LoJack Corporation Reports Financial Results For The Third Quarter Of 2013

  LoJack Corporation Reports Financial Results For The Third Quarter Of 2013

PR Newswire

CANTON, Mass., Oct. 31, 2013

CANTON, Mass., Oct. 31, 2013 /PRNewswire/ --

Third Quarter Highlights

  oRevenue of $34.8 Million, Up 6% from Q3 2012
  oU.S. Dealer Channel Volume up 31%, Outpacing Retail Auto Industry Growth
    for 12 Consecutive Months
  oGross Margin Strong at 54.7%
  oNet Income of $1.7 million, EPS of $0.09 per diluted share
  oCompany Updates 2013 Guidance Due to Continued Volatility in Argentina

LoJack Corporation (NASDAQ: LOJN), a provider of vehicle theft recovery
systems and advanced fleet management solutions, today reported
consolidatedrevenuefor thethird quarter ended September 30, 2013 of $34.8
million, compared with $32.7millionin the third quarter of 2012. Net income
attributable to LoJack Corporation for the third quarter was $1.7 million, or
$0.09 per diluted share, compared with a net loss attributable to the Company
of $7.3 million, or $0.42 per diluted share, in the comparable period of 2012.
Results for the 2012 period included a charge of $6.9 million, or $0.40 per
diluted share, related to a settlement agreement. 

"Our strong third quarter performance reflects the growing base of our Stolen
Vehicle Recovery (SVR) units that are being pre-installed on domestic Dealer
inventories," said LoJack CEO and President Randy Ortiz. "Pre-installed SVR
units accounted for 46% of total volume in the quarter, compared with 34% for
the same period a year earlier. Our domestic SVR unit volume has now surpassed
the growth of the broader retail automotive market for 12 consecutive months.
In addition, we have significantly expanded business with the Top 125 Dealers
in the United States, where total SVR installations increased 55% from the
same period in 2012."

"We believe that the success of our pre-install program is helping to drive
strong unit volume and expand the foundation for growth of our U.S. business,
while supporting higher profitability for our Dealer partners," Ortiz said. 

The Company's U.S. revenue improved 9% to$23.7 million from $21.7millionin
thesame quarter last year, while international licensee revenue increased 7%
to $7.3 million from $6.8 million in the third quarter of 2012. Revenue from
all other operations was $3.8 million in the third quarter of 2013, compared
to $4.2 million in the same quarter last year.

"The increase in international revenue in the third quarter reflected several
factors, including the resumption of shipments to our Argentinean licensee
earlier this year," Ortiz said. "While demand for our products there remains
strong, government controls restricting the importation of goods into
Argentina continue to make business in that country challenging. However, we
continue to be cautiously optimistic that volumes will improve over time."

"In the telematics area, we have expanded the trials of our LoJack fleet
management product distributed in alliance with TomTom. Feedback from Dealer
and Commercial channels remains positive. We are focused on expanding the
LoJack brand by bringing telematics solutions to the Fleet, Dealer/OEM and
Insurance markets. We believe these markets represent a significant growth
opportunity for LoJack. They will allow us to leverage our outstanding brand
reputation, Dealer distribution and unique relationship with law enforcement,
helping customers enhance fleet efficiency and profitability while ensuring
asset protection and excellent customer service."

Consolidated gross profit in the third quarter of 2013 was $19.0 million, or
54.7% of revenue, compared with $18.1 million, or 55.4% of revenue, in the
same period a year earlier.

Operating expensesin the thirdquarterof 2013 were $18.3million, compared
with $24.7 million for the same period of 2012. 

Adjusted EBITDA for the third quarter of 2013, which excludes the items
reflected in Table 1, was $2.2 million, compared with $1.8 million in the
third quarter of 2012.

Cash and equivalents at September 30, 2013 were $41.9 million compared with
$48.6 million at year-end 2012. As previously disclosed, in July 2013 the
Company paid approximately $7.5 million under a settlement agreement reached
in 2012 related to the California wage-and-hour class action litigation. The
payment settled all remaining claims in this matter.

