CalAmp Corp. said Monday that it has reached a settlement with satellite TV provider EchoStar Technologies Corp. following the failure of some of CalAmp’s satellite dish components.
Oxnard-based CalAmp agreed to give the Englewood, Colo. satellite TV provider 1 million shares and a three-year warrant to purchase an additional 350,000 shares at $3.72 each. It also will give EchoStar a $5 million promissory note. EchoStar, which operates the Dish Network satellite TV system, accounts for about half of CalAmp’s annual business.
EchoStar in turn agreed to pay $1.3 million of $2.3 million in outstanding accounts receivable due to CalAmp, with CalAmp canceling the remaining $1 million in receivables as part of the settlement.
EchoStar complained about premature deterioration of laminate material from a circuit board made by CalAmp earlier this year and put new orders on hold. CalAmp said it expects to completely resolve the problem within 15 months.
In its second-quarter earnings, reported in mid-July, CalAmp said it took a $16 million charge because of faulty products.
Shares in CalAmp rose 6.6 percent, to $2.73 in morning trading Monday on the Nasdaq.
