Multi-vertical IoT hardware & DBS 3

5 Customer Base: The CalAmp Connected World CalAmp technology - a hub for business critical data and decisions Telematics Systems Software & Subscription Services *CalAmp supplies its products, services, and solutions to these representative customers. The trademarks and trade names mentioned are the property of their respective owners. 4

6 CalAmp Global Growth Drivers A company uniquely positioned to drive adoption of telematics for emerging applications Drive SaaS Applications Across Vertical Markets Innovation in Emerging Connected Vehicle Opportunities Expanded Presence in Industrial IoT Continued International Expansion 5

7 Large and Growing Market Opportunities Targeting $30B+ global Industrial IoT and Connected Vehicle TAM Ecosystem opportunities around vehicle lifecycle $15B $10B Enterprise Asset Tracking products and service $5B Fleet Management products and services 6

8 Leveraging Customer Base to provide SaaS Applications Core technology platform provides foundation for data monetization and growing subscriber base SaaS Applications Data Monetization 650,000+ subscribers CalAmp Telematics Cloud Micro Services 7M+ connected to our DM platform Global Telematics Products leader 20M installed 7

9 Core SaaS Applications Across Vertical Markets CalAmp Telematics Suite and Automotive IoT solutions enable connected asset management For Construction For Government Fleets For ELD Mandate For Service Fleets For Supply Chain For Vehicle Finance 8

10 LoJack Provides Gateway to Connected Car Solutions Leveraging LoJack s brand and channels to deliver leading telematics products and solutions Strong Brand Equity Well known and established consumer brand US Dealer Relationships 4,000+ active dealers in the US Global Licensees 30 countries across Europe, Africa, North & South America Law Enforcement Unique partnerships with law enforcement Powerful Pre-Install Model Positioned at point of sale to provision turnkey offerings 9

11 Strong International Expansion CalAmp presence and international growth opportunities in key markets U.S. & Canada EMEA Latin America APAC Revenue Company HQ $91M 174 ~7,000 27% FY17 International revenue Global Salesforce Customers International revenue growth 3-year CAGR 10

12 Financial Slides

13 Strengthening Our Financial Profile Company has foundation and well-defined pillars to deliver profitable growth Data Monetization Global Expansion LoJack Beyond Software Solutions Core Telematics Systems 12

14 Strong Top Line Growth and Profitability Solid track record of long-term revenue growth and margin expansion Revenue Gross Margin Adjusted EBITDA $181 20% CAGR $236 $251 $281 $ $88 $90 32% 34% 35% 37% 41% % 41% $22 32% CAGR $30 $38 $49 $ $13 $12 FY13 FY14 FY15 FY16 FY17 Revenues ($M) Q1 FY18 Q2 FY18 FY13 FY14 FY15 FY16 FY17 Q1 FY18 Gross Margin % Q2 FY18 FY13 FY14 FY15 FY16 FY17 Adjusted EBITDA Q1 FY18 Q2 FY18 Note: Fiscal year ended 2/28 13

15 Growing Global Software and Subscription Base Driving long-term predictable revenues Software & Subscription Services Units Application Subscriptions & Other Services Revenue FY13* CY13 FY14 CY14 FY15 CY15 FY16 CY16 Q1 FY17 CY17 $43 $59 $18 $40 $41 CY13 FY13 FY14 CY14 CY15 FY15 FY16 CY16 Q1 FY17 CY17 in thousands $ in millions *Q1 FY14 data 14

16 Strong Adjusted EBITDA Growth High EBITDA to free-cash-flow conversion due to limited CapEx requirements $49 $49 $30 $28 $38 $35 $42 $39 $22 $20 FY13 FY14 FY15 FY16 FY17 Note: Fiscal year ended 2/28 Adjusted EBITDA Non-GAAP Net Income (in Millions) 15

17 CalAmp Corp. (Nasdaq: CAMP) Alton Parkway, Suite 250 Irvine, CA (949) For more information contact: Nicole Noutsios NMN Advisors (510)

