UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 26, 2006
____________________
Exact Name of Registrant as
Specified in Its Charter: CALAMP CORP.
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DELAWARE 0-12182 95-3647070
_____________________________ ____________ _____________
State or Other Jurisdiction of Commission I.R.S. Employer
Incorporation or Organization File Number Identification No.
Address of Principal Executive Offices: 1401 N. Rice Avenue
Oxnard, CA 93030
_________________________
Registrant's Telephone Number, Including
Area Code: (805) 987-9000
_________________________
Former Name or Former Address,
if Changed Since Last Report: Not applicable
_____________________________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 425 under the Exchange Act
(17 CFR 240.14.a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. Entry into a Material Definitive Agreement
On May 26, 2006, CalAmp Corp. (the "Company") entered into a Credit
Agreement (the "Agreement") with Bank of Montreal, as administrative agent,
and the other financial institutions that from time to time may become parties
to this Agreement. The credit facility is comprised of a term loan and a $10
million working capital line of credit.
The Company borrowed $35 million under the term loan and $3 million under
the line of credit. Borrowings are secured by substantially all of the
Company's assets. Of the total proceeds of $38 million, $7 million was used
to pay off the Company's existing loans with another bank and the remaining $31
million, plus cash on hand of approximately $23 million, was used to finance
the acquisition of Dataradio, Inc. as described in Item 2.01 below. The term
loan principal is payable in quarterly installments on the last day of March,
June, September and December in each year commencing on March 31, 2007 with a
final payment on May 26, 2011. The maturity date of the line of credit is also
May 26, 2011. Scheduled principal payments by fiscal year are as follows:
Fiscal Year Term Loan Line of Credit
----------- --------- --------------
2008 $ 3,000,000 $ -
2009 5,000,000 -
2010 7,000,000 -
2011 9,000,000 -
2012 11,000,000 3,000,000
---------- ---------
$35,000,000 $3,000,000
=========== ==========
At the Company's option, borrowings under the Agreement bear interest at
bank's prime rate ("Prime Based Loans") plus a margin ranging from 0% to 0.25%
(the "Prime Rate Margin") or LIBOR ("LIBOR Based Loans") plus a margin ranging
from 0.75% to 1.25% (the "LIBOR Margin"). The Prime Rate Margin and
the LIBOR Margin vary depending on the Company's ratio of debt to earnings
before interest, taxes, depreciation, amortization and other noncash charges
(the "Leverage Ratio"). Interest is payable on the last day of the calendar
quarter for Prime Based Loans and at the end of the fixed rate LIBOR period
(ranging from 1 to 12 months) in the case of LIBOR Based Loans.
The Agreement contains certain financial covenants and ratios that the
Company is required to maintain, including: a total Leverage Ratio of not more
than 2.75; net worth of not less than the sum of $140,887,000, 50% of net
income for each fiscal year and 50% of net cash process from any issuance of
equity; and a fixed charge coverage ratio (earnings before interest, taxes,
depreciation and other noncash charges to fixed charges) of not less than
1.50.
The Company had no material relationship with any of the lenders, other
than in respect of this Agreement.
ITEM 1.02. Termination of a Material Definitive Agreement
In conjunction with the new credit agreement described in Item 1.01
above, the Company paid in full the outstanding loans with U.S. Bank National
Association ("U.S. Bank") and as a result, the Loan and Security Agreement
between the Company and U.S. Bank dated May 2, 2002, as amended, was
terminated.
The Company had no material relationship with U.S. Bank, other
than in respect of this Loan and Security Agreement.
ITEM 2.01. Completion of Acquisition or Disposition of Assets
On May 26, 2006, the Company completed the acquisition of all outstanding
common shares of Dataradio, Inc. ("Dataradio"), a privately held Canadian
company. Under the terms of the agreement that was announced on May 9, 2006,
the Company acquired Dataradio for a cash payment of Canadian $60.1 million,
or approximately U.S. $54 million at the effective Canadian Dollar to U.S.
Dollar exchange rate. Canadian $7 million of the purchase price was deposited
into escrow account. Canadian $3 million will be available as a source for
the payment of indemnification claims and Canadian $4 million will be
available for the payment of any obligation arising out of the purchase price
adjustments. The remaining amount in the escrow account, if any, after
satisfying indemnification claims and purchase price adjustments, will be
distributed to Dataradio's selling stockholders on the second anniversary of the
closing date. Amounts required to pay claims by the Company that are not
resolved by such second anniversary will be held in the escrow account until
such claims are resolved.
The Company financed the transaction using cash on hand of approximately
$23 million and new bank debt of $38 million, of which $7 million was used to
pay off the Company's existing bank loans.
The Company had no material relationship with any of the sellers, other
than in respect of this acquisition.
ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant
The Company has disclosed the information relating to the Company's direct
financial obligation under the Credit Agreement dated May 26, 2006 in Item 1.01
above.
ITEM 9.01. Financial Statements and Exhibits
(a) Financial statements of businesses acquired
The required financial statements will be filed by amendment to this
Current Report on Form 8-K within 71 days of June 2, 2006.
(b) Pro forma financial information
The required pro forma financial information will be filed by amendment
to this Current Report on Form 8-K within 71 days of June 2, 2006.
(c) Exhibits
2.1 Share Purchase Agreement dated May 9, 2006, among CalAmp Corp.,
4308093 Canada, Inc., Dataradio, Inc. and Dataradio's stockholders
10.1 Credit Agreement dated as of May 26, 2006, among CalAmp Corp.,
the direct and indirect subsidiaries of CalAmp Corp. from time
parties hereto as guarantors, the several financial institutions
from time to time parties hereto as lenders, and Bank of Montreal
as administrative agent
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CALAMP CORP.
June 2, 2006 By: /s/ Richard K. Vitelle
_________________ _________________________
Date Richard K. Vitelle,
Vice President-Finance
(Principal Financial Officer)