Woodcliff Lake, NJ, November 7, 2013—I.D. Systems, Inc. (NASDAQ: IDSY), a leading provider of M2M wireless solutions for tracking, securing and managing high-value enterprise assets, today reported financial results for the three and nine months ended September 30, 2013.
Third Quarter 2013 Financial Results
- Revenue increased 20% sequentially to $11.2 million from $9.4 million in the previous quarter. Year over year, revenue from the company’s industrial vehicle management systems increased 60%. This increase partially offset a 96% year-over-year decrease in revenue from the company’s rental car management systems, reflecting Avis Budget Group’s rollout during the third quarter of 2012.
- Non-GAAP net income was $692,000, or $0.06 per basic and diluted share. Non-GAAP results exclude stock-based compensation and depreciation and amortization expenses.
- Recurring revenue was $4.5 million, or 40% of total revenue.
- Selling, general and administrative expenses decreased 9% compared to the third quarter a year ago, due primarily to lower payroll and stock-based compensation expenses.
- Gross margin was 52%, consistent with historical levels.
- Net loss was $76,000, or $(0.01) per basic and diluted share.
- As of September 30, 2013, the company had $13.6 million in cash, cash equivalents and marketable securities, and no debt.
Third Quarter 2013 Operational Highlights
- Recurring business from core customers, including Caterpillar, Domtar, Ford Motor Company, International Paper, John Deere, Meijer, Nestlé, Procter & Gamble, Toyota, the U.S. Postal Service, Walgreens, and Walmart, among others.
- Initial orders for system implementations from a diverse range of new customers, including one of the world’s largest industrial manufacturers, one of the world’s largest tobacco companies, a leading North American packaging manufacturer, a major U.S. dairy products producer, an international specialty logistics company, and the U.S. Defense Logistics Agency.
- Significant revenue contributions from channel partners (primarily industrial truck manufacturers and their dealers), which sold I.D. Systems’ solutions to a broad array of end users, including a Fortune 100 specialty retailer, a Fortune 100 grocery chain, a Fortune 500 discount retailer, two leading global consumer products companies, one of the world’s largest apparel producers, the world’s largest maker of outdoor power equipment, a leading global tire manufacturer, one of North America’s largest logistics companies, and major producers of a variety of other goods, including building products, luggage, medical equipment, and pharmaceuticals.
- Expanded deployments of I.D. Systems’ new Enterprise Analytics software, which, in addition to generating incremental revenue, could benefit the company by differentiating I.D. Systems from competitors, enhancing customers’ return on investment, and enabling I.D. Systems to better integrate with customers’ supply chain optimization strategies.
Nine Month 2013 Financial Results
- Revenue was $28.6 million.
- Recurring revenue was $13.2 million, or 46% of total revenue.
- Gross margin was 51%, consistent with historical levels.
- Selling, general and administrative expenses decreased 4% compared to the same year-ago period.
- Non-GAAP net loss was $2.0 million, or $(0.17) per basic and diluted share. Non-GAAP results exclude stock-based compensation and depreciation and amortization expenses.
- Net loss was $4.4 million, or $(0.37) per basic and diluted share.
“We are encouraged by our third quarter non-GAAP net income of $692,000, which was driven by revenue growth from our core industrial vehicle management business,” said Jeffrey Jagid, I.D. Systems’ chairman and CEO. “We continue to lead the wireless industrial fleet management market with a customer base of global enterprises, good relationships with channel partners, and a wide range of solutions with unique combinations of hardware, software and services.
“During the third quarter of 2013, our transportation asset tracking and management business also continued to contribute positively to our results, especially our recurring revenue stream.
“With respect to our rental car management business, Avis Budget Group has been our exclusive customer in this market, deploying our wireless technology on approximately 30,000 vehicles to date. We continue to negotiate with Avis Budget on further expansion of our technology across their global fleet, but we have not yet reached a definitive agreement. We are committed to bringing I.D. Systems’ patented technology to the global rental car market, where we see growing demand for smarter vehicles that require less human support to rent to a wider range of consumers. We are also committed to vigorously protecting our intellectual property in this space.
“We continue to work hard on our strategic objectives to drive long-term revenue growth for I.D. Systems. We are focused on expanding business with core enterprise customers, diversifying our customer base with a variety of new customers, utilizing channel partners to complement our direct sales team, and controlling operating costs.”
Investor Conference Call
I.D. Systems will hold a conference call for investors and analysts today, Thursday, November 7, 2013, at 4:45 p.m. Eastern time. The company’s chairman and CEO, Jeffrey Jagid, will lead a discussion on the results for the period 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.powerfleet.com. To listen to the live call, go to the website at least 10 minutes early to download and install any necessary audio software.
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 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.powerfleet.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; and plans, strategies and objectives of management for future operations, including utilizing channel partners and controlling operating costs. 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.
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