Business Outlook
Commenting on the Company's business outlook, Ortiz said, "During the quarter,
we continued to broaden and strengthen our U.S. Stolen Vehicle Recovery
business. By expanding relationships with Dealers through our pre-install
program, our strategy is to position LoJack as an important economic partner.
The initial focus of this relationship is the Stolen Vehicle Recovery
business, followed by telematics solutions that we expect to reinforce the
LoJack brand promise of 'Safety, Security and Protection' for our Dealers'
fleet and retail customers." 

Based on the current business environment in Argentina, LoJack is revising its
full year 2013 guidance. The Company now expects consolidated revenue to
increase 5 to 6% over 2012, and adjusted EBITDA in the lower end of the 3 to
7% range of consolidated revenue.

Third Quarter Financial Results Conference Call
In conjunction with its third 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 76204501 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) the Company's
strategic initiatives and plans for growth and future operations, including
with respect to the Company's U.S. Stolen Vehicle Recovery business and
pre-install programs, (c) the Company's relationships with dealers and other
partners, (d) the Company's strategic alliance with TomTom, (e) the
development of new products and services, including telematics solutions and
fleet management products, (f) the Company's future financial performance,
including expected revenue and adjusted EBITDA, and (g) customer demand and
future sales by the Company to its licensee in Argentina. 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: (1) the continued and future acceptance of the Company's
products and services, including the Company's pre-install program and fleet
management products; (2) the Company's ability to obtain financing from
lenders; (3) the outcome of ongoing litigation involving the Company; (4) the
rate of growth in the industries of the Company's customers; (5) the presence
of competitors with greater technical, marketing, and financial resources; (6)
the Company's customers' ability to access the credit markets, including
changes in interest rates; (7) the Company's ability to promptly and
effectively respond to technological change to meet evolving customer needs;
(8) the Company's ability to successfully expand its operations, including
through the introduction of new products and services; (9) changes in general
economic or geopolitical conditions, including the European debt crisis; (10)
conditions in the automotive retail market and the Company's relationships
with dealers, licensees, partners and agents; (11) the expected timing of
purchases by the Company's customers; (12) the Company's ability to achieve
the expected benefits of its strategic alliance with TomTom; and (13) trade
tensions and governmental regulations and restrictions in Argentina and the
Company's other international markets. 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
                                        September 30, 2013  September 30, 2012
                                        $                   $
Net income (loss), as reported          1,671               (7,259)
 Adjusted for:
  (Benefit) provision for income taxes  (887)               358
  Other income (expense)                34                  (354)
Operating income (loss)                 750                 (6,547)
 Adjusted for:
  Depreciation and amortization         881                 993
  Stock compensation expense            534                 457
  Legal Settlement                      —                   6,930
Adjusted EBITDA                         2,165               1,833
                                        Nine Months Ended   Nine Months Ended
                                        September 30, 2013  September 30, 2012
                                        $                   $
Net income (loss), as reported          (1,320)             (9,783)
 Adjusted for:
  (Benefit) provision for income taxes  (3,241)             855
  Other income (expense)                108                 (206)
Operating income (loss)                 (4,669)             (8,722)
 Adjusted for:
  Depreciation and amortization         3,098               3,507
  Stock compensation expense            1,477               1,979
  Legal Settlement                      (623)               6,930
Adjusted EBITDA                         (717)               3,694



LoJack Corporation and Subsidiaries

Condensed Consolidated Statement of Operations
(in thousands, except share and per share amounts)
                                                      Three Months Ended
                                                      September 30,
                                                      2013         2012
                                                      (unaudited)
Revenue                                               $  34,796    $  32,739
Cost of goods sold                                    15,769       14,590
Gross profit                                          19,027       18,149
Costs and expenses:
Product development                                   1,360        1,425
Sales and marketing                                   7,915        7,257
General and administrative                            8,182        8,162
Legal Settlement                                      —            6,930
Depreciation and amortization                         820          922
Total                                                 18,277       24,696
Operating income (loss)                               750          (6,547)
Other income (expense):
Interest income                                       25           33
Interest expense                                      (246)        (181)
Other, net                                            255          (206)
Total                                                 34           (354)
Loss before (benefit) provision for income taxes      784          (6,901)
(Benefit) provision for income taxes                  (887)        358
Net income (loss)                                     1,671        (7,259)
Net income attributable to noncontrolling interest in 11           53
consolidated subsidiary
Net income (loss) attributable to LoJack Corporation  $  1,660     $  (7,312)
Net income (loss) per diluted share attributable to
                                                      $  0.09      $  (0.42)
LoJack Corporation
Weighted average diluted common
                                                      18,020,295   17,616,831
shares outstanding



