I.D. Systems Reports 2012 Revenue Up 14% to Record $44.6 Million Second Year Consecutive Year of Record Revenue Drives Non-GAAP Net Income of $0.06 Per Share WOODCLIFF LAKE, N.J., March 6, 2013 (GLOBE NEWSWIRE) -- I.D. Systems, Inc. (Nasdaq:IDSY), a leading provider of wireless solutions for tracking, securing and managing high-value enterprise assets, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2012. Fourth Quarter 2012 Financial Results *Revenue was $10.7 million compared to $11.8 million in the fourth quarter of 2011, reflecting the company's completion of a statement of work for Avis Budget Group that culminated in the third quarter of 2012. *Recurring revenue increased 10% to $4.5 million compared to $4.1 million in the same period a year ago, attributable primarily to the company's transportation asset and rental car management businesses. *Revenue from I.D. Systems' industrial vehicle management business increased 10% to $5.4 million compared to $4.9 million in the same period a year ago. *Gross margin was 45%, below the company's historical target of 50%, as a result of a short-term increase in production and shipping costs to meet year-end demand, and a one-time sale of surplus inventory built several years ago exclusively for the U.S. Postal Service. *Selling, general & administrative and research & development expenses were $5.7 million and $1.0 million, respectively, compared to $5.5 million and $0.9 million, respectively, in the same period a year ago. *Excluding stock-based compensation and depreciation and amortization, non-GAAP net loss was $215,000, or $(0.02) per basic and diluted share, compared to non-GAAP net income of $830,000, or $0.07 per basic and diluted share, in the same period a year ago. *Net loss was $1.0 million, or $(0.09) per basic and diluted share, compared to net loss of $18,000, or $(0.00) per basic and diluted share, in the fourth quarter of 2011. Full Year 2012 Financial Results *Revenue increased 14% to a record $44.6 million from $39.3 million in 2011, driven by year-over-year sales increases across all product segments. *Recurring revenue increased 5% to $17.3 million from $16.4 million in 2011. *Rental car management revenue increased 86% to $8.0 million from $4.3 million in 2011. *Industrial vehicle management revenue increased 7% to $19.1 million from $17.9 million in 2011. *Transportation asset management revenue increased 2% to $17.6 million compared to $17.2 million in 2011. Deferred revenue, attributable primarily to transportation asset management hardware sales, increased 42% to $10.6 million from $7.4 million in 2011. *Gross margin was consistent with historic levels at 51%. *Selling, general & administrative expenses were $22.4 million, an increase of less than 2% compared to $22.0 million in 2011, as management continued to closely monitor labor and other overhead costs. *Research and development expenses increased 23% to $4.3 million from $3.5 million a year ago, reflecting the company's investment in new product development, including 4th-generation industrial fleet management technology, a 3rd-generation rental car management device, an enhanced refrigerated trailer monitoring system, and a new enterprise software analysis tool—I.D. Systems Analytics. *Excluding stock-based compensation and depreciation and amortization, non-GAAP net income was $748,000, or $0.06 per basic and diluted share, compared to non-GAAP net loss of $485,000, or $(0.04) per basic and diluted share, in 2011. *Net loss improved to $2.6 million, or $(0.22) per basic and diluted share, from a net loss of $4.0 million, or $(0.36) per basic and diluted share, in 2011. *As of December 31, 2012, the company had $15.8 million in cash, cash equivalents and marketable securities, equating to $1.30 per share outstanding, and no debt. As of December 31, 2011, the company had $25.4 million in cash, cash equivalents and marketable securities. The year-over-year decrease was primarily due to management's decision to invest the company's cash in a self-funded lease financing program to encourage customers to enter into long-term service contracts. Results for both the fourth quarter and full year 2012 include an income tax benefit of $662,000 from the sale of a portion of the company's New Jersey net operating losses under the State's Technology Business Tax Certificate Transfer Program, which allows qualified New Jersey-based technology businesses to sell unused amounts of net operating loss carryforwards and research and development tax credits for cash. Management Commentary "2012 was a year of progress and accomplishment for our company," said Jeffrey Jagid, I.D. Systems' chairman and CEO. "Top-line revenue growth across every business segment, a strong gross margin, and continued control over expenses all contributed to our non-GAAP net income of $0.06 per share for the year. Recurring revenue was also a bright spot, growing to a record level and accounting for almost 40% of total revenue. "In 2012, we introduced a self-funded lease financing initiative to encourage customers to enter into long-term service contracts. While this increased the cash we used in operations, we believe it was an excellent investment, as it removed budgeting obstacles for customers, shortened our sales cycles, and helped build our recurring revenue stream. "We remain committed to executing the growth strategy that has led us to two consecutive years of record revenue and improved net results. We will focus on deepening the penetration of our