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Transcription:

Investor Presentation Presented by: Kurtis Binder EVP & Chief Financial Officer Garo Sarkissian SVP Corporate Development August 9, 2018

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 1995. Forward-looking statements are neither historical facts nor assurances of future performance. 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, including, without limitation, the long-term growth of our revenue and gross margin. The words may, will, expect, plan, anticipate, could, intend, target, project, estimate, believe, predict, potential or continue or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. 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 in 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

FY13 FY14 FY15 FY16 FY17 FY18 Q1 FY19 Company Overview CalAmp is a Telematics Pioneer Leading Transformation in a Global Connected Economy Revenues ($M) Nasdaq: CAMP Irvine, CA headquarters $351 $366 $366M revenue in FY18 (15% 5-year CAGR) $236 $251 $281 36% SaaS revenue growth 5-year CAGR $181 $95 International revenue growth: 10% Y/Y to $100M in FY18 ~835 Employees 2

CalAmp Evolution A Company Well-positioned for Long-term Growth and Profitability Long-Term Target Model +10% Y/Y Revenue Growth Gross Margin ~50% FY10 $112M Revenue Gross Margin 20% FY14 $236M Revenue Gross Margin 34% Global telematics products & services FY18 $366M Revenue Gross Margin 41% Connected asset ecosystem solutions Global data & SaaS solutions Multi-vertical IoT hardware & DBS 2010 2011 2012 2013 2014 2015 2016 2017 2018 3

Recent Convertible Debt Offering Issuer CalAmp Corp. (NASDAQ: CAMP) Security Convertible Senior Notes due 2025 Size Use of Proceeds Maturity $230mm Share Repurchase, Purchase Capped Call, General Corporate Purposes including repurchases of outstanding convertible notes August 1, 2025 (7 years) Coupon 2.00% Conversion Premium 30.0% Capped Call Feature Conversion Settlement Offering Format 75.0% over stock price Flexible Settlement with Stated Intent to Net-Share Settle 144A Pricing Date July 17, 2018 (after market close with stock price of $23.65) Closing Date July 20, 2018 4

Telematics Systems Software & Subscription Services CalAmp s Technology Unifies the Connected Economy AssetOutlook FleetOutlook SureDrive LotSmart Transportation PULS PEG Industrial Consumer 5

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 services $5B Fleet Management products and services *Source: James Brehm & Associates; C.J. Driscoll & Associates; and Berg Insight 6

Large and Growing Market Opportunities Targeting $5B+ Global Fleet Management TAM $15B $10B $5B Fleet Management products and services CrashBoxx + Telematics Devices CTC + Telematics Devices FleetOutlook: Full Bundle 7

Large and Growing Market Opportunities Targeting $10B+ Global Enterprise Asset Tracking TAM Enterprise Asset Tracking products and services $15B $10B Full Bundle Solutions AssetOutlook SC ion Command + 24/7 Command Center CTC + Sensor Tags & Telematics Devices $5B Over the top service: Sensor Tags & Telematics Devices Fleet Management products and services CrashBoxx + Telematics Devices CTC + Telematics Devices FleetOutlook: Full Bundle 8

Large and Growing Market Opportunities Targeting $15B+ Global Vehicle Ecosystem TAM Ecosystem opportunities around vehicle lifecycle Enterprise Asset Tracking products and service TransUnion Data Monetization $15B $10B $15B $10B Full Bundle Solutions AssetOutlook SC ion Command + 24/7 Command Center CrashBoxx + Telematics Devices CTC + Sensor Tags & Telematics Devices CrashBoxx SureDrive AssetOutlook FleetOutlook LenderOutlook $5B $5B Over the top service: Sensor Tags & Telematics Devices Fleet Management products and services CrashBoxx + Telematics Devices CTC + Telematics Devices FleetOutlook: Full Bundle 9

Representative Customer Base 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. 10

Strong International Expansion CalAmp Presence and International Growth Opportunities in Key Markets Investments for Growth U.S. & Canada EMEA Salesforce Realignment Geo-specific Investment Latin America APAC Driving Strong Results $100M 25% Revenue Company HQ FY2018 revenue 5-year CAGR 11

