CalAmp cites supply disruptions in reducing its Q3 outlook
CalAmp states: "When the Company provided the financial outlook for the third quarter of fiscal 2019 on September 27, 2018, management discussed an accelerated supply chain diversification program to transition its manufacturing to tier one global contract manufacturers with facilities outside of China. This program was initiated against the backdrop of the escalation of trade tensions between the U.S. and China. During the third quarter, CalAmp experienced various supply disruptions related to this transition, as well as extended lead times driven by component shortages. This resulted in inbound product supply delays at quarter end and impacted the Company's ability to ship certain products to meet customer demand. Management is taking steps to address these operational challenges. These supply chain challenges, coupled with macroeconomic factors, have heightened near term uncertainty and highlight the importance of efforts to increase software-as-a-solution revenue. While we are disappointed in the short-term execution of our supply chain diversification efforts, we recognize that improving our supply chain partner program is critical for us to achieve greater flexibility and geographic diversity with our suppliers. We have undertaken various actions to improve our supply chain operations in order to avoid delays in the timing of future product shipments. Overall, the Company's long-term growth drivers and market opportunities, especially those related to CalAmp's transformation to a SaaS solutions provider, remain intact. CalAmp's Software and Subscription business continues to perform well, and we are keenly focused on driving recurring revenue growth and increasing long-term visibility."