Westwood, Mass.-based LoJack Corp. last week reported that revenue for the fourth quarter ended Dec. 31, increased 8 percent to $55.3 million, from $51.1 million in the same period a year ago. For the year ended Dec. 31, revenue increased 4 percent to $222.7 million, from $213.3 million in 2006.
The fourth-quarter and year-end results reflect a non-cash, after-tax charge of approximately $2.2 million, or $0.12 per fully diluted share, related to the impairment of the carrying value of certain intangible assets established at the acquisition date of Boomerang Tracking. This impairment charge is the result of current expectations of the retention rate of customers in connection with the conversion from analog to digital service by the end of 2008 required by the Canadian government.
Due primarily to the impairment charge, reported operating income computed in accordance with generally accepted accounting principles (GAAP) for the fourth quarter declined 15 percent to $3.5 million, from $4.1 million for the same quarter a year ago. For the year ended Dec. 31, GAAP operating income increased 29 percent to $30.2 million, from $23.5 million for the same period a year ago.
“The strength of our international business and refinements of our domestic business model enabled us to deliver record unit volume, a 4-percent increase in revenue and a 30-percent increase in net income, while we continued to invest in programs to drive long-term growth,” said Richard Riley, chairman and CEO. “Our strategic programs to diversify the business have enabled us to offset the challenges of the domestic markets. We have expanded into the construction and motorcycle markets, which leverage our existing infrastructure, used the power of our brand to license LoJack for Laptops and most significantly, continued to develop our international business, which recorded unit sales in excess of our domestic business for the first time and contributed approximately 70 percent of our net income in 2007, compared to 40 percent for the prior year.”
Domestic revenue in the fourth quarter declined 8 percent to $31.9 million from $34.9 million in the prior year, based on a 13-percent decline in unit volume. International revenue in the fourth quarter grew 59 percent to $18.1 million, from $11.4 million in the prior year, attributable to a 98-percent increase in unit volume.
“For 2008, we expect revenue to be between $232 million and $239 million, net income to be between $20 million and $22 million, and earnings per fully diluted share to be between $1.10 and $1.20,” Riley said. “Additionally, we expect gross margin as a percentage of revenue to be approximately 55 percent.”
LoJack Corp. is a global provider of equipment that tracks and recovers valuable mobile assets. The company’s Stolen Vehicle Recovery System delivers a better than 90-percent success rate in tracking and recovering stolen cars and trucks and has helped recover more than $4 billion in stolen LoJack-equipped global assets. The system is uniquely integrated into law enforcement agencies in the United States that use LoJack's in-vehicle tracking equipment to recover stolen assets, including cars, trucks, commercial vehicles, construction equipment and motorcycles.