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8-K - FORM 8-K - LOJACK CORP | c24320e8vk.htm |
Exhibit 99.1
Contact:
John Swanson
Swanson Communications, Inc.
(516) 671-8582
Donald Peck
LoJack Corporation
(781) 251-4700
John Swanson
Swanson Communications, Inc.
(516) 671-8582
Donald Peck
LoJack Corporation
(781) 251-4700
LOJACK CORPORATION REPORTS
THIRD QUARTER 2011 RESULTS
THIRD QUARTER 2011 RESULTS
Third Quarter Highlights
| Revenue of $34.5 Million |
| Adjusted EBITDA of $1.5 Million |
| Continued Cost Control |
Westwood, MA, November 7, 2011 LoJack Corporation (NASDAQ GS: LOJN), the global leader in
finding and recovering a wide range of mobile assets including cars, construction equipment and
motorcycles, today reported its financial results for the three and nine-month periods ended
September 30, 2011.
The company reported that consolidated revenue for the third quarter of 2011 was $34.5 million,
down 10.4% from $38.5 million in the same quarter last year. Revenue in the companys North
America segment was $24.2 million for the quarter, essentially in line with the $24.4 million of
revenue generated in the same quarter last year. Revenue in the companys International segment
for the third quarter of 2011 was $9.5 million, down 28.9% from $13.4 million in the same quarter
last year.
Richard T. Riley, Chairman, said, While we were pleased with the progress we achieved throughout
the third quarter in our domestic business, the uneven nature of our international business
resulted in a year-over-year decline in both the International segment and in consolidated revenue
for the third quarter.
While we underperformed the broader domestic retail auto market, which was up 7% in the third
quarter, we were able to make steady improvements throughout the quarter including a year-over-year
increase in our United States unit volume for the month of September. We continued to be
negatively impacted by a shift in historical brand and model mix, as well as a slowdown in our bulk
installations due to a shortage of dealer vehicle inventory following the production disruptions
created by the Japanese earthquake earlier in the year. Looking forward, we will continue to
monitor the potential near-term impacts of the Thai floods on Japanese automakers. At the same
time, auto manufacturers and industry experts now expect inventory shortages to ease in the fourth
quarter, which should position us to benefit as the affected auto
manufacturers rebuild their inventory levels at the dealerships and move to recapture their
traditional share of the domestic market.
International revenue in the third quarter was negatively impacted primarily by the timing of
purchases by some of our licensees, much of which we now expect to receive in the final quarter of
the year. Revenue in Italy during the third quarter of 2011 increased 45% over the same period
last year, as we continued adding subscribers and expanded our distribution channels into more
dealerships and insurance brokers.
Consolidated gross margin for the third quarter of 2011 was $17.8 million, down 8.2% from $19.4
million in the same quarter last year, due to the lower sales volume. Gross margin as a percentage
of revenue for the third quarter of 2011 was 51.5%, up from 50.3% in the third quarter of the prior
year.
Operating expenses in the third quarter of 2011 increased $1.9 million from the third quarter of
2010 to $18.3 million. This increase was primarily due to a $2.3 million increase in legal
expenses over the same period last year, as the company established a framework for the settlement
of the California federal employment claims and continued to defend against ongoing litigation.
Adjusted EBITDA for the third quarter of 2011, which includes the items reflected in Table 1, was
$1.5 million, compared to $5.0 million in the third quarter of 2010.
Mr. Riley further stated, Despite the decline in overall revenue, we continued to exhibit tight
cost management in the third quarter of 2011, with the exception of legal costs, which increased
due to the ongoing litigation.
Net loss to LoJack Corporation for the third quarter of 2011 was $1.8 million, or $0.10 per basic
and diluted share, compared to net income of $2.7 million, or $0.15 per diluted share, in the third
quarter of the prior year.
Mr. Riley added, We are excited about the new leadership joining an already dynamic senior
management team. Randy Ortiz, our new CEO and President, is a talented and seasoned veteran of the
automotive industry, while Don Peck, our new Executive Vice President and Chief Financial Officer,
brings valuable strategic, legal and financial expertise in his new role.
Based on our third quarter performance, we have revised 2011 internal forecast to reflect expected
revenue between $137 million and $139 million and adjusted EBITDA of $9 million to $10 million.
During the third quarter of 2011, the company did not repurchase any shares under its stock
repurchase plan. As of September 30, 2011, the company had an outstanding authority to repurchase
1,681,778 shares.
About LoJack Corporation
LoJack Corporation, the company that invented the stolen vehicle recovery market more than two
decades ago, is the global leader in finding and recovering a wide range of mobile assets including
cars, construction equipment and motorcycles having recovered nearly USD$4 billion in stolen
assets worldwide. LoJacks core competencies are being applied into new areas, such as the
prevention, detection and recovery of stolen cargo and finding and rescuing people with cognitive
conditions such as autism and Alzheimers. LoJack has proven processes and technology for recovery
Radio Frequency and unique integration with law enforcement agencies, making its offerings
proven solutions that not only deliver a wide range of recoveries, but also enhance public safety.
