Exhibit 99.1
[I.D. Systems Logo]
CONTACTS: FOR FINANCIAL PRESS FOR TRADE PRESS
Ned Mavrommatis Greg Smith
Chief Financial Officer Vice President Marketing
ned@id-systems.com gsmith@id-systems.com
------------------ ---------------------
General Phone: 201-996-9000. General Fax: 201-996-9144
I.D. Systems, Inc. Reports Record 2004 Year-End Financial Results
Hackensack, NJ, February 16, 2005 --
I.D. Systems, Inc. (NASDAQ: IDSY) today announced its financial results for the
year ended December 31, 2004. Revenues increased 73% to $13,741,000, up from
$7,959,000 for the year ended December 31, 2003. Net income increased to
$398,000, or $0.05 per basic and diluted share, compared to a net loss of
($1,199,000), or ($0.17) per basic and diluted share, a year ago. The growth in
revenues and net income was primarily attributable to increased demand for the
company's patented RFID-based technology - the Wireless Asset Net(TM) - for
tracking and managing industrial equipment.
For the fourth quarter ended December 31, 2004, revenues rose 60% to $3,983,000
compared to $2,482,000 for the same period in 2003. Net income for the fourth
quarter increased to $16,000, compared to a net loss of ($267,000) for the same
period a year ago.
"I.D. Systems had a solid year in 2004, thanks to the continued hard work of our
employees, our success in expanding relationships with key customers, and the
development of new customers and new applications," said Jeffrey Jagid, I.D.
Systems' chairman and chief executive officer. "We continue to innovate, enhance
our technical capabilities, and capitalize on our unmatched experience providing
high-return solutions for our customers. We believe our Wireless Asset Net
industrial fleet management system is becoming a `best-practice' technology for
corporate material handling and we are achieving significant milestones in
opening new markets for our RFID-based solutions, including homeland security,
rental car fleet management, and remote machine monitoring. We are pleased to
note that 2004 was I.D. Systems' best year to date, on many levels."
Ned Mavrommatis, I.D. Systems' chief financial officer, said, "The company
continues to meet or exceed its strategic objectives. In 2004, we continued to
balance rapid growth with sound cost management, achieving a high double-digit
year-over-year increase in revenues, sustaining a high gross profit margin - 53%
this year compared to 49% in 2003 - and realizing net income of $.05 per diluted
share. I.D. Systems also generated positive cash flow from operations in 2004 of
$1,623,000. The company's financial condition remains strong. As of December 31,
2004, the company had $11.6 million in cash, cash equivalents and investments,
and $12.7 million of working capital, compared to $8.6 million and $8.2 million,
respectively, at December 31, 2003."
Selling, general and administrative (SG&A) expenses for the year ended December
31, 2004 were $5,879,000, up from $4,456,000 for the year ended December 31,
2003, as payroll expenses increased to support growing sales. As a percentage of
revenues, however, SG&A expenses decreased to 43% in 2004, compared to 56% in
2003.
Research and development (R&D) expenditures for the year ended December 31,
2004, were $1,234,000, up from $891,000 in 2003. As a percentage of revenues,
however, R&D expenses decreased to 9% in 2004, compared to just over 11% for
2003.
Highlights of the year ended December 31, 2004, included:
o Expansion of business with Ford Motor Company, including additional
orders for I.D. Systems' industrial vehicle electronic control systems
(IVECS) for Ford's North American manufacturing plants, and a new
contract to provide enterprise-wide support and maintenance for IVECS.
o Expansion of business with Target Corporation, which rolled out a new
version of I.D. Systems' Wireless Asset Net industrial fleet management
system on approximately 400 material handling vehicles in Target
distribution facilities throughout the United States.
o Continued work with the United States Postal Service (USPS), to
translate the previous success of Wireless Asset Net technology at
individual USPS mail processing facilities into an enterprise-wide
implementation of a wireless Powered Industrial Vehicle Management
System (PIVMS). These efforts culminated in a USPS contract award to
I.D. Systems, announced in January 2005, for a national PIVMS
deployment encompassing up to 460 USPS facilities over the next three
years.
o Continued development of homeland security applications with the
Transportation Security Administration (TSA), including the successful
completion of a series of key functional tests at Newark Liberty
International Airport, an increase in funding for the Newark program,
and the award of a new TSA contract to deploy a wireless vehicle
security system at a seaport in Jacksonville, Florida.
o Expansion of business with WinCo Foods, which placed a follow-on order
for the Wireless Asset Net for its newest distribution center.
o Continued development of rental car fleet management applications with
Avis Rent A Car System, Inc., which has a version of the Wireless Asset
Net deployed on its 2,000-vehicle fleet in Puerto Rico.
o Continued work with Northrop Grumman Ship Systems, General Dynamics'
National Steel and Shipbuilding Company, and the U.S. Navy's Portsmouth
Naval Shipyard to develop and implement an advanced Wireless Equipment
Monitoring and Control System (WEMACS) for commercial and shipyard
environments.
