LoJack Corporation Reports Fourth Quarter 2002 Results
WESTWOOD, Mass., Feb. 21 -- LoJack Corporation, reported that revenue for the fourth
quarter ended December 31, 2002 was $27,520,000 compared to $27,566,000 in the
same period a year ago. The net income for the fourth quarter was $904,000,
or $.06 per diluted share, compared to a net loss of ($570,000), or ($.04) per
diluted share, for the same period a year ago.
Revenues for the twelve months ended December 31, 2002 increased 17% to
$116,426,000, compared to revenues of $99,860,000 for the same period a year
ago. Net income was $1,829,000, or $.12 per diluted share, for the twelve
months of 2002, compared to $2,692,000, or $.17 per diluted share, for the
twelve months of calendar year 2001, a decrease of 32%.
Domestic revenues for the fourth quarter were $22,048,000, a 5% decrease
compared to $23,160,000 for the same period a year ago, reflecting the current
economic climate. International revenues for the fourth quarter were
$5,472,000, an increase of 24% compared to revenues a year ago of
$4,406,000. This increase was primarily attributable to strong product sales
to the company's South African and South American licensees.
For the twelve months of 2002, domestic revenues exceeded the prior year
by $13,901,000, or 17%, while international revenues exceeded the prior year
by $2,665,000, or 15%.
Gross margin for the fourth quarter remained at 51% compared to the same
period a year ago. Domestic gross margin was 52%, down from 54% for the same
period a year earlier. The two-percentage point decline was primarily due to
lower unit volumes partially offset by decreases in the overall installed cost
of the product. International gross margin for the fourth quarter was 47%, up
from 36% for the same period a year ago, primarily due to favorable volume
variable pricing and other vendor rebates, as well as lower inventory
write-offs than in the prior year.
Additions to deferred revenue, relating to payments received for warranty
products sold in the three and twelve months ended December 31, 2002, totaled
$1,247,000 and $5,759,000, respectively. The company receives full payment
for its warranty products at the time of purchase, but recognition of the
deferred warranty revenue is generally spread over the life of the warranties.
These payments are a significant component of the company's cash flow from
operations.
In announcing the results, Ronald J. Rossi, chairman, said, "For the year
of 2002, we are pleased with our domestic and international performance, and
that we returned to profitability in the third quarter and maintained this
level of profitability in the fourth quarter despite the difficult global
economic climate. The improvement in market penetration and in profitability
reflects our investments in sales, marketing and product development, which
have been funded using cash generated from operations, consistent with our
strategic business plan.
"The launch of the LoJack Early Warning System was well received in our
Northeast test market in October, and nationwide rollout began in January of
this year, with a strong advertising campaign in selected markets beginning in
February.
"As we enter 2003, we now have strong marketing and engineering
organizations in place. In light of the potential continuation of a difficult
global economic climate, we are continuing to focus on improving productivity
and achieving greater operating efficiencies, with the objective of continuing
to increase our profitability in the face of a potential slowing of sales
growth. The areas of focus include sales and distribution as well as overall
installed cost of our product.
"We expect to deliver continued revenue growth in 2003. Due to the
uncertain economy and geopolitical situation we expect to grow at a more
modest rate of 12% to 14%, rather than the aggressive 17% rate we achieved in
2002. We will continue our investment in new product development but will
have only modest growth in other operating expenses compared to a year ago.
Although we face a very uncertain geopolitical and economic environment, we
believe earnings in excess of $.50 per share are attainable in 2003."
LoJack Corporation is the recognized world-leader in stolen vehicle
recovery technology. In the United States, law enforcement officials in
20 states and the District of Columbia utilize its stolen vehicle recovery
system. Globally, LoJack is operated by law enforcement and security
organizations in more than 20 countries in Europe, Africa, Asia and the
Western Hemisphere.
To access the webcast of the company's conference call to be held at
9:00 AM EDT, Friday, February 21, 2003 log onto:
http://www.firstcallevents.com/service/ajwz375231382gf12.html . The webcast
will be available for one week, until February 28, 2003.
From time to time, information provided by the company or statements made
by its employees may contain "forward-looking" information, which involve risk
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 the
company's future operations and products and the company's expected liquidity
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: the continued and future
acceptance of the company's products and services; the effectiveness of the
company's marketing initiatives; the rate of growth in the industries of the
company's customers; the presence of competitors with greater technical,
marketing, and financial resources; the company's ability to promptly and
effectively respond to technological change to meet evolving customer needs;
capacity and supply constraints or difficulties; the company's ability to
successfully expand its operations and 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 transition period from March 1, 2001 to December 31, 2001.
LoJack Corporation
Condensed Statements of Income
(Dollars in thousands except share amounts)
Three Months Ended
December 31,
2002 2001
(Unaudited)
Revenues $27,520 $27,566
Gross Margin 13,988 14,156
R&D 762 1,320
Sales & Marketing 7,193 9,984
G&A and depreciation 4,621 3,737
Operating income (loss) 1,412 (885)
Pre-tax income (loss) 1,531 (905)
Net income (loss) 904 (570)
Diluted earnings per share $.06 ($.04)
Weighted average diluted common
shares outstanding 14,702,069 15,130,604
Twelve Months Ended
December 31,
2002 2001
(Unaudited)
Revenues $116,426 $99,860
Gross Margin 56,868 49,133
R&D 2,291 2,796
Sales & Marketing 34,924 26,381
G&A and depreciation 16,832 15,899
Operating income 2,821 4,057
Pre-tax income 2,999 4,273
Net income 1,829 2,692
Diluted earnings per share $.12 $.17
Weighted average diluted common
shares outstanding 14,726,131 15,774,719
LoJack Corporation
Balance Sheets
(Dollars in thousands)
December 31, 2002 December 31, 2001
ASSETS
CURRENT ASSETS:
Cash $1,367 $5,889
Accounts receivable, net 19,152 16,207
Inventories 7,965 5,865
Deferred taxes and other assets 5,752 2,470
Total current assets 34,236 30,431
PROPERTY AND EQUIPMENT, Net 13,404 12,764
Deferred taxes and other assets 7,363 4,999
TOTAL ASSETS $55,003 $48,194
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capital leases $1,504 $1,539
Accounts payable 10,950 6,689
Accrued and other liabilities 1,393 1,288
Customer deposits 794 1,635
Deferred revenue 4,527 3,086
Accrued compensation 2,214 1,835
Total current liabilities 21,382 16,072
ACCRUED COMPENSATION AND
OTHER LONG TERM LIABILITIES 508 747
DEFERRED REVENUE 11,682 10,660
CAPITAL LEASE OBLIGATIONS 1,064 1,038
TOTAL LIABILITIES 34,636 28,517
STOCKHOLDERS' EQUITY 20,367 19,677
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $55,003 $48,194
NOTE: The full text of this news release as well as current financial
statements may be accessed on the Internet at:
http://www.firstcallevents.com/service/ajwz375231382gf12.html or at
http://www.lojack.com . Each quarter's release is archived on the
web site under LoJack Financial Information during the fiscal year.
The company's Annual Report, Form 10-Q and Form 10-K filings will
also be available on its web site. Copies of the company's
financial information, including news releases, may also be obtained
by contacting Swanson Communications, Inc. at (516) 671-8582.