CalAmp Corp. (CAMP) Earnings Call Transcript: 2015 Q3 Results

Mike Latimore,Northland Capital Markets

Yes, okay.

Michael Burdiek

All of that said, our international business is a lot lumpier than sort of the steady demand we experience domestically.

Mike Latimore,Northland Capital Markets

Right.

Michael Burdiek

But we think that the market is growing at least as it relates to our serviceable market, 15% to 20% on a global basis. A little less so here in the States and certainly probably towards the upper end of that range outside the US.

Mike Latimore,Northland Capital Markets

Got it. And then you mentioned I think a few more fleet management SaaS opportunities. I mean can you talk a little bit about just that pipeline, maybe annual contract values reflected in that pipeline, some more detail on kind of what you are seeing on the fleet management SaaS opportunity?

Michael Burdiek,

Well, we noted two key enterprise customer wins in our prepared remarks. If you take sort of roughly 5000 incremental subscribers at the typical fleet management monthly recurring revenue rates, those are in excess of $1 million of annual contract value combined.

Mike Latimore,Northland Capital Markets

Right.

Michael Burdiek

So certainly significant and meaningful in terms of customer wins there. And I would say our pipeline is quite healthy. I think we are very, very optimistic about the prospect for growing our fleet management SaaS business in what may be considered to be non-traditional sort of mobile work force management applications, and I think the US automotive OEM vehicle testing opportunity is indicative of that.

Mike Latimore,Northland Capital Markets

All right.And then just on the gross margin,do you feel like kind of on the Wireless DataCom, you had fairly good gross margins in the quarter? Is that a sustainable rate, move up-move down a little bit from here, where do you think that might go?

Michael Burdiek

Well, Wireless DataCom margins in the quarter were inching close to the 37%. We’ve been higher than that in the past and we’ve seen relatively steady improvement over the last three quarters in gross margin. We think there’s probably some opportunity for continued expansion there, and driven largely by wireless networks products and services becoming a larger part of the mix. That being said, I think the quality of the MRM product revenue is improving even in the insurance market where we experienced relatively low gross margin product sales earlier on. The quality of that revenue is definitely improving by means of firmer pricing in the market as well as ongoing cost reductions.

Mike Latimore,Northland Capital Markets

Yes, that’s it. Thanks a lot.

Michael Burdiek

Thank you.

Operator

Thank you. Our next question comes from Tim Quillin from Stephens, Inc.