<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --- SECURITIES ACT OF 1934
For the quarterly period ended August 31, 1998
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURTIES ACT OF 1934
For the transition period from ______________ to _______________.
Commission File Number 2-74238-B
LOJACK CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2664794
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
333 Elm Street Dedham, Massachusetts 02026
(Address of principal executive offices) (Zip code)
781-326-4700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
There were 17,766,481 shares issued and outstanding of $.01 par value, common
stock, as of October 14, 1998.
<PAGE>
LOJACK CORPORATION AND SUBSIDIARIES
INDEX
Part I. Financial Information PAGE
----
Item 1. Financial Statements
Consolidated Balance Sheets:
August 31, 1998 and February 28, 1998.......... 1
Consolidated Statements of Operations:
Three Months Ended August 31, 1998 and 1997
Six Months Ended August 31, 1998 and 1997....... 2
Consolidated Statements of Cash Flows:
Six Months Ended August 31, 1998 and 1997........ 4
Notes to Consolidated Financial Statements......... 5
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition.............. 6
Part II. Other Information.................................... 11
Item 6. Exhibits and Reports on Form 8-K
Signatures......................................... 12
Exhibit 11......................................... 13
Exhibit 27......................................... 14
<PAGE>
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AUGUST 31, FEBRUARY 28,
1998 1998
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents........................ $ 7,699,514 $ 5,498,348
Short-term investments...................... 1,400,000 1,400,000
Accounts receivable - net................... 9,645,551 8,073,981
Inventories................................. 5,835,704 4,883,038
Vendor deposit.............................. 1,432,000
Prepaid expenses and other.................. 128,673 132,154
Deferred income taxes....................... 1,266,245 1,195,881
------------ ------------
Total current assets.................... 25,975,687 22,615,402
MARKETABLE SECURITIES....................... $ 1,415,137
PROPERTY AND EQUIPMENT - Net................ 10,997,091 9,763,720
OTHER ASSETS - Net.......................... 264,803 281,786
------------ ------------
TOTAL....................................... $ 38,652,718 $ 32,660,908
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capital lease
obligations.............................. 1,396,455 746,304
Accounts payable............................ 3,208,028 2,578,348
Accrued and other liabilities............... 1,118,102 1,016,345
Deposits.................................... 62,627 379,421
Current portion of deferred revenue......... 1,305,318 1,213,693
Accrued compensation........................ 942,549 1,057,895
Accrued taxes............................... 127,380 136,993
------------ ------------
Total current liabilities.............. 8,160,459 7,128,999
DEFERRED REVENUE............................ 3,033,967 2,676,351
DEFERRED INCOME TAXES....................... 720,493 560,148
CAPITAL LEASE OBLIGATIONS................... 1,787,302 792,926
COMMITMENTS AND CONTINGENCIES...............
STOCKHOLDERS' EQUITY:
Common stock - $.01 par value; authorized,
35,000,000 shares; issued, 22,282,231 and
22,250,381 at August 31, 1998 and
February 28, 1998, respectively........... 222,822 222,504
Additional paid-in-capital.................. 59,629,896 59,493,808
Accumulated other comprehensive income...... 489,025
Retained earnings........................... 11,836,517 5,550,998
Treasury stock, at cost, 4,247,500
and 3,971,500 shares of common stock at
August 31, 1998 and February 28, 1998,
respectively............................... (47,227,763) (43,764,826)
------------ ------------
Total stockholders' equity............. 24,950,497 21,502,484
------------ ------------
TOTAL....................................... $ 38,652,718 $ 32,660,908
============ ============
</TABLE>
See notes to consolidated financial statements.