Case Study Challenge A major insurance company was seeking to improve the manual processes of managing accident reporting by drivers and vehicle damage for almost 1,000 company taxis. Since drivers are liable for damages, the incidence rate of false reports filed was very high Solution LMU-3050 telematics devices were installed on the taxis for a controlled pilot. The accident data was transmitted to two accident management systems, CalAmp s CrashBoxx and an alternate solution Results 1,000 connected taxis CrashBoxx detected all crash incidents within 90 seconds of impact. In comparison, the alternate system registered less than half of the crashes CrashBoxx identified 6 accidents that were not called in to dispatch Our solution provided more location aware data than the driver could iterate

Case Study Challenge A major logistics company was struggling to find and provide status updates for each one of their trailers to optimize integration for their delivery service. It required significant amounts of staff to scour depots nationwide to continuously capture utilization data Solution CalAmp s asset telematics solution was selected to help streamline the management of thousands of trailers, providing location and other data to the CalAmp Telematics Could for reporting and notification alerts. CalAmp s TTU-2840s were installed on the trailers in a weekly rotation, with approximately 56k connected trailers currently deployed Results The company has benefited from real-time information, while reducing manual labor. They are now better able to schedule the trailers based on location and reduce idle time. The data helps them right-size their fleet and optimize utilization

CalAmp Global Growth Drivers Uniquely Positioned to Drive Adoption of Telematics for Emerging Applications Drive SaaS Applications Across Vertical Markets Monetization of Installed base of Telematics Devices Continued International Expansion 14

Financial Slides

Financial Highlights 1 Strong Topline Growth 2 Significant Software & Subscription Momentum 3 Expanding Gross Margins 4 Strong Free Cash Flow Generation 5 Well-Capitalized Balance Sheet 16

FY13 FY14 FY15 FY16 FY17 FY18 Q1 FY19 FY13 FY14 FY15 FY16 FY17 FY18 Q1 FY19 FY13 FY14 FY15 FY16 FY17 FY18 Q1 FY19 Strong Top Line Growth and Profitability Solid Track Record of Long-Term Revenue Growth and Margin Expansion Revenue Gross Margin Adjusted EBITDA $236 $251 $281 $351 $366 32% 34% 35% 37% 41% 41% 40% $29 $38 $49 $49 $52 $181 $22 $95 $12 Revenues ($M) Gross Margin % Adjusted EBITDA ($M) Note: Fiscal year ended 2/28. See Appendix for reconciliation of GAAP to Non-GAAP figures. 17

Growing Global Software and Subscription Base Driving Long-Term Predictable Revenues Software & Subscription Services Units 463 494 482 628 730 776 FY14 FY15 FY16 FY17 FY18 Q1 FY19 in thousands Application Subscriptions & Other Services Revenue $40 $41 $43 $59 $64 $18 FY14 FY15 FY16 FY17 FY18 Q1 FY19 $ in millions 18

FY13 FY14 FY15 FY16 FY17 FY18 Q1 FY19 FY13 FY14 FY15 FY16 FY17 FY18 Q1 FY19 FY13 FY14 FY15 FY16 FY17 FY18 Q1 FY19 Strong Free Cash Flow (FCF) Generation High Free-Cash-Flow Conversion Due to Limited CapEx Requirements Adj. Basis Net Income Free Cash Flow FCF as a % of Adj. Basis Net Income $59 275% $35 $42 $39 $42 $43 $28 $29 139% $20 $10 $15 $21 $21 $18 72% 75% 60% 102% 46% Adj. Basis Net Income Free Cash Flow FCF as a % of Adj. Basis Net Income Note: Fiscal year ended 2/28. Free cash flow calculated as: net cash flow from operating activities less capital expenditures. See Appendix for reconciliation of GAAP to Non-GAAP figures 19

(In Millions) CalAmp Cash Sources and Uses Prudent Positive Cash Flow Management $152 $148 $(121) $(31) $(13) $179 $44 Cash & Marketable Securities (Febraury 28, 2015) Free Cash Flow May 2015 Convertible Note LoJack Acquisition Share Repurchases Others Cash & Marketable Securities (May 31, 2018) 20

CalAmp Corp. (Nasdaq: CAMP) 15635 Alton Parkway, Suite 250 Irvine, CA 92618 (949) 600-5600 www.calamp.com For more information contact: Nicole Noutsios NMN Advisors (510) 315-1003 Nicole@nmnadvisors.com

