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Thursday, Feb 29, 2024

CalAmp Looks to Get Back on Track

CalAmp Corp. in Irvine is counting on new CEO Chris Adams to pull the Irvine-based vehicle-tracking firm out of a long slump.

The job won’t be easy.

The company (Nasdaq: CAMP) earlier this month reported a 32% drop in quarterly revenue on an annual basis and a large net loss for the period, as a key segment of its business sagged.

Still, Adams, a tech veteran who came to CalAmp from a top executive slot at $31 billion-valued semiconductor supplier Onsemi (Nasdaq: ON) of Scottsdale, Ariz., is upbeat about his chances.

“The organization has all the ingredients necessary to drive profitable growth and to solidify its leadership position in telematics solutions,” Adams said in the Jan. 8 announcement of his selection.

Adams, who was most recently the general manager of the Automotive Sensing Division at Onsemi, takes over as president and CEO at CalAmp on Jan. 22, succeeding Jeff Gardner, who died in August. Jason Cohenour, a company director, had been serving as interim president and CEO since Gardner’s unexpected passing.

Tracking Platform

CalAmp’s telematics technology lets owners monitor trucks and their drivers, as well as commercial vehicles, school buses and other vehicles. The technology sends, receives, and stores information using telecommunication devices, such as GPS and cellular networks, in vehicles.

The end result of using the company’s cloud-based “fleet management software solutions” is more effective and profitable deliveries, according to the firm.

“CalAmp’s telematics solutions are used by thousands of the world’s leading organizations including Amazon, AT&T, BMW, and Toyota to reduce costs, increase revenue, optimize operations, and improve safety,” the Irvine-based company says on its website.

The company’s products include cargo monitoring, fleet dash cams, and asset trackers. It counts over 8.5 million devices that are currently connected to its new device management system, it reported this month.

Price Drop

The company’s share price is worrisome.

CalAmp shares were trading at $13 apiece with a market cap of $400 million almost five years ago. A decade ago, its valuation topped $1 billion, and in 2016, when it moved its base from Oxnard to Irvine, it was among Orange County’s more valuable public companies in the tech sector.

The stock had fallen dramatically to 21 cents each and an intraday market cap of $8 million as of Jan. 12.

In the fiscal third quarter ended Nov. 30, revenue was $53.6 million, down 32% on an annual basis, due to a “softer demand” among its telematics service provider customers. That revenue number is expected to drop “slightly” in the current quarter.

In 2018, the company’s revenue topped $94 million for one quarter, a record at the time.
CalAmp also listed “total debt (carrying value)” at $228 million in the latest quarterly report.

Cohenour told analysts after the release that the company’s leadership thinks a recovery is underway.

“Being realistic, I think that recovery is going to be slow,’’ he added.

The quarterly net loss from continuing operations was $85 million versus a $4.7 million loss in the same period of the prior year.

CalAmp late last year announced the closing of a $45 million term loan with Lynrock Lake Master Fund LP to provide the company with additional financial capacity in support of its business transformation.

Lynrock “is a longtime supporter of CalAmp and is an existing holder of a large majority of CalAmp’s 2% convertible senior notes, maturing in August of 2025,” Cohenour told analysts.

“In addition to having a great team, the company also has other tremendous assets, including excellent products and solutions, a blue-chip customer base, and a large and growing market opportunity,” he said of CalAmp.

Telematics Hub

In addition to CalAmp Corp., Orange County has become a hub of telematics companies. They include for example:
• Phillips Industries of Irvine provides telematics services as it uses technology to make trailer-truck hauling smoother, along with other trucking products.
• Verizon Connect—formerly Telogis—with offices in Irvine says “our GPS fleet tracking solution can help you uncover hidden costs while revealing potential for greater productivity and efficiency.”
• Vehicle tracking company Irvine-based Spireon Inc. acquired the LoJack U.S. stolen vehicle recovery business from CalAmp for $7.1 million in 2021. CalAmp paid a reported $131.7 million for LoJack Corp. in 2016.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.

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