(1)
<PAGE>
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
(Unaudited)
AUGUST 31, AUGUST 31,
1998 1997
<S> <C> <C>
Revenues................................. $21,810,039 $18,744,847
Cost of goods sold....................... 9,482,012 8,284,487
----------- -----------
Gross margin............................. 12,328,027 10,460,360
----------- -----------
Costs and expenses:
Systems costs and research and
development........................... 269,662 255,628
Marketing................................ 4,870,198 4,242,534
General and administrative............... 2,135,774 1,681,380
Depreciation and amortization............ 461,044 408,166
----------- -----------
Total................................. 7,736,678 6,587,708
----------- -----------
Operating income ........................ 4,591,349 3,872,652
----------- -----------
Other income (expense):
Interest income.......................... 113,998 244,785
Interest expense......................... (66,205) (48,452)
Gain on sale of fixed assets............. 60,173 47,889
----------- -----------
Total................................. 107,966 244,222
----------- -----------
Income before provision
for income taxes 4,699,315 4,116,874
Provision for income taxes............... 1,833,000 1,600,000
----------- -----------
Net income .............................. $ 2,866,315 $ 2,516,874
=========== ===========
Earnings per share:
Basic.................................... $ 0.16 $ 0.13
=========== ===========
Diluted.................................. $ 0.15 $ 0.12
=========== ===========
Weighted average shares:
Basic.................................... 18,050,267 18,978,756
=========== ===========
Diluted.................................. 19,499,514 20,766,211
=========== ===========
</TABLE>
See notes to consolidated financial statements.
(2)
<PAGE>
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(Unaudited)
AUGUST 31, AUGUST 31,
1998 1997
<S> <C> <C>
Revenues................................. $42,074,578 $37,303,000
Cost of goods sold....................... 18,363,888 16,845,281
----------- -----------
Gross margin............................. 23,710,690 20,457,719
----------- -----------
Costs and expenses:
Systems costs and research and
development........................... 616,498 597,942
Marketing................................ 9,052,547 8,177,258
General and administrative............... 4,224,118 3,461,832
Depreciation and amortization............ 811,661 804,093
----------- -----------
Total................................. 14,704,824 13,041,125
----------- -----------
Operating income......................... 9,005,866 7,416,594
----------- -----------
Other income (expense):
Interest income.......................... 207,199 429,224
Interest expense......................... (114,672) (89,080)
Gain on sale of fixed assets............. 107,531 67,390
Gain on sale of marketable securities.... 1,099,597
----------- -----------
Total................................. 1,299,655 407,534
----------- -----------
Income before provision
for income taxes........................ 10,305,521 7,824,128
Provision for income taxes............... 4,020,000 3,046,000
----------- -----------
Net income .............................. $ 6,285,521 $ 4,778,128
=========== ===========
Earnings per share:
Basic.................................... $ 0.35 $ 0.25
=========== ===========
Diluted.................................. $ 0.32 $ 0.23
=========== ===========
Weighted average shares:
Basic.................................... 18,110,952 19,032,513
=========== ===========
Diluted.................................. 19,588,166 20,607,729
=========== ===========
</TABLE>
See notes to consolidated financial statements.
(3)
<PAGE>
LOJACK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
1998 1997
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income................................ $ 6,285,521 $ 4,778,128
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization....................... 1,501,436 1,266,883
Provision for doubtful accounts...... 102,770 60,268
Deferred taxes....................... (222,676) (134,167)
Gain on sale of marketable security.. (1,099,597)
Increase (decrease) in
cash from changes in
assets and liabilities:
Accounts receivable - net............. (1,674,340) (1,085,591)
Inventories........................... (952,666) (301,046)
Vendor deposit........................ 1,432,000
Prepaid expenses and other............ 3,481 4,648
Other assets.......................... (4,086) (2,930)
Accounts payable...................... 629,680 135,264
Accrued and other
liablities.......................... 109,245 299,357
----------- -----------
Total adjustments.......................... (174,753) 242,686
----------- -----------
Net cash provided by operating
activities............................ 6,110,768 5,020,814
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property
and equipment - net................... (324,649) (1,570,108)
Purchase of marketable securities.......... (1,259,170)
Proceeds from sale of marketable
securities............................ 1,745,310
----------- -----------
Net cash provided by (used for) investing
activities............................ 161,491 (1,570,108)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock................... 136,406 809,681
Repayment of debt.......................... (744,562) (593,881)
Repurchase of common stock................. (3,462,937) (4,997,808)
----------- -----------
Net cash used for
financing activities.................. (4,071,093) (4,782,008)
----------- -----------
INCREASE (DECREASE) IN CASH
AND EQUIVALENTS....................... 2,201,166 (1,331,302)
BEGINNING CASH AND EQUIVALENTS............. 5,498,348 14,671,700
----------- -----------
ENDING CASH AND EQUIVALENTS................ $ 7,699,514 $13,340,398
=========== ===========
</TABLE>
See notes to consolidated financial statements.
