LoJack Corp. Reports Third Quarter 2005 Results
* Net income increased 74% compared to the third quarter 2004 on revenue growth of 37% * Earnings per share increased to $0.30 compared to $0.21 in the same quarter of 2004
WESTWOOD, Mass., Nov. 3 -- LoJack Corporation reported today that revenue for the third quarter ended September 30, 2005 increased 37% to $52,253,000, from $38,019,000 in the same period a year ago. For the nine months ended September 30, 2005, revenue increased 36% to $144,368,000, from $106,104,000 in the prior year.
Net income for the third quarter increased by 74% to $5,801,000, or $0.30 per diluted share, from $3,334,000, or $0.21 per diluted share, for the same quarter a year ago. For the nine months ended September 30, 2005, net income increased 84% to $13,422,000, or $0.71 per diluted share, from $7,292,000, or $0.46 per diluted share, in the prior year.
Gross margin for the third quarter increased 42% to $28,686,000, compared to $20,208,000 in the same period last year, while gross margin as a percentage of revenue was 55% for the third quarter compared to 53% in the same period a year ago. For the nine months ended September 30, 2005, gross margin increased 40% to $77,656,000, from $55,554,000 in the same quarter last year, and gross margin as a percentage of revenue was 54% compared to 52% in the prior year.
Operating income for the third quarter increased 86% to $8,761,000, compared to $4,701,000 for the same period a year ago, and operating income as a percentage of revenue was 17% compared to 12% in the prior year. For the nine months ended September 30, 2005, operating income increased 84% to $20,464,000, from $11,123,000 in the prior year, and operating income as a percentage of revenue was 14% compared to 10% in the same period a year ago.
Third quarter domestic unit volumes grew 24% compared to the same period a year ago, while new vehicle sales increased by only 4% during this same period. Domestic revenues in the third quarter increased 19% to $36,000,000, from $30,174,000 in the prior year, reflecting increased penetration in targeted high volume automotive dealers and strong sales in all regions of the country.
International revenue in the third quarter grew 45% to $11,397,000, from $7,845,000 in the prior year, attributable to a 59% increase in volume. This growth was led by strong product sales in Latin America as well as increased royalties from several licensees.
Boomerang Tracking had revenues of $4,856,000 for the third quarter, down 16%, excluding the impact of foreign exchange, compared to the standalone revenues in the same period a year ago, which was in line with the company's expectations.
The growth in revenue and net income from existing domestic and international business, excluding Boomerang, in the third quarter was 25% and 62%, respectively, compared to the same period a year ago, and was 22% and 78%, respectively, for the three quarters ended September 30, 2005. LoJack acquired Boomerang Tracking in the fourth quarter of 2004. Accordingly, no Boomerang revenues were reflected in the results for the first nine months of 2004.
In announcing the results, Joseph F. Abely, Chief Executive Officer, said, "We are very pleased with the continued strong growth in both revenue and net income, especially during a period of slowing growth in new car sales. The growth in the third quarter and in the first nine months of 2005 exceeded our expectations and reflects continued strong performance in our core domestic and international businesses, extending a trend that began in early 2003.
"With respect to our planned strategic initiatives, which we discussed at the end of the second quarter, we continue to make progress in setting up the local network and operations for the Italian market and expect to begin selling product in Italy in early 2006. In addition, we initiated operations in the Oregon market in September and in the Ohio market this past October, and anticipate opening South Carolina before year end.
"It is our expectation that as a result of the continued strong growth of our core domestic and international businesses, our full year net income will grow by approximately 50% to 60% compared to 2004."
About LoJack
LoJack Corporation, the premier worldwide marketer of wireless tracking and recovery systems for valuable mobile assets, is the undisputed leader in global stolen vehicle recovery. Its Stolen Vehicle Recovery System delivers a better than 90% success rate and has helped recover more than $3 billion in global stolen assets. The system is uniquely integrated into law enforcement agencies in the United States that use LoJack's in-vehicle tracking equipment to recover stolen assets, including cars, trucks, commercial vehicles, construction equipment and motorcycles. LoJack operates in 24 states and the District of Columbia, representing areas of the country with the greatest population density, and highest number of new vehicle sales and incidence of vehicle theft. In addition, LoJack technology is utilized by law enforcement and security organizations in more than 25 countries throughout Europe, Africa and Latin America. Boomerang Tracking, Inc., the dominant marketer of stolen vehicle recovery technology in Canada operates as a wholly owned subsidiary of LoJack Corporation.
LoJack Corporation
Condensed Income Statement Data (Unaudited)
(Dollars in thousands except share and per share amounts)
Three Months Ended September 30,
2005 2004
Revenues $52,253 $38,019
Gross margin 28,686 20,208
Product development 1,247 1,314
Sales & marketing 10,776 9,084
General and administrative 6,390 4,302
Depreciation and amortization 1,512 807
Operating income 8,761 4,701
Other income (expense) 136 774
Pre-tax income 8,897 5,475
Net income 5,801 3,334
Diluted earnings per share $0.30 $0.21
Weighted average diluted common shares
outstanding 19,495,412 16,192,226
Nine Months Ended September 30,
2005 2004
Revenues $144,368 $106,104
Gross margin 77,656 55,554
Product development 3,732 4,132
Sales & marketing 29,828 25,217
General and administrative 19,320 13,029
Depreciation and amortization 4,312 2,053
Operating income 20,464 11,123
Other income (expense) 661 831
Pre-tax income 21,125 11,954
Net income 13,422 7,292
Diluted earnings per share $0.71 $0.46
Weighted average diluted common shares
outstanding 18,985,178 15,810,666
LoJack Corporation
Condensed Balance Sheets (Unaudited)
(Dollars in thousands)
September 30, December 31,
2005 2004
Assets
Current assets:
Cash and short term investments $45,629 $21,437
Accounts receivable, net 36,669 29,687
Inventories 12,210 12,613
Deferred taxes and other assets 8,338 6,996
Total current assets 102,846 70,733
Property and equipment, net 17,154 15,600
Intangible assets - net 7,905 8,446
Goodwill 45,934 44,584
Deferred taxes and other assets 8,296 10,159
Total assets $182,135 $149,522
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt, capital
leases obligations, and short-term borrowings $4,988 $4,241
Accounts payable 11.088 8,040
Accrued and other liabilities 6,593 6,431
Deferred revenue 18,275 15,856
Deferred taxes 36 110
Accrued compensation 4,683 5,495
Total current liabilities 45,663 40,173
Deferred revenue 25,320 21,343
Deferred income taxes 2,596 3,115
Long-term debt, capital lease obligations, and
accrued expenses 16,127 20,941
Total liabilities 89,706 85,572
Stockholders' equity 92,429 63,950
Total liabilities and
Stockholders' equity $182,135 $149,522
NOTE: The full text of this news release can be accessed for 30 days at http://www.prnewswire.com/. This news release as well as current financial statements may also be accessed on the Internet at http://www.lojack.com/. Each quarter's release is archived on the LoJack website under "Investor Relations" during the fiscal year (click "About LoJack Corporation", click "Investor Relations", click "Quarterly Financial Releases"). The company's Annual Report, Form 10-Q and Form 10-K filings are also available on its website. Copies of the company's financial information, including news releases, may also be obtained by contacting Swanson Communications, Inc. at (516) 671-8582.