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I.D. Systems Reports Record Fourth Quarter and Full Year 2011 Revenues; Fourth Quarter Non-GAAP Net Income Increases to $0.07 Per Share
WOODCLIFF LAKE, N.J., March 1, 2012 (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, 2011.
Q4 2011 Financial Results
- Revenue increased 64% to a record $11.8 million from $7.2 million in the same period a year ago, due primarily to increased sales of wireless asset management systems for fleets of rental cars, trailers, and industrial trucks. Recurring revenue in Q4 2011 was $4.1 million, or 35% of total revenue.
- Excluding stock-based compensation and depreciation and amortization, non-GAAP net income was $830,000, or $0.07 per basic and diluted share, compared to non-GAAP net loss of $1.3 million, or ($0.12) per basic and diluted share, in the same year-ago period.
- Net loss was $18,000, or $0.00 per basic and diluted share, compared to net loss of $2.7 million, or ($0.24) per basic and diluted share, in the fourth quarter of 2010.
Full Year 2011 Financial Results
- Revenue increased 52% to a record $39.3 million from $25.9 million in 2010. Recurring revenue in 2011 was $16.4 million, or 42% of total revenue.
- Selling, general and administrative expenses and research and development expenses decreased $2.3 million or 8% to $25.5 million from $27.8 million in 2010, due to cost reduction measures initiated by management at the end of 2010.
- Gross margin in 2011 was 52%, exceeding the company's target.
- Excluding stock-based compensation and depreciation and amortization, non-GAAP net loss was $485,000, or ($0.04) per basic and diluted share, compared to non-GAAP net loss of $8.6 million, or ($0.77) per basic and diluted share, in 2010.
- Net loss was $4.0 million, or ($0.36) per basic and diluted share, a substantial improvement from a net loss of $12.6 million, or ($1.12) per basic and diluted share, in 2010.
- As of December 31, 2011, the company had $25.4 million in cash, cash equivalents and marketable securities, equating to $2.10 per share outstanding, and no debt.
Results for both the fourth quarter and full year include the income tax benefit of $390,000 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.
Q4 2011 Operational Highlights
- Strong repeat business across all major product categories from core customers, including Avis Budget Group, Caterpillar, Deere, Ford Motor Company (North America and Europe), Forward Air, Kellogg, Koch Companies, Marten Transportation, Nestlé, Procter & Gamble, Star Leasing, the U.S. Postal Service, Walgreens, and Walmart.
- Continued strong growth of channel partner sales, resulting in a diverse range of new end-users of I.D. Systems' solutions, including a leading U.S. brewer, a U.S. sporting goods retailer, a major U.K. tea supplier, one of North America's largest third-party logistics providers, one of the world's biggest book publishers, one of the world's leading providers of medical products and services, a Fortune 100 food and drug retailer, and a Global 500 appliance manufacturer.
- New customers from direct sales efforts, including a U.K.-based Global 500 consumer packaged goods manufacturer, a diversified North American provider of transportation and logistics services, and a U.S.-based Fortune 500 food producer.
Management Commentary
"We achieved our goals for 2011," said Jeffrey Jagid, I.D. Systems' chairman and CEO. "Our top line revenue and sustained cost controls were particularly gratifying. Q4 2011 was our sixth consecutive quarter of revenue growth and we set new revenue records for both the quarter and the year. At the same time, we reduced core overhead costs 8% year-over-year. These achievements contributed to a breakeven fourth quarter on a GAAP basis, and a sequential increase in non-GAAP net income from $0.06 per share in the third quarter of 2011 to $0.07 per share in the fourth quarter.
"Due in large part to the ongoing service contracts managed by our Asset Intelligence subsidiary, our recurring revenue was more than 40% of total revenue for the year and our gross margin held strong at 52%.
"With this positive momentum going into 2012," concluded Jagid, "we remain committed to executing our growth strategy—broadening business with core customers, diversifying revenue sources by winning new customers, particularly through channel partners, and continuing to extend our market leadership with product and service innovations, vertical market focus, and international expansion."