o New business in the automotive industry, as Premier Manufacturing
Support Services ordered the Wireless Asset Net on behalf of one of the
world's largest automotive parts manufacturers. Premier provides
management and support services for more than 120 automotive plants
worldwide and could potentially develop into a strategic marketing and
system support partner for I.D. Systems.
o New business in the mass market retail distribution sector, as Wajax
Industries ordered the Wireless Asset Net on behalf of a major Canadian
retailer, as announced in January 2005.
o New Wireless Asset Net system enhancements, including the launch of a
new generation of wireless vehicle monitoring hardware (the Universal
Vehicle Asset Communicator, or UVAC 02) and a series of software
upgrades. The UVAC 02 has expanded data management capabilities, can be
installed more quickly and easily than earlier hardware generations,
simplifies interactivity for equipment operators, and allows for easier
maintenance. The improved software includes expanded server options for
2
enterprise-wide deployments, augmented database support, increased data
throughput, new reporting and auto-emailing tools, and enhanced remote
diagnostic capabilities.
o New RFID-based product developments, including the Battery Charger
Monitoring Point(TM) (Battery ChaMP(TM)), the AC Power Control Module
(ACPCM), and the Machine Asset Communicator(TM) (MAC).
o The Battery ChaMP provides remote management and real-time
visibility of batteries and chargers used to power fleets of
electric vehicles. I.D. Systems has already received an order
for this new product, as announced in January 2005 -
AeroVironment, Inc. purchased 500 ChaMP units for its
PosiCharge(TM) fast-charging system, which is being deployed
for a major automotive manufacturer.
o The ACPCM product, developed as part of I.D. Systems' program
with the National Shipbuilding Research Program, supports
Wireless Asset Net installations on complex machinery, such as
cranes. The ACPCM is designed to accommodate virtually any
power input and monitor multiple motor data points for
advanced maintenance management and asset utilization
analysis.
o The MAC product provides advanced wireless monitoring and
control of fixed machinery, including automatic quality
control checks, real-time alerts on out-of-specification
machine parameters, automatic machine shut-down based on
user-defined criteria, and electronic maintenance checklists.
The initial application of MAC technology is in the automotive
industry, where it is being used to enforce quality control on
adhesive-dispensing robots.
o A new cooperative relationship with Unisys Coporation, which, as a
subcontractor to I.D. Systems, will provide implementation services and
technical support for I.D. Systems' program with the U.S. Postal
Service. I.D. Systems is also working with Unisys in a informal joint
marketing capacity to explore other opportunites for Wireless Asset Net
system deployments within the U.S. Government.
o The transition of trading in I.D. Systems common stock from the NASDAQ
Small Cap Market to the NASDAQ National Market.
Investor Conference Call
I.D. Systems will be holding a conference call for investors and analysts at
4:45 p.m. Eastern Standard Time on February 16, 2005. Jeffrey Jagid, chairman
and CEO, Kenneth Ehrman, president and COO, Ned Mavrommatis, CFO, and Frederick
Muntz, 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 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.
ABOUT I.D. SYSTEMS
I.D. Systems, Inc. is a leading provider of wireless RFID-based solutions for
corporate asset management. I.D. Systems' customers include 3M, American Axle,
Archer Daniels Midland, DaimlerChrysler, Deere & Co., Ford, General Dynamics,
Hallmark Cards, Northrop Grumman, Target, Walgreen, the U.S. Navy, the U.S.
Postal Service, and the U.S. Transportation Security Administration, among
others. Using local area networks, wide area networks, and the Internet, the
company's systems enable management to control and track the location and status
of assets - from forklifts, tugs and cranes to automobiles and trucks - in real
time. For more information on I.D. Systems, Inc., visit www.id-systems.com.
ABOUT THE WIRELESS ASSET NET(TM)
The Wireless Asset Net consists of intelligent wireless devices installed on
powered equipment, a patented radio frequency communication infrastructure, and
client-server software for access control, utilization analysis, real-time
location tracking, and many other functions. The Wireless Asset Net is designed
to improve industrial workplace safety by restricting vehicle access to trained,
authorized operators and by providing electronic safety inspection checklists.
The system is designed to reduce maintenance expenses by automatically uploading
vehicle data, reporting vehicle problems in real time, scheduling maintenance
3
according to actual vehicle usage rather than on a calendar basis, and helping
plant management determine the optimal economic time to replace equipment. The
system is also designed to help improve labor productivity and asset utilization
by ensuring equipment is in the proper place at the right time and by providing
management with unique reports, charts, and analyses.
TRADEMARKS
I.D. Systems, Inc., Wireless Asset Net, Battery Charger Monitoring Point,
Battery ChaMP, ChaMP, and Machine Asset Communicator are all registered or
pending 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, the impact of competitive products, product demand and market acceptance
risks, fluctuations in operating results and other risks detailed from time to
time in I.D. Systems' filings with the Securities and Exchange Commission. These
risks could cause I.D. Systems' 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.