Appendix: Non-GAAP Reconciliations (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), as a substitute for results prepared in accordance with GAAP. 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. AdjustedBasis NetIncomeandNetIncomeperDilutedShare The reconciliation of GAAP basis net income (loss) to Adjusted basis (non-gaap) net income is as follows (in thousands except per share amounts): Year Ended February 28, 2013 2014 2015 2016 2017 2018 GAAP basis net income (loss) $ 44,626 $ 11,803 $ 16,508 $ 16,940 $(7,904) $ 16,617 Intangible assets amortization expense 1,743 6,283 6,590 6,626 15,061 14,989 Stock-based compensation expense 2,910 2,924 4,100 5,854 7,833 9,298 Non-cash interest expense from amortization of debt discount - - - 4,613 6,232 6,627 GAAP basis income tax provision (benefit) (29,178) 6,108 8,292 4,572 (1,563) 10,681 Equity in net loss of affiliate - - - 829 1,284 1,411 Acquisition and integration expenses 305 661-1,980 4,513 - Litigation provision - - - 2,900 7,244 7,415 Unrealized gain on investment in LoJack common stock - - - (1,416) - - Non-cash cost of sales on mark-up of LoJack inventory - - - - 4,339 29 Depreciation and write-off on mark-up of LoJack fixed assets - - - - 734 979 Legal expense for LoJack battery performance issue - - - - 1,948 3,323 Gain on legal settlement - - - - - (28,333) Adjusted basis income before income taxes 20,406 27,779 35,490 42,898 39,721 43,036 Income tax provision (non-gaap basis) (a) (54) (87) (328) (499) (1,164) (875) Adjusted basis net income $ 20,352 $ 27,692 $ 35,162 $ 42,399 $ 38,557 $ 42,161 Adjusted basis net income per diluted share $ 0.68 $ 0.77 $ 0.96 $ 1.15 $ 1.06 $ 1.17 Weighted average common shares outstanding on diluted basis 29,982 36,023 36,530 36,950 36,397 36,139 (a) 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 credit carryforwards. 22

Appendix: Non-GAAP Reconciliations (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): Year Ended February 28, 2013 2014 2015 2016 2017 2018 GAAP basis net income (loss) $ 44,626 $ 11,803 $ 16,508 $ 16,940 $(7,904) $ 16,617 Investment income (28) (42) (224) (1,871) (1,691) (2,256) Interest expense 515 407 296 7,595 9,896 10,280 GAAP basis income tax provision (benefit) (29,178) 6,108 8,292 4,572 (1,563) 10,681 Depreciation expense 1,021 1,822 2,796 3,582 8,408 7,968 Intangible assets amortization expense 1,743 6,283 6,590 6,626 15,061 14,989 Stock-based compensation expense 2,910 2,924 4,100 5,854 7,833 9,298 Equity in net loss of affiliate 0 0 0 829 1,284 1,411 Acquisition and integration expenses 305 0 0 1,980 4,513 0 Litigation provision 0 0 0 2,900 7,244 7,415 Non-cash cost of sales on markup of LoJack inventory 0 0 0 0 4,339 335 Legal arbitration expenses for LoJack battery claim 0 0 0 0 1,948 3,323 Deferred compensation expense 0 0 0 0 0 0 Gain on legal settlement 0 0 0 0 0 (28,333) Other 0 0 0 0 0 654 Adjusted EBITDA $ 21,914 $ 29,305 $ 38,358 $ 49,007 $ 49,368 $ 52,382 Revenue $ 180,579 $ 235,903 $ 250,606 $ 280,719 $ 351,102 $ 365,912 Adjusted EBITDA margin 12.1% 12.4% 15.3% 17.5% 14.1% 14.3% Free Cash Flow Free Cash Flow is calculated as follows (dollars in thousands): Year Ended February 28, 2013 2014 2015 2016 2017 2018 Net cash provided by operating activities $ 16,597 $ 22,816 $ 28,645 $ 47,400 $ 25,796 $ 66,894 Less capital expenditures (1,852) (2,133) (7,437) (4,317) (7,962) (8,339) Free Cash Flow $ 14,745 $ 20,683 $ 21,208 $ 43,083 $ 17,834 $ 58,555 23

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