Press Releases

I.D. Systems, Inc. Reports First Quarter Financial Results and Announces Share Repurchase Program

HACKENSACK, N.J., May 3, 2007 (PRIME NEWSWIRE) -- I.D. Systems, Inc. (Nasdaq:IDSY) today announced its financial results for the first quarter of 2007. Revenues for the three months ended March 31, 2007, were $4,621,000, compared to $6,390,000 for the three months ended March 31, 2006. Net loss for the quarter was $1,462,000, or ($.13) per basic and diluted share, compared to net income of $125,000, or $0.01 per basic and diluted share, for the first quarter of 2006.

Adjusted net loss for the first quarter of 2007 was $695,000, or ($0.06) per basic and diluted share, compared to adjusted net income of $508,000, or $0.06 per basic and $0.05 per diluted share, for the first quarter of 2006. Adjusted net results were calculated by adjusting GAAP net income (loss) for the impact of stock-based compensation, which was $767,000 for the first quarter of 2007 and $383,000 for the first quarter of 2006. Adjusted net income (loss) is considered non-GAAP financial information; a reconciliation of non-GAAP financial measures used in this press release to GAAP financial measures can be found in the Reconciliation of GAAP to Non-GAAP Financial Measures table included in this press release.

"We have achieved a compound annual growth rate of 93% over the past five years, in part due to our success with large customers," said Jeffrey Jagid, I.D. Systems' chairman and chief executive officer. "Clearly, our goals include a more predictable quarter-to-quarter revenue stream from more diversified sources. To that end, our mission is to drive customer benefit from our unique wireless technology, facilitate customer adoption and expansion of our solutions, and open new applications and markets for our technology, while maintaining our technical leadership. We are taking many actions to realize these goals, including the appointment of Peter Fausel as I.D. Systems' new executive vice president of sales, marketing and customer support in the first quarter. The addition of Peter, formerly of wireless mobile computing leader LXE, has significantly strengthened our sales and marketing organization."

For the quarter ended March 31, 2007, cost of revenues was $2.4 million, resulting in a gross profit margin of 49%.

Selling, general and administrative expenses for the quarter increased 39% to $3.8 million, compared to $2.7 million for the first quarter in 2006. The increase was attributable primarily to increased payroll and related expenses resulting from the hiring of additional employees and a $190,000 increase in stock-based employee compensation compared to the first quarter a year ago.

Research and development expenditures increased 43% to $706,000 for the first quarter of 2007, compared to $493,000 for the corresponding period in 2006. The increase was attributable primarily to a $183,000 increase in stock-based employee compensation over the first quarter a year ago.

Interest income for the quarter increased to $792,000, compared to $150,000 for the same period in 2006, reflecting the company's investment of proceeds from its public stock offering in March 2006.

As of March 31, 2007, I.D. Systems had $70.6 million in cash, cash equivalents and marketable securities, and $79.3 million of working capital, compared to $70.4 million and $80.0 million, respectively, as of December 31, 2006.

Highlights of the first quarter ended March 31, 2007, included:

  * Receipt of purchase orders for I.D. Systems' Wireless Asset Net(r)
    industrial vehicle management system to be deployed at a
    DaimlerChrysler plant in Ohio.  The Wireless Asset Net system
    controls, tracks and manages fleets of industrial equipment to
    increase productivity, improve safety and reduce costs in material
    handling operations. The system for DaimlerChrysler was ordered
    through NACCO Materials Handling Group, Inc., and its Yale(r)
    brand industrial truck sales organization, under a cooperative
    marketing agreement with I.D. Systems.  In addition to monitoring
    industrial vehicles, the DaimlerChrysler system will incorporate
    I.D. Systems' new OptiKan(tm) application, an optimized, wireless,
    electronic "kanban" system designed to increase productivity and
    reduce labor costs associated with material replenishment in the
    manufacturing process.

  * Receipt of purchase orders from a leading U.S. defense contractor:
    one for a Wireless Equipment Monitoring & Control System to be
    deployed on a fleet of industrial trucks at a major U.S. shipyard;
    another for an RFID-based access control and time-and-attendance
    system to be deployed at three shipyards on the Gulf Coast.

  * Receipt of additional purchase orders from the U.S. Postal Service
    (USPS), to deploy the Wireless Asset Net system at seven
    additional USPS facilities. These orders will increase the number
    of USPS facilities deploying the Wireless Asset Net to 72.

  * The addition of Nucor Corporation as a customer, with an initial
    pilot deployment of the Wireless Asset Net system at a Nucor
    facility in Alabama.

