LoJack Corporation Reports Financial Results For First Quarter 2013

     LoJack Corporation Reports Financial Results For First Quarter 2013

PR Newswire

CANTON, Mass., May 2, 2013

CANTON, Mass., May 2, 2013 /PRNewswire/ --

Highlights

  oFirst-Quarter LoJack U.S. Dealer Channel Unit Volume Up 17%, Outpacing
    Retail Auto Industry Growth
  oPre-Install Programs Account for 44% of Unit Sales, Up from 31% in Q1 2012
  oNew Fleet Telematics Product Deployed in Pilot Testing; Launched in April
    2013
  oInternational Licensee Revenues Grow 6% as Company Awaits Resumption of
    Product Sales to Argentina
  oCompany Confirms Guidance of Double-Digit Revenue Growth for Full-Year
    2013

LoJack Corporation (NASDAQ GS: LOJN), the company that created the stolen
vehicle recovery market, today reported financial results for the first
quarter of 2013 ended March31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20080512/NEM054LOGO)

"Our initiatives to stabilize and then grow our core stolen vehicle recovery
business had a positive effect on our LoJack unit sales performance in the
first quarter," said Randy L. Ortiz, the Company's Chief Executive Officer and
President. "During the first quarter we grew our domestic unit volume 17% from
the same period in 2012, nearly doubling the 8.8% unit volume growth for the
domestic retail auto industry. Our strategy includes reestablishing sales and
marketing relationships with the nation's top-volume dealer groups, and we
have reorganized our U.S. sales team to focus on the largest accounts. During
the first quarter, LoJack installations with the nation's top 125 dealer
groups located within our coverage area increased 35% compared with the same
quarter last year."

"We believe that the growth in our U.S. dealer channel underscores the
powerful value proposition inherent in our pre-install program, which we
believe is a more sustainable business model going forward," continued Ortiz.
"These programs accounted for 44% of our unit volume in the first quarter this
year, versus 31% in the first quarter of 2012."

"We continue to make progress in advancing our strategy to extend our brand
reputation for safety, security and protection to vehicle telematics," said
Ortiz. "During the quarter we deployed in pilot testing our inaugural
telematics product – LoJack Fleet Management Solutions Powered by TomTom. We
recently exhibited this new system, which provides fleet owners with online
access to data captured for every vehicle, at the NAFA Fleet Management
Association Institute and Expo. We are exploring new telematics products for
the dealer/OEM and insurance segments as well."

Consolidated revenue for the first quarter of 2013 was $31.2 million, compared
with $34.3 million for the first quarter of 2012. U.S. revenue declined 12%
to $21.6 million from $24.7 million for the same quarter a year earlier,
reflecting $3.1 million in one-time extended warranty liability transfer
revenue in the first quarter of 2012 that did not recur in the first quarter
of 2013. International licensee revenue was $5.7 million in the first quarter
of 2013 versus $5.4 million in the comparable quarter of 2012. The Company
did not have any product shipments to Argentina during the first quarter of
2013, but expects resumption of shipments in the coming weeks.

Consolidated gross profit for the first quarter of 2013 was $16.5 million, or
52.8% of revenue, compared with $18.7 million, or 54.4% of revenue, in the
same quarter of 2012. Gross profit for the first quarter of 2012 included $2.8
million of gross margin related to the extended warranty liability transfer.
Excluding the impact of the non-recurring extended warranty liability
transfer, gross margin improved over the same period last year.

Operating expensesin the firstquarterof 2013 were $22.1million, an
increase of 14% from $19.3 million in the first quarter of 2012, reflecting
significantly higher outside legal fees as well as expenses related to the
Company's new enterprise resource planning implementation. Outside legal
expenses for the first quarter of 2013 were $2.7 million, a 50% increase over
the same quarter last year, primarily due to the arbitration hearing related
to litigation with the Company's Brazilian licensee. The Company also
incurred approximately $700,000 of expenses related to its new ERP system,
which is currently scheduled for rollout in 2014. The Company incurred
approximately $422,000 of expenses during the first quarter of 2013 related to
its business development efforts and the extension of its product line, which
the Company expects will contribute to its revenues in the coming quarters.
The Company also hired a new Chief Technology Officer during the quarter to
execute on product development strategies and initiatives.

