Quarterly Financial Releases

back to financial release listing

LoJack Corporation Reports Earnings of $.15 Per Share on $21,810,000 In Revenues For Second Quarter

Dedham, MA, Oct. 1 - LoJack Corporation, (NASDAQ NMS: "LOJN") announced today that for the second quarter ended August 31, 1998, (fiscal 1999) revenues were $21,810,000 a 16% increase over second quarter revenues of $18,745,000 in fiscal 1998. Net income was $2,866,000, or $.15 per diluted share, for the second quarter of fiscal 1999, compared to earnings of $2,517,000 or $.12 per diluted share for the same period last year. Operating income for the second quarter of fiscal 1999 was $4,591,000 compared to $3,873,000 for the second quarter in fiscal 1998.

Revenues for the six months ended August 31, 1998 were $42,075,000, a 13% increase over revenues of $37,303,000 for the same period a year earlier. Net income was $6,286,000, or $.32 per diluted share, for the first six months of fiscal 1999, compared to $4,778,000, or $.23 per diluted share, for the first six months of fiscal 1998. Net income for the six months ended August 31, 1998 included a pre-tax gain in the first quarter on the sale of marketable securities of $1,100,000, or $.03 per diluted share, after taxes. The gain was the result of the sale of a portion of the company's stock in Tracker Network UK, Ltd., LoJack's licensee in the United Kingdom, which had been acquired pursuant to an option agreement. Operating income for the six months ended August 31, 1998 was $9,005,000 compared to $7,417,000 for the same period a year ago.

The increase in revenues for the second quarter of fiscal 1999 of $3,065,000 reflected a $2,851,000, or 17%, increase in domestic revenues and a $214,000, or 9% increase in revenues from product sales and licensing fees pursuant to license agreements for the company's technology in international markets.

In making the announcement, C. Michael Daley, chairman, said "Domestic revenue growth of 17% during the second quarter of fiscal 1999, compared to a year earlier, was the result of a strong performance in most of our existing domestic markets, and the commencement of operations in the Arizona market in July. Total LoJack Units sold domestically during the second quarter increased by 21% over a year ago, and this trend seems to be continuing as we enter the third quarter. LoJack Unit revenue growth rate was partially offset by continued decreases in the penetration of sales of LoJack's low margin optional alarm products as more cars are being sold with factory-installed alarm systems.

"We are very pleased with the results of our domestic operations and unit sales growth during the second quarter, particularly in light of the negative impact the General Motors strike had on new car sales during the quarter. Additionally, we have started to make some meaningful inroads in the fleet and commercial business including our recent introduction of a ruggedized LoJack Unit for use in the heavy equipment industry.

"International revenues increased by $214,000, or 9%, during the second quarter of fiscal 1999 compared to a year earlier. This increase consisted of a $165,000, or 9%, decrease in sales of and royalties on the international version of the LoJack Unit and related products, and a $379,000, or 83%, increase in the sale of components and license fees from new licensees which are generally non-recurring in nature.

"With respect to sales of the international version of the LoJack Unit, our licensees in South Africa, Columbia and Ecuador posted strong results. On the other hand, licensees experiencing decreases were Korea, China and Russia, due to the economic crises impacting those areas of the globe, and Argentina, as the result of the licensee's financial difficulties. We are continuing to work towards a resolution of problems with our licensee in Argentina so that sales can be resumed there.

"We are optimistic about domestic prospects for the remainder of fiscal 1999. We expect that we can continue our growth trends, especially given the expansion into Arizona and Houston. We estimate that our rate of profit growth domestically will increase in the balance of the year as growth in revenues in these two markets covers the increase in costs and expenses incurred due to their start up.

"We are cautiously optimistic about the rest of fiscal 1999, especially in light of the instability in world markets, which continue to impact our licensees in Asia and Russia and potentially Latin America. I would also like to point out that during the third and fourth quarters of last year we recognized $2,433,000 in revenues from the sale of components and license fees from new licensees, which were non-recurring in nature. While we have new licensees in several major countries with the possibility of generating revenues in excess of that amount, it is uncertain whether any of them will have their regulatory approvals and financing completed before the end of our fiscal year. However, on the positive side, our licensees continue to expand into new international markets. Our licensee in Mexico recently commenced operations and is planning further expansion over the next two quarters. In addition, our licensees in Germany and Nigeria are expected to commence operations during this year.

"Gross margins for the second quarter of fiscal 1999 increased to 57% of revenues from 56% a year earlier. Domestically, gross margins remained at 56% of revenues for the second quarters of fiscal 1999 and 1998. International gross margins increased to 58% of related revenues during the second quarter of fiscal 1999 compared to 52% during the second quarter of 1998, principally the result of an increase in non-recurring licensing fee revenue and component sales. Gross margins for the six months ended August 31, 1998 increased to 56% from 55% for the same period a year earlier. Domestically, gross margins also increased to 57% from 56% for the same period a year earlier, while international gross margins increased to 54% from 51% last year.

"We continue to repurchase shares under our stock buyback program. As of September 30, 1998 our total shares repurchased under the current board authorization is 4,532,500 shares."

Certain statements contained herein, including, without limitation, those concerning expectations for results of operations for the remainder of fiscal 1999, for prospects for international expansion and sales of the company's products, and expectations for growth and profit trends, are forward-looking statements which involve a number of known and unknown risks and uncertainties which could cause actual results to differ from those expressed or implied in such forward-looking statements. Such risks and uncertainties include, without limitation, matters affecting the company, such as the timing of commencement of operations of new licensees, successful completion of the development and customer acceptance of new products, the results of the company's domestic markets, general economic conditions in domestic and foreign markets and other factors which are listed in Exhibit 99 incorporated by reference in the company's Annual Report on Form 10-K for the fiscal year ended February 28, 1996.

LoJack Corporation

Condensed Financial Information
(Unaudited)

Contact:
Joseph F. Abely, President
(781)326-4700

John Swanson
Swanson Communications, Inc.
(212) 683-4890