Welcome to CalAmp's second quarter 2024 financial results conference call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Logan Lucas, Corporate Strategy and Investor Relations Manager at CalAmp. Logan, you may begin. Good afternoon, and welcome to CalAmp's fiscal second quarter 2024 financial results conference call. I'm Logan Lucas, Corporate Strategy and Investor Relations Manager at CalAmp. With us today are CalAmp's Interim President and Chief Executive Officer, Jason Cohenour, and Chief Financial Officer, Jikun Kim. During today's call, we will make certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. You should listen to today's call with the understanding that our actual results may be materially different from the plans, intentions, and expectations disclosed in the forward-looking statements we make. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the earnings press release we issued today, as well as the company's filings with the Securities and Exchange Commission. Readers are cautioned not to put undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. Now, Jason will begin today's call with a review of the company's recent operational highlights, and then Jikun will provide a more detailed review of the financial results, followed by a question and answer session. With that, it is my great pleasure to turn the call over to CalAmp's Interim President and CEO, Jason Cohenour. Jason, please go ahead. Thank you, Logan, and thanks to all of you for joining us on the call today. I will start by taking a moment to express our heartfelt condolences to the family, friends and teammates of Jeff Gardner following his passing in late August. Jeff was not only a passionate leader for this organization, but a kind and compassionate friend to many. We appreciate the effort and countless hours he put into CalAmp over these past few years, taking on challenges and opportunities with positivity and resilience. He had a truly remarkable life and career, and the outreach the company has received on his behalf following his unexpected passing is a testament to the positive impact he had on others along the way. The CalAmp team is keeping Jeff and his loved ones in our thoughts and hearts through this difficult time. Moving to our results. The company's second quarter for fiscal year 2024 produced mixed results. While we continued to experience demand softness with TSP customers, we saw strength in other parts of the business, including international connected car and with our large industrial OEM customer. The TSP softness is attributed to continued customer inventory rebalancing following the fulfillment of a large volume of orders in the second half of fiscal year 2023. These orders had been backlogged due to the severe supply chain constraints that we and many others encountered over the past few years. Additionally, competitive pressures experienced by our TSP customers have complicated the inventory rebalancing process. We are continuing to work with each of these customers as they align their inventory levels with demand. Consolidated Q2 revenue was $61.7 million, which was below our guidance range. Revenue from TSPs, which was lower than expected, was the key driver of the revenue miss. Q2 Adjusted EBITDA was $5.9 million, which was within our guidance range. The company also delivered strong cash flow from operations of $7.1 million. The strength in Adjusted EBITDA and cash flow from operations is primarily the result of cost savings initiatives. Some of these initiatives were carried out during the second quarter, so we expect to see some incremental expense reductions from our previous actions in the back half of the year. We continue to evaluate opportunities to refocus, simplify, and streamline the business. On the product front, our team continues to push forward with several initiatives focused on value creation for our customers. For example, in the second quarter, we launched our electronic logging device, or ELD, to help customers streamline their compliance workflows. Our ELD solution is integrated with the rest of our fleet management product suite and adds to a portfolio that we plan to leverage to drive increased ARPU and gross margins in our fleet segments. We also commenced commercial shipments of our new Vision 2.0 dash cam solution during the quarter, and now have our first successful installations. We expect to see additional commercial traction with Vision at our fleet customers in the coming months and quarters. We also secured several new customer wins during the quarter, including with Transportes Castores, one of the largest transportation and logistics companies in Mexico. Transportes Castores is leveraging both CalAmp's in-cab and trailer tracking solutions to pull data from their assets and to integrate the data with their proprietary enterprise applications. The solution provides seamless visibility across the customer's operations and illustrates our unique ability to integrate data from many different asset types into a variety of systems, thereby providing highly tailored insights that drive efficiency, safety, and compliance. We are excited to embark on this partnership with Transportes Castores to optimize the management of their fleet. Our international connected car business continued to deliver strong performance during the quarter, driven by expanding relationships with large automotive OEMs and rental customers, particularly in Europe. We expect this segment to continue to deliver consistent, profitable growth as we expand with our customers, secure new B2B customers, and grow new geographical markets such as Spain. With respect to the CalAmp team, you may have seen the news regarding the departure of our Chief Revenue Officer. In response to