Exhibit 99.1
FOR IMMEDIATE RELEASE
| CONTACTS: | Company | Investor Relations |
| | Ned Mavrommatis | Liolios Group, Inc. |
| | Chief Financial Officer | Scott Liolios or Matt Glover |
| | Phone: 201-996-9000 | Phone: 949-574-3860 |
| | ned@id-systems.com | info@liolios.com |
I.D. Systems Reports Record Quarterly Revenue and Net Income
Third Quarter Revenue Up 37%, Net Income $0.18 per Share,
Non-GAAP Net Income $0.25 per Share
Woodcliff Lake, NJ, November 7, 2012—I.D. Systems, Inc. (NASDAQ: IDSY),a leading provider of wireless solutions for tracking, securing and managing high-value enterprise assets, today reported financial results for the threeand nine months ended September 30, 2012.
Third Quarter of 2012 Financial Results
| · | Revenue increased 37% to a record $15.5 million from $11.3 million in the same period a year ago. The improvement was driven primarily by increased sales of the company’s wireless rental fleet management systems to Avis Budget Group. Recurring revenue in Q3 2012 was $4.3 million, attributable primarily to service contracts for the company’s transportation asset management products, which also posted a strong sales increase in the quarter. |
| · | Sales, general and administrative expenses decreased 4% to $5.5 million from $5.7 million in the third quarter a year ago, due primarily to a reduction in third-party services. |
| · | Gross margin increased to 56% from 52% in the same period a year ago. |
| · | Net income was a record $2.2 million, or $0.18 per basic and diluted share, compared to a net loss of $214,000, or $(0.02) per basic and diluted share, in the same year-ago period. |
| · | Excluding stock-based compensation and depreciation and amortization, non-GAAP net income increased 349% to a record $3.0 million, or $0.25 per basic and diluted share, from non-GAAP net income of $665,000, or $0.06 per basic and diluted share, in the same year-ago period. |
| · | As of September 30, 2012, the company had $18.9 million in cash, cash equivalents and marketable securities, equating to $1.56 per share outstanding, with no debt. |
First Nine Months of 2012 Financial Results
| · | Revenue increased 24% to a record $34.0 million from $27.5 million in the same period a year ago. Recurring revenue in the nine months ended September 30, 2012 was a record $12.8 million. |
| · | Selling, general and administrative expenses increased 1% to $16.7 million from $16.5 million in the same year-ago period. |
| · | Gross margin remained consistent at 53%, unchanged from the same period a year ago. |
| · | Excluding stock-based compensation and depreciation and amortization, non-GAAP net income was $1.0 million, or $0.08 per basic and diluted share, an improvement from a non-GAAP net loss of $1.3 million, or $(0.12) per basic and diluted share, in the same year-ago period. |
| · | Net loss improved to $1.5 million, or $(0.13) per basic and diluted share, from a net loss of $4.0 million, or $(0.37) per basic and diluted share, in the same period a year ago. |
| · | As of September 30, 2012, I.D. Systems had repurchased a total of 310,000 shares of its common stock under a stock repurchase program authorized in November of 2010, at an aggregate purchase price of approximately $1.3 million, including 45,000 shares at an aggregate purchase price of $193,000 during the first nine months of 2012. The program authorizes the repurchase of issued and outstanding shares of up to $3 million in aggregate value. |
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Third Quarter of 2012 Operational Highlights
| · | Delivery of approximately 20,000 rental fleet management units to Avis Budget Group for deployment across the Northeast U.S. and Canada. This increases the total units deployed to approximately 30,000, which is expected to generate $270,000 in recurring revenue per quarter over the next five years. |
| · | Repeat business with core customers in both the industrial fleet and transportation asset management markets, including Audi, Caterpillar, Continental Tire, Deere & Company, Ford Motor Company, International Paper, Kellogg Company, Knight Transportation, Kuehne + Nagel, Nestlé, Procter & Gamble, Swift Transportation, Toyota, the U.S. Postal Service, Walgreens, and Walmart. |
| · | New key customers in both the industrial fleet and transportation asset management markets, including: Detroit Diesel, a leading engine manufacturer and subsidiary of global automotive leader Daimler AG, which deployed I.D. Systems’ PowerFleet™ industrial vehicle management system (VMS); one of the world’s largest medical and consumer products companies, which ordered the I.D. Systems-hosted PowerBox™ VMS; a major national trucking company, which ordered the company’s VeriWise™ trailer management system; and National Retail Systems, which executed a five-year contract for the company’s Track and Trace trailer-tracking system valued at $1.7 million. |
| · | Continued deployments of industrial fleet management systems through forklift dealers and other channel partners. End users expanding or initiating business through channel partners during the third quarter included two Fortune 500 retailers, two national food and beverage retail chains, a women’s fashion retailer, and one of the world’s largest food producers. |
| · | The launch of a new software product—I.D. Systems Analytics—designed to provide a single, integrated view of industrial fleet activity across multiple locations, generating enterprise-wide benchmarks, peer-industry comparisons and deeper insights into material handling operations. |
Management Commentary
“In the third quarter of 2012, we achieved our highest quarterly revenue to date and our 11th consecutive quarter of year-over-year revenue growth,” said Jeffrey Jagid, I.D. Systems’ chairman and CEO. “With nine-month revenue of $34 million, we remain on pace to achieve a second consecutive year of record annual revenue, exceeding last year’s record of just under $40 million.
