LoJack Reports Q3 Earnings of $.15 Per Share On Revenues of $22,168,000
6 January 2000
LoJack Corporation Reports Third Quarter Earnings of $.15 Per Share On Revenues of $22,168,000
DEDHAM, Mass., Jan. 6 -- LoJack Corporation,
reported today that for the third quarter ended November 30, 1999 (fiscal
2000) revenues were $22,168,000, a 6% increase over third quarter revenues of
$20,864,000 in fiscal 1999. Net income was $2,505,000, or $.15 per diluted
share, for the third quarter of fiscal 2000, compared to $2,279,000, or
$.12 per diluted share, for the same period a year ago. Revenues for the nine
months ended November 30, 1999 were $68,754,000, a 9% increase over revenues
of $62,938,000 for the same period a year earlier. Net income was $7,271,000,
or $.41 per diluted share, for the first nine months of fiscal 2000, compared
to $8,565,000, or $.44 per diluted share, for the same period a year ago. Net
income for the nine months ended November 30, 1999 included a gain on sale of
marketable securities, which was offset by a charge related to the financial
difficulties of a licensee, of $.01 per diluted share after taxes. 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 third quarter of fiscal 2000 of
$1,304,000 reflected a $1,229,000, or 7%, increase in domestic revenues and a
$75,000, or 3%, 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 nine months ended November 30, 1999
of $5,816,000 reflected a $5,947,000 or 11% increase in domestic revenues and
a $131,000 decrease in international revenues.
In announcing the results, C. Michael Daley, chairman, said, "Domestic
revenue growth of 7% during the third quarter of fiscal 2000, compared to a
year earlier, was the result of a 10% increase in LoJack Units sold,
reflecting our continued success at penetrating the large dealer groups across
the United States who have contributed to the bulk of our growth. As the
result of a change in the mix of our sales towards the large dealer groups,
domestic gross margin was 54% for the third quarter of fiscal 2000 compared to
55% a year earlier.
"International revenues increased by $75,000, or 3%, during the third
quarter of fiscal 2000 compared to a year earlier. This increase consisted of
a $385,000, or 16%, decrease in sales of and royalties on the international
version of the LoJack Unit and related products, and a $460,000, or 410%,
increase in the sale of components and license fees from new licensees, which
are generally non-recurring in nature. During the third quarter we shipped an
initial order of systems component hardware to our licensee in Brazil and we
have other potential new licensees that we expect will begin to generate
revenues during the fourth quarter of fiscal 2000 and into fiscal 2001.
"As we prepare to enter a new fiscal year on March 1, I would like to
point out several areas of additional revenue opportunities and product
enhancements targeted to contribute to our future growth and profitability.
"With respect to expansion, we plan to expand into the San Francisco area
late in the fourth quarter of fiscal 2000, and into Las Vegas and Louisiana by
the second quarter of fiscal 2001. We are also proceeding with expansion
plans in a number of other jurisdictions around the country for fiscal 2001
and 2002.
"In addition, the Internet is changing the way the customer researches and
purchases goods and services. The use of the Internet by consumers has become
more prominent in the automotive industry which has prompted us to develop a
twofold strategy. First, we plan to direct a portion of our existing
advertising dollars to major automotive sites on the Internet as part of our
fiscal 2001 media plan in order to be in front of the customer at the time
when he is making the decision to buy an automobile and accessories. Second,
as dealerships increasingly devote resources to sales to consumers who use the
Internet, our sales focus will include working with our dealer distribution
network to include integrating LoJack into their Internet selling efforts.
"We have recently begun to install our new product, LJU III. For our
current application in consumer vehicles, this unit will enhance the
performance of the LoJack System, improve installation efficiencies and
provide opportunities in markets other than consumer vehicles. After it is
fully rolled out at the end of January 2000, we anticipate improvement in our
gross margins. We also plan to introduce a self-powered version of the
LJU-III, which will permit LoJack to expand into new applications,
specifically tractor trailers and motorcycles. We expect to be marketing into
these segments by the third quarter of fiscal 2001.
"There is a coming trend towards increased communications to and from the
vehicle for both consumer and commercial applications which will provide a
variety of services including roadside assistance, medical alert, navigation,
convenience, asset tracking and, eventually, Internet access. Given LoJack's
strengths in brand name, dealer distribution, and installation capability, we
believe that we will be the dominant player in the aftermarket for these
products. We are currently talking to several potential partners about the
development of an aftermarket specific product, and expect to complete an
agreement within the next 30 days. We hope to be able to test market a
product to both the consumer and commercial markets sometime during fiscal
2001.
"With respect to our buyback program, we repurchased 737,500 shares during
the third quarter of fiscal 20. As of January 6, 2000 total shares
repurchased was 6,393,600 shares."
From time to time, information provided by the Company or statements made
by its employees may contain "forward-looking" information, which involves
risk and uncertainties. Any statements in this release 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 markets, ability to
compete in new markets, new product potential 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 Quarterly Report
on Form 10-Q for the quarterly period ended August 31, 1999.
LoJack Corporation
Condensed Financial Information
(Unaudited)
Three Months Ended Nine Months Ended
November 30, November 30,
1999 1998 1999 1998
Revenues $22,168,000 $20,864,000 $68,754,000 $62,938,000
Operating Income 7,745,000 3,663,000 11,362,000 12,669,000
Pre-tax Income 4,108,000 3,739,000 11,920,000 14,045,000
Net Income 2,505,000 2,279,000 7,271,000 8,565,000
Diluted Earnings
Per Share $.15 $.12 $.41 $.44
Diluted Common
Shares
Outstanding 17,074,000 18,897,000 17,712,000 19,359,000
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.