this departure, we have elevated two highly qualified individuals to lead this critical function. One of these team members now leads new revenue generation, while the other leads customer success and sales operations. Both leaders report directly to the CEO, and the transition has been seamless. Our CEO search is ongoing, and interest in the position is high. While we have met with some excellent candidates, we have no new additional news to share regarding the search at this time. Similarly, our exploration of strategic alternatives is ongoing, and we have no additional news to report at this time. As for me, I've been serving as the interim CEO of CalAmp since August 28, following Jeff's tragic passing. I can report without hesitation that the CalAmp team is talented and passionate, and they believe in the opportunity before us. In addition to having a great team, the company has other tremendous assets, including excellent products and solutions, a blue-chip customer base, and a large and growing market opportunity. While I am here, I will be supporting the team, I will be supporting customers, and I will be helping the team to hone focus, to execute operationally, and to capture efficiencies as we strive to deliver profitable growth and positive cash flow. With that, I'll turn the call over to Jikun to discuss our second quarter financial results in more detail. Jikun? Thank you, Jason, and thank you for stepping up to this transition. My commentary will include references to our non-GAAP financial measures. A full reconciliation of these non-GAAP measures with the corresponding GAAP measure is included in our earnings release. The total revenue in the second quarter was $61.7 million. Revenues declined 15% year-over-year and 13% sequentially from $70.9 million last quarter. Much of the year-over-year and sequential revenue decline was driven by lower sales to our telematics service provider customers. As Jason mentioned in his remarks, the revenue decline was driven by our TSP customers continuing to rebalance their inventories while also navigating competitive pressures in their end markets. We now expect this inventory rebalancing with our TSP customers to take longer than previously expected. Revenue declines from the TSP customers were partially offset by revenue increases from our industrial and international connected car businesses. Recurring application subscription revenues in the quarter were $18.7 million, a $500,000 sequential decline. Most of the decline was driven by a $400,000 true-up catch-up for prior period accounting cleanups and corrections. RPO and hardware backlog ended the quarter at $194 million and $14 million, respectively. RPO declined $24 million, and hardware backlog declined $6 million sequentially. The RPO and hardware backlog decline was driven by customer PO fulfillments as well as TSP conversions that have already been completed. Consolidated gross margin in the second quarter was 36%, compared to 38% last quarter. The sequential gross margin decline was driven by lower volumes and unfavorable product mix. Second quarter GAAP operating expenses declined $3.9 million sequentially and $8.8 million year-over-year. The cost reductions that we implemented over the past 12 months are starting to significantly impact not only our OpEx, but are also our cost of goods sold and CapEx. Q2 FY 2024 adjusted EBITDA was $5.9 million, or 9.5% of revenue... essentially flat compared to the $6 million in the prior quarter. Year-over-year, adjusted EBITDA increased by $1.1 million. At the end of Q2 FY 2024, we had a total cash and cash equivalents of $38.5 million, as compared to $35 million last quarter, an increase of $3.6 million. Cash flow from operations was $7.1 million in the second quarter. Positive cash flow was driven by a $4.2 million cash flow from operations, excluding working capital changes, as well as a $2.9 million in net working capital reductions. Unlike the prior quarter, working capital changes worked in our favor in Q2. Compared to the prior quarter, cash flow from operations, excluding working capital, increased by $100,000 sequentially and continues to be strong despite volume reductions. Cash flow stability is driven by our cost reductions. At the end of the quarter, we have $32.7 million in undrawn asset-backed line availability. This availability is subject to customary covenant tests. The $230 million, 2% coupon convertible notes are due on August 1, 2025. Our objective is to generate a high-quality EBITDA run rate in order to optimize our options for refinancing the convertible notes. As demonstrated over the past few quarters, EBITDA performance has been strong and stable. We believe that our future EBITDA run rate increases will be driven by several factors and initiatives, including the normalization of TSP revenues as we stabilize and then return to growth in this market segment. Growth in recurring revenues driven by new solution introductions, such as Vision 2.0, which we expect to drive significant ARPU growth with new and existing customers. Improvements in gross margin trending back to our historical levels and continued focus on our cost management. In addition, we will have to continue our vigilance with respect to cash flow and cash generation. Continued strong EBITDA and positive cash flow will enable us to retire a portion of the convertible notes as it matures. In addition, we are actively exploring a range of additional financing options and how they can play in our capital structure. From a business outlook standpoint, we continue to manage through a dynamic situation with our TSP customers, and we expect Q3 FY 2024 revenues and adjusted EBITDA to be slightly down sequentially. With that, I'll turn the call back over to Jason