Press Releases

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

HACKENSACK, N.J., May 11, 2010 (GLOBE NEWSWIRE) -- I.D. Systems, Inc. (Nasdaq:IDSY) today announced its financial results for the first quarter of 2010. Revenue for the three months ended March 31, 2010, increased 109% to $6.1 million, compared to $2.9 million for the three months ended March 31, 2009. The increase was attributable primarily to service contracts held by I.D. Systems' Asset Intelligence business unit, which was acquired from General Electric Company in January, 2010. Asset Intelligence currently averages approximately $1.1 million per month in recurring revenue under multi-year contracts.

Gross margin for the first quarter of 2010 was 55.3%, compared to 54.2% for the corresponding period in 2009. Net loss for the quarter was $4.1 million, or ($0.36) per basic and diluted share, compared to net loss of $3.1 million, or ($0.28) per basic and diluted share, for the first quarter of 2009. Excluding $454,000 in stock-based compensation expense, non-GAAP net loss for the first quarter of 2010 was $3.6 million, or ($0.32) per basic and diluted share.

As of March 31, 2010, excluding a $9.5 million line of credit, I.D. Systems had $30.1 million in cash, cash equivalents and marketable securities, and $35.7 million of working capital.

The acquisition of Asset Intelligence--a leading provider of wireless solutions for tracking and managing trailers, containers, and other supply chain assets--was one of several first quarter highlights. The acquisition expands the scope of I.D. Systems' asset management solutions, broadens the Company's customer base, and establishes a more stable recurring revenue stream. In addition, integrating Asset Intelligence resources has enabled synergies expected to lead to significant operational cost reductions in 2010.

Other highlights for the first quarter included:

  --  Follow-on purchase orders from Audi AG, a division of Volkswagen, to
      expand its deployment of I.D. Systems' PowerFleet(TM) Wireless Vehicle
      Management System for industrial trucks in a major automotive plant in
  --  A follow-on purchase order from American Eagle Airlines to expand its
      use of I.D. Systems' AvRamp(R) Wireless Vehicle Management System for a
      fleet of aircraft ground support equipment at Chicago's O'Hare
      International Airport, and the subsequent naming of AvRamp(R) as the
      winner of an aviation industry award for engineering innovation.
  --  New contracts for Asset Intelligence products and services, including
      from Royal Freight, a North American carrier that will initially equip
      750 dry van trailers with Asset Intelligence's VeriWise(TM) trailer
      tracking and management technology.
  --  The award of two patents covering vehicle access control and luggage
      tracking, which expand I.D. Systems' intellectual property portfolio and
      further differentiate I.D. Systems' solutions.

"We are committed to improving our financial results in 2010, and the acquisition and integration of the Asset Intelligence business was a key step in our efforts," said Jeffrey Jagid, I.D. Systems' Chairman and Chief Executive Officer. "At the end of the first quarter of 2010, we initiated a series of staff consolidations expected to reduce employee count by more than 30% by July 31, 2010. This and other cost management initiatives are expected ultimately to decrease I.D. Systems' consolidated annual operating expenses by approximately $8 million.

"We are also pleased with the expanded use of our wireless vehicle management system by key customers, the contribution of the Asset Intelligence business to our revenue stream, and the expansion of our patent portfolio, which we believe reflects our continuing industry leadership and technical competitive advantages.

"We are determined to control costs, maintain robust gross margins, and grow revenues," concluded Mr. Jagid, "and we expect to achieve profitability in 2011. Our goal remains to become a preeminent provider of wireless asset management technology and deliver superior long-term shareholder value."

Selling, general and administrative expenses for the three months ended March 31, 2010, were $6.5 million, reflecting post-acquisition payroll and expenses prior to staff consolidation, compared to $4.2 million for the first quarter of 2009. Research and development expenditures for the first quarter of 2010 were $1.2 million, compared to $689,000 for the corresponding period in 2009, reflecting 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 May 11, 2010. Jeffrey Jagid, Chairman and Chief Executive Officer, 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.

                         -- Tables to Follow --

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

                              Three months ended
                                  March 31,

                              2009           2010
                         -------------  -------------
  Products                 $ 1,378,000    $ 2,023,000

  Services                   1,556,000      4,101,000
                         -------------  -------------
                             2,934,000      6,124,000
  Cost of Revenue:
  Cost of products             798,000        975,000

  Cost of services             547,000      1,764,000
                         -------------  -------------
                             1,345,000      2,739,000

  Gross Profit               1,589,000      3,385,000

  Selling, general and
   expenses                  4,211,000      6,474,000
  Research and
   development expenses        689,000      1,154,000
                         -------------  -------------

  Loss from operations     (3,311,000)    (4,243,000)
  Interest income              347,000        209,000
  Interest expense                  --       (30,000)
  Other (expense)
   income, net               (108,000)          1,000
                         -------------  -------------

  Net loss               $ (3,072,000)  $ (4,063,000)
                         =============  =============

  Net loss per share --
   basic and diluted         $  (0.28)       $ (0.36)
                         =============  =============

  Weighted average
   common shares
   outstanding -- basic
   and diluted              10,895,000     11,185,000
                         =============  =============

                             I.D. Systems, Inc. and Subsidiaries
                                      Balance Sheet Data

