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 March 31, 2003 |
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 (State or other jurisdiction of incorporation or organization) |
04-2664794 (I.R.S. Employer Identification Number) | |
| 200 Lowder Brook Drive, Suite 1000 Westwood, Massachusetts (Address of principal executive offices) |
02090 (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
There were 23,403,675 shares issued and outstanding of the registrant’s common stock, $.01 par value, as of May 9, 2003.
LOJACK CORPORATION AND SUBSIDIARIES
| Page | ||||
| Part I. Financial Information |
||||
| Item 1. Unaudited Financial Statements |
||||
| Consolidated Balance Sheets: March 31, 2003 and December 31, 2002 |
1 | |||
| Consolidated Statements of Income: Three Months Ended March 31, 2003 and 2002 |
2 | |||
| Consolidated Statements of Cash Flows: Three Months Ended March 31, 2003 and 2002 |
3 | |||
| 4 | ||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
8 | |||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
10 | |||
| Item 4. Controls and Procedures |
11 | |||
| Part II. Other Information |
||||
| Item 6. Exhibits and Reports on Form 8-K |
12 | |||
| 13 | ||||
| 14 | ||||
Item 1. Unaudited Financial Statements
LOJACK CORPORATION AND SUBSIDIARIES
(in thousands, except share amounts)
| March 31 2003 |
December 31 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS |
||||||||
| CURRENT ASSETS: |
||||||||
| Cash and equivalents |
$ |
1,389 |
|
$ |
1,367 |
| ||
| Accounts receivable—Net |
|
19,297 |
|
|
19,152 |
| ||
| Inventories |
|
7,552 |
|
|
7,965 |
| ||
| Prepaid expenses and other |
|
1,298 |
|
|
3,175 |
| ||
| Prepaid income taxes |
|
— |
|
|
219 |
| ||
| Deferred income taxes |
|
2,512 |
|
|
2,358 |
| ||
| Total current assets |
|
32,048 |
|
|
34,236 |
| ||
| PROPERTY AND EQUIPMENT—Net |
|
14,974 |
|
|
13,404 |
| ||
| DEFERRED INCOME TAXES |
|
2,914 |
|
|
2,886 |
| ||
| OTHER ASSETS—Net |
|
3,805 |
|
|
4,477 |
| ||
| TOTAL |
$ |
53,741 |
|
$ |
55,003 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| CURRENT LIABILITIES: |
||||||||
| Current portion of capital lease obligations |
$ |
1,361 |
|
$ |
1,504 |
| ||
| Accounts payable |
|
8,344 |
|
|
10,950 |
| ||
| Accrued and other liabilities |
|
1,984 |
|
|
1,392 |
| ||
| Customer deposits |
|
470 |
|
|
794 |
| ||
| Current portion of deferred revenue |
|
4,727 |
|
|
4,527 |
| ||
| Accrued compensation |
|
2,127 |
|
|
2,214 |
| ||
| Total current liabilities |
|
19,013 |
|
|
21,381 |
| ||
| ACCRUED COMPENSATION |
|
443 |
|
|
508 |
| ||
| DEFERRED REVENUE |
|
12,187 |
|
|
11,682 |
| ||
| CAPITAL LEASE OBLIGATIONS |
|
766 |
|
|
1,064 |
| ||
| STOCKHOLDERS’ EQUITY: |
||||||||
| Common stock—$.01 par value; authorized, 35,000,000 shares; issued, |
|
234 |
|
|
234 |
| ||
| Additional paid-in capital |
|
63,884 |
|
|
63,884 |
| ||
| Retained earnings |
|
35,916 |
|
|
34,952 |
| ||
| Treasury stock, at cost, 8,663,034 shares of common stock at March 31, 2003 |
|
(78,702 |
) |
|
(78,702 |
) | ||
| Total stockholders’ equity |
|
21,332 |
|
|
20,368 |
| ||
| TOTAL |
$ |
53,741 |
|
$ |
55,003 |
| ||
See notes to unaudited consolidated financial statements.
-1-
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
| Three Months Ended |
||||||||
| March 31, 2003 |
March 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| Revenues |
$ |
27,742 |
|
$ |
27,400 |
| ||
| Cost of goods sold: |
||||||||
| Product and installation costs |
|
13,293 |
|
|
13,505 |
| ||
| Systems costs (exclusive of depreciation shown below) |
|
763 |
|
|
495 |
| ||
| Total |
|
14,056 |
|
|
14,000 |
| ||
| Gross margin |
|
13,686 |
|
|
13,400 |
| ||
| Costs and expenses: |
||||||||
| Research and development |
|
673 |
|
|
446 |
| ||
| Sales and marketing |
|
7,006 |
|
|
9,294 |
| ||
| General and administrative |
|
3,906 |
|
|
3,114 |
| ||
| Depreciation and amortization |
|
547 |
|
|
466 |
| ||
| Total |
|
12,132 |
|
|
13,320 |
| ||
| Operating income |
|
1,554 |
|
|
80 |
| ||
| Other income (expense): |
||||||||
| Interest income |
|
29 |
|
|
23 |
| ||
| Interest expense |
|
(40 |
) |
|
(49 |
) | ||
| Gain on sale of fixed assets |
|
38 |
|
|
79 |
| ||
| Total |
|
27 |
|
|
53 |
| ||
| Income before provision for income taxes |
|
1,581 |
|
|
133 |
| ||
| Provision for income taxes |
|
617 |
|
|
49 |
| ||
| Net income |
$ |
964 |
|
$ |
84 |
| ||
| Earnings per share: |
||||||||
| Basic |
$ |
0.07 |
|
$ |
0.01 |
| ||
| Diluted |
$ |
0.07 |
|
$ |
0.01 |
| ||
| Weighted average shares: |
||||||||
| Basic |
|
14,740,641 |
|
|
14,419,127 |
| ||
| Diluted |
|
14,742,306 |
|
|
14,738,483 |
| ||
See notes to unaudited consolidated financial statements.
-2-
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Three Months Ended |
||||||||
| March 31, 2003 |
March 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income |
$ |
964 |
|
$ |
84 |
| ||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Deferred revenue recognized |
|
(2,510 |
) |
|
(846 |
) | ||
| Deferred revenue additions |
|
3,215 |
|
|
1,655 |
| ||
| Depreciation and amortization |
|
1,097 |
|
|
889 |
| ||
| Provision for doubtful accounts |
|
34 |
|
|
173 |
| ||
| Deferred income taxes |
|
(182 |
) |
|
— |
| ||
| Increase (decrease) in cash from changes in assets and liabilities: |
||||||||
| Accounts receivable |
|
(485 |
) |
|
(3,161 |
) | ||
| Inventories |
|
413 |
|
|
(216 |
) | ||
| Prepaid expenses and other |
|
1,877 |
|
|
195 |
| ||
| Prepaid income taxes |
|
219 |
|
|
(242 |
) | ||
| Other assets |
|
(22 |
) |
|
(6 |
) | ||
| Accounts payable |
|
(2,606 |
) |
|
2,464 |
| ||
| Customer deposits |
|
(324 |
) |
|
||||