Investor Conference Call
I.D. Systems will hold a conference call for investors and analysts today, Thursday, March 1, 2012, at 4:45 p.m. Eastern time. The company's chairman and CEO, Jeffrey Jagid, will lead a discussion on 2011 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
Based in Woodcliff Lake, New Jersey, with subsidiaries in Germany and the United Kingdom, I.D. Systems is a leading provider of wireless solutions for securing, controlling, tracking, and managing high-value enterprise assets, including vehicles, powered equipment, trailers, containers, baggage, and cargo. The company's patented technologies address the needs of organizations to monitor and analyze their assets to improve safety, security, efficiency, and productivity. For more information, please visit www.id-systems.com.
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, 2010. 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, | |||
| 2010 |
2011 (Unaudited) |
2010 |
2011 (Unaudited) |
|
| Revenues: | ||||
| Product revenues | $ 3,089,000 | $ 7,775,000 | $ 9,483,000 | $ 22,450,000 |
| Service revenues | 4,145,000 | 4,066,000 | 16,378,000 | 16,842,000 |
| 7,234,000 | 11,841,000 | 25,861,000 | 39,292,000 | |
| Cost of revenues: | ||||
| Cost of products | 1,730,000 | 4,504,000 | 5,077,000 | 12,863,000 |
| Cost of services | 1,472,000 | 1,329,000 | 6,363,000 | 5,860,000 |
| 3,202,000 | 5,833,000 | 11,440,000 | 18,723,000 | |
| Gross profit | 4,032,000 | 6,008,000 | 14,421,000 | 20,569,000 |
| Selling, general and administrative expenses | 5,739,000 | 5,505,000 | 23,326,000 | 21,995,000 |
| Research and development expenses | 1,067,000 | 931,000 | 4,429,000 | 3,534,000 |
| Operating loss | (2,774,000) | (428,000) | (13,334,000) | (4,960,000) |
| Interest income | 100,000 | 83,000 | 675,000 | 243,000 |
| Interest expense | -- | -- | (56,000) | -- |
| Other income (expense) | 10,000 | (63,000) | 104,000 | 287,000 |
| Net loss before income tax | (2,664,000) | (408,000) | (12,611,000) | (4,430,000) |
| Income tax benefit | -- | 390,000 | -- | 390,000 |
| Net loss | $ (2,664,000) | $ (18,000) | $ (12,611,000) | $ (4,040,000) |
| Net loss per share – basic and diluted | $ (0.24) | $ (0.00) | $ (1.12) | $ (0.36) |
| Weighted average common shares outstanding – basic and diluted | 11,263,000 | 11,734,000 | 11,239,000 | 11,162,000 |
| I.D. Systems, Inc. and Subsidiaries | ||||
| Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
| (Unaudited) | ||||
|
Three Months Ended December 31, 2010 |
Three Months Ended December 31, 2011 |
Year Ended December 31, 2010 |
Year Ended December 31, 2011 |
|
| Net loss | $ (2,664,000) | $ (18,000) | $ (12,611,000) | $ (4,040,000) |
| Depreciation expense and amortization of intangible assets | 988,000 | 571,000 | 2,435,000 | 2,367,000 |
| Stock-based compensation expense | 376,000 | 277,000 | 1,558,000 | 1,188,000 |
| Non-GAAP net income (loss) | $ (1,300,000) | $ 830,000 | $ (8,618,000) | $ (485,000) |
| Non-GAAP net income (loss) per basic and diluted share | $ (0.12) | $ 0.07 | $ (0.77) | $ (0.04) |
| I.D. Systems, Inc. and Subsidiaries | ||
| Condensed Balance Sheet Data | ||
| December 31, 2010 | December 31, 2011 (Unaudited) | |
| ASSETS | ||
| Cash and cash equivalents | $14,491,000 | $8,386,000 |
| Investments – short term | 4,565,000 | 6,904,000 |
| Restricted cash | -- | 300,000 |
| Accounts receivable, net | 7,044,000 | 7,947,000 |
| Note and lease receivable – current | 353,000 | 1,217,000 |
| Inventory, net | 7,295,000 | 8,114,000 |
| Deferred costs – current | 1,159,000 | 1,950,000 |
| Prepaid expenses and other current assets | 1,264,000 | 2,192,000 |
| Deferred tax asset – current | -- | 390,000 |
| Total current assets | 36,171,000 | 37,400,000 |
| Investments – long term | 9,364,000 | 9,779,000 |