(4)
<PAGE>
LOJACK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying consolidated financial statements and notes do not include
all of the disclosures made in the Company's Annual Report to
Stockholders, which should be read in conjunction with these statements.
Certain fiscal 1998 amounts have been reclassified to conform to the fiscal
1999 presentation. In the opinion of the Company, the statements include all
adjustments necessary for a fair presentation of the quarterly results and
any and all such adjustments were of a normal recurring nature.
2. The results of operations for the three and six months ended August 31, 1998
and 1997 are not necessarily indicative of the results to be expected for
the full year.
3. Supplemental cash flow information:
Cash paid for interest for the six months ended August 31, 1998 and 1997
was $115,000 and $89,000, respectively. Cash paid for income taxes for the
six months ended August 31, 1998 and 1997 was $3,234,000 and $2,670,000,
respectively. For the six months ended August 31, 1998 and 1997 the Company
incurred capital lease obligations of $2,389,000 and $808,000 respectively.
4. Earnings per share:
In fiscal 1998 the Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." All
prior periods have been restated to conform to the provisions of SFAS No.
128. Basic earnings per share is computed using the weighted average number
of common shares outstanding during the period. Diluted earnings per share
reflects the effect of the Company's outstanding options (using the treasury
stock method), except where such options would be antidilutive.
5. Marketable Securities:
In March 1998 the Company exercised an option to purchase 292,507 common
shares of its United Kingdom licensee, Tracker Network, UK Ltd. for an
aggregate exercise price of $1,259,000. In April 1998 the Company sold
150,000 of these shares and recognized a pre-tax gain of approximately
$1,100,000. The remaining 142,507 shares of the investment are classified as
an available-for-sale security in accordance with SFAS No. 115 in the
Company's Consolidated Balance Sheet with a fair value of approximately
$1,415,000 as of August 31, 1998. The unrealized gain of $489,000 (net of
taxes of $313,000) is reported in accumulated other comprehensive income
under stockholders' equity at August 31, 1998.
6. Comprehensive Income:
Effective March 1, 1998, the Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income." Currently, in addition to net income, the
only item which would be included in comprehensive income is unrealized
gains or losses on available-for-sale securities. Unrealized gains or losses
on available-for-sale securities (net of taxes) for the three and six months
ended August 31, 1998 were an unrealized loss of $391,000, and an unrealized
gain of $489,000, respectively. Comprehensive income for the three months
ended August 31, 1998 and 1997 totaled $2,475,000 and $2,517,000,
respectively. Comprehensive income for the six months ended August 31, 1998
and 1997 totaled approximately $6,775,000 and $4,778,000 respectively.