solutions with core customers, especially through our new enterprise Analytics software. We will strive to continue diversifying revenue sources by winning new customers, through both direct sales and channel partners. And we will continue our efforts to extend our market leadership through product and service innovations, vertical market focus and international expansion." Fourth Quarter 2012 Operational Highlights *I.D. Systems was named for the third time to Deloitte's Technology Fast 500™ list, which ranks the 500 fastest growing technology companies in North America. The award was based on I.D. Systems' revenue growth of 130% over the past five years. *The company received repeat orders across all major product categories from core customers, including Avis Budget Group, Ford Motor Company, Freymiller, General Mills, Kellogg, Nestlé, Procter & Gamble, US Trailer Holdings, and Walgreens. *New customers from direct sales efforts included one of the world's largest tire producers, a leading global manufacturer of heavy equipment, a prominent European auto maker, a multinational packaging producer, a major U.S. food processor, and a multi-billion dollar manufacturer of machine components. *The company executed its first licensing agreements with customers for I.D. Systems Analytics, a new software offering that provides a single, integrated view of industrial vehicle activity across multiple locations, generating enterprise-wide benchmarks, peer-industry comparisons and deeper insight into large-scale material handling operations. Investor Conference Call I.D. Systems will hold a conference call for investors and analysts today, Wednesday, March 6, 2013, at 4:45 p.m. Eastern time. The company's chairman and CEO, Jeffrey Jagid, will lead a discussion on 2012 results and other recent developments, followed by a question and answer period. The conference call will be broadcast live via the Investors section of the company's website at www.id-systems.com. To listen to the live call, go to the website at least 10 minutes early to download and install any necessary audio software. Non-GAAP Measures To supplement its financial statements presented in accordance with Generally Accepted Accounting Principles (GAAP), I.D. Systems provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP net income/loss and non-GAAP net income/loss per basic and diluted share. Reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, or superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of I.D. Systems' current financial performance. Specifically, I.D. Systems believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results and business outlook. Reconciliation of all non-GAAP measures included in this press release to the nearest GAAP measures can be found in the financial tables included in this press release. About I.D. Systems Headquartered in Woodcliff Lake, New Jersey, with subsidiaries in Texas, Germany, and the United Kingdom, I.D. Systems is a leading global provider of wireless solutions for securing, controlling, tracking, and managing high-value enterprise assets, including industrial vehicles, rental cars, trailers, containers, and cargo. The company's patented technologies address the needs of organizations to monitor and analyze their assets to increase efficiency and productivity, reduce costs, and improve profitability. For more information, please visit www.id-systems.com. The I.D. Systems, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=17090 Cautionary Note Regarding Forward-Looking Statements This press release contains forward looking statements within the meaning of federal securities laws. Forward-looking statements include statements with respect to I.D. Systems' beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond I.D. Systems' control, and which may cause its actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. For example, forward-looking statements include: statements regarding prospects for additional customers; market forecasts; projections of earnings, revenues, synergies, accretion or other financial information; and plans, strategies and objectives of management for future operations, including integration plans in connection with acquisitions. The risks and uncertainties referred to above include, but are not limited to, future economic and business conditions, the loss of key customers or reduction in the purchase of products by any such customers, the failure of the market for I.D. Systems' products to continue to develop, the possibility that I.D. Systems may not be able to integrate successfully the business, operations and employees of acquired businesses, the inability to protect I.D. Systems' intellectual property, the inability to manage growth, the effects of competition from a variety of local, regional, national and other providers of wireless solutions, and other risks detailed from time to time in I.D. Systems' filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2011. These risks could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, I.D. Systems. Unless otherwise required by applicable law, I.D. Systems assumes no obligation to update the information contained in this press release, and expressly disclaims any obligation to do so, whether as a result of new information, future events or otherwise. - Tables Follow - I.D. Systems, Inc. and Subsidiaries Condensed Statement of Operations Data Three Months Ended Year Ended December 31, December 31, 2011 2012 2011 2012 (Unaudited) (Unaudited) Revenues: Product revenues $ 7,775,000 $ 6,895,000 $ 22,450,000 $ 28,640,000 Service revenues 4,066,000 3,768,000 16,842,000 15,995,000 11,841,000 10,663,000 39,292,000 44,635,000 Cost of revenues: Cost of products 4,504,000 4,380,000 12,863,000 16,038,000 Cost of services 1,329,000 1,446,000 5,860,000 5,667,000 5,833,000 5,826,000 18,723,000 21,705,000 Gross profit 6,008,000 4,837,000 20,569,000 22,930,000 Selling, general and 5,505,000 5,682,000 21,995,000 22,409,000 administrative expenses Research and 931,000 1,044,000 3,534,000 4,341,000 developmentexpenses Operating loss (428,000) (1,889,000) (4,960,000) (3,820,000) Interest income 83,000 172,000 243,000 507,000 Other (expense) income (63,000) 9,000 287,000 59,000 Net loss before income (408,000) (1,708,000) (4,430,000) (3,254,000) tax Income tax benefit 390,000 662,000 390,000 662,000 Net loss $ (18,000) $ (1,046,000) $ (4,040,000) $ (2,592,000) Net loss per share – $ (0.00) $ (0.09) $ (0.36) $ (0.22) basic and diluted Weighted average common shares outstanding – 11,734,000 11,786,000 11,162,000 11,744,000 basic and diluted I.D. Systems, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) Three Months Three Months Year Ended Year Ended Ended Ended December 31, December 31, December 31, December 31, 2011 2012 2011 2012 Net loss $ (18,000) $ (1,046,000) $ (4,040,000) $ (2,592,000) Depreciation expense and amortization of 571,000 542,000 2,367,000 2,186,000 intangible assets Stock-based compensation 277,000 289,000 1,188,000 1,154,000 expense Non-GAAP net income $ 830,000 $ (215,000) $ (485,000) $ 748,000 (loss) Non-GAAP net income (loss) per basic and $ 0.07 $ (0.02) $ (0.04) $ 0.06 diluted share I.D. Systems, Inc. and Subsidiaries Condensed Balance Sheet Data December 31, 2011 December 31, 2012 Unaudited) ASSETS Cash and cash equivalents $8,386,000 $ 1,614,000 Investments – short term 6,904,000 4,794,000 Restricted cash 300,000 300,000 Accounts receivable, net 7,947,000 8,814,000 Note and lease receivable – current 1,217,000 3,143,000 Inventory, net 8,114,000 7,512,000 Deferred costs – current 1,950,000 2,380,000 Prepaid expenses and other current assets 2,192,000 1,043,000 Deferred tax asset – current 390,000 662,000 Total current assets 37,400,000 30,262,000 Investments – long term 9,779,000 9,064,000 Note and lease receivable – less current 4,101,000 10,814,000 portion Deferred costs – less current portion 1,916,000 2,651,000 Fixed assets, net 3,092,000 2,401,000 Goodwill 1,837,000 1,837,000 Intangible assets, net 4,399,000 3,230,000 Other assets 307,000 307,000 $62,831,000 $60,566,000 LIABILITIES Accounts payable and accrued expenses $9,482,000 $5,638,000 Deferred revenue, current 3,090,000 4,689,000 Total current liabilities 12,572,000 10,327,000 Deferred rent 327,000 343,000 Deferred revenue, less current portion 4,332,000 5,869,000 Total liabilities 17,231,000 16,539,000 STOCKHOLDERS' EQUITY Preferred stock: authorized 5,000,000 -- -- shares; none issued Common stock: 50,000,000 shares authorized; 12,546,000 and 12,678,000 shares issued at December 31, 2011 and 121,000 122,000 2012, respectively; 12,055,000 and 12,088,000 shares outstanding at December 31, 2011 and 2012, respectively Additional paid-in capital 101,766,000 103,135,000 Accumulated deficit (53,510,000) (56,102,000) Accumulated other comprehensive (loss) (49,000) 53,000 income 48,328,000 47,208,000 Treasury stock, at cost (2,728,000) (3,181,000) Total stockholders' equity 45,600,000 44,027,000 Total liabilities and stockholders' equity $62,831,000 $60,566,000 I.D. Systems, Inc. and Subsidiaries Condensed Statement of Cash Flows Data Year Ended December 31, 2011 2012 (Unaudited) Cash flows from operating activities: Net loss $(4,040,000) $ (2,592,000) Adjustments to reconcile net loss to cash used in operating activities: Stock-based compensation expense 1,188,000 1,154,000 Depreciation and amortization 2,367,000 2,186,000 Deferred rent expense 128,000 16,000 Bad debt reserve 275,000 432,000 Deferred income tax benefit (390,000) (272,000) Issuance of warrants 137,000 -- Changes in: Restricted cash (300,000) -- Accounts receivable (1,240,000) (1,299,000) Note and lease receivables (4,126,000) (8,639,000) Inventory (819,000) 602,000 Prepaid expenses and other assets (963,000) 1,149,000 Deferred costs 271,000 (1,165,000) Deferred revenue 622,000 3,136,000 Accounts payable and accrued expenses 293,000 (3,844,000) Net cash used in operating activities (6,597,000) (9,136,000) Cash flows from investing activities: Purchase of fixed assets (434,000) (326,000) Purchase of investments (7,196,000) (5,478,000) Proceeds from sales and maturities of investments 4,434,000 8,399,000 Net cash (used in) provided by investing (3,196,000) 2,595,000 activities Cash flows from financing activities: Proceeds from sale of stock to Avis Budget Group 4,605,000 -- Proceeds from exercise of stock options 35,000 117,000 Purchase of treasury shares (1,050,000) (193,000) Net cash provided by (used in) financing 3,590,000 (76,000) activities Effect of foreign exchange rate changes on cash 98,000 (155,000) and equivalents Net decrease in cash and cash equivalents (6,105,000) (6,772,000) Cash and cash equivalents - beginning of period 14,491,000 8,386,000 Cash and cash equivalents - end of period $8,386,000 $1,614,000 CONTACT: Investor Relations Liolios Group, Inc. Scott Liolios or Matt Glover 949-574-3860, email@example.com I.D. Systems, Inc. logo
I.D. Systems Reports 2012 Revenue Up 14% to Record $44.6 Million
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