I.D. SYSTEMS, INC.(TM)
Expanding the range of wireless solutions
FOR IMMEDIATE RELEASE
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 Third Quarter Financial Results
Hackensack, NJ, November 2, 2005 --
I.D. Systems, Inc. (NASDAQ: IDSY) today announced its financial results for the
quarter and nine months ended September 30, 2005. Revenues for the quarter
increased 75% to $5,742,000, up from $3,289,000 in the third quarter a year ago.
Net income for the quarter rose 1,324% to $641,000, or $0.08 per basic share and
$0.07 per diluted share, compared to net income of $45,000, or $0.01 per basic
and diluted share, in the three-month period ended September 30, 2004.
The improved performance was attributable primarily to continued market
penetration of the company's patented Wireless Asset Net(TM) technology - an
RFID-based hardware/software system that tracks, controls, and manages fleets of
industrial equipment for customers such as Ford Motor Company, the U.S. Postal
Service (USPS), the U.S. Transportation Security Administration (TSA), and
Walgreen Co.
For the nine-month period ended September 30, 2005, revenues increased 33% to
$12,974,000 and net income increased 10% to $419,000, compared to $9,758,000 and
$382,000, respectively, for the nine-months ended September 30, 2004.
"We are pleased to report continued strong increases in both revenues and net
income this quarter, driven primarily by expansion of business with core
customers," said Jeffrey Jagid, I.D. Systems' chairman and chief executive
officer. "At the same time, consistent with our strategic business plan, we
continue to position the company to obtain important new customers in key
vertical markets, such as mass retail distribution and industrial manufacturing.
We expected 2005 to be a breakthrough year for I.D. Systems and our third
quarter results are consistent with that vision. We look forward to building
further on this strong performance."
In the three months ended September 30, 2005, selling, general and
administrative expenses increased 10% to $1,624,000, and research and
development expenditures increased 7% to $398,000, compared to $1,470,000 and
$372,000, respectively, in the three months ended September 30, 2004. Gross
profit margin in the third quarter was just over 45%, compared to 55% in the
third quarter of 2004.
For the nine-month period ended September 30, 2005, selling, general and
administrative expenses were $4,928,000 and research and development expenses
were $1,135,000, compared to $4,177,000 and $810,000, respectively, for the same
period a year ago. Gross profit margin for the nine-month was 48%, compared to
53% for the corresponding period in 2004.
Ned Mavrommatis, the company's chief financial officer, said, "We continue to
focus on rapid growth while closely monitoring costs. As a percentage of
revenues, our selling, general and administrative expenses decreased to 28.3%
this quarter, and research and development costs decreased to 7%, compared to
45% and 11%, respectively, in the third quarter a year ago. Our gross margins
this quarter were affected by higher than expected service costs at the first
eight USPS facilities that implemented our Wireless Asset Net system, but by
carefully tracking those costs we have refined the scope of work for subsequent
USPS deployments and expect to maintain our accustomed gross margins of at least
50% in the future.
"I.D. Systems' overall financial condition remains strong," continued Mr.
Mavrommatis. "As of September 30, 2005, the company had approximately $6 million
in cash, cash equivalents and short-term investments, and approximately $13.8
million of working capital."
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Highlights of I.D. Systems' third quarter included:
o The USPS placed repeat orders valued at $1.6 million to implement the
Wireless Asset Net at five additional facilities beyond the eight
initially deployed earlier this year. One of those eight facilities
performed a successful, comprehensive field evaluation of system
performance. Under the USPS' three-year national contract with I.D.
Systems, up to 460 USPS facilities can order the Wireless Asset Net.
o Walgreen Co. placed a repeat order for Wireless Asset Net deployment at an
additional distribution center, bringing to five the number of Walgreens
facilities utilizing I.D. Systems' technology.
o AeroVironment placed a repeat order for I.D. Systems' Battery ChaMP(TM) to
wirelessly monitor its PosiCharge(TM) industrial battery fast-charging
system. More than 1,300 Battery ChaMPs have been sold since the new
product was introduced at the end of 2004.
o Target Corporation awarded a maintenance contract to I.D. Systems to
support Target's enterprise-wide deployment of the Wireless Asset Net on
approximately 400 material handling vehicles in distribution facilities
throughout the United States. I.D. Systems also received new orders from
Target for the Wireless Asset Net to be deployed on additional material
handling equipment at several new distribution facilities.
o Deloitte & Touche identified I.D. Systems as one of the top ten fastest
growing technology companies in New Jersey, and one of the top 150 in
North America. Rankings are based on the percentage of revenue growth from
2000 to 2004 - I.D Systems' revenue during that five-year period increased
1,354%.
o I.D. Systems enhanced the RFID-based equipment tracking capabilities of
its Wireless Asset Net' system to enable location accuracy to within 20
feet - indoors as well as out. This high degree of indoor tracking
accuracy is technically significant because it does not rely on costly,
high-bandwidth interconnections with centralized data-processing computers
- as required by other types of real-time locating systems - and because
it is accomplished through the use of radio frequency technology only, not
GPS (the Global Positioning System), which is inoperable indoors.
Investor Conference Call
I.D. Systems will hold a conference call for investors and analysts at 4:45 p.m.
Eastern Standard Time on November 3, 2005. Jeffrey Jagid, chairman and CEO,
Kenneth Ehrman, president and COO, Ned Mavrommatis, CFO, and Rick Muntz, EVP of
sales and marketing, will discuss the results of the quarter. 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
Based in Hackensack, NJ, I.D. Systems, Inc. is a leading provider of wireless
solutions for corporate asset management. I.D. Systems' customers include 3M
Company, American Axle, Archer Daniels Midland, Daimler Chrysler, Deere & Co.,
Ford Motor Company, General Dynamics, Hallmark Cards, Northrop Grumman, Target
Corporation, Walgreen Co., 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 their assets - from forklifts and
cranes to automobiles and trucks to complex fixed machinery - in real time. For
more information on I.D. Systems, Inc., visit www.id-systems.com.
