I.D. Systems Reports 2012 Revenue Up 14% to Record $44.6 Million

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
  *Recurring revenue increased 5% to $17.3 million from $16.4 million in
  *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

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)
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
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)
Income tax benefit       390,000      662,000       390,000       662,000
Net loss                 $ (18,000)   $ (1,046,000) $ (4,040,000) $
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
                         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) $
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
Non-GAAP net income      $ 830,000    $ (215,000)   $ (485,000)   $ 748,000
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
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
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
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
                                          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
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
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)
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, info@liolios.com

I.D. Systems, Inc. logo
Press spacebar to pause and continue. Press esc to stop.