I.D. Systems Reports Financial Results for Fourth Quarter and
Fiscal Year 2009
GlobeNewswire
2010-03-10
HACKENSACK, N.J., March 10, 2010 (GLOBE NEWSWIRE) -- I.D. Systems, Inc.
(Nasdaq:IDSY) today announced its financial results for the fourth
quarter and year ended December 31, 2009.
For the three-month period ended December 31, 2009, revenues were $2.9
million, compared to $7.9 million for the three months ended December
31, 2008. Net loss for the fourth quarter of 2009 was $4.8 million, or
($0.43) per basic and diluted share, compared to net loss of $1.2
million, or ($0.11) per basic and diluted share, for the fourth quarter
of 2008. The fourth quarter loss was impacted by $1.3 million in
acquisition costs, a charge of $621,000 for inventory obsolescence, and
$540,000 in stock-based compensation. Excluding these expenses,
non-GAAP net loss for the fourth quarter of 2009 was $2.3 million, or
($0.21) per basic and diluted share. Gross margin for the fourth
quarter of 2009 was 28%. Excluding the inventory reserve charge, gross
margin for the period was 50%.
Revenues for the year ended December 31, 2009, were $10.3 million,
compared to $27.0 million for 2008, and net loss for 2009 was $13.2
million, or ($1.20) per basic and diluted share, compared to net loss
of $4.2 million, or ($0.38) per basic and diluted share, for 2008.
Excluding the aforementioned acquisition costs, inventory reserve
charge, and $2.2 million in stock-based compensation, non-GAAP net loss
for the year was $9.1 million, or ($0.83) per basic and diluted share.
Gross margin for the year was 46%. Excluding the inventory reserve
charge, gross margin for 2009 was 52%.
Jeffrey Jagid, I.D. Systems' chairman and CEO, said, "Our short term
results did not meet our goals, as the global recession impacted
technology spending across industrial markets. However, we established
over 20 new customers in 2009, including global leaders in the
automotive, aviation, food, and consumer packaged goods industries.
This expansion of our customer base is a continuing testament to the
economic value of our wireless technology and reflects our strategy of
diversifying sources of revenue and transitioning initial system
deployments into enterprise-scale implementations to drive long-term
growth.
"I.D. Systems also achieved a significant milestone in the rental fleet
management market in 2009, executing a multi-year contract with a
leading U.S. rental car company to deploy our latest rental fleet
management solutions in 2010."
"In addition," continued Mr. Jagid, "we made two strategic
acquisitions, most notably the Asset Intelligence business unit of
General Electric, as announced in January, 2010. This is a
transformational event for I.D. Systems, positioning us to become a
preeminent provider of wireless technology for managing high-value
corporate assets. Integrating Asset Intelligence into our business
expands our range of asset tracking solutions, provides a recurring
revenue stream that should help reduce quarterly revenue volatility,
gives us immediate access to new customers, and enables operational
efficiencies that should reduce our consolidated expenses by an
estimated $8 million in 2010. With these revenue and cost synergies, we
expect I.D. Systems to continue achieving strong gross margins and
achieve profitability in 2011."
"Our balance sheet remains strong," concluded Mr. Jagid. "As of
December 31, 2009, before we closed on the acquisition of Asset
Intelligence, I.D. Systems had cash, cash equivalents and investments
of $48.5 million, excluding the Company's $11.6 million line of credit,
and more than $47 million of working capital."
While maintaining investments in growth opportunities, I.D. Systems'
management continued to focus on cost controls in 2009.
Selling, general and administrative (SG&A) expenses for the fourth
quarter and year ended December 31, 2009, were $4.9 million and $16.5
million, respectively, which included $1.3 million in acquisition
costs. Excluding acquisition and stock-based compensation costs, SG&A
expenses were $3.2 million for the quarter and $13.5 million for the
year, 6% lower than the comparable figure for the year ended December
31, 2008.
Research and development (R&D) expenditures for the three months ended
December 31, 2009, were $582,000. R&D expenses for the year were $2.6
million, 10% lower than the comparable figure in 2008.
Investor Conference Call
I.D. Systems will host a conference call for investors and analysts at
4:45 p.m. Eastern Standard Time on March 10, 2010. Jeffrey Jagid, I.D.
Systems' chairman and CEO, will lead a discussion on the year's results
and highlights. 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 I.D. Systems' web site 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 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. 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 Texas, 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, visit www.id-systems.com.
