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LoJack to acquire minority stake in SC-integrity

October 16, 2006 | WESTWOOD, MA

LoJack to Enter Cargo Security Market Through Investment and Brand Licensing Agreement with SC-Integrity

LoJack Corporation (NASDAQ: LOJN), the leading global provider of tracking and recovery systems for stolen mobile assets, today announced that it is entering the cargo security market through an investment in SC-integrity, a Bothell, Washington-based company providing comprehensive solutions for cargo theft prevention, investigation, tracking and recovery. Under the terms of the agreement signed today, LoJack will receive a significant minority stake in SC-integrity. In addition, LoJack will license the LoJack brand to SC-integrity, which will market its current tracking and recovery service as LoJack inTransit.

“We have been conducting in-depth analysis of the cargo security market for more than a year, and determined that the best way to enter this arena is with a partner that has security experience and a comprehensive solution that is well known and highly respected in the industry,” said LoJack Chairman and CEO Joseph F. Abely. “SC-integrity’s high-profile, experienced leadership, knowledge of the security industry and innovative services provide our two companies with the opportunity for a strong alliance. We believe SC-integrity’s comprehensive security solution and key customer relationships will accelerate LoJack’s entry into the cargo security market. We look forward to working closely with SC-integrity to deliver highly effective solutions for the costly problem of cargo theft.”

SC-integrity CEO Denis duNann said, “Our agreement with LoJack gives us the immediate benefit of leveraging the company’s trusted brand, which is synonymous with tracking and recovery. Combining our collective knowledge enables the two organizations to form a powerhouse in the cargo recovery arena that no other company can match.”

LoJack’s Investment in SC-integrity

Under the agreement, LoJack is investing $6 million in SC-integrity, of which $3 million is cash and will be used for ongoing operations and repayment of advances for expenses pending receipt of closing proceeds. The remaining $3 million represents the value of SC-integrity’s use of the LoJack brand, along with ongoing collaboration and product development support. In return, LoJack will receive significant minority ownership in SC-integrity and representation on the board. SC-integrity will leverage its existing experienced sales force to sell the LoJack inTransit service. Currently, SC-integrity has more than 40 major supply chain customers in the manufacturing, retailing and transportation sectors.

Mr. Abely said, “Our investment in SC-integrity is part of a long term strategy to expand into new markets that provide opportunities for growth. During the first 18 to 24 months of the relationship, we expect to recognize a portion of SC-integrity’s operating losses and related costs supporting our cargo initiative. We expect the impact of that to be approximately $0.02 to $0.03 per share in the fourth quarter of 2006, and approximately $0.10 per share for the calendar year 2007. The calendar year 2007 costs are consistent with our expectations to enter the cargo security market in an effective and efficient manner. We are optimistic about the opportunity that the cargo security market represents and are confident in the growth prospects for SC-integrity.”

SC-integrity Solution

SC-integrity provides services in the areas of cargo theft prevention, investigation, monitoring, tracking and recovery. Its proprietary cargo tracking solution allows shippers, transportation companies, retailers and insurers to control risks, reduce losses and track shipments. The solution creates in transit visibility to the cargo itself, which is an advantage over vehicle and trailer based systems. In addition, SC-integrity is developing the Supply Chain Information Sharing and Analysis Center (SC-ISAC). The SC-ISAC is one of 18 federally authorized ISACs created to protect the nation’s critical infrastructures. Members of the SC-ISAC will receive supply chain security alerts, bulletins and vulnerability reports. Additionally, members will have the ability to share case-specific investigative intelligence with other members to help resolve and prevent supply chain related crimes.

About SC-integrity

SC-integrity, Inc. provides security technology and information services to the global supply chain targeting cargo theft, product counterfeiting and diversion. SC-integrity was founded in 2004 in Bothell, Washington by Denis duNann, Mark Eppley and King Rogers. Mr. duNann previously co-founded Verifone (targeting credit card fraud), SCAN (targeting check fraud), and TheftNet (targeting employee theft). Mr. Eppley was the founder of Traveling Software and Laplink, Inc., a pioneer in mobile and wireless communications for laptop and handheld computers. Mr. Rogers has earned a reputation throughout the supply chain industry and law enforcement as an expert in asset protection. He has received several awards for his service to the industry including, most recently, the 2006 National Industry Leadership Award from the International Cargo Security Council.

About LoJack Corporation

LoJack Corporation, the company that invented and is the proven leader in the global stolen vehicle recovery market, leverages its superior technology, direct connection with law enforcement and proven processes to be the leader in tracking and recovering valuable mobile assets. The company’s Stolen Vehicle Recovery System delivers a better than 90% success rate in tracking and recovering stolen cars and trucks and has helped recover more than $3 billion in global assets. LoJack systems are 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. Today LoJack operates in 26 states and the District of Columbia, and in 28 countries throughout Europe, Africa, Latin America and Asia. For more information, please visit www.lojack.com

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 news release that are not statements of historical fact are forward-looking statements (including, but not limited to, statements concerning the characteristics and growth of the company’s market and customers, the company’s objectives and plans for future operations and products 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 risks and uncertainties, and accordingly, actual results could differ materially. 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 effectiveness of the company’s marketing initiatives; the rate of growth in 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; the extent of the company’s use of third party installers and distributors; capacity and supply constraints or difficulties; the company’s ability to successfully expand its operations and changes in general economic or geopolitical conditions. 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 the company’s Annual Report on Form 10-K for the year ended December 31, 2005.

The company undertakes no obligation to release publicly the result of any revision to the forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contacts

Supply Chain Integrity
Robert Furtado
951-775-1168

LoJack Corporation
Paul McMahon
781-251-4130

Tier One Partners
Laura Feng
978-975-1414

Tier One Partners
Jeanne Bock
781-861-5249

© 2016 SC-integrity, Inc. All rights reserved.