Press Releases

I.D. Systems, Inc. Reports Second Quarter Financial Results

HACKENSACK, N.J., Aug. 11, 2010 (GLOBE NEWSWIRE) -- I.D. Systems, Inc. (Nasdaq:IDSY) today announced its financial results for the second quarter of 2010. Revenue for the three months ended June 30, 2010, increased $3.3 million to $6.0 million, compared to $2.7 million for the three months ended June 30, 2009. The increase was attributable primarily to service contracts held by I.D. Systems' Asset Intelligence business unit, acquired from General Electric in January, 2010, which currently averages approximately $1.1 million per month in recurring revenue under multi-year contracts.

Gross margin for the second quarter of 2010 was 60.1%, compared to 54.8% for the corresponding period in 2009. Net loss for the quarter was $4.0 million, or ($0.36) per basic and diluted share, compared to net loss of $2.3 million, or ($0.21) per basic and diluted share, for the second quarter of 2009. Excluding $439,000 in stock-based compensation expense, non-GAAP net loss for the second quarter of 2010 was $3.6 million, or ($0.32) per basic and diluted share.

For the six-month period ended June 30, 2010, revenues increased $6.5 million to $12.1 million, compared to $5.6 million for the six months ended June 30, 2009. Gross margin for the six-month period was 57.7%, compared to 54.5% for the corresponding period in 2009. Net loss for the period was $8.1 million, or ($0.72) per basic and diluted share, compared to net loss of $5.4 million, or ($0.49) per basic and diluted share, for the six months ended June 30, 2009. Excluding $893,000 in stock-based compensation expense, non-GAAP net loss for the six-month period ended June 30, 2010 was $7.2 million, or ($0.64) per basic and diluted share.

As of June 30, 2010, excluding a $1.2 million line of credit, I.D. Systems had $27.1 million in cash, cash equivalents and marketable securities, and $32.7 million of working capital.

"Although our short term results did not meet our goals, we remain committed to improving our financial results in 2010 by continuing to expand our portfolio of solutions, control costs, maintain robust margins, and grow revenues," said Jeffrey Jagid, I.D. Systems' Chairman and Chief Executive Officer. "We expect our cost management initiatives, including staff consolidations related to our January, 2010, acquisition of General Electric's Asset Intelligence business, to ultimately decrease I.D. Systems' consolidated annual operating expenses by approximately $8 million."

Highlights for the second quarter of 2010 included:

-- Expansion of I.D. Systems' solutions with existing customers, including:

  --  Wal-Mart, which extended, through 2012, a contract with I.D. Systems'
      Asset Intelligence subsidiary for its VeriWise(TM) over-the-road trailer
      management systems.
  --  Knight Transportation, which expanded its deployment of VeriWise(TM)
      trailer management systems to more than 1,500 additional trailers.
  --  American Airlines and American Eagle Airlines, which expanded the number
      of vehicles at Dallas Fort-Worth International Airport equipped with
      I.D. Systems' AvRamp(TM) Wireless Vehicle Management System.
  --  Procter & Gamble ("P&G"), which ordered I.D. Systems' PowerFleet(R)
      Wireless Vehicle Management System for a fleet of lift trucks at a
      facility in Canada (P&G's first PowerFleet(R) deployment in North
      America), and which also selected I.D. Systems as its global supplier of
      industrial vehicle management systems.

-- Initial implementations of I.D. Systems' PowerFleet(R) Wireless Vehicle Management System for the industrial truck fleets of new customers, including Armstrong World Industries, Campbell Soup Company, and General Mills.

-- Development of new products to expand the markets and applications addressed by I.D. Systems' solutions, including:

  --  VeriWise(TM) Track & Trace, a low-cost, long-life, cellular device with
      flexible mounting options and simple installation, aimed at trailer and
      container location tracking, theft countermeasures, and short-term asset
  --  SafeNav(TM) Powered by Garmin(TM), an on-vehicle, GPS-based navigation
      and alert system designed to provide airport vehicle operators with
      real-time situational awareness, with the goal of avoiding accidental
      runway incursions.
  --  PowerBox(TM), a hosted, out-of-the-box solution designed to simplify
      system acquisition, deployment and benefit achievement for customers
      with small to medium fleets, or larger fleets with basic vehicle
      management requirements.

-- Execution of a marketing agreement with The Raymond Corporation, a leading global manufacturer of material handling vehicles, under which Raymond will sell I.D. Systems' vehicle management solutions, and the concurrent certification of I.D. Systems' on-vehicle hardware for direct interface with Raymond lift trucks to simplify installation and expand system functionality.