“We are also pleased to report record quarterly net income of $2.2 million and non-GAAP net income of $3.0 million in the third quarter. This reflects our ability to support near-term revenue growth without a commensurate increase in overhead costs.
“Our third quarter revenue growth was driven primarily by the successful completion of the first major phase of our rental fleet management system expansion for Avis Budget Group. With about 30,000 devices now deployed, we expect our patented wireless technology to generate a significant, steady revenue stream over the next five years. We can now also shift our focus to capitalizing on the significant additional growth opportunities within Avis’ global operations.
“Our positive results in the third quarter also reflect improved performance of our Asset Intelligence subsidiary, which produces our VeriWise transportation asset management systems. Unit sales for the first nine months of 2012 increased 47% over the same period in 2011. Due primarily to this increase, our deferred revenue grew to $10.1 million as of September 30, 2012.
“We continue to make progress toward our long-term strategic objectives. We remain focused on expanding sales of our vehicle and transportation asset management products with core customers, building a strong recurring revenue base and diversifying revenue sources through a variety of wireless technology applications, all while sustaining high gross margins. We look forward to reporting our further progress through the end of the year and into 2013.”
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Investor Conference Call
I.D. Systems will hold a conference call for investors and analysts today, Wednesday, November 7, 2012, at 4:45 p.m. Eastern time. Jeffrey Jagid, I.D. Systems’ chairman and CEO, will lead a discussion on the results of the quarter and other recent developments. After management’s discussion, 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 atwww.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 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
Based in Woodcliff Lake, 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 visitwww.id-systems.com.
Important Cautions 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 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, 2011. 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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I.D. Systems, Inc. and Subsidiaries
Condensed Statement of Operations Data
(Unaudited)
| | | Three months ended | | | Nine months ended | |
| | | September 30, | | | September 30, | |
| | | 2011 | | | 2012 | | | 2011 | | | 2012 | |
| Revenue: | | | | | | | | | | | | | | | | |
| Products | | | 6,912,000 | | | $ | 11,273,000 | | | $ | 14,675,000 | | | $ | 21,745,000 | |
| Services | | | 4,372,000 | | | | 4,206,000 | | | | 12,776,000 | | | | 12,227,000 | |
| | | | 11,284,000 | | | | 15,479,000 | | | | 27,451,000 | | | | 33,972,000 | |
| Cost of revenue: | | | | | | | | | | | | | | | | |
| Cost of products | | | 3,833,000 | | | | 5,385,000 | | | | 8,359,000 | | | | 11,658,000 | |
| Cost of services | | | 1,529,000 | | | | 1,497,000 | | | | 4,531,000 | | | | 4,221,000 | |
| | | | 5,362,000 | | | | 6,882,000 | | | | 12,890,000 | | | | 15,879,000 | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 5,922,000 | | | | 8,597,000 | | | | 14,561,000 | | | | 18,093,000 | |
| | | | | | | | | | | | | | | | | |
| Selling, general and administrative | | | 5,669,000 | | | | 5,467,000 | | | | 16,490,000 | | | | 16,727,000 | |