Net loss attributable to LoJack Corporation for the first quarter of 2013 was
$5.7 million, or $0.32 per share, compared with net loss of $0.3 million, or
$0.02 per share, in the comparable period of 2012. Adjusted EBITDA for the
first quarter of 2013, which excludes the items reflected in Table 1, was a
loss of $4.1 million, compared with adjusted EBITDA of $1.4 million in the
first quarter of 2012.

Business Outlook
Ortiz noted, "Going forward, we will continue to pursue our strategy to grow
our domestic stolen vehicle recovery business and extend our brand reputation
for safety, security and protection to vehicle telematics. We are quickly
becoming a data-driven company with stronger process discipline to improve our
functional and technical excellence. From a financial perspective, we are
focused on properly allocating capital to fund our growth plan and improve our
balance sheet, as well as efficiently managing our cash while making
investments in the systems, people and the processes that we expect will grow
LoJack's enterprise value for the long term."

For full-year 2013, LoJack continues to expect that consolidated revenue will
increase approximately 10% over 2012, and that adjusted EBITDA will be in the
range of 3 to 7% of consolidated revenue for the full year.

First-Quarter Financial Results Conference Call
In conjunction with its first-quarter 2013 financial results, LoJack will host
a conference call for investors and analysts at 8:30 a.m. ET today. To access
the webcast of the call, log onto http://www.lojack.com (click "About Us,"
"Investor Relations," and then click "Events and Presentations"). The live
call can also be accessed by 877-868-1835 (toll-free) or 914-495-8581
(international) and using 41301581 as the conference ID. An archive of the
webcast will be available on the Company's website.

About LoJack Corporation
LoJack Corporation, the company that has helped more than nine million people
protect their vehicles in the event of theft over the past 25+ years, today
provides safety, security and protection for an ever-growing range of valuable
assets and people. Leveraging its core strengths, including its well-known
brand, direct integration with law enforcement and dealer distribution
network, LoJack Corporation is expanding into new areas across the continuum
from theft deterrence to recovery. The Company is focusing on creating a new
level of value for its dealer, customer and investor communities by delivering
innovative offerings and multiple technologies in expanding geographies. 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. You can identify these statements
by use of the words "assumes," "believes," "estimates," "expects," "will,"
"intends," "plans," "projects" and similar expressions that do not relate to
historical matters. Any statements in this news release that are not
statements of historical fact are forward-looking statements, including, but
not limited to, statements concerning (a) the Company's markets, including the
domestic auto market and international markets, (b) conditions in the
automotive industry and market trends, (c) the Company's strategic initiatives
and plans for growth and future operations, including with respect to the
Company's pre-install programs, (d) the Company's relationships with
consumers, dealer groups and other dealer-partners, (e) the Company' strategic
alliance with TomTom, (f) the development of new products and services, (g)
the Company's future financial performance, including expected revenue and
adjusted EBITDA and the expected timing of product shipments to Argentina, and
(h) the Company's allocation of capital, future investments and cash
management. 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, including our pre-install
program; (ii) our ability to obtain financing from lenders; (iii) the outcome
of ongoing litigation involving the Company; (iv) the final resolution of the
settlement of the California wage-and-hour class action lawsuits; (v) the rate
of growth in the industries of the Company's customers; (vi) our relationships
with dealers, licensees and partners and the strength of their business; (vii)
the presence of competitors with greater technical, marketing, and financial
resources; (viii) the Company's customers' ability to access the credit
markets, including changes in interest rates; (ix) the Company's ability to
promptly and effectively respond to technological change to meet evolving
customer needs; (x) the Company's ability to successfully expand its
operations, including through the introduction of new products and services;
(xi) conditions in the automotive retail market andchanges in customer demand
and automotive production schedules; (xii) the Company's ability to achieve
the expected benefits of its strategic alliance with TomTom; (xiii) changes in
general economic or geopolitical conditions, including the European debt
crisis; and (xiv) trade tensions and governmental regulations and restrictions
on sales to our licensees. 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, 2012 and the Company's other filings
with the Securities and Exchange Commission.

Readers should not place undue reliance on any forward-looking statements,
which only speak as of the date made. 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 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.