Selling, general and administrative expenses ("SG&A") for the three months ended June 30, 2010, were $6.7 million, compared to $3.8 million for the second quarter of 2009. SG&A expenses for the six months ended June 30, 2010, were $13.2 million, compared to $8.0 million for the corresponding period of 2009. These increases reflect additional payroll-related and consulting expenses following the acquisition of Asset Intelligence, prior to staff consolidations and other cost reduction measures.

Research and development ("R&D") expenses for the second quarter of 2010 were $1.1 million, compared to $0.7 million for the second quarter of 2009. R&D expenses for the six months ended June 30, 2010 were $2.3 million, compared to $1.4 million for the corresponding period in 2009. The increases reflect investments in new Asset Intelligence products coming to market in 2010.

                        Investor Conference Call

I.D. Systems will hold a conference call for investors and analysts at 4:45 p.m. Eastern Time on Wednesday, August 11, 2010. Jeffrey Jagid, Chairman and Chief Executive Officer of I.D. Systems, will lead a discussion on the results of the quarter and recent developments. After opening remarks and a discussion of the quarter, there will be a question and answer period. The conference call will be broadcast live over the Internet via the Investors section of the Company's website at 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 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. All non-GAAP measures included in this press release are accompanied by information for a reconciliation to the nearest GAAP measures.

                           About I.D. Systems

Based in Hackensack, 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

                        "Safe Harbor" Statement

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, 2009. 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. 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.

                           I.D. Systems, Inc. and Subsidiaries
                               Statement of Operations Data

                               Three months ended               Six months ended
                                    June 30,                        June 30,
                         ------------------------------  ------------------------------

                              2009            2010            2009            2010
                         --------------  --------------  --------------  --------------
   Products                 $ 1,771,000     $ 1,829,000     $ 3,149,000     $ 3,852,000

   Services                     913,000       4,184,000       2,469,000       8,285,000
                         --------------  --------------  --------------  --------------
                              2,684,000       6,013,000       5,618,000      12,137,000
  Cost of revenue:
   Cost of products             890,000         865,000       1,688,000       1,840,000

   Cost of services             323,000       1,532,000         870,000       3,296,000
                         --------------  --------------  --------------  --------------
                              1,213,000       2,397,000       2,558,000       5,136,000

  Gross profit                1,471,000       3,616,000       3,060,000       7,001,000

  Selling, general and
   administrative             3,764,000       6,689,000       7,975,000      13,163,000
  Research and
   development expenses         691,000       1,119,000       1,380,000       2,273,000
                         --------------  --------------  --------------  --------------

  Loss from operations      (2,984,000)     (4,192,000)     (6,295,000)     (8,435,000)
  Interest income               283,000         187,000         630,000         396,000
  Interest expense             (43,000)        (25,000)        (43,000)        (55,000)

  Other income, net             420,000           4,000         312,000           5,000
                         --------------  --------------  --------------  --------------

  Net loss                $ (2,324,000)   $ (4,026,000)   $ (5,396,000)   $ (8,089,000)
                         ==============  ==============  ==============  ==============

  Net loss per share --
   basic and diluted           $ (0.21)        $ (0.36)        $ (0.49)        $ (0.72)
                         ==============  ==============  ==============  ==============

  Weighted average
   common shares
   outstanding -- basic
   and diluted               10,916,000      11,253,000      10,906,000      11,219,000
                         ==============  ==============  ==============  ==============
             I.D. Systems, Inc. and Subsidiaries
                      Balance Sheet Data

                                                  June 30,
                                  December 31,      2010
                                     2009*       (Unaudited)
                                  ------------  ------------
  Cash and cash equivalents        $19,481,000    $6,768,000
  Investments -- short term         33,909,000    17,103,000
  Accounts receivable, net           3,252,000     5,843,000
  Note and lease receivable --
   current                                  --       153,000
  Inventory, net                     4,487,000     8,591,000
  Interest receivable                   97,000        74,000
  Deferred costs -- current                 --       566,000
  Prepaid expenses and other
   current assets                      686,000     1,940,000
                                  ------------  ------------
     Total current assets           61,912,000    41,038,000

  Investments -- long term           6,752,000     4,379,000
  Note and lease receivable --
   less current portion                     --     1,088,000
  Deferred costs -- less current
   portion                                  --     1,233,000
  Fixed assets, net                    917,000     3,984,000
  Other assets                              --       271,000
  Goodwill                             619,000     1,573,000

  Intangible assets, net               375,000     5,620,000
                                  ------------  ------------

                                   $70,575,000   $59,186,000
                                  ============  ============

