LoJack Corp (
Q4 2010 Earnings Call
February 16, 2011 9:00 am ET
Paul McMahon – Vice President, Corporate and Marketing Communications
Richard Riley – Chairman, President and Chief Executive Officer
Timothy O’Connor – Executive Vice President and Chief Financial Officer
Paul Coster – JPMorgan
[Bill Fulgill] — [Malin]
Name - Company
Bill Dezellem – Tieton Capital
Roger Papazian -- Morgan Stanley
Previous Statements by LOJN
» LoJack CEO Discusses Q3 2010 Results – Earnings Call Transcript
» LoJack Corp.Q2 2010 Earnings Call Transcript
» LoJack Corporation Q1 2010 Earnings Call Transcript
» LoJack Corporation Q4 2009 Earnings Call Transcript
Good morning, thank you for joining the call today. Our moderator is Richard Riley, Chairman and Chief Executive Officer. He will be joined in 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 fact 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 31
I will now turn the call over to Rich Riley.
Thank you Kathleen. 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 Q4 along with our view of the recent trend in the global auto markets, with a particular focus on the domestic market in order to provide some contrast 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, after I provide some perspective on our core business initiatives, and our focus for the coming year, Tim, Paul, and I will open the call to your questions.
Overall, we were pleased with our financial performance for Q4, and encouraged that we saw positive momentum from the second half of this year and into the new year, 2011. Consolidated revenue for Q4 was up 12% over prior year levels, on the strength of revenue growth of 27% in our international business and a 5% net increase in revenue in our North America segment. Year over year growth in the international business for the quarter was driven by a solid 23% increase in units, as our licensees return to historical buying patterns after a very difficult year in 2009.
For the full year in 2010, revenue in our international business segment was up 30% over prior levels, with strong performance throughout the year. Our business in Italy demonstrated continued growth, with revenue up 59% over prior levels for Q4, and up 89% for the full year. We added another 2200 new subscribers during Q4, and closed out the year with approximately 13,000 total subscribers in Italy.
Turning to the results in our North American segment, revenue for Q4 increased 5% over prior year levels, at an increase of 8% in the US was partially offset by a 12% decline in our Boomerang business in Canada, as we continue our integrated efforts there. Our revenue growth in the US was driven by an increase in units of more than 15% over prior year levels, as retail auto sales in the US reflected strong growth for the quarter. While a 15% increase in LoJack units sold in the US market matched our strongest relative performance for the year, it trailed down to broader auto domestic market for the quarter, as we were negatively impacted by a shift in historical brandex, with our most successful brand experiencing slower growth rates than the other brands. In response, we’ve developed and are investing in new programs to address the pressing need that auto dealers have to generate new sources of sustainable income in an increasingly competitive market place.
Our new sales programs will be rolled out to targeted dealers in 2011, with a specific goal of grabbing deeper penetration, increased profitability, and developing stronger, long term relationships with our dealer base. Looking at our bottom line financial performance, our profitability and strong cash flow in Q4 reflect the aggressive steps we have taken to resize the business in a new global auto market. As a result of these actions, OpEx for Q4 were down $3.4 million from prior year levels, and contributed to an increase in operating income of $5.6 million over prior year levels for the quarter.
Net income in Q4 was $2.8 million or $0.15 a share, compared to a net loss of $2.3 million in 2009. In addition, we generated more than $14 million of operating cash for Q4, as careful management of the balance sheet, combined with a tax refund of almost $8 million enabled us to end the year with a cash balance of almost $52 million. With that, I’ll turn the call over to Tim.
Thank you Rich, good morning everyone. As I review our Q4 financial results, all comparisons will be against Q4 2009 unless otherwise noted. Consolidated revenue for the quarter increased 12% to $40 million over the prior year. Within our North American segment, US revenue increased 8% on a unit shipment growth of 15% compared to the prior year. Consistent with previous quarters, our bulk install programs have continued to grow, with a mix level of bulk installs reaching 29% versus 19% in Q4 2009.