(5)
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
THREE AND SIX MONTHS ENDED AUGUST 31, 1998 ("FISCAL 1999")
VERSUS THREE AND SIX MONTHS ENDED AUGUST 31, 1997 ("FISCAL 1998")
RESULTS OF OPERATIONS
Revenues for the three and six months ended August 31, 1998 increased by
$3,065,000 and $4,772,000, or 16% and 13%, respectively to $21,810,000 and
$42,075,000, from $18,745,000 and $37,303,000, respectively, for the same
periods a year earlier. Revenues from domestic markets increased by $2,851,000
and $6,152,000, or 17% and 20%, for the three and six months ended August 31,
1998, respectively, to $19,338,000 and $36,929,000, from $16,487,000 and
$30,777,000, respectively, for the same periods a year earlier. International
revenues increased by $214,000, or 9% for the three months ended August 31, 1998
to $2,472,000 from $2,258,000 for the same period last year. International
revenues for the six months ended August 31, 1998 decreased by $1,381,000, or
21% to $5,145,000, from $6,526,000 for the same period last year. The increase
in domestic revenues resulted primarily from an increase of 21% and 24% in the
number of LoJack Units sold for the three and six months ended August 31, 1998,
respectively, as compared to the same periods a year earlier, offset partially
by decreases in the penetration of sales of low margin optional alarm products.
The increase in international revenues for the three months ended August 31,
1998 of $214,000 resulted from an increase of $379,000, or 83% in revenues from
the sale of components to and license fees from new licensees, which are
generally non-recurring in nature, offset partially by a decrease of $165,000,
or 9%, in sales of and royalties on the international version of the LoJack Unit
and related products. The decrease in international revenues for the six months
ended August 31, 1998 of $1,381,000 resulted from a decrease in revenues from
the sales of components and license fees of $74,000, and a decrease in revenues
from the sale of the international version of the LoJack Unit and related
products of $1,307,000. The decrease in sales of the international version of
the LoJack Unit is related to the effect on certain licensees of the economic
crises in certain areas of the world, and the financial difficulties of the
company's licensee in Argentina, offset partially by increased sales to other
existing licensees in both South America and Africa.
Cost of goods sold for the three and six months ended August 31, 1998 decreased
to 43% and 44%, respectively, from 44% and 45% for the same periods a year
earlier. Domestically, cost of goods sold for the three months ended August
31, 1998 and 1997 was 44% of related revenues. For the six months ended August
31, 1998 cost of goods sold decreased to 43% of domestic revenues as compared
with 44% for the same period a year earlier. Cost of goods sold decreased as the
result of installation efficiencies, lower manufactured cost of the LoJack Unit,
and a decrease in sales of low margin alarm products. During the three months
ended August 31, 1998, these savings were partially offset by start-up costs in
the Arizona and Houston markets. International cost of goods sold decreased to
42% and 46% of related revenues for the three and six months ended August 31,
1998, respectively from 48% and 49% for the same periods a year earlier.
International cost of goods sold decreased for the three and six months ended
August 31, 1998 as a result of the decline in sales of the international version
of the LoJack Unit which generally have a higher cost as a percentage of related
revenues than revenues from component sales and license fees.
(6)
<PAGE>
Systems costs and research and development increased by $14,000 and $19,000 for
the three and six months ended August 31, 1998, respectively to $270,000 and
$616,000 from $256,000 and $598,000 for the same periods a year earlier. Systems
costs increased by $61,000 and $83,000 for the three and six months ended August
31, 1998 as compared with the same periods a year earlier primarily as the
result of the start-up of new markets and maintenance costs in certain existing
markets. Research and development expense decreased by $48,000 and $66,000 for
three and six months ended August 31, 1998, respectively, as a result of the
timing of certain work related to a redesign of the LoJack Unit.
Marketing expense increased by $627,000 and $876,000 for the three and six
months ended August 31, 1998 and 1997, respectively to $4,870,000 and
$9,053,000 from $4,243,000 and $8,177,000 for the same periods a year earlier.
These increases were primarily related to increases in marketing salaries and
benefits, advertising, and promotional spending related to increased domestic
sales, expansion to new markets, as well as marketing expenses related to sales
efforts related to the fleet and commercial business.
General and administrative expense increased by $455,000 and $762,000 for the
three and six months ended August 31, 1998 and 1997, respectively to $2,136,000
and $4,224,000, from $1,681,000 and $3,462,000 for the same periods a year
earlier. These increases were the result of increases in administrative salaries
and benefits, and other general and overhead expenses related to the increase in
the domestic business and market expansion, as well as certain professional and
recruiting fees related to ongoing business.