for some final thoughts. Jason? Thank you, Jikun. In closing, I will assert our unwavering commitment to our customers, partners, employees, and investors. While we have experienced challenges, we also see tremendous opportunity ahead, and we are confident in our ability to overcome these obstacles and to return to profitable growth. Thanks to all of you for your continued support and interest in the company. With that, we will now open the call to your questions. Operator? Thank you. We will now begin the Q&A session. If you would like to ask a question, please press Star, followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press Star, followed by two. Again, to ask a question, press Star one. It has been asked that all question askers hold themselves to one question with one follow-up question. We will pause here briefly as questions are registered. Our first question is from Jerry Revich with Goldman Sachs. Please go ahead. Hi, thanks for taking my question. This is Adam Bubes on for Jerry today. Nice to see the positive cash flow from ops. Just wondering if you could talk about how you're thinking about the free cash flow trajectory from here. You know, what does normalized free cash flow conversion look like in this business, and when can you get there? Yeah, I think, Jerry asked me this question last quarter also, so, thank you for your question. So you can see, based on the last few quarters of, cash flow statements, that cash flow from operations, excluding working capital changes, have been in the $4 million range, right? We're at $4.2 million this quarter. I think we were at $4.1 million last quarter. Working capital worked in our favor this quarter. It didn't last quarter. The question that you ask about free cash flow and stability, I think, you know, one, you know, we need to make sure that our revenue is back to where it should be, right? And then be able to project that into the future. But, you know, what you're experiencing is very strong cost management from management, as well as continued vigilance in that capacity. So, you know, it's difficult for me to say, based on the working capital changes that we have right now, but I think you can be sure that we will do our hardest and utmost to make sure that we manage our costs and continue to generate cash here. ... Thanks for that. And it looks like revenue per subscriber in the software and subscription segment was down sequentially. Just wondering if you could unpack the moving pieces there. What, what's the, you know, price versus true core price versus mix impact? And what's the path here going forward now that most of conversion is through? Should we expect, you know, higher ARPU starting to flow through that metric? Yeah. So keep in mind, I think it was, you know, commented in our prepared remarks as well as our, you know, earnings release, that we had about a $400,000 recurring revenue Q catch-up impact that we corrected in the quarter. So the recurring revenue is, you know, should be roughly $400,000 higher. You know, we had some accounting errors in the past that we corrected in this quarter, right? It just caught up. So if you do that, I think you'll see the ARPUs coming back a little better from a calculation standpoint. Fundamentally, you know, we are looking to grow our recurring revenue business, and it's on new applications like Vision and ELD. You know, we just launched Vision not two months ago, three months ago, and we're starting to see—you know, we're seeing very good pipeline and customer interest. We just need to convert those and accelerate those into the fourth quarter. We have an opportunity coming up in the December time frame, as school buses, you know, school kids go on, you know, vacation during school buses, during the Christmas time, and we'll be able to fit a lot more of those Vision opportunities onto our customers' fleets. Yeah, and I'll- Got it. Jason, here, I'll add a little bit of color. You know, as we complete these conversions, you know, that's gonna goose subscriber count, and those TSP customers come in at a lower ARPU, right? So that's gonna be a battle of mix, if you will, as those low ARPU customers come in and as we win new, higher ARPU customers with products like Vision and ELD. So a couple of moving parts there with respect to ARPU. Got it. Helpful. And then lastly, from me, on the Q3 revenue and Adjusted EBITDA guide to be down slightly sequentially, could you provide any color by segment there? Will software and subscription be up sequentially, or, you know, are we expecting both segments to be down? Yeah. So, again, you know, we don't break out the subcomponents of the revenue, but you can see that our TSP has a very large impact on our business. And so, you know, what you're seeing is the, you know, continued, our customers continuing to rebalance their inventory positions. In terms of recurring revenue, you know, I would hope that we could do better. Got it. Thanks so much. Sure. Our next question is from Scott Searle with Roth. Your line is now open. Hey, good afternoon. Thanks for taking my questions. Jason, just wanted to extend my condolences to you, your team, and Jeff's family in, you know, his untimely passing. Maybe to follow up- Thank you, Scott. Scott. Appreciate it. ... on, you know, to follow up on some of the earlier questions. I'm wondering, what is the level of normalized TSP that you would expect? And then on the OpEx front, Jikun, you know, that's been coming down. It sounds like there's more that'll come out in the back half of this year. Is there an absolute number that you could calibrate us with? Yeah. So I mean, most of the cost reductions that we implemented on the OpEx side were done earlier in the year. We just had transition periods where, you