LoJack Corporation, (LOJN) reported Jan. 11 that for the third quarter ended Nov. 30, 2001 (fiscal 2002) revenues were $26,940,000 compared to revenues of $24,252,000 for the same period a year ago. Net income was $155,000 or $.01 per diluted share, compared to $1,692,000, or $.10 per diluted share, for the same period a year ago.
Revenues for the nine months ended Nov. 30, 2001 were $76,895,000 compared to revenues of $74,605,000 for the same period a year ago. Net income was $4,318,000 or $.27 per diluted share, for the first nine months of fiscal 2002, compared to $4,217,000, or $.25 per diluted share, for the first nine months of fiscal 2001.
As previously disclosed, last year's net income has been restated to reflect the adoption of the SEC's Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements," which resulted in a one-time charge of $2,978,000, or ($) per diluted share. Approximately $401,000 ($.03 per diluted share) of this charge has been recognized in net income in the first nine months of fiscal 2002, and the remainder will be recovered in future quarters.
International revenues in the third quarter of fiscal 2002 increased $490,000, or 11 percent, compared to a year ago, while domestic revenues increased $2,198,000, or 11 percent.
For the first nine months of fiscal 2002, international revenues exceeded the prior year by $2,077,000, or 18 percent, while domestic revenues were only modestly higher than the prior year, reflective of the weak domestic new car sales in the March-to-September time period. The increase in international revenue reflected continued strong year-over-year growth in unit sales to the company's international licensees.
The company also has received payment in connection with its warranty programs, but recognition of this revenue is deferred over the life of the programs. The total deferred revenue relating to payments received on these programs in the three and nine months ended Nov. 30, 2001 amounted to $1,368,000 and $3,349,000, respectively. This revenue is becoming an increasingly significant component of the company's cash flow.
"As a result of the tragic events of Sept. 11, sales for September were severely reduced," said Ronald J. Rossi, chairman of LoJack. "However, the launch of our multi-media advertising and brand awareness campaign, coupled with continued improvement in our field sales organization, enabled LoJack to achieve record unit sales levels in October and November. Domestic unit sales exceeded sales for the same two months in fiscal 2001 by 27 percent and 29 percent, respectively, while total domestic car sales for the two months grew by 24 percent and 8 percent, respectively, compared to the prior year.
"Although the zero percent financing programs of the major auto manufacturers obviously helped LoJack's sales, for the first time in recent years, the growth of LoJack's domestic unit sales outstripped the growth of domestic car sales. This trend continued in December, where our unit sales grew 24 percent over December 2000, while total car sales grew by 5 percent," Rossi said.
"The quarter's earnings reflect our planned investments in people, marketing, technology, and research and development as the execution of our marketing expansion program proceeded on schedule," Rossi continued. "While funded by internally generated sources, these investments are reflected in the quarter's earnings.
"As previously announced, we have changed the company's fiscal year end to Dec. 31 from the last day of February, effective Dec. 31, 2001. The change to a calendar year will align our fiscal year with that of our customers, suppliers and industry counterparts. We will report a one-month fourth quarter for the fiscal year ending Dec. 31, 2001.
"While unit sales were very strong for this December, which is traditionally a weak month, compared to last December, we anticipate a loss for the one-month transition quarter as a result of our continued investment in new marketing initiatives and of the timing of recognition of certain expenses within this transition quarter.
"While the outlook for the U.S. economy continues to be uncertain, we will continue our investment program in accordance with our strategic business plan - which has already begun to produce initial results. Our multi-media advertising program and strong brand name, our tactical initiatives to grow the domestic dealer and commercial business through increased penetration of existing markets and opening of new market channels, increased sales to our international partners, and our new product introduction in the first quarter (LoJack Early Warning) are expected to contribute increased revenues throughout the year. Because of our strong financial position we expect to continue to finance this growth internally.
"Our strategy of repurchasing shares, as they become available at price levels we believe represent a good investment opportunity for the company, will continue. During the first three quarters of fiscal 2002 the company repurchased 993,640 shares under its stock buyback program. As of Dec. 31, 2001, total shares repurchased since inception of the program were 7,992,840 shares," Rossi said.