Depreciation and amortization increased by $53,000 and $8,000 for the three and
six months ended August 31, 1998, respectively, to $461,000 and $812,000, from
$408,000 and $804,000 for the same periods a year earlier, primarily as the
result of depreciation expense on LoJack System components in new markets and
depreciation expense on installation vehicles purchased during the periods under
capital leases.
Interest income decreased by $131,000 and $222,000 for the three and six months
ended August 31, 1998, respectively, to $114,000 and $207,000, from $245,000 and
$429,000 for the same periods a year earlier. These decreases were the result of
a decrease in the average cash balances available for investment during the
periods.
Interest expense increased by $18,000 and $26,000 for the three and six months
ended August 31, 1998, respectively, to $66,000 and $115,000, from $48,000 and
$89,000 for the same periods a year earlier as the result of interest expense on
capital leases of installation vehicles.
Gain on sales of fixed assets increased by $12,000 and $41,000 for the three and
six months ended August 31, 1998, respectively, to $60,000 and $108,000, from
$48,000 and $67,000 for the same periods a year earlier, due to an increase in
the number of fully depreciated installation vehicles sold during the periods in
the normal course of business.
Gain on sale of marketable securities for the six months ended August 31, 1998
of $1,100,000 was the result of the sale of a portion of the company's stock in
its United Kingdom licensee which had been acquired pursuant to an option
agreement in the related license agreement.
(7)
<PAGE>
The provision for income taxes increased by $233,000 and $974,000 for the three
and six months ended August 31, 1998, respectively, to $1,833,000 and
$4,020,000, from $1,600,000 and $3,046,000 for the same periods a year earlier
as the result of the increase in the Company's taxable income during the
respective periods. The Company's effective tax rate remained at 39% during both
periods.
As a result of the foregoing, net income increased by $349,000 and $1,507,000
for the three and six months ended August 31, 1998, respectively, to $2,866,000
and 6,286,000, from $2,517,000 and $4,778,000 for the same periods a year
earlier.
LIQUIDITY AND CAPITAL RESOURCES
In the six months ended August 31, 1998 cash and equivalents increased by
$2,201,000. Cash flow from operations was $6,111,000, cash flow from investing
activities was $161,000 and cash flow used for financing purposes was
$4,071,000. Cash flow from operations included net income of $6,286,000, non-
cash additions to net income of $1,604,000, less $1,100,000 related to the
sale of a marketable security,$219,000 of deferred taxes and decreases from
changes in assets and liabilities of $460,000. The decrease in cash flow from
changes in assets and liabilities includes an increase in accounts receivable of
$1,674,000 and inventories of $953,000 both of which were primarily related to
the increase in domestic revenues, and timing of certain international
shipments, and an increase in other assets of $4,000. These decreases in cash
flow were offset partially by a return of a vendor deposit of $1,432,000, a
decrease in prepaid expenses of $4,000, and increases in accrued and other
liabilities of $109,000. The increase in accounts payable of $630,000 is
primarily related to the timing of payment on certain media expenses, and an
inventory supplier.
Cash flows from investing activities included expenditures for property and
equipment (exclusive of additions under capital leases of $2,389,000) for the
six months ended August 31, 1998 of $325,000. Additionally, the Company
purchased 292,507 common shares of its United Kingdom licensee for $1,259,000
under terms of an option agreement in the related license agreement. A
subsequent sale of a 150,000 of these shares netted proceeds to the Company of
$1,745,000.
Cash flows used for financing activities included the repurchase of 276,000
shares of the Company's common stock during the six months ended August 31, 1998
for $3,463,000. Total cumulative common shares repurchased under the Company's
stock repurchase program were 4,247,500 as of August 31, 1998. The Company
intends to continue to repurchase shares of its common stock in open market
transactions, from time to time, depending upon the price of the stock. As of
August 31, 1998 there are 952,500 additional common shares authorized for
repurchase under the Company's existing repurchase program.
