LoJack Reports Fourth Quarter Income of $.13 Per Share
22 April 1999
LoJack Reports Fourth Quarter Income of $.13 Per Share; Revenues $20,272,000
DEDHAM, Mass., April 22 -- LoJack Corporation
announced today that for the fourth quarter ended February 28,
1999 (fiscal 1999) revenues were $20,272,000, an increase of 13% over revenues
of $17,889,000 for the same period a year ago. Net income was $2,444,000, or
$.13 per share, compared to $2,198,000, or $.11 per share, for the same period
a year ago. This reflects increases of 11% in net income and 18% in earnings
per share in the fourth quarter of fiscal 1999 compared to the fourth quarter
of fiscal 1998.
The increase in revenues in the fourth quarter of fiscal 1999 reflected a
$2,589,000, or 18%, increase in domestic revenues and a $206,000, or 6%,
decrease in revenues from product sales and licensing fees pursuant to license
agreements for the company's technology in international markets over the
fourth quarter in fiscal 1998.
Revenues for the year ended February 28, 1999 were $83,210,000, an
increase of $8,708,000, or 12%, over revenues of $74,502,000 a year ago. Net
income for the year ended February 28, 1999 was $11,008,000, or $.57 per
share, increases of 11% and 19%, respectively, over net income of $9,887,000,
or $.48 per share, for the same period a year ago. Net income for the year
ended February 28, 1999 included a gain on the sale of marketable securities
which accounted for $.03 per diluted share, after taxes.
The increase in annual revenues reflects an $11,662,000, or 19%, increase
in domestic revenues and a $2,954,000, or 21%, decrease in revenues from
product sales and licensing fees pursuant to international licensing
agreements.
Gross margin for the fourth quarter of fiscal 1999 was 52% of revenues,
down from 56% for the same period in fiscal 1998. Domestic gross margin was
55%, down from 57% for the same period a year earlier primarily due to
investments in personnel and other related installation costs in order to
prepare for the seasonal increase in business which normally begins in March.
This represents implementation of a strategy to provide premium customer
service to LoJack's dealer distribution network. International margins for
the fourth quarter of fiscal 1999 decreased to 40% of related revenues from
52% for the same period a year earlier due to a decrease in high margin
license fee revenue as well as an increase in the percentage of sales of the
international version of the LoJack Unit to licensees who achieve volume
discounted pricing. For the year ended February 28, 1999 gross margin
decreased to 55% of revenues from 56% a year earlier. Domestic gross margin
for fiscal years 1999 and 1998 was 56% of related revenues, while
international gross margins decreased to 48% of related revenues in fiscal
1999 from 56% a year earlier.
In making the announcement, C. Michael Daley, chairman, said, "We continue
to achieve strong revenue growth in our domestic operations as the result of
improvements in our new and existing domestic markets. The number of LoJack
Units sold increased by 22% and 23% in the fourth quarter and fiscal 1999
respectively, over the same periods a year earlier. Several of our established
markets continued to record double-digit revenue growth during the quarter,
which, we believe, is the result of our strategy to increase the number of
dealers regularly selling our products as well as our efforts to capitalize on
established dealer relationships by increasing the penetration of LoJack sales
within existing dealerships. We have launched an aggressive multi-media
advertising campaign for fiscal year 2000 which includes our first national
television and automotive magazine advertising as well as our traditional
radio advertising format. We believe that this strategy, together with
planned expansion to additional domestic markets and our continued efforts to
establish our company as a major player in the fleet and commercial markets,
presents an opportunity for improving domestic revenue growth. In fact for
March, the first month of the new fiscal year, we experienced growth of 31% in
the number of LoJack Units sold, over the same month a year earlier, setting
a new record for LoJack Units sold in a month.
"International revenues did not meet our expectations for fiscal 1999
primarily because of the economic crises in a number of our Asian and South
American markets as well as from lower license fee revenues resulting from
fewer new licensees. Our South African and United Kingdom licensees, and many
of our smaller international markets, continue to show improvement, and we
expect to experience reasonable growth in revenues in this sector in fiscal
2000. We expect that further growth can be accomplished through economic
improvement in the Asian and South American markets and from continued
expansion by new licensees.
"If our performance in March 1999 is any indication, fiscal year 2000
should be a year of continued growth in revenues and profitability. In
addition, we are actively pursuing opportunities, including strategic
alliances with other companies, for the purpose of both introducing new
products into LoJack's market niche as well as distributing LoJack's existing
products through additional channels of distribution. We expect to report on
our progress in these efforts over the next several months. One item of note
is that as the result of the timing of the production of advertising and our
media buy, our fiscal year 2000 sales and marketing expenditures will be more
heavily weighted in the first six months than in past years.
"The company's board of directors recently approved an increase of
1,000,000 in the number of shares authorized to be purchased under our stock
buyback program. Total shares repurchased under the buyback program as of
April 22, 1999 was 5,146,100 shares, with 1,053,900 remaining under the
current authorization. At the current market price, we believe that our stock
is undervalued in the marketplace and that the repurchase of our stock is a
good long-term investment. We will continue to repurchase shares as they
become available."
The foregoing statements concerning expectations for fiscal 2000 and
thereafter 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 the 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 29, 1996.
LoJack Corporation
Consolidated Financial Information
3 Months Ended Year Ended
(Unaudited) (Unaudited)
1999 1998 1999 1998
Revenues $20,272,000 $17,889,000 $83,210,000 $74,502,000
Operating income 3,818,000 3,482,000 16,486,000 15,520,000
Pre-tax income 4,005,000 3,606,000 18,049,000 16,205,000
Net income 2,444,000 2,198,000 11,008,000 9,887,000
Diluted earnings
Per share $.13 $.11 $.57 $.48
Diluted weighted
Average shares
Outstanding 18,779,000 20,291,000 19,215,000 20,580,000
Note: This news release and other corporate information may be reviewed on
the company's web site: http://www.lojack.com