LoJack's domestic sales soften with declining motorcycle market
By the Staff of Clutch and Chrome
November 6th, 2008
LoJack, a
company offering motorcycle recovery systems reported a
decline in sales for its third quarter results.
Looking to
international sales to soften the decline of a domestic
market, the company said third quarter results were down 4%
over the same period last year. LoJack For Motorcycles, the only Stolen Vehicle Recovery System operated by the Police
reports its sales following the trend of the motorcycle
industry, with international sales supporting its slowing
domestic counterpart.
LoJack Corporation technology works with police to
deliver a 90 percent success rate in tracking and recovering stolen
cars, trucks and motorcycles. Today, LoJack operates in
26 states and the District of Columbia, and in more than 30 countries throughout Europe, Africa,
North America, South America and Asia.
In announcing the results, Richard T. Riley, Chairman and Chief Executive Officer said,
“In this quarter our international business increased 40% in unit volume and 47% in revenue
over the prior year. Even that strong performance was not enough to fully offset the decline in
our domestic business, as the problems intensified in the auto market during the third quarter.
The decline in the domestic auto market deepened in each sequential quarter in 2008, with
monthly new car sales in September falling below one million vehicles for the first time in 15
years. The continued deterioration in the domestic auto industry has been well documented, with
industry experts now predicting annual vehicle sales of 13 to 13.5 million units, both in 2008 and
2009, compared to new car sales of approximately 16 million vehicles in 2007."
“Despite the severe economic climate, we continue to mitigate the challenges we face,
invest in strategic programs to leverage our proprietary technology for diversification and deliver
solid cash flow. Moreover, our balance sheet remains strong and positions us well as we continue
to diversify and expand into new markets.”
Domestic revenue in the third quarter declined 21% to $29.9 million from $37.6 million
in the same quarter of the prior year, on a 22% reduction in unit volume. Domestic gross margin
dollars for the quarter declined 29% from the same quarter in the prior year, while gross margin
as a percentage of revenue declined to 55% from 61% in the third quarter of 2007.
International revenue in the third quarter however increased 47% to $17.7 million, from $12.0
million in the prior year, attributable to a 40% increase in unit volume. The
growth was driven by our larger licensees in Latin America
and Africa, where the business is based on insurance
mandates.
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