LoJacks Stolen Vehicle Recovery System operates in 28 states and the District of Columbia, and in
more than 30 countries throughout North America, South America, Europe, Africa and Asia. For more
information, visit http://www.lojack.com.
To access the webcast of the companys conference call to be held at 9:00 AM ET, November 7, 2011,
log onto www.lojack.com (click About Us, Investor Relations, and then click Events and
Presentations). An archive of the webcast will be available through
http://www.lojack.com until superseded by the next quarters earnings release and related
webcast.
Safe Harbor Regarding Forward Looking Statements
From time to time, information provided by the company or statements made by its employees may
contain forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995 and other securities laws, which involve risks and uncertainties. Any statements in
this news release that are not statements of historical fact are forward-looking statements
(including, but not limited to, statements concerning the characteristics and growth of the
companys market, customers and auto inventories, expected timing of licensee purchases, the
companys objectives and plans for future operations and products and the companys expected
liquidity, cash flow, revenue, profit margins, adjusted EBITDA 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: (i) the continued and future acceptance of the
companys products and services; (ii) our ability to obtain financing from lenders; (iii) the
outcome of ongoing litigation involving the company; (iv) the rate of growth in the industries of
the companys customers; (v) our relationships with our licensees and the strength of their
business; (vi) the presence of competitors with greater technical, marketing, and financial
resources; (vii) the companys customers ability to access the credit markets; (viii) the
companys ability to promptly and effectively respond to technological change to meet evolving
customer needs; (ix) the companys ability to successfully expand its operations; and (x) changes
in general economic or geopolitical conditions. 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 the companys Annual Report on
Form 10-K for the year ended
December 31, 2010 and the companys other filings with the Securities and Exchange Commission.
Except as required by law, the company undertakes no obligation to release publicly the result of
any revision to the forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
###
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally accepted accounting
principles (GAAP), this press release also contains the non-GAAP financial measure, adjusted
EBITDA. The company believes that the inclusion of this non-GAAP financial measure in this press
release helps investors to gain a meaningful understanding of changes in the companys core
operating results, and can also help investors who wish to make comparisons between LoJack and
other companies on both a GAAP and a non-GAAP basis. LoJack management uses this non-GAAP measure,
in addition to GAAP financial measures, as the basis for measuring our core operating performance
and comparing such performance to that of prior periods and to the performance of our competitors.
These measures are also used by management to assist with their financial and operating decision
making.
The non-GAAP financial measures included in this press release are not meant to be considered
superior to or a substitute for results of operations prepared in accordance with GAAP. In
addition, the non-GAAP financial measures included in this press release may be different from, and
therefore may not be comparable to, similar measures used by other companies. Reconciliations of
the non-GAAP financial measures used in this press release to the most directly comparable GAAP
financial measures are set forth in the text of, and the accompanying tables to, this press
release.
Table 1 Adjusted EBITDA Computation
GAAP to Pro Forma Non-GAAP Reconciliation
(in millions)
(in millions)
Three Months ended | Three Months ended | |||||||
September 30, 2011 | September 30, 2010 | |||||||
$ | $ | |||||||
Net income (loss), as reported |
$ | (1.8 | ) | $ | 2.7 | |||
Adjusted for: |
||||||||
Provision for income taxes |
0.6 | 0.4 | ||||||
Other income (expense) |
0.7 | (0.1 | ) | |||||
Operating income (loss) |
$ | (0.5 | ) | $ | 3.0 | |||
Adjusted for: |
||||||||
Depreciation and amortization |
1.4 | 1.8 | ||||||
Stock compensation expense |
0.6 | 0.2 | ||||||
Adjusted EBITDA |
$ | 1.5 | $ | 5.0 | ||||
LoJack Corporation and Subsidiaries
Condensed Consolidated Statement of Operations
Condensed Consolidated Statement of Operations
(in millions, except share and per share amounts)
Three Months Ended September 30, | ||||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
Revenue |
$ | 34.5 | $ | 38.5 | ||||
Cost of goods sold |
16.7 | 19.1 | ||||||
Gross profit |