-- Tables to Follow --
4
I.D. SYSTEMS, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31,
-----------------------------
2003 2004
------------ ------------
Revenue $ 7,959,000 $ 13,741,000
Cost of revenue 4,075,000 6,509,000
------------ ------------
Gross profit 3,884,000 7,232,000
------------ ------------
Operating expenses:
Selling, general and administrative expenses 4,456,000 5,879,000
Research and development expenses 891,000 1,234,000
------------ ------------
5,347,000 7,113,000
------------ ------------
Income (loss) from operations (1,463,000) 119,000
Interest income 269,000 195,000
Interest expense (59,000) (63,000)
Other income 54,000 147,000
------------ ------------
NET INCOME (LOSS) $ (1,199,000) $ 398,000
============ ============
NET INCOME (LOSS) PER SHARE - BASIC $ (.17) $ 0.05
============ ============
NET INCOME (LOSS) PER SHARE - DILUTED $ (.17) $ 0.05
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC 6,905,000 7,455,000
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED 6,905,000 8,783,000
============ ============
5
I.D. SYSTEMS, INC.
BALANCE SHEETS
December 31, 2003 DECEMBER 31, 2004
----------------- -----------------
ASSETS
Cash and cash equivalents $ 3,179,000 $ 8,440,000
Short-term investments 3,339,000 3,195,000
Accounts receivable, net 2,204,000 1,432,000
Unbilled receivables -- 402,000
Inventory 676,000 1,739,000
Investment in sales type leases 37,000 39,000
Interest receivable 75,000 50,000
Officer loan 10,000 10,000
Prepaid expenses and other current assets 129,000 225,000
------------ ------------
Total current assets 9,649,000 15,532,000
Long-term investments 2,100,000 --
Fixed assets, net 845,000 1,009,000
Investment in sales type leases 73,000 34,000
Officer loan 31,000 20,000
Deferred contract costs 675,000 476,000
Other assets 97,000 88,000
------------ ------------
$ 13,470,000 $ 17,159,000
============ ============
LIABILITIES
Accounts payable and accrued expenses $ 1,055,000 $ 2,541,000
Long term debt - current portion 188,000 199,000
Line of credit 137,000 --
Deferred revenue 89,000 95,000
------------ ------------
Total current liabilities 1,469,000 2,835,000
Long term debt 648,000 449,000
Deferred revenue 285,000 191,000
Deferred rent 89,000 112,000
------------ ------------
2,491,000 3,587,000
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock; authorized 5,000,000 shares, $.01 par value;
none issued
Common stock; authorized 15,000,000 shares, $.01 par value;
issued and outstanding 7,097,000 shares and 7,690,000 shares 71,000 77,000
Additional paid-in capital 22,804,000 24,994,000
Treasury stock; 40,000 shares at cost (113,000) (113,000)
Accumulated deficit (11,783,000) (11,386,000)
------------ ------------
10,979,000 13,572,000
------------ ------------
$ 13,470,000 $ 17,159,000
============ ============
6
I.D. SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
DECEMBER 31,
---------------------------
2003 2004
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(1,199,000) $ 398,000
Adjustments to reconcile net income (loss) to cash (used in)
provided by operating activities:
Depreciation and amortization 173,000 255,000
Deferred rent expense 23,000 23,000
Deferred revenue 348,000 (88,000)
Bad debt expense 20,000 (7,000)
Deferred contract costs (675,000) 199,000
Amortization of premium on investments 174,000 94,000
Changes in:
Accounts receivable (1,110,000) 779,000
Unbilled receivables -- (402,000)
Inventory 715,000 (1,063,000)
Prepaid expenses and other assets 28,000 (87,000)
Investment in sales type leases 571,000 37,000
Installment receivable 867,000 --
Other liabilities (100,000) --
Accounts payable and accrued expenses (70,000) 1,485,000
----------- -----------
Net cash (used in) provided by operating activities (235,000) 1,623,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (339,000) (419,000)
Purchase of investments (5,698,000) (1,235,000)
Maturities of investments 4,084,000 3,385,000
Increase (decrease) in interest receivable (2,000) 25,000
Collection of officer loan 10,000 11,000
----------- -----------
Net cash (used in) provided by investing activities (1,945,000) 1,767,000
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from term loan 1,000,000 --
Repayment of term loan (164,000) (188,000)
Repayment of line of credit -- (137,000)
Proceeds from exercise of stock options 765,000 1,171,000
Proceeds from exercise of warrants -- 1,025,000
----------- -----------
Net cash provided by financing activities 1,601,000 1,871,000
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (579,000) 5,261,000
Cash and cash equivalents - beginning of period 3,758,000 3,179,000
----------- -----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 3,179,000 $ 8,440,000
=========== ===========
7