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8-K - FORM 8-K - LOJACK CORP | c16421e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
John Swanson
Swanson Communications, Inc.
(516) 671-8582
John Swanson
Swanson Communications, Inc.
(516) 671-8582
LOJACK CORPORATION REPORTS
FIRST QUARTER 2011 RESULTS
FIRST QUARTER 2011 RESULTS
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 companys 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 companys business in Canada. Revenue in the companys 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 companys
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
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, May 3, 2011, log
onto www.lojack.com (click About Us, Investor Relations, and then click Quarterly Results
Conference Call Webcast). 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 and customers, the companys objectives and plans for future operations and
products and the companys 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 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) the presence of competitors with greater technical,
marketing, and financial resources; (vi) the companys customers ability to access the credit
markets; (vii) the companys ability to promptly and effectively respond to technological change to
meet evolving customer needs; (viii) the companys 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 companys 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 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 March 31, 2011 | Three Months ended March 31, 2010 | |||||||
$ | $ | |||||||
Operating loss, as
reported |
$ | (2.6 | ) | $ | (5.9 | ) | ||
Adjusted for: |
||||||||
Depreciation and
amortization |
1.8 | 1.9 | ||||||
Stock compensation
expense |
0.7 | 1.1 | ||||||
Adjusted EBITDA |
$ | (0.1 | ) | $ | (2.9 | ) | ||
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 March 31, | ||||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
Revenue |
$ | 30.3 | $ | 30.8 | ||||
Cost of goods sold |
15.3 | 16.3 | ||||||
Gross profit |
15.0 | 14.5 | ||||||
Costs and expenses: |
||||||||
Product development |
1.4 | 1.9 | ||||||
Sales and marketing |
6.5 | 7.5 | ||||||
General and administrative |
8.0 | 9.3 | ||||||
Depreciation and amortization |
1.7 | 1.7 | ||||||
Total |
17.6 | 20.4 | ||||||
Operating loss |
(2.6 | ) | (5.9 | ) | ||||
Other income (expense): |
||||||||
Interest income |
0.7 | 0.1 | ||||||
Interest expense |
(0.2 | ) | (0.2 | ) | ||||
Other, net |
0.7 | 0.4 | ||||||
Total |
1.2 | 0.3 | ||||||
Loss before provision for income taxes |
(1.4 | ) | (5.6 | ) | ||||
Provision for income taxes |
0.2 | 0.1 | ||||||
Net loss |
(1.6 | ) | (5.7 | ) | ||||
Less: Net loss attributable to the noncontrolling interest |
| (0.1 | ) | |||||
Net loss attributable to LoJack Corporation |
$ | (1.6 | ) | $ | (5.6 | ) | ||
Diluted net loss per share attributable to
LoJack Corporation |
$ | (0.09 | ) | $ | (0.32 | ) | ||
Weighted average diluted common
shares outstanding |
17,531,613 | 17,283,560 | ||||||
LoJack Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions)
Condensed Consolidated Balance Sheets
(in millions)
March 31, 2011 | December 31, 2010 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | 52.2 | $ | 51.8 | ||||
Restricted cash |
0.1 | 0.2 | ||||||
Marketable securities at fair value |
1.2 | 1.4 | ||||||
Accounts receivable, net |
23.0 | 26.9 | ||||||
Inventories |
9.1 | 8.5 | ||||||
Prepaid expenses and other |
3.6 | 4.0 | ||||||
Prepaid and receivable income taxes |
0.8 | 0.7 | ||||||
Deferred income taxes |
0.3 | 0.3 | ||||||
Total current assets |
90.3 | 93.8 | ||||||
Property and equipment, net |
14.3 | 15.1 | ||||||
Deferred income taxes |
0.1 | 0.1 | ||||||
Intangible assets, net |
0.2 | 0.3 | ||||||
Goodwill |
1.7 | 1.7 | ||||||
Other assets, net |
10.7 | 11.3 | ||||||
Total assets |
$ | 117.3 | $ | 122.3 | ||||
Liabilities and equity |
||||||||
Current Liabilities: |
||||||||
Current portion of long term debt |
$ | 0.2 | $ | 0.2 | ||||
Accounts payable |
4.2 | 7.1 | ||||||
Accrued and other liabilities |
10.5 | 11.1 | ||||||
Current portion of deferred revenue |
20.9 | 21.8 | ||||||
Accrued compensation |
3.8 | 4.7 | ||||||
Total current liabilities |
39.6 | 44.9 | ||||||
Long term debt |
11.6 | 8.8 | ||||||
Deferred revenue |
28.3 | 28.8 | ||||||
Deferred Income Taxes |
0.3 | 0.3 | ||||||
Other accrued liabilities |
3.5 | 3.5 | ||||||
Accrued compensation |
1.4 | 1.6 | ||||||
Total liabilities |
84.7 | 87.9 | ||||||
Commitments and Contingent Liabilities |
||||||||
Equity: |
||||||||
Common stock |
0.2 | 0.2 | ||||||
Additional paid-in capital |
20.7 | 20.0 | ||||||
Accumulated other comprehensive income |
5.8 | 6.7 | ||||||
Retained earnings |
6.1 | 7.7 | ||||||
Total LoJack Corporation equity |
32.8 | 34.6 | ||||||
Noncontrolling interest in subsidiary |
(0.2 | ) | (0.2 | ) | ||||
Total equity |
32.6 | 34.4 | ||||||
Total liabilities and equity |
$ | 117.3 | $ | 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 Quarterly
Financial 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.