Table 1 – Adjusted EBITDA Computation

GAAP to Pro Forma Non-GAAP Reconciliation
(in thousands)
                                       Three Months Ended  Three Months Ended
                                       March 31, 2013      March 31, 2012
                                       $                   $
Net income (loss), as reported (GAAP)  (5,636)             (295)
   Adjusted for:
      Provision for income taxes       (74)                257
      Other income (expense)           (76)                607
Operating income (loss)                (5,634)             (645)
   Adjusted for:
      Depreciation and amortization    1,129               1,197
      Stock compensation expense       422                 872
Adjusted EBITDA (non-GAAP)             (4,083)             1,424



LoJack Corporation and Subsidiaries
Condensed Consolidated Statement of Operations

(in thousands, except share and per share amounts)
                                                       Three Months Ended
                                                       March31,
                                                       2013        2012
                                                       (unaudited)
Revenue                                                $  31,220   $  34,302
Cost of goods sold                                     14,748      15,639
Gross profit                                           16,472      18,663
Costs and expenses:
Product development                                    1,442       1,514
Sales and marketing                                    8,278       6,969
General and administrative                             11,321      9,685
Depreciation and amortization                          1,065       1,140
Total                                                  22,106      19,308
Operating loss                                         (5,634)     (645)
Other income (expense):
Interest income                                        21          38
Interest expense                                       (198)       (170)
Other, net                                             101         739
Total                                                  (76)        607
Loss before provision for income taxes                 (5,710)     (38)
(Benefit) provision for income taxes                   (74)        257
Net loss                                               (5,636)     (295)
Net income attributable to noncontrolling interest in  39          13
consolidated subsidiary
Net loss attributable to LoJack Corporation            $  (5,675)  $  (308)
Net loss per diluted share attributable to
                                                       $  (0.32)   $  (0.02)
LoJack Corporation
Weighted average diluted common
                                                       17,591,344  17,388,528
shares outstanding



LoJack Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
                                          March 31, 2013  December 31, 2012
                                          (unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                 $    45,993     $    48,592
Restricted cash                           118             225
Marketable securities at fair value       1,959           1,877
Accounts receivable, net                  18,823          20,037
Inventories                               7,887           7,123
Prepaid and other expenses                3,035           2,917
Prepaid and receivable income taxes       1,493           1,319
Deferred income taxes                     776             586
Total current assets                      80,084          82,676
PROPERTY AND EQUIPMENT                    11,322          11,686
DEFERRED INCOME TAXES                     150             145
INTANGIBLE ASSETS—NET                     98              100
GOODWILL                                  1,245           1,245
OTHER ASSETS—NET                          5,797           6,076
TOTAL ASSETS                              $    98,696     $    101,928
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short term debt                           $    274        $    274
Accounts payable                          5,893           5,979
Accrued and other liabilities             17,466          15,827
Current portion of deferred revenue       12,499          13,274
Accrued compensation                      3,883           3,290
Total current liabilities                 40,015          38,644
LONG TERM DEBT                            14,321          13,820
DEFERRED REVENUE                          12,659          13,395
DEFERRED INCOME TAXES                     776             586
OTHER ACCRUED LIABILITIES                 3,996           3,994
ACCRUED COMPENSATION                      1,564           1,243
Total liabilities                         73,331          71,682
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Preferred stock—$.01 par value;           —               —
authorized, 10,000,000 shares
Common stock—$.01 par value; authorized,
35,000,000 shares; issued and outstanding 182             182
18,271,522 at March 31, 2013 and
18,187,703 at December 31, 2012
Additional paid-in capital                23,655          23,261
Accumulated other comprehensive income    6,552           6,191
Retained earnings                         (4,938)         737
Total LoJack Corporation equity           25,451          30,371
Noncontrolling interest in subsidiary     (86)            (125)
Total equity                              25,365          30,246
TOTAL LIABILITIES AND EQUITY              $    98,696     $    101,928

CONTACTS:

Donald R. Peck
LoJack Corporation
(781) 302-4200

David Calusdian
Sharon Merrill Associates
(617) 542-5300



SOURCE LoJack Corporation

Website: http://www.lojack.com
 
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