Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from [Sarah Chang - SF Capital].
Sarah Chang - SF Capital
At what level of revenues does the satellite business generate both positive operating cash flow and positive operating profit?
Rick Gold
So, the satellite business is currently generating positive operating cash flow and has for the last couple of quarters. In terms of positive operating profit, we’ve discussed that a couple calls ago, I believe and on an adjusted basis in other words, pulling out stock based compensation, I guess that’s the only thing that would be pulled out of that one.
We had said then that the breakeven was somewhere around $15 million a quarter. With some of the cost savings actions that we’ve taken across the company that level is a little bit lower now. I would estimate it’s currently at about to $13 million level.
Sarah Chang - SF Capital
Then moving over to the wireless segment; you seem to be replacing a rather large bet on the auto industry in light of the MOC partnership in Autonet and just given the continued negative outlook for the industry are these really good distribution channels for CalAmp?
Rick Gold
Well, I think we have a number of different distribution channels that were working in that market. It includes the OEMs, it includes the aftermarket, it includes dealers and it includes some consumer channels and some of those are direct and some of those are with partners.
So clearly, the new car business is not doing great right now, but within that segment the whole area of Telematics and electronics in cars is one of the highlights really within the automotive market and a number of the people that we’re talking to are looking for ways to increase their revenues even as the overall automotive market is in a down cycle.
So it’s an area that we participated in through MRM for a number of years and I would also just mention it’s not just cars, it’s also other kinds of vehicles. In the transportation sector right now, school buses, are an area where both from the standpoint of tracking as well as communications that is a growth segment.
So we’re very cognizant of the fact that in the near term, particularly with some of the OEM channels there. There’s going to be a lot of pressure, but I think long term the trends are good and I think through some of the other channels that we’re developing. We’re already seeing that the MRM market, as I mentioned earlier is one that is rebounding.
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