  * The execution of a strategic agreement with C&D Technologies, a
    leading producer and marketer of electrical power storage and
    conversion systems, to market a new generation of wireless
    technology for managing the batteries that power industrial
    trucks.  This I.D. Systems-developed system expected to be co-
    marketed to address the needs of manufacturing and distribution
    facilities to increase productivity, reduce capital expenditures,
    and lower operating costs associated with industrial truck

  * The appointment of Peter Fausel as executive vice president of
    sales, marketing and customer support.  Mr. Fausel has more than
    25 years of sales and marketing experience for leading companies
    in wireless technology, enterprise application integration, and
    process automation, most recently serving as senior vice president
    of sales and marketing for LXE, Inc., a leading manufacturer of
    wireless mobile computing solutions.  Prior to LXE, Mr. Fausel
    held executive positions with Jacada, Inc., Ross Systems, and
    Invensys PLC.  Mr. Fausel holds a Bachelor of Science degree in
    Business Administration-Finance from the University of Florida.

  * I.D. Systems today announced that its Board of Directors has
    authorized the repurchase of issued and outstanding shares of its
    common stock having an aggregate value of up to $10,000,000.  The
    repurchases under the share repurchase program will be made from
    time to time on the open market or in privately negotiated
    transactions. The amount and timing of such repurchases will be
    dependent upon the price and availability of shares, general market
    conditions and the availability of cash, as determined in the
    discretion of I.D. Systems' management. The repurchases will be
    funded from I.D. Systems' working capital. I.D. Systems may
    discontinue or suspend the share repurchase program at any time.
    Jeffrey Jagid stated, "We believe that the recent trading price of
    our common stock does not adequately reflect our company's
    intrinsic value. This share repurchase program reflects our
    continued commitment to improving shareholder value."

Investor Conference Call

I.D. Systems will hold a conference call for investors and analysts at 4:45 p.m. Eastern Standard Time on May 3, 2007. Jeffrey Jagid, chairman and CEO, Ned Mavrommatis, CFO, Kenneth Ehrman, president and COO, and Peter Fausel, EVP of sales and marketing, will discuss the results of the quarter and recent developments. After opening remarks, 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 consolidated 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 and provide further information for comparative information due to the adoption of accounting standard SFAS 123R. 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. In addition, I.D. Systems believes the non-GAAP measures that exclude stock-based compensation enhance the comparability of results against prior periods. Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release can be found in the financial tables included in this press release.

About I.D. Systems

Based in Hackensack, NJ, I.D. Systems, Inc. is a leading provider of wireless solutions for managing and securing high-value enterprise assets. These assets include industrial vehicles, such as forklifts and airport ground support equipment, and rental vehicles. The Company's patented Wireless Asset Net system, which utilizes radio frequency identification, or RFID, technology, addresses the needs of organizations to control track, monitor and analyze their assets. For more information on I.D. Systems, Inc., visit


I.D. Systems, Inc. and Wireless Asset Net are registered trademarks of I.D. Systems, Inc.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and that are subject to risk and uncertainties, including, but not limited to, future economic and business conditions, the loss of any of the Company's key customers or reduction in the purchase of its products by any such customers, the failure of the market for the Company's products to continue to develop, the inability to protect the Company's intellectual property, the inability to manage the Company's growth, the effects of competition from a wide variety of local, regional, national and other providers of wireless solutions and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's annual report on Form 10-K for the year ended December 31, 2006. These risks could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the Company. The Company assumes no obligation to update the information contained in this press release.

                           I.D. Systems, Inc.
               GAAP - Condensed Statements of Operations
                                                Three months ended
                                                     March 31,
                                                2006         2007
                                             -----------  -----------
 Products                                    $ 4,132,000  $ 2,310,000
 Services                                      2,258,000    2,311,000
                                             -----------  -----------
                                               6,390,000    4,621,000
 Cost of Revenue:
 Cost of products                              2,010,000    1,146,000
 Cost of services                              1,193,000    1,233,000
                                             -----------  -----------
                                               3,203,000    2,379,000

 Gross Profit                                  3,187,000    2,242,000

 Selling, general and administrative expenses  2,748,000    3,824,000
 Research and development expenses               493,000      706,000
                                             -----------  -----------

 Loss from operations                            (54,000)  (2,288,000)
 Interest income                                 150,000      792,000
 Interest expense                                 (9,000)      (4,000)
 Other income                                     38,000       38,000
                                             -----------  -----------

 Net income (loss)                           $   125,000  $(1,462,000)
                                             ===========  ===========
 Net income (loss) per share - basic and
  diluted                                    $      0.01  $     (0.13)
                                             ===========  ===========
 Weighted average common shares outstanding-
  basic                                        8,382,000   11,346,000
                                             ===========  ===========
 Weighted average common shares outstanding-
  diluted                                     10,227,000   11,346,000
                                             ===========  ===========

                           I.D. Systems, Inc.
         Reconciliation of GAAP to Non-GAAP Financial Measures

                                          Three Months Ended March 31,
                                               2006         2007
 Net income (loss) attributable to common
  stockholders                             $   125,000  $(1,462,000)
 Stock-based compensation                      383,000      767,000
 Non-GAAP net  income (loss)               $   508,000  $  (695,000)
 Non-GAAP net  income (loss) per share -
  basic                                    $      0.06  $     (0.06)
 Non-GAAP net income (loss) per share -
  diluted                                  $      0.05  $     (0.06)