As of August 31, 1998 the Company had working capital of $17,815,000 compared to
$15,486,000 at February 28, 1998. The Company believes that it can meet its
anticipated capital and operating requirements for the remainder of fiscal 1999
using existing working capital, cash flow from operations, and if necessary, the
Company's $7,500,000 line of credit, which was unused as of August 31, 1998.
The Company presently is pursuing expansion efforts in several additional
domestic jurisdictions. The Company expects that, pending receipt of necessary
governmental approvals, certain potential expansion markets may become
operational during fiscal 1999. The Company plans to
(8)
<PAGE>
fund these expansions as well as other capital expenditures during fiscal 1999
using existing working capital, cash flow from operations, and/or the line of
credit. The Company expects that it will spend approximately $1,000,000 on
capital expenditures (excluding assets purchased under capital lease agreements)
during the remainder of fiscal 1999.
The Company's expansion to additional international markets is achieved through
licensing agreements and has not in the past required capital investment on the
part of the Company. The Company currently has no formal plans to change this
practice.
The Company is also continuing to explore possible investment opportunities,
including, but not limited to, possible acquisitions of, or investments in,
other companies.
NEW ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1998, the Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information." The adoption of SFAS No. 130 had no
effect on the financial position or results of operations of the Company, but
resulted in the disclosure of comprehensive income of approximately $2,475,000
and $6,775,000 for the three and six months ended August 31, 1998, respectively,
which was derived from net income and unrealized gains on available-for-sale
marketable securities. With the adoption of SFAS No. 131 and as permitted by the
pronouncement, the Company will provide information about its operating
segments, as determined, in the annual financial statements, and will begin
providing such information on an interim basis for the first quarter of 2000.
YEAR 2000
The company has conducted a review of its computer systems to identify those
areas that could be affected by the "Year 2000" issue and is developing an
implementation plan to resolve the issue. The Company is currently implementing
new accounting and custom software as well as new computer network systems which
have been designed by the vendors to properly process transactions which could
be impacted by the "Year 2000" problem. The Company believes that with certain
modifications to LoJack System components, the "Year 2000" problem will not pose
significant operational problems and costs to complete this process are not
anticipated to be material to its financial position or results of operation in
any given year.
CAUTIONARY STATEMENTS
The Private Securities Litigation Reform Act of 1995 contains certain safe
harbors regarding forward-looking statements. From time to time, information
provided by the Company or statements made by its employees may contain
"forward-looking" information which involve risks and uncertainties. Any
statements in this report that are not statements of historical fact are
forward-looking statements (including, but not limited to, statements concerning
characteristics and growth of the Company's objectives and plans for future
operations 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 known and unknown risks and uncertainties which could cause actual
results expressed or implied in such forward looking statements to differ from
those projected. 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 rate of growth in
(9)
<PAGE>
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; and the
Company's ability to successfully integrate new operations, prospects for
international expansion, and general and economic conditions in domestic and
foreign 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 Exhibit 99 of the Company's Annual Report on
Form 10-K for the fiscal year ended February 29, 1996.
(10)
<PAGE>
PART II - OTHER INFORMATION
Item 1. Not Applicable
Item 2. Not Applicable
Item 3. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the Company was held on
July 17, 1998. Stockholders acted affirmatively to elect nominees for
directors proposed by management.
<TABLE>
<CAPTION>
VOTES "FOR" VOTES "WITHELD"
<S> <C> <C>
C. Michael Daley 19,659,037 70,672
James A. Daley 19,668,081 61,628
Harold W. Shad III 19,668,066 61,643
Lee T. Sprague 19,668,081 61,628
Robert J. Murray 19,667,881 61,828
Larry C. Renfro 19,668,081 61,628
Harvey Rosenthal 19,667,881 61,828
</TABLE>
Item 5. Not Applicable
Item 6a. Exhibit 11. Statement Regarding Computation of Per Share
Earnings
Exhibit 27. Financial Data Schedule
b. No reports on Form 8-K were filed during the quarter for which
this report is filed.