18 Non-GAAP Reconciliations Exhibit 1 (page 1 of 2) (Unaudited; amounts in thousands except per share amounts) CalAmp Corp. Reconciliation of Non-GAAP Measures to GAAP (Unaudited) "GAAP" refers to financial information presented in accordance with U.S. Generally Accepted Accounting Principles. This presentation includes historical non-gaap financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission. CalAmp believes that its presentation of historical non-gaap financial measures provides useful supplementary information to investors. The presentation of historical non-gaap financial measures is not meant to be considered in isolation from or as a substitute for results prepared in accordance with GAAP. In this presentation, CalAmp uses the non-gaap financial measures of Adjusted basis net income, Adjusted basis net income per diluted share, Adjusted EBITDA (Earnings Before Investment Income, Interest Expense, Taxes, Depreciation, Amortization, Stock-Based Compensation, gain on legal settlement and other adjustments as identified below), Adjusted EBITDA margin and Free Cash Flow. CalAmp uses these non-gaap financial measures to enhance the investor's overall understanding of the financial performance and future prospects of CalAmp's core business activities. Specifically, CalAmp believes that the use of these non-gaap measures facilitates the comparison of results of core business operations between its current and past periods. Adjusted Basis Net Income and Net Income per Diluted Share The reconciliation of GAAP basis net income (loss) to Adjusted basis (non-gaap) net income is as follows (in thousands except per share amounts): GAAP basis net income (loss) $ 44,626 $ 11,803 $ 16,508 $ 16,940 $ (7,904) $ 12,232 $ 9,579 Intangible assets amortization expense 1,743 6,283 6,590 6,626 15,061 3,710 7,568 Stock-based compensation expense 2,910 2,924 4,100 5,854 7,833 2,227 4,044 Non-cash interest expense from amortization of debt discount ,613 6,232 1,653 3,263 GAAP basis income tax provision (benefit) (29,178) 6,108 8,292 4,572 (1,563) 3,699 2,619 Equity in net loss of affiliate , Acquisition and integration expenses ,980 4, Litigation provision ,900 7, ,486 Unrealized gain on investment in LoJack common stock (1,416) Non-cash cost of sales and depreciation on markup of LoJack inventory and fixed assets , Legal expense for LoJack battery performance issue , Gain on legal settlement (15,032) (15,032) Adjusted basis income before income taxes 20,406 27,779 35,490 42,898 39,721 9,875 20,522 Income tax provision (non-gaap basis) (a) (54) (87) (328) (499) (1,164) (300) (550) Adjusted basis net income $ 20,352 $ 27,692 $ 35,162 $ 42,399 $ 38,557 $ 9,575 $ 19,972 Adjusted basis net income per diluted share $ 0.68 $ 0.77 $ 0.96 $ 1.15 $ 1.06 $ 0.27 $ 0.56 Weighted average common shares outstanding on diluted basis 29,982 36,023 36,530 36,950 36,397 36,021 35,973 (a) Year Ended February 28, The non-gaap income tax provision represents cash taxes paid or payable for the period after giving effect to the utilization of net operating loss and tax credit carryforwards. Three Months Ended August 31, 2017 Six Months Ended August 31,

19 Non-GAAP Reconciliations Exhibit 1 (page 2 of 2) (Unaudited; amounts in thousands except per share amounts) Adjusted EBITDA and Adjusted EBITDA Margin The reconciliation of GAAP basis net income (loss) to Adjusted EBITDA, and the calculation of Adjusted EBITDA margin, are as follows (dollars in thousands): Six Months Ended August 31, 2017 GAAP basis net income (loss) $ 44,626 $ 11,803 $ 16,508 $ 16,940 $ (7,151) $ 12,232 9,579 Investment income (28) (42) (224) (1,871) (1,691) (396) (729) Interest expense ,595 9,896 2,567 5,085 GAAP basis income tax provision (benefit) (29,178) 6,108 8,292 4,572 (1,098) 3,699 2,619 Depreciation expense 1,021 1,822 2,796 3,582 8,408 1,958 3,983 Intangible assets amortization expense 1,743 6,283 6,590 6,626 15,061 3,710 7,568 Stock-based compensation expense 2,910 2,924 4,100 5,854 7,833 2,227 4,044 Equity in net loss of affiliate , Acquisition and integration expenses ,980 4, Litigation provision ,900 6, ,486 Non-cash cost of sales on markup of LoJack inventory , Legal arbitration expenses for LoJack battery claim , Deferred compensation expense Gain on legal settlement (15,032) (15,032) Adjusted EBITDA $ 21,914 $ 29,305 $ 38,358 $ 49,007 $ 49,368 $ 12,301 25,482 Revenue $ 180,579 $ 235,903 $ 250,606 $ 280,719 $ 351,102 $ 89, ,848 Adjusted EBITDA margin 12.1% 12.4% 15.3% 17.5% 14.1% 13.7% 14.3% Free Cash Flow Free Cash Flow is calculated as follows (dollars in thousands): Year Ended February 28, Three Months Ended August 31, 2017 Year Ended February 28, Three Months Ended August 31, 2017 Six Months Ended August 31, 2017 Net cash provided by operating activities $ 16,597 $ 22,816 $ 28,645 $ 47,400 $ 25,796 $ 25,100 36,009 Less capital expenditures (1,852) (2,133) (7,437) (4,317) (7,962) (1,634) (3,713) Free Cash Flow $ 14,745 $ 20,683 $ 21,208 $ 43,083 $ 17,834 $ 23,466 32,296 18

20 Thank You