LoJack Reports Q3 Earnings
6 January 1998
LoJack Reports Earnings of $.14 Per Share on 28% Revenue Growth For Third Quarter of Fiscal 1998
DEDHAM, Mass., Jan. 6 -- LoJack Corporation
announced today that for the third quarter of fiscal 1998 ending
November 30, 1997 revenues were $19,311,000, a 28% increase over third quarter
revenues of $15,132,000 in fiscal 1997. Earnings per share were $.14 for the
third quarter of fiscal 1998, an increase of 56% over earnings per share of
$.09 for the same period last year. Net income was $2,911,000, an increase of
51% over net income of $1,928,000 for the same period last year. Operating
income for the third quarter of fiscal 1998 was $4,621,000, an increase of 66%
over $2,776,000 for the same period a year ago.
Revenues for the nine months ended November 30, 1997 were $56,614,000, a
23% increase over nine months revenues of $46,047,000 in fiscal 1997.
Earnings per share were $.37 for the first nine months of fiscal 1998, an
increase of 37% over earnings per share of $.27 for the same period last year.
Net income for the first nine months of fiscal 1998 was $7,689,000, an
increase of 24% over net income of $6,224,000 for the same period a year ago.
Operating income for the nine months ended November 30, 1997 was $12,038,000,
an increase of 34% compared with $9,003,000 for the same period a year ago.
The increase in revenues for the third quarter reflected a $2,604,000, or
20% increase in domestic revenues and a $1,575,000, or 69% increase in
revenues from product sales and licensing fees pursuant to license agreements
for the company's technology in international markets ("international
revenues"). The increase in revenues for the nine months ended
November 30, 1997 reflected a $6,194,000, or 15% increase in domestic
revenues, and a $4,373,000, or 73% increase in international revenues.
For the third quarter, the increase in domestic revenues reflects a
25% increase in the sale of LoJack Units. Most of this growth in LoJack unit
sales was through LoJack's dealer distribution network, causing the percentage
of revenues from higher priced direct-to-consumer sales to decrease. Thus,
the domestic revenue growth rate of 20% was not proportionate to the rate of
increase in unit sales of 25%. The increase in domestic revenues also was
offset partially by decreased penetrations of optional, lower margin
automobile security products, which also contributed to the increased margin
percentages in the third quarter of this year compared to last year.
International revenues for the third quarter of fiscal 1998 consisted
primarily of sales of and royalties on the international version of the LoJack
Unit and other products of $2,258,000 to licensees in several international
markets, as well as license fees of $1,590,000, primarily from new licensees
in the countries of Germany, Brazil and Mexico. These revenues represent an
increase in revenues from product sales of 31% and an increase in revenues
from license fees of 171% over the third quarter a year earlier.
In making the announcement, C. Michael Daley, chairman, said, "We continue
to be pleased with the growth in both our revenues and profitability.
Domestically, our new markets of Maryland, Texas and Pennsylvania are growing
their business in line with our expectations, while growth in most existing
markets continues to improve. We believe that the improvement in our domestic
markets is a reflection of our continued focus on personnel and advertising,
including increased market research on our products and customers.
"Our international sales of LoJack Units are continuing to improve,
particularly in our South American markets. Implementation schedules of our
new licensees in Germany, Mexico and Brazil are progressing on schedule. We
shipped our initial system components to Mexico during the third quarter, with
startup expected early in 1998. We expect that additional licensing activity
in a number of international locations will impact our revenues during the
remainder of fiscal 1998 and early in fiscal 1999.
"Overall gross margins for the third quarter of fiscal 1998 increased to
59% from 56% for the same period a year earlier. Domestically, gross margins
increased to 56% in the third quarter of fiscal 1998 from 54% a year earlier,
while international gross margins increased to 68% from 62%, for the same
periods, respectively. The increase in the international gross margin for
the third quarter of fiscal 1998 reflects an increase in higher margin license
fee revenues in the revenue mix compared to lower margin sales of
international LoJack Units and systems components.
"For the mine months ended November 30, 1997, gross margins continued to
be strong at 56%, up from 55% for the same period a year earlier. Domestic
gross margins for the same periods increased to 56% from 55% a year earlier,
while international gross margins for the same periods increased to 58% from
56%, respectively. The increase in domestic margins for the third quarter and
for the fiscal year resulted primarily from overall improved installation
efficiencies brought about by our increased revenues as well as an absence of
regional promotions on our lower margin alarm products.
"The results of the third quarter reflect our increasing profitability.
As revenues from both the sale of LoJack Units domestically (particularly in
our new markets) and from our international licensees increase, profit margins
can be expected to increase once our fixed costs are covered. Interestingly,
our rate of growth in earnings per share of 56% for the third quarter of
fiscal 1998 was double our rate of growth in revenues."
The foregoing statements concerning expectations for the remainder of
FY 1998 are forward-looking statements which involve a number of risks and
uncertainties which could cause actual results to differ from those projected.
Such risks and uncertainties include, without limitation, matters affecting
the sale of automobiles, and the state of the economy, as well as matters
affecting the company, such as the timing of commencement of operations of new
markets and success of the company's new and existing foreign licensees, the
results of the company's domestic markets, and other factors which are listed
in Exhibit 99 to the company's Annual Report on Form 10-K for the fiscal year
ended February 29, 1996.
LoJack Corporation
Condensed Financial Information
(Unaudited)
Three Months Ended Nine Months Ended
November 30, November 30,
1997 1996 1997 1996
Revenues $19,311,000 $15,132,000 $56,614,000 $46,047,000
Operating Income 4,621,000 2,776,000 12,038,000 9,003,000
Pre-Tax Income 4,775,000 3,159,000 12,599,000 10,201,000
Net income 2,911,000 1,928,000 7,689,000 6,224,000
Per share: $.14 $.09 $.37 $.27
Weighted average
number of common
and common
equivalent shares
outstanding 20,794,000 22,485,000 20,673,000 23,953,000
SOURCE LoJack Corporation