"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, 2008. 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 Twelve Months Ended
December 31, (Unaudited) December 31,
----------------------------------------------------- ---------------------------------------------------
2008 2009 2008 2009
--------------------------- -------------------- ------------------------ ---------------------
Revenues:
Product revenues $5,988,000 $2,103,000 $20,072,000 $6,470,000
Service revenues 1,933,000 754,000 6,974,000 3,846,000
-------------- -------------- -------------- ---------------
7,921,000 2,857,000 27,046,000 10,316,000
Cost of revenues:
Cost of products 3,160,000 1,591,000 9,996,000 3,882,000
Cost of services 925,000 463,000 3,470,000 1,672,000
-------------- -------------- -------------- ---------------
4,085,000 2,054,000 13,466,000 5,554,000
Gross profit 3,836,000 803,000 13,580,000 4,762,000
Selling, general and
administrative
expenses 4,311,000 4,924,000 16,760,000 16,543,000
Research and
development expenses 792,000 582,000 2,883,000 2,604,000
-------------- -------------- -------------- ---------------
Loss from operations (1,267,000) (4,703,000) (6,063,000) (14,385,000)
Interest income 373,000 19,000 2,226,000 933,000
Interest expense -- (43,000) -- (130,000)
Other income (loss) (338,000) (32,000) (338,000) 390,000
-------------- -------------- -------------- ---------------
Net loss $(1,232,000) $(4,759,000) $(4,175,000) $(13,192,000)
=========================== ==================== ======================== =====================
Net loss per share --
basic and diluted $(0.11) $(0.43) $(0.38) $(1.20)
============== ============== ============== ===============
Weighted average common
shares outstanding --
basic and diluted 10,896,000 11,075,000 10,887,000 10,991,000
============== ============== ============== ===============
.D. Systems, Inc. and Subsidiaries
Balance Sheet Data
As of December 31,
2008 2009
------------------------------------- ------------------
ASSETS
Current assets:
Cash and cash
equivalents $12,558,000 $19,481,000
Restricted cash 230,000
Investments -- short
term 8,550,000 33,909,000
Accounts receivable,
net of allowance for
doubtful accounts of
$239,000 and $106,000
in 2008 and 2009,
respectively 8,245,000 3,252,000
Unbilled receivables 168,000 --
Inventory, net 3,273,000 4,487,000
Interest receivable 217,000 97,000
Prepaid expenses and
other current assets 261,000 686,000
------------ ------------
Total current assets 33,502,000 61,912,000
Investments --long term 34,911,000 6,752,000
Fixed assets, net 1,050,000 917,000
Goodwill 200,000 619,000
Intangible assets, net 178,000 375,000
Other assets 107,000 --
------------ ------------
$69,948,000 $70,575,000
============ ============
LIABILITIES
Current liabilities:
Accounts payable and
accrued expenses $2,175,000 $2,094,000
Line of credit -- 11,638,000
Deferred revenue 424,000 501,000
------------ ------------
Total current
liabilities 2,599,000 14,233,000
Deferred rent 33,000 --
Deferred revenue 231,000 461,000
------------ ------------
2,863,000 14,694,000
------------ ------------
Commitments and
Contingencies (Note J)
STOCKHOLDERS' EQUITY
Preferred stock;
authorized 5,000,000
shares, $0.01 par value;
none issued -- --
Common stock; authorized
50,000,000 shares, $0.01
par value; 12,082,000
and 12,284,000 shares
issued at December 31,
2008 and 2009,
respectively; 10,893,000
and 11,075,000 shares
outstanding at December
31, 2008 and 2009,
respectively 120,000 120,000
Additional paid-in
capital 101,437,000 103,596,000
Accumulated deficit (23,667,000) (36,859,000)
Accumulated other
comprehensive income 46,000 (60,000)
------------ ------------
77,936,000 66,797,000
Treasury stock; 1,189,000
shares and 1,209,000
shares at cost at
December 31, 2008 and
2009, respectively (10,851,000) (10,916,000)
------------ ------------
Total stockholders'
equity 67,085,000 55,881,000
------------ ------------
Total liabilities and
stockholders' equity $69,948,000 $70,575,000
============ ============
I.D. Systems, Inc. and Subsidiaries
Statement of Cash Flows Data
Year Ended December 31,
------------------------------------------------------------------------------
2007 2008 2009
---------------------- --------------------- -------------------
Cash flows from operating
activities:
Net loss $(7,341,000) $(4,175,000) $(13,192,000)
Adjustments to reconcile net loss
to cash provided by (used in)
operating activities:
Inventory reserve 517,000 126,000 621,000
Accrued interest income 20,000 (75,000) 120,000
Stock based compensation 3,288,000 2,989,000 2,157,000
Depreciation and amortization 544,000 540,000 533,000
Deferred rent expense (22,000) (22,000) (22,000)
Deferred revenue 104,000 197,000 307,000
Change in fair value of
investments -- 338,000 (338,000)
Deferred contract costs 33,000 -- --
Changes in:
Restricted cash -- (230,000) 230,000
Accounts receivable 2,226,000 (5,370,000) 5,049,000
Unbilled receivables 462,000 412,000 168,000
Inventory 1,493,000 1,212,000 (1,815,000)
Prepaid expenses and other
assets (20,000) 10,000) (320,000)
Accounts payable and accrued
expenses (700,000) (843,000) (369,000)
------------ ------------ -------------
Net cash provided by (used in)
operating activities 604,000 (4,891,000) (6,871,000)
------------ ------------ -------------
Cash flows from investing
activities:
Purchase of fixed assets (548,000) (188,000) (358,000)
Business acquisition -- (573,000) (518,000)
Purchase of investments (15,691,000) (28,513,000) (59,408,000)
Maturities of investments 16,523,000 44,649,000 62,439,000
------------ ------------ -------------
Net cash provided by investing
activities 284,000 15,375,000 2,155,000
------------ ------------ -------------
Cash flows from financing
activities:
Repayment of term loan (221,000) (19,000) --
Proceeds from exercise of stock
options 367,000 1,377,000 2,000
Collection of officer loan 8,000 -- --
Borrowings on line of credit -- -- 12,900,000
Principal payments on line of
credit -- -- (1,262,000)
Purchase of treasury shares (5,583,000) (4,387,000) --
------------ ------------ -------------
Net cash (used in) provided by
financing activities (5,429,000) (3,029,000) 11,640,000
------------ ------------ -------------
Effect of foreign exchange rate
changes on cash and cash
equivalents -- -- (1,000)
Net (decrease) increase in cash
and cash equivalents (4,541,000) 7,455,000 6,923,000
Cash and cash equivalents -
beginning of period 9,644,000 5,103,000 12,558,000
------------ ------------ -------------
Cash and cash equivalents -
end of period $5,103,000 $12,558,000 $19,481,000
============ ============ =============
CONTACT: I.D. Systems, Inc.
Ned Mavrommatis, Chief Financial Officer
201-996-9000
Fax: 201-996-9144
ned@id-systems.com
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