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WOODCLIFF LAKE, N.J., March 6, 2014 (GLOBE NEWSWIRE) -- I.D. Systems, Inc. (Nasdaq:IDSY), a leading provider of wireless M2M 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, 2013.
Fourth Quarter 2013 Financial Results
Fourth Quarter 2013 Operational Highlights
Full Year 2013 Financial Results
Results for the fourth quarter and full year 2013 include an income tax benefit of $63,000, and results for 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
"We are encouraged by the continued revenue growth in our industrial vehicle management segment, and our core margins underlying that business," said Kenneth Ehrman, I.D. Systems' president and interim chief executive officer. "Although our decision to increase inventory reserve by $2.1 million significantly impacted margins in 2013, our action was appropriate and necessary. We had a group of aged products, including many we obtained in our acquisitions of PowerKey in 2008 and Asset Intelligence in 2010, which have been rendered obsolete by our latest generation of cutting-edge wireless products.
"These product developments, which we believe position the company well to capitalize on the increasing global adoption of M2M technology, include the fourth generation of our smart, on-vehicle device for controlling industrial trucks, two improved cellular devices for tracking trailer chassis and intermodal containers, an enhanced rental vehicle management unit, and refinements to our Analytics software offering.
"Our rental fleet management business remains an evolving opportunity, not only with our current customer, Avis Budget Group, but also with other companies—both in and outside of the car rental industry. We will continue our efforts to commercialize our intellectual property in this area.
"Our cloud-based Analytics software has evolved through multiple customer deployments, resulting in the recent launch of an industry-first set of key performance indicators based on Analytics data. These KPIs enable unique, quantified valuations of material handling operations, which provide a daily assessment of industrial vehicle performance and form the basis for comparison with the user's peer industry.
"We remain focused on expanding business with core enterprise customers—particularly by leveraging our Analytics software—and diversifying revenue through new customer development. We are also committed to maintaining I.D. Systems' position as a leader in wireless M2M solutions—by investing in key resources to accelerate growth, improving our internal quality processes, and capitalizing on both short- and long-term growth opportunities."
Investor Conference Call
I.D. Systems will hold a conference call for investors and analysts today, Thursday, March 6, 2014, at 4:45 p.m. Eastern time. The company's interim CEO, Kenneth Ehrman, will lead a discussion on 2013 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 gross margin, 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 M2M 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.
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; emerging new products; and plans, strategies and objectives of management for future operations, including growing revenue, controlling operating costs, and expanding business with core customers. 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, 2012. 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 December 31, |
Year Ended December 31, |
|||
2012 (Unaudited) |
2013 (Unaudited) |
2012 |
2013 (Unaudited) |
|
Revenues: | ||||
Product revenues | $ 6,895,000 | $ 7,096,000 | $ 28,640,000 | $ 23,140,000 |
Service revenues | 3,768,000 | 4,261,000 | 15,995,000 | 16,806,000 |
10,663,000 | 11,357,000 | 44,635,000 | 39,946,000 | |
Cost of revenues: | ||||
Cost of products | 4,380,000 | 6,362,000 | 16,038,000 | 15,914,000 |
Cost of services | 1,446,000 | 1,588,000 | 5,667,000 | 6,122,000 |
5,826,000 | 7,950,000 | 21,705,000 | 22,036,000 | |
Gross profit | 4,837,000 | 3,407,000 | 22,930,000 | 17,910,000 |
Selling, general and administrative expenses | 5,682,000 | 5,677,000 | 22,409,000 | 21,769,000 |
Research and development expenses | 1,044,000 | 1,044,000 | 4,341,000 | 4,389,000 |
Operating loss | (1,889,000) | (3,314,000) | (3,820,000) | (8,248,000) |
Interest income | 172,000 | 151,000 | 507,000 | 635,000 |
Other income | 9,000 | 6,000 | 59,000 | 51,000 |
Net loss before income tax | (1,708,000) | (3,157,000) | (3,254,000) | (7,562,000) |
Income tax benefit | 662,000 | 63,000 | 662,000 | 63,000 |
Net loss | $ (1,046,000) | $ (3,094,000) | $ (2,592,000) | $ (7,499,000) |
Net loss per share – basic and diluted | $ (0.09) | $ (0.26) | $ (0.22) | $ (0.63) |
Weighted average common shares outstanding – basic and diluted | 11,786,000 | 11,991,000 | 11,744,000 | 11,912,000 |
I.D. Systems, Inc. and Subsidiaries | ||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
(Unaudited) | ||||
Three Months Ended December 31, 2012 |
Three Months Ended December 31, 2013 |
Year Ended December 31, 2012 |
Year Ended December 31, 2013 |
|
Net loss | $ (1,046,000) | $ (3,094,000) | $ (2,592,000) | $ (7,499,000) |
Inventory reserve | -- | 2,066,000 | -- | 2,066,000 |
Depreciation expense and amortization of intangible assets | 542,000 | 603,000 | 2,186,000 | 2,171,000 |