                            I.D. Systems, Inc.
                         Condensed Balance Sheets

                                                          March 31,
                                           December 31,     2007
                                               2006      (Unaudited)
                                           ------------  ------------
 Cash and cash equivalents                 $  9,644,000  $ 11,681,000
 Marketable securities                       60,716,000    58,913,000
 Accounts receivable, net                     5,101,000     3,844,000
 Unbilled receivables                         1,042,000       745,000
 Inventory                                    6,430,000     5,911,000
 Interest receivable                            179,000       222,000
 Officer loan                                     8,000         5,000
 Prepaid expenses and other current assets      271,000       209,000
                                           ------------  ------------
     Total current assets                    83,391,000    81,530,000

 Fixed assets, net                            1,394,000     1,337,000
 Deferred contract costs                         33,000        25,000
 Other assets                                    87,000        87,000
                                           ------------  ------------
                                           $ 84,905,000  $ 82,979,000
                                           ============  ============

 Accounts payable and accrued expenses     $  2,950,000  $  1,840,000
 Current portion of long term debt              221,000       186,000
 Deferred revenue                               221,000       216,000
                                           ------------  ------------
     Total current liabilities                3,392,000     2,242,000

 Long term debt                                  19,000            --
 Deferred revenue                               133,000       214,000
 Deferred rent                                   77,000        72,000
                                           ------------  ------------
     Total liabilities                        3,621,000     2,528,000
                                           ------------  ------------
 Preferred stock; authorized 5,000,000
  shares, $.01 par value; none issued                --            --
 Common stock; authorized 50,000,000 shares,
  $.01 par value; issued and outstanding
  11,337,000 shares and 11,379,000 shares       113,000       113,000
 Additional paid-in capital                  93,423,000    94,242,000
 Accumulated deficit                        (12,151,000)  (13,613,000)
 Comprehensive income                            12,000         3,000
                                           ------------  ------------
                                             81,397,000    80,745,000
 Treasury stock; 40,000 shares and 51,000
  shares at cost                               (113,000)     (294,000)
                                           ------------  ------------
  Total stockholders' equity                 81,284,000    80,451,000
                                           ------------  ------------
   Total liabilities and stockholders'
    equity                                 $ 84,905,000  $ 82,979,000
                                           ============  ============

                            I.D. Systems, Inc.
                   Condensed Statements of Cash Flows

                                               Three months ended
                                                    March 31,
                                               2006          2007
 Cash flows from operating activities:     ------------  ------------

 Net income (loss)                         $    125,000  $ (1,462,000)
 Adjustments to reconcile net income
  (loss) to cash (used in)provided by
  operating activities:
   Inventory reserve                                 --        75,000
   Accrued interest income (expense)              4,000       (16,000)
   Stock-based compensation expense             383,000       767,000
   Depreciation and amortization                113,000       133,000
   Deferred rent expense                         (5,000)       (5,000)
   Deferred revenue                             194,000        76,000
   Deferred contract costs                       53,000         8,000
   Unrealized loss on investments                    --        (9,000)
   Changes in:
    Accounts receivable                        (408,000)    1,257,000
    Unbilled receivables                       (528,000)      297,000
    Inventory                                  (900,000)      444,000
    Prepaid expenses and other assets            13,000        62,000
    Investment in sales type leases             203,000            --
    Accounts payable and accrued expenses       200,000    (1,291,000)
                                           ------------  ------------
      Net cash (used in) provided by
       operating activities                    (553,000)      336,000
                                           ------------  ------------

 Cash flows from investing activities:

   Purchase of fixed assets                    (355,000)      (76,000)
   Purchase of investments                  (19,147,000)   (3,811,000)
   Maturities of investments                    340,000     5,587,000
   Collection of officer loan                     2,000         3,000
                                           ------------  ------------

    Net cash (used in) provided by
     investing activities                   (19,160,000)    1,703,000
                                           ------------  ------------

 Cash flows from financing activities:
   Repayment of term loan                       (51,000)      (54,000)
   Proceeds from exercise of stock options      321,000        52,000
   Net proceeds from stock offering          64,025,000            --
                                           ------------  ------------

    Net cash provided by (used in)
     financing activities                    64,295,000        (2,000)
                                           ------------  ------------
 Net increase (decrease) in cash and
  cash equivalents                           44,582,000     2,037,000
 Cash and cash equivalents - beginning
  of period                                   2,138,000     9,644,000
                                           ------------  ------------
 Cash and cash equivalents - end of
  period                                   $ 46,720,000  $ 11,681,000
                                           ============  ============
 Supplemental disclosure of cash flow
   Cash paid for:
    Interest                               $      9,000  $      4,000
                                           ============  ============
CONTACT:  I.D. Systems, Inc.
          Ned Mavrommatis, CFO
          Fax: 201-996-9144