LoJack Corp. Reports Second Quarter Earnings
11 October 1999
LoJack Corp. Reports Second Quarter Earnings of $.14 Per Share on Revenues of $24,085,000
DEDHAM, Mass., Oct. 8 -- LoJack Corporation,
reported today that for the second quarter ended August 31, 1999, (fiscal
2000) revenues were $24,085,000, a 10% increase over second quarter revenues
of $21,810,000 in fiscal 1999. Net income was $2,521,000, or $.14 per diluted
share for the second quarter of fiscal 2000, compared to $2,866,000, or
$.15 per diluted share, for the same period a year ago. Net income for the
three months ended August 31, 1999 included a pre-tax gain on the sale of
marketable securities of $864,000 partially offset by a pre-tax charge of
$521,000 related to the financial difficulties of a licensee. The net result
was a gain of $.01 per diluted share after taxes.
Revenues for the six months ended August 31, 1999 were $46,586,000, an
11% increase over revenues of $42,075,000 for the same period a year earlier.
Net income was $4,766,000, or $.26 per diluted share, for the first six months
of fiscal 2000, compared to $6,286,000, or $.32 per diluted share, for the
first six months of fiscal 1999. Net income for the six months ended August
31, 1999 included the aforementioned gain on sale of marketable securities
offset by the charge related to the financial difficulties of a licensee,
resulting in a gain of $.01 per diluted share after taxes, while net income
for the same period last year included a gain on the sale of marketable
securities of $.03 per diluted share, after taxes.
The increase in revenues for the second quarter of fiscal 2000 of
$2,275,000 reflected a $1,655,000, or 9%, increase in domestic revenues and a
$620,000 or 25% increase in revenues from product sales and licensing fees
pursuant to license agreements for the company's technology in international
markets. The increase in revenues for the six months ended August 31, 1999 of
$4,511,000 reflected a $4,718,000 or 13% increase in domestic revenues and a
$207,000 decrease in international revenues.
In announcing the results, C. Michael Daley, chairman, said, "Domestic
revenue growth of 9% during the second quarter of fiscal 2000, compared to a
year earlier, was the result of a 14% increase in LoJack Units sold. As the
result of a change in the mix of our sales, domestic gross margin was 54% for
the second quarter of fiscal 2000 compared to 56% a year earlier.
"We recently reached an agreement with AutoNation Financial Services, the
finance subsidiary of AutoNation Inc., the world's largest automobile
retailer, whereby LoJack's proprietary stolen vehicle recovery system will be
an endorsed ANFS menu product to be sold through AutoNation's 300-plus
dealerships. We believe that this agreement presents the opportunity for
significant future growth in this sector.
As previously disclosed, our sales and marketing expenditures, because of
the timing of the production of advertising and our media buy, were more
heavily weighted in the first six months this year than in previous
years. This is a significant reason why our earnings per share decreased for
the first six months in fiscal 2000 compared to the same periods in fiscal
1999. As these media related expenditures return to normal levels, we expect
that our profitability will increase in the last two quarters of fiscal 2000.
"In addition, we also plan to expand into the San Francisco area and Las
Vegas late in the fourth quarter of fiscal 2000.
"International revenues increased by $620,000, or 25%, during the second
quarter of fiscal 2000 compared to a year earlier. This increase consisted of
a $289,000, or 18%, increase in sales and royalties on the international
version of the LoJack Unit and related products, and a $331,000, or 39%,
increase in the sale of components and license fees from new licensees, which
are generally non-recurring in nature.
"We are pleased that our international revenues generated from sales of
and royalties on the international version of the LoJack Unit have returned to
growth this quarter, and are encouraged to note that we are starting to
experience the return to growth of several of our South American and African
licensees. In addition, we have several potential new licensees that we
expect will begin to generate revenues during the latter half of fiscal 2000
and into fiscal 2001.
"Our German licensee experienced severe financial difficulties during
start-up of operations in that market and filed for bankruptcy. The charge we
experienced during the quarter was primarily related to our efforts to assist
the licensee to continue the operation while we evaluated our options. We
continue to believe that Germany represents a market opportunity for LoJack
and we will continue to explore our options to revive the market and secure a
suitable replacement licensee.
"In addition, we have recently begun to receive shipments of our new
product, LJU III. This unit will enhance the performance of the LoJack
System, improve installation efficiencies and provide opportunities in markets
in addition to consumer vehicles. We are also expanding our research and
development efforts to take advantage of new technologies and opportunities to
further enhance LoJack's state-of-the-art stolen vehicle recovery technology.
"We continued to repurchase shares under the buyback program during the
first quarter of fiscal 2000. As of October 5, 1999 total shares repurchased
was 6,096,000 shares. The Board of Directors recently increased the
authorization by 1,000,000 shares to 7,200,000 shares. We will continue to
repurchase shares as they become available at price levels we believe
represent a good investment opportunity for the company."
From time to time, information provided by the Company or statements made
by its employees may contain "forward-looking" information, which involve risk
and uncertainties. Any statements in this report and accompanying materials
that are not statements of historical fact are forward-looking statements
(including, but not limited to, statements concerning the characteristics and
growth of the Company's objectives and plans for future operations and
products and the Company's expected liquidity and capital resources). Such
forward-looking statements are based on a number of assumptions and involve a
number of risks and uncertainties, and accordingly, actual results could
differ materially.
Factors that may cause such differences include, but are not limited to:
the continued and future acceptance of the Company's products and services,
the rate of growth in the industries of the Company's customers; the presence
of competitors with greater technical, marketing, and financial resources; the
Company's ability to promptly and effectively respond to technological change
to meet evolving customer needs; capacity and supply constraints or
difficulties; and the Company's ability to successfully expand its operations.
For a further discussion of these and other significant factors to consider in
connection with forward-looking statements concerning the Company, reference
is made to Exhibit 99 of 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 Six Months Ended
August 31, August 31,
1999 1998 1999 1998
Revenues $24,085,000 $21,810,000 $46,586,000 $42,075,000
Operating Income 3,746,000 4,591,000 7,343,000 9,006,000
Pre-tax Income 4,133,000 4,699,000 7,812,000 10,305,000
Net Income 2,521,000 2,866,000 4,766,000 6,286,000
Diluted Earnings
Per Share $.14 $.15 $.26 $.32
Diluted Common
Shares Outstanding 17,898,000 19,500,000 18,028,000 19,588,000
NOTE: The full text of this news release as well as current financial
statements may be accessed on the Internet at: http://www.lojack.com. Each
quarter's release is archived on the web site under LoJack Financial
Information during the fiscal year. The company's Annual Report, 10Q and 10K
filings will also be available on its web site. Copies of the company's
financial information, including news releases, may also be obtained by
contacting Swanson Communications, Inc. at 516-671-8582.