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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 10-Q
 
(Mark One)
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    
 
SECURITIES EXCHANGE ACT OF 1934
 
    
 
For the quarterly period ended September 30, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    
 
SECURTIES EXCHANGE ACT OF 1934
 
    
 
For the transition period from                          to                         .
 
Commission File Number 1-8439
 

 
LOJACK CORPORATION
(Exact name of registrant as specified in its charter)
 
Massachusetts
 
04-2664794
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification Number)
 
200 Lowder Brook Drive, Suite 1000
Westwood, Massachusetts
 
02090
(Address of principal executive offices)
 
(Zip code)
 
781-326-4700
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES   x   NO  ¨
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)  YES  ¨
NO  x
 
APPLICABLE ONLY TO CORPORATE ISSUERS
 
There were 00,000,000 shares issued and outstanding of the registrant’s common stock, $.01 par value, as of November 00, 2002.
 


Table of Contents
 
LOJACK CORPORATION AND SUBSIDIARIES
 
TABLE OF CONTENTS
 
 
              
PAGE

Part I.        Financial Information
    
    
Item 1.
  
Unaudited Financial Statements
    
         
Consolidated Balance Sheets:
    
            
1
         
Consolidated Statements of Income:
    
            
2
         
Consolidated Statements of Cash Flows:
    
            
4
            
5
    
Item 2.
     
9
    
Item 3.
     
13
    
Item 4.
     
14
Part II.        Other Information
    
    
Item 6.
     
14


Table of Contents
 
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share amounts)
 
    
September 30, 2002

    
December 31, 2001

 
ASSETS
                 
CURRENT ASSETS:
                 
Cash and equivalents
  
$
5,266
 
  
$
5,889
 
Accounts receivable—net
  
 
21,738
 
  
 
16,207
 
Inventories
  
 
7,184
 
  
 
5,865
 
Prepaid expenses and other
  
 
921
 
  
 
387
 
Prepaid income taxes
  
 
—  
 
  
 
141
 
Deferred income taxes
  
 
2,463
 
  
 
1,942
 
    


  


Total current assets
  
 
37,572
 
  
 
30,431
 
PROPERTY AND EQUIPMENT—Net
  
 
13,050
 
  
 
12,764
 
DEFERRED INCOME TAXES
  
 
2,684
 
  
 
2,205
 
OTHER ASSETS—Net
  
 
2,981
 
  
 
2,794
 
    


  


TOTAL
  
$
56,287
 
  
$
48,194
 
    


  


LIABILITIES AND STOCKHOLDERS' EQUITY
                 
CURRENT LIABILITIES:
                 
Current portion of capital lease obligations
  
$
1,676
 
  
$
1,539
 
Accounts payable
  
 
11,932
 
  
 
6,689
 
Current portion of deferred revenue
  
 
4,229
 
  
 
3,086
 
Accrued and other liabilities
  
 
1,916
 
  
 
1,288
 
Customer deposits
  
 
1,286
 
  
 
1,635
 
Accrued taxes
  
 
442
 
  
 
—  
 
Accrued compensation
  
 
2,240
 
  
 
1,835
 
    


  


Total current liabilities
  
 
23,721
 
  
 
16,072
 
ACCRUED COMPENSATION
  
 
785
 
  
 
747
 
DEFERRED REVENUE
  
 
12,051
 
  
 
10,660
 
CAPITAL LEASE OBLIGATIONS
  
 
1,360
 
  
 
1,038
 
STOCKHOLDERS' EQUITY:
                 
Common stock—$.01 par value; authorized, 35,000,000 shares; issued, 23,330,161 and 22,700,281 shares at September 30, 2002 and December 31, 2001, respectively
  
 
233
 
  
 
227
 
Additional paid-in capital
  
 
62,791
 
  
 
61,530
 
Retained earnings
  
 
34,048
 
  
 
33,123
 
Treasury stock, at cost, 8,663,034 and 7,995,840 shares of common stock at September 30, 2002 and December 31, 2001, respectively
  
 
(78,702
)
  
 
(75,203
)
    


  


Total stockholders' equity
  
 
18,370
 
  
 
19,677
 
    


  


TOTAL
  
$
56,287
 
  
$
48,194
 
    


  


 
 
See notes to unaudited consolidated financial statements.

