LoJack Corp. announced Oct. 12 that for the second quarter ended Aug. 31, 2001 (fiscal 2002) revenues were $25,408,000 compared to record revenues of $25,867,000 for the same period a year ago. Net income was $1,965,000 or $.12 per diluted share, compared to $2,888,000, or $.17 per diluted share, for the same period a year ago.
Revenues for the six months ended Aug. 31, 2001 were $49,955,000, slightly less than revenues of $50,353,000 for the same period a year ago. Net income was $4,164,000, or $.26 per diluted share, for the first six months of fiscal 2002, compared to $2,525,000, or $.15 per diluted share, for the first six 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 amounted to a one-time charge of $2,978,000, or ($.18) per diluted share. This adjustment will be recovered in future periods when deferred international license fee revenue is recognized.
International revenues in the second quarter of fiscal 2002 increased $896,000, or 25 percent, compared to a year ago, while domestic revenues decreased $1,355,000, or 6 percent. For the first six months of fiscal 2002, international revenues exceeded the prior year by $1,587,000, or 23 percent, while domestic revenues decreased by $1,985,000, or 5 percent.
According to LoJack, the decrease in domestic revenues reflects a decline in unit sales from the second quarter of fiscal 2001 due to the softening economy and the downturn in new car sales. For the first six months of fiscal 2002 domestic sales of LoJack units declined by 3 percent from the same period a year ago while new vehicle registrations to consumers decreased by approximately 4 percent.
LoJack says the 23 percent growth in international revenue was led by continued strong product sales to the company's international licensees. For the second quarter in a row, shipments of LoJack units to its international licensees set a new record for the company.
Although company officials say it is not fully reflected in current revenue, the company has also received payment for its warranty programs, but recognition of this revenue is deferred over the life of the various warranty programs. This revenue is becoming an increasingly significant contribution to the company's cash flow, according to LoJack. The deferred revenue relating to payments received on these programs in the three and six months ended Aug. 31, 2001 amounted to $1,008,000 and $1,981,000, respectively.
"Our domestic consumer business reflects current U.S. economic conditions, while our international growth rate continues to be strong," said Ronald J. Rossi, chairman of LoJack Corp. "We have introduced new initiatives to increase our domestic dealer penetration, and continue to expand into new domestic and international markets. In September, in conjunction with the company's new strategic business plan, an aggressive multimedia advertising and brand awareness campaign was introduced, focused around the theme of 'LoJack: Protect What's Yours'," Rossi said.
"This program will lay the foundation for new product introductions as well as other brand building initiatives in early 2002. Our strategic business plan also calls for continued investment in people, marketing, technology, research and development during the next several quarters, which will put pressure on earnings during this period. We have a strong cash flow, despite current pressures on the domestic economy. We can invest in our growth program from internally generated sources.
"Our strategy of repurchasing shares as they become available at price levels we believe represents a good investment opportunity for the company will continue. During the first half of fiscal 2002 the company repurchased 275,000 shares under its stock buyback program. As of Oct. 1, 2001, total shares repurchased since inception of the program was 7,343,000 shares," Rossi said.
For more information on LoJack Corp., visit www.lojack.com.
