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Monday, May 20, 2024

CalAmp Ex-CEO, B. Riley Unit Seek Board Control

Two former executives at Irvine-based CalAmp Corp. (Nasdaq: CAMP) appear to be closely tracking the Irvine-based telematics firm.

CalAmp, which provides software and equipment enabling companies to track their vehicles, last week said the duo, in conjunction with a  big investment firm, have made an unsolicited bid to take control of the company’s board, though specifics of their plans haven’t been detailed.

Michael Burdiek, who was CalAmp chief executive for nine years, and Garo Sarkissian, a former senior vice president of corporate development at the company until 2019, along with 272 Capital Master Fund Ltd., which is backed by investment banking firm B. Riley Financial, have proposed six nominees for the board of directors, according to the company.

CalAmp rejected the proposal, saying the current board, which has eight members, has the “right mix of skills, experience and diversity to oversee and guide” the execution of the company’s long-term strategy.

CalAmp last week criticized the former executives for not talking to the company before it proposed the new slate.

It is “astonishing that neither 272 Capital Master Fund Ltd. nor Messrs. Burdiek or Sarkissian heretofore have attempted to engage with, meet with, share viewpoints with, or otherwise reach out to discuss the business prior to nominating a controlling slate of directors,” a CalAmp’s statement said.

The annual meeting date for CalAmp has not been announced.

CalAmp late last month said that board chairperson Amal Johnson has decided not to seek reelection as a director at the next shareholders meeting.

Positive Spin

Since its share price has fallen in half during the past year to around $5.85 apiece and a $211 million market cap as of last week, CalAmp may be vulnerable to a shake-up.

The week before Burdiek’s board move became public, CalAmp reported fiscal fourth-quarter sales dropped a little more than 16% to $68.4 million and its net loss almost tripled to $9.2 million.

Its fiscal 2022 sales declined 4.1% to $295.8 million as its net loss widen to $31.1 million.

CalAmp declined to provide a fiscal first-quarter forecast, saying “visibility into product shipments still remains uncertain due to the global supply shortages.”

Still, the company, which is looking to position itself more as an Internet of Things software firm, offering more cloud-based Software-as-a-Service products, put a positive spin on the results.

“The company’s transformation strategy is working and delivering results, as demonstrated by its strong quarterly performance reported on April 28th,” the company said in its statement.

“The company is stronger today and better positioned than it has ever been, with a realistic strategic path toward sustainable and long-term growth and profitability.”

2020 Departure

Burdiek, who holds a bachelor’s in electrical engineering from Kansas State University, as well as MBA and MSEE degrees from California State University, Fullerton, began his career as a design engineer with the Hughes Aircraft Company. He was the CEO of Telenetics Corp., a manufacturer of data communications products, from 2005 to 2006. He joined CalAmp in 2006 as executive 

vice president and rose through the ranks until becoming CEO and a director in 2011.

During his tenure, CalAmp sales climbed from $114.3 million in fiscal 2011 to $321.8 million in fiscal 2020.

In 2016, Burdiek, who was then a resident of Laguna Beach, moved the company from Oxnard to Irvine.

“For some time here really, the center of gravity has been in Orange County,” Burdiek told the Business Journal at that time.

Shares rose from about $3 when he began as CEO to as high as $32 in 2014 before eventually falling to around $10. The shares for the most part outperformed the Nasdaq composite index during his tenure.

However, during Burdiek’s last month as CEO, the height of the pandemic when all company stocks took a beating, the shares fell in half to around $4.50 on the day he left.

In 2019, Burdiek and Sarkissian were CalAmp’s two largest individual shareholders, with 931,965 and 327,281 shares respectively, or about 3.7% of the company, according to the company’s 2019 proxy statement.

CalAmp’s largest shareholder is Blackrock Inc., with 15%, followed by Aristotle Capital Boston LLC, with 8.1%, according to the company’s 2021 proxy.

Besides the two former executives, 272 Capital Master Fund, with about $270 million in assets, often invests in small caps; it was bought a year ago by B. Riley Financial, a Santa Monica-based investment firm. B. Riley knew the company well when Burdiek was CEO as he often appeared at its investment conferences. In 2013, B. Riley acted as a joint book-running manager to help 

CalAmp raise $39 million on Wall Street.

Retired or Fired? 

CalAmp said in March 2020 that Burdiek was retiring as president and CEO. However, the May 2 announcement disclosing his bid said the board “chose not to renew” Burdiek’s contract at that time.

Board member Jeff Gardner, former president and CEO of Brinks Home Security, now serves as CEO.

When asked for further comment, CalAmp sent the following statement to the Business Journal:

“It is our company policy not to comment on interactions with individual investors,” the company said last week. “That said, we felt it was important for our stockholders to have transparency on this matter. The press release issued this morning includes all the pertinent details. We have no further comments at this time.”

Neither Burdiek nor Sarkissian returned messages by press time; the proponents of the nominees hadn’t filed additional materials with the SEC as of late last week.

In the two trading sessions after the board challenge was announced, the company’s shares rose about 7%.

1M Subscribers

CalAmp has 1 million software and services subscribers and approximately 10 million products deployed worldwide, according to its website.

Last year, it sold the North American operations of one of its better-known products, the LoJack stolen vehicle recovery system, to fellow Irvine-based telematics firm Spireon in a $7.1 million deal (see story, this page). CalAmp retained the international operations of LoJack.

CEO Gardner is scheduled to take part in Oppenheimer’s 7th Annual Emerging Growth Conference on May 10, a virtually held event, CalAmp said. The appearance is bound to raise questions about Burdiek’s board move.

Burdiek and Sarkissian have been active elsewhere.

They served as execs for New York City-based Motion Acquisition Corp., a Special Purpose Acquisition Corp. (SPAC) that last November brought DocGo Inc., a provider of mobile health services and integrated medical mobility solutions, to the public markets via a reverse merger.

DocGo (Nasdaq: DCGO) was valued around $660 million as of last week; its shares are off by about a third from the SPAC’s $10 IPO price. 

Telematics Cluster

Orange County has become a hub for telematics firms that can tell companies where their vehicles are at any given time. Alongside CalAmp Corp., other notable firms are:

• Verizon Connect—formerly Telogis—in Aliso Viejo says its “GPS fleet tracking solution can help you uncover hidden costs while revealing potential for greater productivity and efficiency.”

• Advantage GPS of Irvine provides GPS technology and data mining innovations that empower dealers also operating as lenders and vehicle finance companies to make better business decisions.

• GPS fleet tracking firm Teletrac Navman in Irvine has integrated artificial intelligence into the Irvine firm’s software that manages logistics and operations for transportation players.

• Vehicle tracking company Irvine-based Spireon Inc. acquired the LoJack U.S. stolen vehicle recovery business from CalAmp last year for $7.1 million

• SkyLab Solutions in Long Beach, and with a large fulfillment center in the Irvine Spectrum, provides GPS tracking services.

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Kevin Costelloe
Kevin Costelloe
Tech reporter at Orange County Business Journal

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