CANTON, Mass., Jan. 28, 2015 /PRNewswire/ -- LoJack Corporation (NASDAQ: LOJN) today announced that LoJack Equipment Ireland Ltd. ("LoJack Ireland"), which manages the company's international licensee relationships, has reached a legal settlement with Tracker do Brasil LTDA ("Tracker"). The agreement results in $5 million of total value to LoJack. Specifically, Tracker will pay LoJack $2 million in cash and will provide $3 million of value in the form of gross margin through product sales. The cash payments will be received evenly over the twelve months ending January 2016. Of the total value, $4.0 million will be received in 2015 and $1.0 million will be received in the first seven months of 2016. The product sales are a combination of last time purchases by Tracker in Brazil and other purchases by Tracker affiliates with valid license agreements in other territories. The agreement also terminates all litigation between the parties, although LoJack Ireland's damages claim may be re-instated in the event that Tracker does not comply with the terms of the settlement agreement, and the immediate termination of Tracker as LoJack's exclusive licensee in the country of Brazil.
"LoJack is pleased to have the distraction of litigation with our former Brazilian partner behind us," said Randy Ortiz, LoJack's Chief Executive Officer and President. "We are once again focused on, reactivating the LoJack brand in Brazil, one of the largest market opportunities in the world for our products and services."
The arbitration case stemmed from a contractual dispute between Tracker and LoJack Ireland that began in March 2011. The liability phase of arbitration was conducted in March 2013. In May 2014, The International Centre for Dispute Resolution of the American Arbitration Association dismissed all claims filed against LoJack Ireland by Tracker.
In its binding decision, the arbitrators also upheld several of LoJack Ireland's counterclaims against Tracker for violating the terms of its license agreement, breaching the implied duty of good faith and fair dealing, and engaging in unfair competition. The panel also ruled that Tracker has been making unauthorized use of LoJack's trademarks, copyrights, technology and other confidential information to advertise, lease, sell or market non-LoJack products, representing them to the public as LoJack products. The panel found that the unauthorized use of LoJack's intellectual property and confidential information caused LoJack Ireland to suffer damages to its reputation, in addition to other damages. As a result of the arbitration panel's decision on liability, LoJack Ireland was pursuing damages associated with their counterclaims, which was scheduled to go to a formal damages hearing in February 2015.
About LoJack Corporation
LoJack Corporation, the company that has helped more than nine million people protect their vehicles in the event of theft over the past 25+ years, today provides safety, security and protection for an ever-growing range of valuable assets and people. Leveraging its core strengths, including its well-known brand, direct integration with law enforcement and Dealer distribution network, LoJack Corporation is expanding into new areas across the continuum from theft deterrence to recovery. The Company is focusing on creating a new level of value for its Dealer, customer and investor communities by delivering innovative offerings and multiple technologies in expanding geographies. For more information, visit www.lojack.com, www.autotheftblog.com, www.youtube.com/lojack, www.twitter.com/LoJackCorp,or www.Facebook.com/LoJackCorp.
Safe Harbor Regarding Forward Looking Statements
From time to time, information provided by the Company or statements made by its employees may contain "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws, which involve risks and uncertainties. You can identify these statements by use of the words "assumes," "believes," "estimates," "expects," "will," "intends," "plans," "projects" and similar expressions that do not relate to historical matters. Any statements in this news release that are not statements of historical fact are forward-looking statements, including, but not limited to, statements concerning (a) the Company's relationship with Tracker do Brasil LTDA and its affiliates, and (b) the Company's strategic initiatives, investments and plans for growth and future operations, including its re-entry into the Brazilian market. 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: (1) the Company's ability to enforce the terms of the settlement agreement and its impact on the Company's future relationships with Tracker do Brasil LTDA and its affiliates; (2) the Company's ability to re-enter the Brazilian market in a timely manner and/or on favorable terms; (3) the continued and future acceptance of the Company's products and services, including the Company's pre-install program and fleet management and other telematics products; (4) the Company's ability to obtain financing from lenders; (5) the rate of growth in the industries of the Company's customers; (6) the presence of competitors with greater technical, marketing, and financial resources; (7) the Company's customers' ability to access the credit markets, including changes in interest rates; (8) the Company's ability to promptly and effectively respond to technological change to meet evolving customer needs; (9) the Company's ability to successfully expand its operations, including through the introduction of new products and services; (10) changes in general economic or geopolitical conditions, including the European debt crisis; (11) conditions in the automotive retail market and the Company's relationships with dealers, licensees, partners, agents and local law enforcement; (12) the expected timing of purchases by the Company's customers; (13) the Company's ability to achieve the expected benefits of its strategic alliance with TomTom; (14) the Company's ability to maintain the strength of its brand; and (15) trade tensions and governmental regulations and restrictions in Argentina, Brazil and the Company's other international markets. 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, 2013 and the Company's other filings with the Securities and Exchange Commission.
Readers should not place undue reliance on any forward-looking statements, which only speak as of the date made. Except as required by law, 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.
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SOURCE LoJack Corporation