(11)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LoJack Corporation
------------------
Registrant
October 14, 1998 /s/ C. Michael Daley
- ---------------- --------------------
Date C. Michael Daley
Chief Executive Officer
October 14, 1998 /s/ Joseph F. Abely
- ---------------- -------------------
Date Joseph. F. Abely
President and Chief
Operating Officer
(Principal Financial Officer)
(12)
<PAGE>
EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF
PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
AUGUST 31, AUGUST 31,
1998 1997
------------ ------------
<S> <C> <C>
BASIC EARNINGS PER SHARE:
Weighted average number of common
shares outstanding..................... 18,050,267 18,978,756
============ ============
Net Income............................... $ 2,866,315 $ 2,516,874
============ ============
BASIC EARNING PER SHARE.................. $ 0.16 $ 0.13
============ ============
DILUTED EARNINGS PER SHARE:
Weighted average number of common
shares outstanding..................... 18,050,267 18,978,756
Common equivalent shares from
stock options.......................... 1,449,247 1,787,455
------------ ------------
Total.................................... 19,499,514 20,766,211
============ ============
Net Income............................... $ 2,866,315 $ 2,516,874
============ ============
DILUTED EARNINGS PER SHARE............... $ 0.15 $ 0.12
============ ============
<CAPTION>
SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
1998 1997
------------ ------------
<S> <C> <C>
BASIC EARNINGS PER SHARE:
Weighted average number of common
shares outstanding..................... 18,110,952 19,032,513
============ ============
Net Income............................... $ 6,285,521 $ 4,778,128
============ ============
BASIC EARNING PER SHARE.................. $ 0.35 $ 0.25
============ ============
DILUTED EARNINGS PER SHARE:
Weighted average number of common
shares outstanding..................... 18,110,952 19,032,513
Common equivalent shares from
stock options.......................... 1,477,214 1,575,216
------------ ------------
Total.................................... 19,588,166 20,607,729
============ ============
Net Income............................... $ 6,285,521 $ 4,778,128
============ ============
DILUTED EARNINGS PER SHARE............... $ 0.32 $ 0.23
============ ============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM LOJACK
CORPORATION FORM 10-Q FOR QUARTER ENDING AUGUST 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> FEB-28-1999 FEB-28-1999
<PERIOD-START> JUN-01-1998 MAR-01-1998
<PERIOD-END> AUG-31-1998 AUG-31-1998
<CASH> 7,699,514 0
<SECURITIES> 1,400,000 0
<RECEIVABLES> 10,387,518 0
<ALLOWANCES> 741,967 0
<INVENTORY> 5,835,704 0
<CURRENT-ASSETS> 25,975,687 0
<PP&E> 28,700,493 0
<DEPRECIATION> 17,703,402 0
<TOTAL-ASSETS> 38,652,718 0
<CURRENT-LIABILITIES> 8,160,459 0
<BONDS> 0 0
0 0
0 0
<COMMON> 222,822 0
<OTHER-SE> 24,727,675 0
<TOTAL-LIABILITY-AND-EQUITY> 38,652,718 0
<SALES> 21,550,055 41,488,288
<TOTAL-REVENUES> 21,810,039 42,074,578
<CGS> 9,482,012 18,363,888
<TOTAL-COSTS> 9,482,012 18,363,888
<OTHER-EXPENSES> 7,736,678 14,704,824
<LOSS-PROVISION> 47,505 102,770
<INTEREST-EXPENSE> 66,205 114,672
<INCOME-PRETAX> 4,699,315 10,305,521
<INCOME-TAX> 1,833,000 4,020,000
<INCOME-CONTINUING> 2,866,315 6,285,521
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,866,315 6,285,521
<EPS-PRIMARY> .16 .35
<EPS-DILUTED> .15 .32
</TABLE>