  Accounts payable and accrued
   expenses                         $2,094,000     6,084,000
  Line of credit                    11,638,000     1,161,000

  Deferred revenue -current            501,000     1,131,000
                                  ------------  ------------
     Total current liabilities      14,233,000     8,376,000
  Deferred revenue -- less
   current portion                     461,000     2,133,000
                                  ------------  ------------

     Total liabilities              14,694,000    10,509,000
                                  ------------  ------------

  Commitments and contingencies

  Preferred stock; authorized
   5,000,000 shares, $0.01 par
   value; none issued                       --            --
  Common stock; authorized
   50,000,000 shares, $0.01 par
   value; 12,284,000 and
   12,466,000 shares issued at
   December 31, 2009 and June
   30, 2010, respectively;
   shares outstanding,
   11,075,000 and 11,253,000 at
   December 31, 2009 and June
   30, 2010, respectively              120,000       121,000
  Additional paid-in capital       103,596,000   104,491,000
  Accumulated deficit             (36,859,000)  (44,948,000)
  Accumulated other
   comprehensive loss                 (60,000)      (61,000)
                                  ------------  ------------
                                    66,797,000    59,603,000

  Treasury stock, at cost         (10,916,000)  (10,926,000)
                                  ------------  ------------

    Total stockholders' equity      55,881,000    48,677,000
                                  ------------  ------------
     Total liabilities and
      stockholders' equity         $70,575,000   $59,186,000
                                  ============  ============
  *Derived from audited balance
   sheet as of December 31,
                 I.D. Systems, Inc. and Subsidiaries
                     Statement of Cash Flows Data

                                          Six months ended June 30,

                                             2009          2010
                                         ------------  ------------
  Cash flows from operating activities:
  Net loss                               ($5,396,000)  ($8,089,000)
  Adjustments to reconcile net loss to
   cash used in operating activities:
   Bad debt expense                                --        53,000
   Accrued interest income                     46,000        23,000
   Stock-based compensation expense         1,058,000       893,000
   Depreciation and amortization              277,000       970,000
   Change in fair value of investments      (312,000)            --
   Deferred rent expense                     (11,000)            --
   Deferred revenue                          (14,000)       919,000
   Changes in:
    Restricted cash                           230,000            --
    Accounts receivable                     5,565,000       571,000
    Unbilled receivables                       44,000            --
    Note and lease receivable                      --       149,000
    Inventory                             (2,236,000)     1,131,000
    Prepaid expenses and other assets           6,000     (625,000)
    Deferred costs                                 --   (1,104,000)
    Accounts payable and accrued
     expenses                             (1,017,000)     (401,000)
                                         ------------  ------------
     Net cash used in operating
      activities                          (1,760,000)   (5,510,000)
                                         ------------  ------------

  Cash flows from investing activities:
   Expenditures for fixed assets
    including website development           (278,000)     (961,000)
   Business acquisition                            --  (15,000,000)
   Purchase of investments               (34,607,000)   (2,751,000)
   Proceeds from sales and maturities
    of investments                         29,855,000    22,017,000
                                         ------------  ------------
    Net cash (used in) provided by
     investing activities                 (5,030,000)     3,305,000
                                         ------------  ------------

  Cash flows from financing activities:
   Proceeds from exercise of stock
    options                                        --         3,000
   Borrowing on line of credit             12,900,000            --

   Principal payments on line of credit     (234,000)  (10,477,000)
                                         ------------  ------------
    Net cash provided by (used in)
     financing activities                  12,666,000  (10,474,000)
                                         ------------  ------------

  Effect of foreign exchange rate
   changes on cash and equivalents              2,000      (34,000)
  Net increase (decrease) in cash and
   cash equivalents                         5,878,000  (12,713,000)
  Cash and cash equivalents - beginning
   of period                               12,558,000    19,481,000
                                         ------------  ------------
  Cash and cash equivalents - end of
   period                                 $18,436,000     6,768,000
                                         ============  ============
  Supplemental disclosure of cash flow

  Cash paid for interest                      $43,000       $55,000
                                         ============  ============
  Noncash activities:
   Unrealized (loss) gain on
    investments                              ($6,000)       $88,000
                                         ============  ============
   Shares withheld pursuant to stock
    issuance                                  $65,000       $10,000
                                         ============  ============
   Fair value of assets acquired                   --   $19,695,000

    Liabilities assumed                            --   (4,695,000)
                                         ------------  ------------

   Net cash paid in 2010                           --   $15,000,000
                                         ============  ============
CONTACT:  I.D. Systems, Inc.
          Ned Mavrommatis, CFO
          fax: 201-996-9144