| Research and development expenses | | | 827,000 | | | | 1,098,000 | | | | 2,603,000 | | | | 3,297,000 | |
| | | | 6,496,000 | | | | 6,565,000 | | | | 19,093,000 | | | | 20,024,000 | |
| (Loss) income from operations | | | (574,000 | ) | | | 2,032,000 | | | | (4,532,000 | ) | | | (1,931,000 | ) |
| Interest income | | | 60,000 | | | | 116,000 | | | | 160,000 | | | | 335,000 | |
| Other income, net | | | 300,000 | | | | 19,000 | | | | 350,000 | | | | 50,000 | |
| | | | | | | | | | | | | | | | | |
| Net (loss) income | | $ | (214,000 | ) | | $ | 2,167,000 | | | $ | (4,022,000 | ) | | $ | (1,546,000 | ) |
| Net (loss) income per share – basic | | $ | (0.02 | ) | | $ | 0.18 | | | $ | (0.37 | ) | | $ | (0.13 | ) |
| Net (loss) income per share – diluted | | $ | (0.02 | ) | | $ | 0.18 | | | $ | (0.37 | ) | | $ | (0.13 | ) |
| Weighted average common shares outstanding – basic | | | 11,173,000 | | | | 11,768,000 | | | | 10,969,000 | | | | 11,730,000 | |
| Weighted average common shares outstanding – diluted | | | 11,173,000 | | | | 12,141,000 | | | | 10,969,000 | | | | 11,730,000 | |
I.D. Systems, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
| | | Three months ended September 30, | | | Nine months ended September 30, | |
| | | 2011 | | | 2012 | | | 2011 | | | 2012 | |
| | | | | | | | | | | | | |
| Net (loss) income attributable to common stockholders | | $ | (214,000 | ) | | $ | 2,167,000 | | | $ | (4,022,000 | ) | | $ | (1,546,000 | ) |
| Depreciation and amortization | | | 584,000 | | | | 537,000 | | | | 1,796,000 | | | | 1,644,000 | |
| Stock-based compensation | | | 295,000 | | | | 285,000 | | | | 911,000 | | | | 865,000 | |
| Non-GAAP net income (loss) | | $ | 665,000 | | | $ | 2,989,000 | | | $ | (1,315,000 | ) | | $ | 963,000 | |
| Non-GAAP net income (loss) per share – basic and diluted | | $ | 0.06 | | | $ | 0.25 | | | $ | (0.12 | ) | | $ | 0.08 | |
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I.D. Systems, Inc. and Subsidiaries
Condensed Balance Sheet Data
| | | December 31, 2011* | | | September 30, 2012 | |
| | | | | | (Unaudited) | |
| ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 8,386,000 | | | $ | 4,631,000 | |
| Restricted cash | | | 300,000 | | | | 300,000 | |
| Investments – short term | | | 6,904,000 | | | | 6,115,000 | |
| Accounts receivable, net | | | 7,947,000 | | | | 7,328,000 | |
| Notes and lease receivable – current | | | 1,217,000 | | | | 739,000 | |
| Inventory, net | | | 8,114,000 | | | | 8,704,000 | |
| Deferred costs – current | | | 1,950,000 | | | | 3,047,000 | |
| Deferred tax asset – current | | | 390,000 | | | | -- | |
| Prepaid expenses and other current assets | | | 2,192,000 | | | | 1,578,000 | |
| Total current assets | | | 37,400,000 | | | | 32,442,000 | |
| | | | | | | | | |
| Investments – long term | | | 9,779,000 | | | | 7,844,000 | |
| Notes and lease receivable – less current portion | | | 4,101,000 | | | | 12,639,000 | |
| Deferred costs – less current portion | | | 1,916,000 | | | | 2,180,000 | |
| Fixed assets, net | | | 3,092,000 | | | | 2,564,000 | |
| Other assets | | | 307,000 | | | | 307,000 | |
| Goodwill | | | 1,837,000 | | | | 1,837,000 | |
| Intangible assets, net | | | 4,399,000 | | | | 3,522,000 | |
| Total assets | | $ | 62,831,000 | | | $ | 63,335,000 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 9,482,000 | | | $ | 8,125,000 | |
| Deferred revenue – current portion | | | 3,090,000 | | | | 4,846,000 | |
| Total current liabilities | | | 12,572,000 | | | | 12,971,000 | |
| Deferred rent | | | 327,000 | | | | 346,000 | |
