First Quarter Highlights
Revenue of $30.3 Million
Improved Profitability on Tight Cost Control
Net Loss Reduced to $1.6 Million
Westwood, MA. May 3, 2011 – LoJack Corporation (NASDAQ GS: “LOJN”) today reported consolidated revenue of $30.3 million for the first quarter ended March 31, 2011 compared to $30.8 million in the same quarter of the prior year. Revenue in the company’s North America segment was $22.4 million for the first quarter compared to $23.1 million in the first quarter of the prior year. A 7% increase in U.S. unit volume was offset by lower average pricing in the U.S. and a decline in the company’s business in Canada. Revenue in the company’s international segment for the first quarter of 2011 increased 5% to $7.2 million from $6.9 million in the same quarter of the prior year, driven by continued expansion of the subscriber base in Italy.
Richard T. Riley, Chairman and Chief Executive Officer said, “While we were pleased with our continued strong progress in improving profitability in the first quarter, we were disappointed with our top line revenue performance.. Consolidated revenue for the first quarter was largely unchanged from prior year levels as the expected modest growth in our international business was offset by a slight decline in our North America segment. While the broader auto market in the U.S. grew approximately 20% in the first quarter of 2011 over prior year levels, our unit volume increased 7%, as our domestic business continued to be negatively impacted by a shift in historical brand mix and an increased level of leased vehicles. Our unit volume increase in the U.S. was offset by lower average pricing as a greater percentage of our business was driven by our bulk installation business model at lower price points. We have developed specific sales programs to address these cyclical auto trends with initial strong dealer acceptance thus far in the second quarter.”
“International revenue in the first quarter of 2011 reflected a 5% increase over prior year levels, with the business in Italy continuing to generate positive momentum. Unit volume and revenue in Italy during the first quarter of 2011 increased 35% and 55%, respectively over the same quarter in 2010 as we continued to make solid progress in adding new subscribers. With
approximately 2,000 new subscribers added during the first quarter we now have aproximately
15,000 subscribers in Italy.”
Consolidated gross profit for the first quarter of 2011 increased 4% to $15.0 million from $14.5
million in the first quarter of 2010. Gross profit as a percentage of revenue for the first quarter of
2011 was 50%, compared to 47% in the same quarter of the prior year. The improvement in
gross profit as a percentage of revenue for the first quarter was driven by a change in customer
mix, lower promotional spending in the U.S. and lower product warranty costs related to the
company’s legacy technology in Canada.
Operating expenses in the first quarter declined $2.8 million, or 14%, from the same quarter of
the prior year, to $17.6 million, primarily due to staffing reductions made earlier in 2010 and
lower marketing spending. The resulting operating loss for the first quarter of 2011 was $2.6
million, or $3.3 million better than the operating loss of $5.9 million in the first quarter of 2010.
Adjusted EBITDA, which includes the items reflected in Table 1, for the first quarter of 2011,
was a loss of $0.1 million, compared to a loss of $2.9 million in the first quarter of 2010.
Mr. Riley said, “We continued to benefit from strong cost control in the first quarter, delivering
significantly improved profitability in our historically lowest revenue quarter of the year. The
tight cost management allowed us the flexibility to make specific investments in future sales and
marketing programs to address the changes in brand mix and leasing that we experienced in the
first quarter of 2011.”
The net loss attributable to LoJack Corporation for the first quarter of 2011 was $1.6 million, or
$0.09 per diluted share, compared to a net loss of $5.6 million, or $0.32 per diluted share, in the
first quarter of the prior year.
Mr. Riley said, “As a result of the brand mix shift seen in the first quarter of 2011 coupled with
the expected disruption in the second half of 2011 from the natural disaster in Japan, we have
adjusted our internal revenue forecast down slightly. We will continue to aggressively manage
our cost structure to deliver our budgeted adjusted EBITDA. Our 2011 internal forecast reflects
revenue between $152 million and $156 million and adjusted EBITDA to be between $16
million and $18 million.”
During the first quarter of 2011, the company did not repurchase any shares under its stock
repurchase plan. As of March 31, 2011, the company had an outstanding authority to repurchase
About LoJack Corporation
LoJack Corporation, the company that invented the stolen vehicle recovery market more than 25 years ago, is the global leader in finding and recovering a wide range of mobile assets including cars, construction equipment and motorcycles-having recovered nearly $4 billion USD in stolen assets worldwide. In today's rapidly changing world, LoJack's core competencies are more valuable and more relevant than ever as they are now 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 Alzheimer's.
For more information, visit www.lojack.com, www.autotheftblog.com, www.youtube.com/lojack, www.twitter.com/LoJackCorp or www.Facebook.com/LoJackCorp.
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 company’s market and customers, the company’s objectives and plans for future operations
and products and the company’s expected liquidity, revenue, profit, 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 company’s 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 company’s customers; (v) the presence of competitors with
greater technical, marketing, and financial resources; (vi) the company’s customers’ ability to
access the credit markets; (vii) the company’s ability to promptly and effectively respond to
technological change to meet evolving customer needs; (viii) the company’s ability to
successfully expand its operations; and (ix) 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
company’s Annual Report on Form 10-K for the year ended December 31, 2010.
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 company’s
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.
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