LoJack Corporation and Subsidiaries

Condensed Consolidated Statement of Operations
(in thousands, except share and per share amounts)
                                                      Nine Months Ended
                                                      September 30,
                                                      2013         2012
                                                      (unaudited)
Revenue                                               $  99,696    $  98,705
Cost of goods sold                                    45,833       45,389
Gross profit                                          53,863       53,316
Costs and expenses:
Product development                                   4,026        4,247
Sales and marketing                                   24,247       21,924
General and administrative                            27,968       25,658
Legal Settlement                                      (623)        6,930
Depreciation and amortization                         2,914        3,279
Total                                                 58,532       62,038
Operating loss                                        (4,669)      (8,722)
Other income (expense):
Interest income                                       73           116
Interest expense                                      (701)        (539)
Other, net                                            736          217
Total                                                 108          (206)
Loss before (benefit) provision for income taxes      (4,561)      (8,928)
(Benefit) provision for income taxes                  (3,241)      855
Net loss                                              (1,320)      (9,783)
Net income attributable to noncontrolling interest in 60           62
consolidated subsidiary
Net loss attributable to LoJack Corporation           $  (1,380)   $  (9,845)
Net loss per diluted share attributable to
                                                      $  (0.08)    $  (0.56)
LoJack Corporation
Weighted average diluted common
                                                      17,664,875   17,492,315
shares outstanding



LoJack Corporation and Subsidiaries

Condensed Consolidated Balance Sheets
(in thousands)
                                                   September30,  December31,
                                                   2013           2012
                                                   (unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                          $   41,924     $  48,592
Restricted cash                                    47             225
Marketable securities at fair value                —              1,877
Accounts Receivable, net of allowances of $2,075   21,201         20,037
and $2,599, respectively
Inventories                                        7,501          7,123
Prepaid and other expenses                         2,182          2,917
Prepaid and receivable income taxes                926            1,319
Deferred income taxes                              399            586
Total current assets                               74,180         82,676
PROPERTY AND EQUIPMENT, net of accumulated         12,084         11,686
depreciation of $48,337 and $49,250, respectively
DEFERRED INCOME TAXES                              —              145
INTANGIBLE ASSETS—NET                              93             100
GOODWILL                                           1,245          1,245
OTHER ASSETS—NET                                   4,963          6,076
TOTAL ASSETS                                       $   92,565     $  101,928
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short term debt                                    $   274        $  274
Accounts payable                                   5,195          5,979
Accrued and other liabilities                      9,205          15,827
Current portion of deferred revenue                11,637         13,274
Accrued compensation                               5,917          3,290
Total current liabilities                          32,228         38,644
LONG TERM DEBT                                     15,627         13,820
DEFERRED REVENUE                                   11,601         13,395
DEFERRED INCOME TAXES                              399            586
OTHER ACCRUED LIABILITIES                          84             3,994
ACCRUED COMPENSATION                               2,073          1,243
Total liabilities                                  62,012         71,682
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 10)   —              —
EQUITY:
Preferred stock—$.01 par value; authorized,        —              —
10,000,000 shares
Common stock—$.01 par value; authorized,
35,000,000 shares; issued and outstanding          186            182
18,670,906 at September 30, 2013 and 18,187,703 at
December 31, 2012
Additional paid-in capital                         24,567         23,261
Accumulated other comprehensive income             6,508          6,191
Retained earnings (accumulated deficit)            (643)          737
Total LoJack Corporation equity                    30,618         30,371
Noncontrolling interest in subsidiary              (65)           (125)
Total equity                                       30,553         30,246
TOTAL LIABILITIES AND EQUITY                       $   92,565     $  101,928



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

Scott Solomon
Sharon Merrill Associates
(617) 542-5300



SOURCE LoJack Corporation

Website: http://www.lojack.com
 
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