| Note and lease receivable – less current portion | 839,000 | 4,101,000 |
| Deferred costs – less current portion | 2,978,000 | 1,916,000 |
| Fixed assets, net | 3,853,000 | 3,092,000 |
| Goodwill | 1,837,000 | 1,837,000 |
| Intangible assets, net | 5,571,000 | 4,399,000 |
| Other assets | 272,000 | 307,000 |
| $60,885,000 | $62,831,000 | |
| LIABILITIES | ||
| Accounts payable and accrued expenses | $9,141,000 | $9,482,000 |
| Deferred revenue, current | 2,186,000 | 3,090,000 |
| Total current liabilities | 11,327,000 | 12,572,000 |
| Deferred rent | 199,000 | 327,000 |
| Deferred revenue, less current portion | 4,614,000 | 4,332,000 |
| Total liabilities | 16,140,000 | 17,231,000 |
| STOCKHOLDERS' EQUITY | ||
| Preferred stock: authorized 5,000,000 shares; none issued | -- | -- |
| Common stock: 50,000,000 shares authorized; 12,491,000 and 12,553,000 shares issued at December 31, 2010 and 2011, respectively; 11,242,000 and 12,062,000 shares outstanding at December 31, 2010 and 2011, respectively | 121,000 | 121,000 |
| Additional paid-in capital | 105,156,000 | 101,766,000 |
| Accumulated deficit | (49,470,000) | (53,510,000) |
| Accumulated other comprehensive loss | (37,000) | (49,000) |
| 55,770,000 | 48,328,000 | |
| Treasury stock, at cost | (11,025,000) | (2,728,000) |
| Total stockholders' equity | 44,745,000 | 45,600,000 |
| Total liabilities and stockholders' equity | $60,885,000 | $62,831,000 |
| I.D. Systems, Inc. and Subsidiaries | ||
| Condensed Statement of Cash Flows Data | ||
| Year Ended December 31, | ||
| 2010 |
2011 (Unaudited) |
|
| Cash flows from operating activities: | ||
| Net loss | $ (12,611,000) | $ (4,040,000) |
| Adjustments to reconcile net loss to cash used in operating activities: | ||
| Stock-based compensation expense | 1,558,000 | 1,188,000 |
| Depreciation and amortization | 2,435,000 | 2,367,000 |
| Deferred rent expense | 188,000 | 128,000 |
| Bad debt reserve | 65,000 | 275,000 |
| Deferred income tax benefit | -- | (390,000) |
| Issuance of warrants | -- | 137,000 |
| Changes in: | ||
| Restricted cash | -- | (300,000) |
| Accounts receivable | (611,000) | (1,240,000) |
| Note and lease receivable | 199,000 | (4,126,000) |
| Inventory | 2,428,000 | (819,000) |
| Prepaid expenses and other assets | 149,000 | (963,000) |
| Deferred costs | (3,442,000) | 271,000 |
| Deferred revenue | 4,454,000 | 622,000 |
| Accounts payable and accrued expenses | 1,593,000 | 293,000 |
| Net cash used in operating activities | (3,595,000) | (6,597,000) |
| Cash flows from investing activities: | ||
| Purchase of fixed assets | (1,459,000) | (434,000) |
| Business acquisition | (15,000,000) | -- |
| Purchase of investments | (15,330,000) | (7,196,000) |
| Proceeds from sales and maturities of investments | 42,107,000 | 4,434,000 |
| Net cash provided by (used in) investing activities | 10,318,000 | (3,196,000) |
| Cash flows from financing activities: | ||
| Proceeds from sale of stock to Avis | -- | 4,605,000 |
| Proceeds from exercise of stock options | 3,000 | 35,000 |
| Principal payments on line of credit | (11,638,000) | -- |
| Purchase of treasury shares | (99,000) | (1,050,000) |
| Net cash provided by (used in) financing activities | (11,734,000) | 3,590,000 |
| Effect of foreign exchange rate changes on cash and equivalents | 21,000 | 98,000 |
| Net decrease in cash and cash equivalents | (4,990,000) | (6,105,000) |
| Cash and cash equivalents - beginning of period | 19,481,000 | 14,491,000 |
| Cash and cash equivalents - end of period | $ 14,491,000 | $ 8,386,000 |
CONTACT: Company
Ned Mavrommatis
Chief Financial Officer
Phone: 201-996-9000
ned@id-systems.com
Investor Relations
Liolios Group, Inc.
Scott Liolios or Matt Glover
Phone: 949-574-3860
info@liolios.com
Source: I.D. Systems, Inc.
Released March 1, 2012