know, we had to make sure that, you know, various tasks that employees were responsible were transferred to the appropriate people. So you're gonna see—I mean, it's not gonna be, you know, $3.8 million quarter-over-quarter, but it should be a little down. And, you know, some, yeah, it's not a lot, but just a little bit. In terms of TSPs, yeah, I mean, it's normalization of TSPs. I mean, I can tell you in 2021, we did $104 million, in 2022, we did $91 million, in 2023, we did $110 million, right? Those are historical numbers. Need to figure out, obviously, when we can get back there, you know, and whether that's, you know, sustainable or not, as our customers, you know, provide us feedback and information. Jason, any thoughts on that? Yes. Just a little more color, Scott, on the TSPs. I mean, it was the part of our business that that was considerably softer than we expected in Q2, so down considerably from Q1 and down considerably from historical run rates. So we're, you know, we believe we're, you know, battling through this inventory rebalancing thing, but we're also conscious of the fact that our TSPs operate in a very competitive environment, right? So we need to keep an eye on that as well. You know, we're hoping we're around stability here, Scott, and we can grow from here. But, you know, to be candid, there's still a little bit of uncertainty around that channel, where inventory levels are and should be, and the ability of our TSPs to, you know, to compete in a pretty competitive marketplace. So I would say we're getting our arms around that. Obviously, it surprised us in Q2, and we will know more in the quarters that come. ... Okay, very helpful. As my follow-up, and perhaps a little bit unfair, given the transition in current events, but as you start to think about the convert and what you need to do to be able to refinance that, it implies that EBITDA levels are higher than where we are today. Clearly, you've got to get the top line going a little bit more and more subscription. It seems like OpEx has been tightened up. I'm wondering if you could talk a little bit about timing and model as it relates to EBITDA margins or otherwise as we get out, you know, several quarters from now to think about that. Because I guess you got to be getting close to doing, you know, 10, 12 or more in terms of quarterly EBITDA to be able to fully handle that convert. Thanks. Yeah. So, you know, again, we provided next quarter guidance, but, you know, I can point in some direction from the current quarter, if you like, right? So, you know, we missed revenue guidance. The midpoint would have been $70 million. That would have generated roughly an $8 million revenue, you know, increase—I mean, you know, our revenues would have been $8 million higher. You can add a gross margin number to that, and if you make the assumption that that drops down, you kinda get a feel for where we could be, have our, you know, revenues normalized sometime in the future. And I'm not saying 70 is a normalized revenue, but, that was the midpoint of the guidance. Yeah, and I'll add, Scott, I mean, I... Thank you ... You're not off base with respect to EBITDA levels we need to get to, in order to have, you know, maximum optionality, maximum options on the convert. And that has got to, you know, come through a combination of growth, obviously, and continued vigilance on cost, and not just OpEx, but COGS as well. Great. Thank you. Thank you, Scott. Our next question is from George Notter with Jefferies. Your line is now open. Hi. Thanks a lot, guys. I guess, can you guys give us the backlog metrics and RPO metrics that you referenced earlier in the monologue? Sure. Do you have another question? I'll dig that up for you in a minute. Yeah, and then I also wanted to just kinda go through, you know, what are, what are the options on refinancing the convertible debt. I'm kinda wondering, you know, how you guys are thinking about it. You know, obviously, growing the EBITDA is, is part of the formula here, but I'm just wondering what kind of options are available to you. What are you, what are you contemplating? Thanks. Sure. So just going back to your first question, our RPO was $194 million, and our hardware backlog was $14 million in the quarter. At the end of the quarter- Okay. I'm sorry. Anything else on that? No, and I'm just curious about your refinancing options. How do you think about it? Yeah. Yeah, sure, sure. So I mean, you know, it, it's clear that we've got to do better from a top-line standpoint and generate, you know, sustainable, sufficient EBITDA. You know, higher the EBITDA, more optionality we'll have, but, you know, look at it at the same time, the 2% convertible note has a 2% coupon on it. It's very valuable, right? So as we increase our EBITDA and revenues come back, you're gonna see more cash flow drop to the bottom line, and, you know, ideally, you know, some portion of this 2% coupon, I'd like to take to maturity and pay it off at maturity, right? And then, you know, we're looking at, once you get the EBITDA high enough, we might have term loans available to us, you know, different types of financial instruments that might be available to us. So, the key is operational, you know, performance, revenue growth, EBITDA growth, and which will provide various levers that we might be able to pull on. Got it. Okay, great. Thank you. Sure. Thank you, George. There are no additional questions waiting at this time, so I'll pass the call back over to Jason Cohenour for any closing remarks. Thank you very much, and thank you to everybody for joining us on the call today and for your continued interest in CalAmp. We look forward to speaking with you during our third quarter earnings call. Operator, you may now disconnect the call.