LoJack Corporation Reports Third Quarter 2008 Results; Updates Current Year Guidance
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WESTWOOD, Mass., November 4, 2008: LoJack Corporation reported today that revenue for the third quarter ended September 30, 2008 declined 4% to $52.9 million, from $55.1 million in the same period of the prior year. For the nine months ended September 30, 2008, revenue declined 10% to $150.4 million, from $167.4 million for the same period in 2007.
One-time, non-cash charges contributed to a net loss of $2.05 per share for the quarter, compared to net income of $0.33 per share for the same quarter in 2007.
In announcing the results, Richard T. Riley, Chairman and Chief Executive Officer said, "In this quarter our international business increased 40% in unit volume and 47% in revenue over the prior year. Even that strong performance was not enough to fully offset the decline in our domestic business, as the problems intensified in the auto market during the third quarter. The decline in the domestic auto market deepened in each sequential quarter in 2008, with monthly new car sales in September falling below one million vehicles for the first time in 15 years. The continued deterioration in the domestic auto industry has been well documented, with industry experts now predicting annual vehicle sales of 13 to 13.5 million units, both in 2008 and 2009, compared to new car sales of approximately 16 million vehicles in 2007.
"Despite the severe economic climate, we continue to mitigate the challenges we face, invest in strategic programs to leverage our proprietary technology for diversification and deliver solid cash flow. Moreover, our balance sheet remains strong and positions us well as we continue to diversify and expand into new markets."
The third quarter and nine month results for 2008 reflect a non-cash, after-tax charge of approximately $37.7 million, or $2.23 and $2.17 per fully diluted share respectively, related to the impairment of the intangible assets recorded upon the acquisition of Boomerang Tracking. The impairment charge reflects our current estimate of the fair market value of the business, as we work to generate new customers and convert our existing customers from analog to digital technology in a difficult economic environment.
Due to the impairment charge, the operating loss for the third quarter of 2008, calculated in accordance with generally accepted accounting principles ("GAAP") was $33.2 million, compared to operating income of $8.2 million in the same quarter a year ago. For the nine months ended September 30, 2008, the operating loss calculated on a GAAP basis was $30.0 million, compared to operating income of $26.7 million for the same period in the prior year.
Pro forma operating income for the third quarter, which excludes the items identified in Table 1 below, declined 34% to $4.9 million. Pro forma operating income for the nine months ended September 30, 2008, which excludes the items identified in Table 1 below, was $8.1 million, representing a decline of 69% over the same period last year.