                                       December 31, 2009*              March 31, 2010

                                  ----------------------------  ----------------------------
  Cash and cash equivalents                     $   19,481,000                  $  5,979,000
  Investments -- short term                         33,909,000                    29,209,000
  Accounts receivable, net                           3,252,000                     5,470,000
  Note and lease receivable --
   current                                                  --                       254,000
  Inventory, net                                     4,487,000                     9,008,000
  Interest receivable                                   97,000                       131,000
  Deferred costs -- current                                 --                       364,000
  Prepaid expenses and other
   current assets                                      686,000                     2,142,000
                                  ----------------------------  ----------------------------
     Total current assets                           61,912,000                    52,557,000

  Investments -- long term                           6,752,000                     4,392,000
  Note and lease receivable --
   long term                                                --                     1,062,000
  Deferred costs -- long term                               --                       761,000
  Fixed assets, net                                    917,000                     3,872,000
  Goodwill                                             619,000                     2,590,000

  Intangible assets, net                               375,000                     5,816,000
                                  ----------------------------  ----------------------------

                                                 $  70,575,000                  $ 71,050,000
                                  ============================  ============================

  Accounts payable and accrued
   expenses                                       $  2,094,000                   $ 6,135,000
  Line of Credit                                    11,638,000                     9,451,000

  Deferred revenue                                     501,000                     1,264,000
                                  ----------------------------  ----------------------------
     Total current liabilities                      14,233,000                    16,850,000

  Deferred revenue                                     461,000                     1,884,000
                                  ----------------------------  ----------------------------

     Total liabilities                              14,694,000                    18,734,000
                                  ----------------------------  ----------------------------
  Commitments and Contingencies

  Preferred stock; authorized
   5,000,000 shares, $.01 par
   value; none issued                                       --                            --
  Common stock; authorized
   50,000,000 shares, $0.01 par
  12,284,000 and 12,466,000
   shares issued at December 31,
   2009 and
  March 31, 2010, respectively;
   shares outstanding,
   11,075,000 and
  11,253,000 at December 31,
   2009 and March 31, 2010,
   respectively                                        120,000                       121,000
  Additional paid-in capital                       103,596,000                   104,052,000
  Accumulated deficit                             (36,859,000)                  (40,922,000)
  Accumulated other
   comprehensive income                               (60,000)                      (19,000)
                                  ----------------------------  ----------------------------
                                                    66,797,000                    63,232,000

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

   Total stockholders' equity                       55,881,000                    52,316,000
                                  ----------------------------  ----------------------------
    Total liabilities and
     stockholders' equity                    $      70,575,000                 $  71,050,000
                                  ============================  ============================
  *Derived from audited balance
   sheet as of December 31,

                 I.D. Systems, Inc. and Subsidiaries
                     Statement of Cash Flows Data

                                       Three months ended March 31,

                                           2009            2010
                                      --------------  -------------
  Cash flows from operating
  Net loss                            $  (3,072,000)  $ (4,063,000)
  Adjustments to reconcile net loss to cash used in
   operating activities:
   Bad debt expense                               --         16,000
   Accrued interest income                    32,000       (34,000)
   Stock-based compensation expense          559,000        454,000
   Depreciation and amortization             138,000        432,000
   Change in fair value of
    investments                              108,000             --
   Deferred rent expense                     (5,000)             --
   Deferred revenue                          475,000        802,000
   Changes in:
    Restricted cash                          177,000             --
    Accounts receivable                    2,762,000      1,011,000
    Unbilled receivables                    (32,000)             --
    Note and lease receivable                     --         74,000
    Inventory                            (1,215,000)        715,000
    Prepaid expenses and other
     assets                                 (69,000)      (483,000)
    Deferred costs                                --      (494,000)
    Accounts payable and accrued
     expenses                            (1,414,000)    (1,360,000)
                                      --------------  -------------
     Net cash used in operating
      activities                         (1,556,000)    (2,930,000)
                                      --------------  -------------

  Cash flows from investing
   Purchase of fixed assets                (198,000)      (506,000)
   Business acquisition                           --   (15,000,000)
   Purchase of investments              (16,474,000)    (2,751,000)

   Maturities of investments              11,778,000      9,877,000
                                      --------------  -------------
    Net cash used in investing
     activities                          (4,894,000)    (8,380,000)
                                      --------------  -------------

  Cash flows from financing
   Proceeds from exercise of stock
    options                                       --          3,000
   Borrowing on line of credit            12,900,000             --
   Principal payments on line of
    credit                                 (160,000)    (2,187,000)
                                      --------------  -------------
    Net cash provided by (used in)
     financing activities                 12,740,000    (2,184,000)
                                      --------------  -------------

  Effect of foreign exchange rate
   changes on cash and equivalents                --        (8,000)
  Net increase (decrease) in cash
   and cash equivalents                    6,290,000   (13,502,000)
  Cash and cash equivalents -
   beginning of period                    12,558,000     19,481,000
                                      --------------  -------------
  Cash and cash equivalents - end of
   period                               $ 18,848,000      5,979,000
                                      ==============  =============
  Supplemental disclosure of cash
   flow information:

   Cash paid for Interest                       $ --       $ 30,000
                                      ==============  =============
   Noncash activities:

    Unrealized loss on investments        $ (45,000)       $ 66,000
                                      ==============  =============
    Shares withheld pursuant to
     stock issuance                         $ 65,000          $  --
                                      ==============  =============

    Accrued contingent consideration            $ --    $ 1,017,000
                                      ==============  =============
    Fair value of assets acquired                 --   $ 20,788,000
    Liabilities assumed                           --    (4,771,000)
    Less: contingent consideration
     potentially due                              --    (1,017,000)
                                      --------------  -------------

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