LoJack Corp (
Q1 2011 Earnings Call
May 3, 2011 9:00 am ET
Richard Riley – Chairman and CEO
Tim O'Connor – EVP and CFO
Paul Weichselbaum – EVP
Paul Coster – JPMorgan
Bill Dezellem – Tieton Capital
Chris Owen – Tieton Capital
Ali Hilali – Ingalls
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» LoJack Corporation Q1 2010 Earnings Call Transcript
Good day everyone and welcome to today's program. At this point all participants are in a listen only mode. Later you will have the opportunity to ask questions during the question-and-answer session. (Operator Instructions) Please note this call will be recorded and I'll be standing by if you need any assistance.
It is now my pleasure to turn the conference over to Mr. Jeremy Warnick. Please go ahead sir.
Good morning and thank you for joining the call today. Our moderator is Richard Riley, Chairman and Chief Executive Officer. He will be joined on the call by Tim O'Connor, Executive Vice President and Chief Financial Officer and Paul Weichselbaum, Executive Vice President, responsible for our domestic and international businesses.
An archive of the webcast will be available through lojack.com in the investor relations section. Any statements during this call that are not statements of historical facts are forward-looking statements. These forward-looking statements are based on a number of assumptions and involve a number of risks and uncertainties and accordingly actual results could differ materially. For further information regarding the forward-looking statements and factors that may cause such differences please see the warning regarding forward-looking statements in our form 10-K for the year ended December 31st, 2010.
I will now turn the call over to Rich Riley.
Thank you Jeremy, good morning everyone. Thanks for joining us on the call this morning. I'll begin the call today with a brief overview of our performance for the first quarter along with our view of the recent trends in domestic auto market in order to provide some context for our later comments. I’ll then turn the call over to Tim who will take us through a more detailed review of our financial performance for the quarter. Finally, I'll provide some perspective on our focus on specific plans for the remainder of the year. Tim, Paul and I will open the call for your questions.
We were pleased with the continued improvement in the level of profitability demonstrated in the first quarter of 2011 particularly as it builds on a positive trend that began in the second half of 2010. The net loss for the first quarter which is our historically lowest revenue quarter of the year was $1.6 million or $0.09 for fully diluted share. This bottom line performance reflects a dramatic improvement over the net loss of $5.6 million or $0.32 for fully diluted share in the first quarter of the prior year. The operating discipline and strong cost controls demonstrated in the first quarter drove the improvement bottom line financial performance while still enabling us to make investments in a number of areas of the business.
During the first quarter, we made incremental investments in our business in Italy, our stake in that business and in a number of sales and marketing programs designed to address specific cyclical changes in the domestic auto marketplace which I will touch on in my later comments. We were however disappointed in our consolidated revenue performance for the first quarter of 2011 in light of the solid improvements in the broader U.S. domestic market during the quarter.
Our consolidated revenue for the quarter was $30.3 million down slightly from $30.8 million in a prior year as year-over-year growth in our in our international segment was offset by a decline in net revenue in our North America segment. International revenue for the first quarter was $7.2 million, up 5% from $6.9 million in the prior year driven by our business in Italy.
Revenue on Italy during the first quarter 2011 increased 55% over prior year levels, as we continue to make solid progress and adding new subscribers. After entering the New Year in 2010 with only 3,000 subscribers, we added 10,000 net new subscribers during the full year and continued at that pace during the first quarter of 2011 adding 2,000 more net new subscribers. We are encouraged by the progress demonstrated in our business in Italy over the last 15 months.
Revenue for first quarter in the North American segment was $22.4 million down slightly from $23.1 million in a prior year has a 7% increase in units sold in U.S. market was more than offset by lower average price in the U.S. and a year-over-year decline in our business in Canada. The decline in average price in the U.S. came as more of our business shifted to larger national accounts and to the bulk installation business model which come at lower price points.
Our primary focus in the U.S. business continued to be centered on the 7% increase in the LoJack unit sales in the first quarter against the backdrop of a stronger performance by the broader U.S. auto market. While the growth in the overall domestic auto market reflected a year-over-year increase of approximately 20% in the first quarter, our unit growth was more modest, as our business was negatively impacted by an accelerating shift in historical brand mix, a shift in consumer purchasing habits as gas prices continue to rise and an increase in vehicle leasing.