1


Table of Contents
 
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except share and per share amounts)
 
    
Three Months Ended

 
    
September 30,
2002

    
September 30,
2001

 
Revenues
  
$
31,087
 
  
$
24,657
 
Cost of goods sold:
                 
Product and installation costs
  
 
15,768
 
  
 
12,342
 
Systems costs (exclusive of depreciation shown below)
  
 
648
 
  
 
351
 
    


  


Total
  
 
16,416
 
  
 
12,693
 
Gross margin
  
 
14,671
 
  
 
11,964
 
    


  


Costs and expenses:
                 
Research and development
  
 
674
 
  
 
463
 
Sales and marketing
  
 
8,762
 
  
 
6,382
 
General and administrative
  
 
3,318
 
  
 
3,115
 
Depreciation and amortization
  
 
655
 
  
 
489
 
    


  


Total
  
 
13,409
 
  
 
10,449
 
    


  


Operating income
  
 
1,262
 
  
 
1,515
 
    


  


Other income (expense):
                 
Interest income
  
 
51
 
  
 
121
 
Interest expense
  
 
(59
)
  
 
(68
)
Gain (loss) on sale of fixed assets
  
 
37
 
  
 
(33
)
    


  


Total
  
 
29
 
  
 
20
 
    


  


Income before provision for income taxes
  
 
1,291
 
  
 
1,535
 
Provision for income taxes
  
 
478
 
  
 
568
 
    


  


Net income
  
$
813
 
  
$
967
 
    


  


Earnings per share:
                 
Basic
  
$
0.06
 
  
$
0.06
 
    


  


Diluted
  
$
0.06
 
  
$
0.06
 
    


  


Weighted average shares:
                 
Basic
  
 
14,669,147
 
  
 
15,283,535
 
    


  


Diluted
  
 
14,669,147
 
  
 
15,845,199
 
    


  


 
See notes to unaudited consolidated financial statements.

2


Table of Contents
 
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except share and per share amounts)
 
    
Nine Months Ended

 
    
September 30,
2002

    
September 30,
2001

 
Revenues
  
$
88,906
 
  
$
72,294
 
Cost of goods sold:
                 
Product and installation costs
  
 
44,297
 
  
 
36,171
 
Systems costs (exclusive of depreciation shown below)
  
 
1,729
 
  
 
1,146
 
    


  


Total
  
 
46,026
 
  
 
37,317
 
Gross margin
  
 
42,880
 
  
 
34,977
 
    


  


Costs and expenses:
                 
Research and development
  
 
1,529
 
  
 
1,476
 
Sales and marketing
  
 
27,731
 
  
 
16,397
 
General and administrative
  
 
10,538
 
  
 
10,652
 
Depreciation and amortization
  
 
1,673
 
  
 
1,510
 
    


  


Total
  
 
41,471
 
  
 
30,035
 
    


  


Operating income
  
 
1,409
 
  
 
4,942
 
    


  


Other income (expense):
                 
Interest income
  
 
98
 
  
 
363
 
Interest expense
  
 
(167
)
  
 
(203
)
Gain on sale of fixed assets
  
 
128
 
  
 
75
 
    


  


Total
  
 
59
 
  
 
235
 
    


  


Income before provision for income taxes
  
 
1,468
 
  
 
5,177
 
Provision for income taxes
  
 
543
 
  
 
1,915
 
    


  


Net income
  
$
925
 
  
$
3,262
 
    


  


Earnings per share:
                 
Basic
  
$
0.06
 
  
$
0.21
 
    


  


Diluted
  
$
0.06
 
  
$
0.20
 
    


  


Weighted average shares:
                 
Basic
  
 
14,691,748