Stock-based compensation expense | 289,000 | 270,000 | 1,154,000 | 1,118,000 |
Non-GAAP net income (loss) | $ (215,000) | $ (155,000) | $ 748,000 | $ (2,144,000) |
Non-GAAP net income (loss) per basic and diluted share | $ (0.02) | $ (0.01) | $ 0.06 | $ (0.18) |
Three Months Ended December 31, 2012 |
Three Months Ended December 31, 2012 |
Year Ended December 31, 2012 |
Year Ended December 31, 2012 |
|
Revenues | $ 10,663,000 | $ 11,357,000 | $ 44,635,000 | $ 39,946,000 |
Cost of revenues | 5,826,000 | 7,950,000 | 21,705,000 | 22,036,000 |
Gross profit | 4,837,000 | 3,407,000 | 22,930,000 | 17,910,000 |
Inventory reserve | -- | 2,066,000 | -- | 2,066,000 |
Stock-based compensation expense | 3,000 | 4,000 | 12,000 | 16,000 |
Depreciation expense and amortization of intangibles | 15,000 | 23,000 | 54,000 | 83,000 |
Non-GAAP gross profit | $ 4,855,000 | $ 5,500,000 | $ 22,996,000 | $ 20,075,000 |
GAAP gross margin | 45% | 30% | 51% | 45% |
Non-GAAP gross margin | 46% | 48% | 52% | 50% |
I.D. Systems, Inc. and Subsidiaries | ||
Condensed Balance Sheet Data | ||
December 31, 2012 | December 31, 2013 (Unaudited) | |
ASSETS | ||
Cash and cash equivalents | $ 1,614,000 | $ 6,582,000 |
Investments – short term | 4,794,000 | 4,090,000 |
Restricted cash | 300,000 | 300,000 |
Accounts receivable, net | 8,814,000 | 9,574,000 |
Financing receivables – current | 3,143,000 | 4,051,000 |
Inventory, net | 7,512,000 | 5,156,000 |
Deferred costs – current | 2,380,000 | 2,112,000 |
Prepaid expenses and other current assets | 1,043,000 | 909,000 |
Deferred tax asset – current | 662,000 | 63,000 |
Total current assets | 30,262,000 | 32,837,000 |
Investments – long term | 9,064,000 | 3,100,000 |
Financing receivables – less current portion | 10,814,000 | 10,255,000 |
Deferred costs – less current portion | 2,651,000 | 2,861,000 |
Fixed assets, net | 2,401,000 | 2,239,000 |
Goodwill | 1,837,000 | 1,837,000 |
Intangible assets, net | 3,230,000 | 2,064,000 |
Other assets | 307,000 | 322,000 |
$ 60,566,000 | $ 55,515,000 | |
LIABILITIES | ||
Accounts payable and accrued expenses | $ 5,638,000 | $ 6,264,000 |
Capital lease obligation, current | -- | 144,000 |
Deferred revenue, current | 4,689,000 | 4,641,000 |
Total current liabilities | 10,327,000 | 11,049,000 |
Deferred rent | 343,000 | 330,000 |
Capital lease obligation, less current portion | -- | 149,000 |
Deferred revenue, less current portion | 5,869,000 | 6,538,000 |
Total liabilities | 16,539,000 | 18,066,000 |
STOCKHOLDERS' EQUITY | ||
Preferred stock: authorized 5,000,000 shares; none issued | -- | -- |
Common stock: 50,000,000 shares authorized; 12,678,000 and 12,835,000 shares issued at December 31, 2012 and 2013, respectively; 12,088,000 and 12,196,000 shares outstanding at December 31, 2012 and 2013, respectively | 122,000 | 123,000 |
Additional paid-in capital | 103,135,000 | 104,479,000 |
Accumulated deficit | (56,102,000) | (63,601,000) |
Accumulated other comprehensive income (loss) | 53,000 | (106,000) |
47,208,000 | 40,895,000 | |
Treasury stock, at cost | (3,181,000) | (3,446,000) |
Total stockholders' equity | 44,027,000 | 37,449,000 |
Total liabilities and stockholders' equity | $ 60,566,000 | $ 55,515,000 |
I.D. Systems, Inc. and Subsidiaries | ||
Condensed Statement of Cash Flows Data | ||
Year Ended December 31, | ||
2012 |
2013 (Unaudited) |
|
Cash flows from operating activities: | ||
Net loss | $ (2,592,000) | $ (7,499,000) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Inventory reserve | -- | 2,066,000 |
Stock-based compensation expense | 1,154,000 | 1,118,000 |
Depreciation and amortization | 2,186,000 | 2,171,000 |
Deferred rent expense | 16,000 | (13,000) |
Bad debt reserve | 432,000 | 482,000 |
Deferred income tax benefit | (272,000) | 599,000 |
Changes in: | ||
Accounts receivable | (1,299,000) | (1,186,000) |
Financing receivables | (8,639,000) | (354,000) |
Inventory | 602,000 | 290,000 |
Prepaid expenses and other assets | 1,149,000 | 119,000 |
Deferred costs | (1,165,000) | 58,000 |
Deferred revenue | 3,136,000 | 621,000 |
Accounts payable and accrued expenses | (3,844,000) | 385,000 |
Net cash used in operating activities | (9,136,000) | (1,143,000) |
Cash flows from investing activities: | ||
Purchase of fixed assets | (326,000) | (538,000) |
Purchase of investments | (5,478,000) | (3,841,000) |
Proceeds from sales and maturities of investments | 8,399,000 | 10,427,000 |
Net cash provided by investing activities | 2,595,000 | 6,048,000 |
Cash flows from financing activities: | ||
Principal payments of capital lease obligation | -- | (12,000) |
Proceeds from exercise of stock options | 117,000 | 203,000 |
Purchase of treasury shares | (193,000) | -- |
Net cash provided by (used in) financing activities | (76,000) | 191,000 |
Effect of foreign exchange rate changes on cash and equivalents | (155,000) | (128,000) |
Net decrease in cash and cash equivalents | (6,772,000) | 4,968,000 |
Cash and cash equivalents - beginning of period | 8,386,000 | 1,614,000 |
Cash and cash equivalents - end of period | $ 1,614,000 | $ 6,582,000 |
CONTACT: Investor Relations Liolios Group, Inc. Scott Liolios or Matt Glover 949-574-3860, IDSY@liolios.comSource: I.D. Systems, Inc.
Released March 6, 2014