CalAmp (CAMP 22.34, +1.22 +5.78%) is on better than two-year gains this afternoon after reported solid Q2 earnings and guiding Q3 in-line.
Both earnings and revenues beat market expectations in Q2, as CAMP registered non-GAAP earnings of $0.27 per share and revenues of $89.8 million, respectively.
Breaking it down a bit, the company’s MRM Telematics product revenues were up 29% in Q2 to $38.1 million with management calling out the sector as a key growth driver for the Telematics Systems segment. Caterpillar revenues grew 7.4% sequentially to more than $10.5 million, a new quarterly record and the company began shipments to a new global heavy equipment OEM, which is expected to contribute revenue of about $2 million in the second half of the current fiscal year.
Additionally, the company received $15 million of net proceeds in June 2017 from a legal settlement with a former LoJack supplier, contributing to strong operating cash flow of $36 million for the first six months of the year. They expect to receive about $31 million of additional net proceeds during the next four quarters thereby further contributing to the company’s strong free cash flows.
Further, management noted the company was awarded the largest SaaS contract in its history with a global freight transport company to track mobile assets across North America. This program will roll out over the next few quarters and is expected to contribute 10% incremental growth in SaaS recurring revenue.
As mentioned, guidance was in-line; for Q3, CAMP sees EPS of $0.27-0.33 with revenues between $89-94 million.
Trading was already healthy into the print, as the stock was posting gains of about 13% in the month of September. On today’s action, shares break out of the December 2015 highs near $21.34 and knock on the door of the highs from back in July of 2014. Looking back at the chart, the post-20078 crash run the stock enjoyed saw shares go from lows well under a dollar to all-time highs of $35/share in early 2014. Looking at the chart again, the stock appears to be in the early innings of a potential equally impressive run.