17.8 | 19.4 | ||||||
Costs and expenses: |
||||||||
Product development |
1.3 | 1.2 | ||||||
Sales and marketing |
6.9 | 6.9 | ||||||
General and administrative |
8.8 | 6.6 | ||||||
Depreciation and amortization |
1.3 | 1.7 | ||||||
Total |
18.3 | 16.4 | ||||||
Operating income (loss) |
(0.5 | ) | 3.0 | |||||
Other income (expense): |
||||||||
Interest income |
0.1 | | ||||||
Interest expense |
(0.1 | ) | (0.2 | ) | ||||
Other, net |
(0.7 | ) | 0.3 | |||||
Total |
(0.7 | ) | 0.1 | |||||
Income (loss) before provision for income taxes |
(1.2 | ) | 3.1 | |||||
Provision for income taxes |
0.6 | 0.4 | ||||||
Net income (loss) |
(1.8 | ) | 2.7 | |||||
Less: Net loss attributable to the noncontrolling interest |
| | ||||||
Net income (loss) attributable to LoJack Corporation |
$ | (1.8 | ) | $ | 2.7 | |||
Diluted net income (loss) per share attributable to
LoJack Corporation |
$ | (0.10 | ) | $ | 0.15 | |||
Weighted average diluted common
shares outstanding |
17,678,213 | 17,738,093 | ||||||
LoJack Corporation and Subsidiaries
Condensed Consolidated Statement of Operations
Condensed Consolidated Statement of Operations
(in millions, except share and per share amounts)
Nine Months Ended September 30, | ||||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
Revenue |
$ | 98.4 | $ | 106.6 | ||||
Cost of goods sold |
48.4 | 53.3 | ||||||
Gross profit |
50.0 | 53.3 | ||||||
Costs and expenses: |
||||||||
Product development |
4.0 | 4.9 | ||||||
Sales and marketing |
20.1 | 22.7 | ||||||
General and administrative |
24.3 | 24.7 | ||||||
Depreciation and amortization |
4.7 | 5.4 | ||||||
Total |
53.1 | 57.7 | ||||||
Operating loss |
(3.1 | ) | (4.4 | ) | ||||
Other income (expense): |
||||||||
Interest income |
0.9 | 0.2 | ||||||
Interest expense |
(0.5 | ) | (0.5 | ) | ||||
Other, net |
0.6 | (0.1 | ) | |||||
Total |
1.0 | (0.4 | ) | |||||
Loss before provision for income taxes |
(2.1 | ) | (4.8 | ) | ||||
Provision for income taxes |
1.2 | 16.6 | ||||||
Net loss |
(3.3 | ) | (21.4 | ) | ||||
Less: Net loss attributable to the noncontrolling interest |
(0.1 | ) | (0.3 | ) | ||||
Net loss attributable to LoJack Corporation |
$ | (3.2 | ) | $ | (21.1 | ) | ||
Diluted net loss per share attributable to
LoJack Corporation |
$ | (0.18 | ) | $ | (1.21 | ) | ||
Weighted average diluted common
shares outstanding |
17,601,996 | 17,330,533 | ||||||
LoJack Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions)
Condensed Consolidated Balance Sheets
(in millions)
September 30, 2011 | December 31, 2010 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | 51.7 | $ | 51.8 | ||||
Restricted cash |
| 0.2 | ||||||
Marketable securities at fair value |
1.4 | 1.4 | ||||||
Accounts receivable, net |
21.5 | 26.9 | ||||||
Inventories |
8.6 | 8.5 | ||||||
Prepaid expenses and other |
2.8 | 4.0 | ||||||
Prepaid and receivable income taxes |
0.6 | 0.7 | ||||||
Deferred income taxes |
0.3 | 0.3 | ||||||
Total current assets |
86.9 | 93.8 | ||||||
Property and equipment, net |
12.4 | 15.1 | ||||||
Deferred income taxes |
0.1 | 0.1 | ||||||
Intangible assets, net |
0.1 | 0.3 | ||||||
Goodwill |
1.7 | 1.7 | ||||||
Other assets, net |
8.9 | 11.3 | ||||||
Total assets |
$ | 110.1 | $ | 122.3 | ||||
Liabilities and equity |
||||||||
Current Liabilities: |
||||||||
Current portion of long term debt |
$ | 0.2 | $ | 0.2 | ||||
Accounts payable |
4.8 | 7.1 | ||||||
Accrued and other liabilities |
10.3 | 11.1 | ||||||
Current portion of deferred revenue |
20.0 | 21.8 | ||||||
Accrued compensation |
3.5 | 4.7 | ||||||
Total current liabilities |
38.8 | 44.9 | ||||||
Long term debt |
9.4 | 8.8 | ||||||
Deferred revenue |
23.6 | 28.8 | ||||||
Deferred Income Taxes |
0.3 | 0.3 | ||||||
Other accrued liabilities |
3.6 | 3.5 | ||||||
Accrued compensation |
1.2 | 1.6 | ||||||
Total liabilities |
76.9 | 87.9 | ||||||
Commitments and Contingent Liabilities |
||||||||
Equity: |
||||||||
Common stock |
0.2 | 0.2 | ||||||
Additional paid-in capital |
21.8 | 20.0 | ||||||
Accumulated other comprehensive income |
6.9 | 6.7 | ||||||
Retained earnings |
4.5 | 7.7 | ||||||
Total LoJack Corporation equity |
33.4 | 34.6 | ||||||
Noncontrolling interest in subsidiary |
(0.2 | ) | (0.2 | ) | ||||
Total equity |
33.2 | 34.4 | ||||||
Total liabilities and equity |
$ | 110.1 | $ | 122.3 | ||||
NOTE: The full text of this news release can be accessed for 30 days at www.prnewswire.com.
This news release as well as current financial statements may also be accessed on the Internet at
www.lojack.com. Each quarters release is archived on the LoJack website under Investor Relations
during the fiscal year (click About Us, then, click Investor Relations, click Press
Releases). The companys Annual Report, Form 10-Q and Form 10-K filings are also available on its
website. Copies of the companys financial information, including news releases, may also be
obtained by contacting Swanson Communications, Inc. at (516) 671-8582.