| Deferred revenue – less current portion | | | 4,332,000 | | | | 5,267,000 | |
| Total liabilities | | | 17,231,000 | | | | 18,584,000 | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| 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;
12,546,000 and 12,663,000 shares issued at December 31, 2011 and
September 30, 2012, respectively; shares outstanding, 12,055,000 and
12,075,000 at December 31, 2011 and September 30, 2012, respectively | | | 121,000 | | | | 121,000 | |
| Additional paid-in capital | | | 101,766,000 | | | | 102,829,000 | |
| Accumulated deficit | | | (53,510,000 | ) | | | (55,056,000 | ) |
| Accumulated other comprehensive (loss) income | | | (49,000 | ) | | | 25,000 | |
| | | | 48,328,000 | | | | 47,919,000 | |
| Treasury stock, at cost | | | (2,728,000 | ) | | | (3,168,000 | ) |
| Total stockholders’ equity | | | 45,600,000 | | | | 44,751,000 | |
| Total liabilities and stockholders’ equity | | $ | 62,831,000 | | | $ | 63,335,000 | |
*Derived from audited balance sheet as of December 31, 2011.
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I.D. Systems, Inc. and Subsidiaries
CondensedStatement ofCash Flows Data
(Unaudited)
| | | Nine months ended September 30, | |
| | | 2011 | | | 2012 | |
| Cash flows from operating activities: | | | | | | | | |
| Net loss | | $ | (4,022,000 | ) | | $ | (1,546,000 | ) |
| Adjustments to reconcile net loss to cash used in operating activities: | | | | | | | | |
| Bad debt expense | | | 165,000 | | | | 484,000 | |
| Proceeds from sale of New Jersey net operating loss carryforwards | | | -- | | | | 390,000 | |
| Stock-based compensation expense | | | 911,000 | | | | 865,000 | |
| Depreciation and amortization | | | 1,796,000 | | | | 1,644,000 | |
| Issuance of warrants | | | 137,000 | | | | -- | |
| Other non-cash items | | | 73,000 | | | | 19,000 | |
| Changes in: | | | | | | | | |
| Accounts receivable | | | 498,000 | | | | 147,000 | |
| Note and lease receivable | | | (2,254,000 | ) | | | (8,060,000 | ) |
| Inventory | | | (1,125,000 | ) | | | (590,000 | ) |
| Prepaid expenses and other assets | | | 66,000 | | | | 611,000 | |
| Deferred costs | | | 393,000 | | | | (1,361,000 | ) |
| Deferred revenue | | | 488,000 | | | | 2,691,000 | |
| Accounts payable and accrued expenses | | | (917,000 | ) | | | (1,359,000 | ) |
| Net cash used in operating activities | | | (3,791,000 | ) | | | (6,065,000 | ) |
| | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | |
| Expenditures for fixed assets including website development | | | (211,000 | ) | | | (238,000 | ) |
| Purchase of investments | | | (2,889,000 | ) | | | (4,252,000 | ) |
| Maturities of investments | | | 1,618,000 | | | | 7,087,000 | |
| Net cash (used in) provided by investing activities | | | (1,482,000 | ) | | | 2,597,000 | |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
| Proceeds from issuance of shares | | | 4,605,000 | | | | -- | |
| Proceeds from exercise of stock options | | | 35,000 | | | | 101,000 | |
| Purchase of treasury shares | | | (1,050,000 | ) | | | (193,000) | |
| Net cash provided by (used in) financing activities | | | 3,590,000 | | | | (92,000 | ) |
| | | | | | | | | |
| Effect of foreign exchange rate changes on cash and equivalents | | | (5,000 | ) | | | (195,000 | ) |
| Net decrease in cash and cash equivalents | | | (1,688,000 | ) | | | (3,755,000 | ) |
| Cash and cash equivalents - beginning of period | | | 14,491,000 | | | | 8,386,000 | |
| Cash and cash equivalents - end of period | | $ | 12,803,000 | | | $ | 4,631,000 | |
