LoJack Reports First Quarter Earnings of $.17 Per Share Revenues Were $20,265,000
7 July 1998
LoJack Reports First Quarter Earnings of $.17 Per Share Revenues Were $20,265,000
DEDHAM, Mass., July 7 -- LoJack Corporation,
(Nasdaq NMS: LOJN) announced today that for the first quarter ending
May 31, 1998 (fiscal 1999) revenues were $20,265,000, a 9% increase over first
quarter revenues of $18,558,000 in fiscal 1998. Net income was $3,420,000, or
$.17 per diluted share for the first quarter of fiscal 1999, an increase of
51% over net income of $2,261,000, or $.11 per diluted share for the same
period last year. Net income for the first quarter of fiscal 1999 included an
after tax gain on the sale of marketable securities of $671,000, or $.03
per diluted share. Operating income for the first quarter of fiscal 1999 was
$4,416,000, an increase of 25% over $3,544,000 for the same period last year.
The increase in revenues for the first quarter of fiscal 1999 of
$1,707,000 reflected a $3,302,000, or 23% increase in domestic revenues and a
$1,595,000, or 37% decrease in revenues from product sales and licensing fees
pursuant to license agreements for the company's technology in international
markets.
In making the announcement, C. Michael Daley, chairman, said,
"Domestic revenue growth of 23% during the first quarter compared with a year
earlier was the result of a strong performance in most of our existing
domestic markets as well as the continued ramp up in revenues from the Texas,
Maryland and Pennsylvania markets which began operations during the first
quarter of fiscal 1998. Total LoJack Units sold domestically during the first
quarter increased by 28% over a year ago, and this trend is continuing as we
enter the second quarter. LoJack Unit revenue growth rate has been offset
partially by a continued decrease in the penetration of sales of LoJack's
optional alarm products, as more cars are being sold with factory-installed
alarm systems.
"We are very pleased with the results of our domestic operations and the
prospects for their continued growth. This growth has been fueled by
increasing our overall dealer count and increasing penetration in major dealer
groups, both of which have continued through the month of June. We believe
that our overall dealer count will continue to grow. In addition we expect to
enter Arizona and Houston this quarter and thereafter to begin to penetrate
the fleet and commercial vehicle business.
"International revenues decreased by $1,595,000 during the first quarter
of fiscal 1999 compared to a year earlier. Our international revenues tend to
fluctuate from quarter to quarter based upon timing of product orders and the
recognition of revenues from the sale of components and license fees from new
licensees which are generally non-recurring in nature. Non-recurring license
fee and component revenue decreased by $450,000 in the first quarter of fiscal
1999 compared to a year earlier. Revenues from sales of the international
version of the LoJack Unit to our South African licensee during the first
quarter of last year were $474,000 greater than this year, because that
licensee had been building up its initial inventory stock. We also
experienced a decrease in revenues in excess of $1 million in the first
quarter of fiscal 1999 related to the financial difficulties of LoJack's
licensee in Argentina. On the positive side, the first quarter of fiscal 1999
included a partial shipment of system components to our new licensee in
Nigeria, and overall our licensees continued to experience growth in their
core business.
"With respect to out Argentina licensee, we have initiated steps to
complete an agreement with another party. We believe that the Argentinean
market continues to have good prospects for growth and we will work diligently
to try to bring a viable licensee to this market."
While the results of our international operations for the first quarter
were disappointing, we expect that they will return to growth as the year
progresses. Our licensee in Mexico recently commenced operations and our
licensees in Germany and Nigeria are expected to commence operations sometime
this year. In addition, we recently received an initial order from our
licensee in Poland.
"Gross margins for the first quarter of fiscal 1999 increased to 56% of
revenues from 54% a year earlier. Domestically, gross margins increased to
57% of revenues from 55% of related revenues a year earlier. These margins
were positively impacted by lower alarm sales, lower manufactured costs of the
LoJack Unit, and increased installation efficiencies as a result of our
average sale per dealer increasing. International gross margins decreased to
50% of related revenues during the first quarter of fiscal 1999 compared to
51% during the first quarter of fiscal 1998, principally the result of the
decrease in non-recurring component sales and license fees.
"The results from the first quarter of fiscal 1999 included an after-tax
gain of $671,000 related to the sale of stock of our United Kingdom licensee,
Tracker Network UK Ltd. Our license agreement with Tracker Network included
an option to purchase up to 5% of the outstanding common stock of this
licensee at a predetermined price, which we exercised in March 1998. We
subsequently sold approximately half of this initial investment which
translated into a pre-tax gain of $1,100,000.
"We have continued to repurchase shares under our stock buyback program.
During the first quarter of fiscal 1999 we repurchased 165,000 shares. As of
July 7, 1998 our total shares repurchased under the current board
authorization is 4,247,500. We plan to continue to repurchase shares at
prices we think are a good investment for the company."
The foregoing statements concerning expectations for fiscal 1999 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 sales of
automobiles, and the state of the economy in general, as well as matters
affecting the company, such as timing of commencement of operations of new
markets and success and financial condition 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 28, 1996.
LoJack Corporation
Condensed Financial Information
(Unaudited)
Three Months Ended
May 31,
1998 1997
Revenues $20,265,000 $18,558,000
Operating Income 4,416,000 3,544,000
Pre-tax income 5,607,000 3,707,000
Net income 3,420,000 2,261,000
Per share $.17 $.11
Weighted average
number of shares
outstanding 19,674,361 20,449,384