Trademarks
I.D. Systems, Inc., Wireless Asset Net, and Battery ChaMP are registered or
pending trademarks of I.D. Systems, Inc. PosiCharge is a trademark of
AeroVironment, 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 --
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I.D. Systems, Inc.
Condensed Statements of Operations
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2004 2005 2004 2005
------------ ------------ ------------ ------------
Revenues $ 3,289,000 $ 5,742,000 $ 9,758,000 $ 12,974,000
Cost of Revenues 1,467,000 3,154,000 4,589,000 6,741,000
------------ ------------ ------------ ------------
Gross Profit 1,822,000 2,588,000 5,169,000 6,233,000
Selling, general and administrative expenses 1,470,000 1,624,000 4,177,000 4,928,000
Research and development expenses 372,000 398,000 810,000 1,135,000
------------ ------------ ------------ ------------
Income (loss) from operations (20,000) 566,000 182,000 170,000
Interest income 44,000 51,000 138,000 179,000
Interest expense (16,000) (14,000) (49,000) (43,000)
Other income 37,000 38,000 111,000 113,000
------------ ------------ ------------ ------------
Net income $ 45,000 $ 641,000 $ 382,000 $ 419,000
============ ============ ============ ============
Net income per share - basic $ 0.01 $ 0.08 $ 0.05 $ 0.05
============ ============ ============ ============
Net income per share - diluted $ 0.01 $ 0.07 $ 0.05 $ 0.05
============ ============ ============ ============
Weighted average common shares outstanding - basic 7,629,000 7,800,000 7,380,000 7,745,000
============ ============ ============ ============
Weighted average common shares outstanding - diluted 8,976,000 9,448,000 8,477,000 9,246,000
============ ============ ============ ============
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I.D. Systems, Inc.
Condensed Balance Sheets
September 30,
December 31, 2005
2004 (Unaudited)
------------ ------------
ASSETS
Cash and cash equivalents $ 8,440,000 $ 5,282,000
Short-term investments 3,195,000 750,000
Accounts receivable, net 1,432,000 5,939,000
Unbilled receivables 402,000 2,757,000
Inventory 1,739,000 2,067,000
Investment in sales type leases 39,000 44,000
Interest receivable 50,000 7,000
Officer loan 10,000 11,000
Prepaid expenses and other current assets 225,000 174,000
------------ ------------
Total current assets 15,532,000 17,031,000
Fixed assets, net 1,009,000 1,167,000
Investment in sales type leases 34,000 --
Officer loan 20,000 11,000
Deferred contract costs 476,000 172,000
Other assets 88,000 88,000
------------ ------------
$ 17,159,000 $ 18,469,000
============ ============
LIABILITIES
Accounts payable and accrued expenses $ 2,541,000 $ 2,885,000
Long term debt - current portion 199,000 207,000
Deferred revenue 95,000 177,000
------------ ------------
Total current liabilities 2,835,000 3,269,000
Long term debt 449,000 293,000
Deferred revenue 191,000 115,000
Deferred rent 112,000 105,000
------------ ------------
3,587,000 3,782,000
------------ ------------
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 7,690,000 shares
and 7,839,000 shares 77,000 78,000
Additional paid-in capital 24,994,000 25,691,000
Treasury stock; 40,000 shares at cost (113,000) (113,000)
Accumulated deficit (11,386,000) (10,969,000)
------------ ------------
13,572,000 14,687,000
------------ ------------
$ 17,159,000 $ 18,469,000
============ ============
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I.D. Systems, Inc.
Condensed Statements of Cash Flows
(Unaudited)
Nine months ended
September 30,
2004 2005
----------- -----------
Cash flows from operating activities:
Net income $ 382,000 $ 419,000
Adjustments to reconcile net loss to cash used in operating
activities:
Inventory reserve -- 75,000
Depreciation and amortization 184,000 266,000
Deferred rent expense 17,000 (7,000)
Deferred revenue (66,000) 6,000
Deferred contract costs 98,000 303,000
Changes in:
Accounts receivable (1,100,000) (4,507,000)
Unbilled receivables (788,000) (2,355,000)
Inventory (435,000) (403,000)
Prepaid expenses and other assets (51,000) 52,000
Investment in sales type leases 27,000 29,000
Accounts payable and accrued expenses 119,000 342,000
----------- -----------
Net cash used in operating activities (1,613,000) (5,780,000)
----------- -----------
Cash flows from investing activities:
Purchase of fixed assets (217,000) (424,000)
Purchase of investments (487,000) (500,000)
Decrease in interest receivable 15,000 43,000
Maturities of investments 2,054,000 2,953,000
Amortization of premium on investments 148,000 (8,000)
Collection of officer loan 8,000 8,000
----------- -----------
Net cash provided by investing activities 1,521,000 2,072,000
----------- -----------
Cash flows from financing activities:
Repayment of term loan (140,000) (148,000)
Repayment of line of credit (137,000)
Proceeds from exercise of stock options 1,089,000 698,000
Proceeds from exercise of warrants 1,025,000
----------- -----------
Net cash provided by financing activities 1,837,000 550,000
----------- -----------
Net increase (decrease) in cash and cash equivalents 1,745,000 (3,158,000)
Cash and cash equivalents - beginning of period 3,179,000 8,440,000
----------- -----------
Cash and cash equivalents - end of period $ 4,924,000 $ 5,282,000
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 49,000 $ 43,000
=========== ===========
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