Exhibit 99.1
I.D. Systems Logo
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 Record Financial Results for 2005
Hackensack, NJ, February 16, 2006 --
I.D. Systems, Inc. (NASDAQ: IDSY) today announced its financial results for the
year ended December 31, 2005. Revenues for 2005 increased 38.3% to $19,004,000
from $13,741,000 for 2004. Net income increased 113.8% to $851,000, or $0.11 per
basic share and $0.09 per diluted share, for 2005, compared to $398,000, or
$0.05 per basic and diluted share, for 2004. The growth in revenues and net
income was attributable primarily to increased demand for I.D. Systems' patented
Wireless Asset Net(TM) system, which utilizes radio frequency identification, or
RFID, technology to control, track, monitor and analyze assets. Gross profit
margin for the year was 49% and for the fourth quarter was 51%.
For the fourth quarter ended December 31, 2005, revenues rose 51.4% to
$6,030,000 compared to $3,983,000 for the quarter ended December 31, 2004. Net
income for the fourth quarter increased to $432,000 compared to $16,000 for the
same period a year ago.
Selling, general and administrative (SG&A) expenses for 2005 were $7,140,000
compared to $5,879,000 for 2004, primarily as a result of increased payroll
expenses to support growing sales. As a percentage of revenues, however, SG&A
expenses decreased to 37.6% in 2005 compared to 42.8% in 2004.
Research and development (R&D) expenditures for 2005 were $1,625,000 compared to
$1,234,000 in 2004. As a percentage of revenues, R&D expenditures decreased to
8.6% in 2005 compared to 9.0% for 2004.
As of December 31, 2005, I.D. Systems had $7.6 million in cash, cash equivalents
and investments, and $13.9 million of working capital, compared to $11.6 million
and $12.7 million, respectively, as of December 31, 2004.
With respect to expanding relationships with existing customers, highlights of
2005 included the following events and milestones:
o The United States Postal Service (USPS) awarded a national contract
to I.D. Systems to produce and deploy a wireless Powered Industrial
Vehicle Management System (PIVMS) at up to 460 USPS facilities over
the next three years. As of December 31, 2005, the USPS had placed
orders for PIVMS system deployment in 28 facilities.
o Ford Motor Company continued to order I.D. Systems' Industrial
Vehicle Electronic Control System (IVECS) for its North American
manufacturing plants. As of December 31, 2005, I.D. Systems had
implemented its IVECS on an aggregate of approximately 5,000
vehicles at 36 Ford facilities.
o The Transportation Security Administration (TSA), part of the U.S.
Department of Homeland Security, funded an expansion of its wireless
vehicle security program with I.D. Systems at the Jacksonville,
Florida, seaport. The TSA also funded a new program to integrate
radio frequency identification (RFID) tag-reading capabilities into
I.D. Systems' Wireless Asset Net system. Finally, at the end of
2005, the TSA issued the final report on its wireless vehicle
security program with I.D. Systems at Newark Liberty International
Airport. This report concludes that the project, during which more
than 100 system elements were tested without a single requirement
failure, successfully demonstrated that I.D. Systems' technology is
an effective tool for securing and managing vehicles in the radio
frequency (RF)-rich environment of a major U.S. airport.
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o Walgreen Co. placed a series of repeat orders for I.D. Systems'
Wireless Asset Net industrial fleet management system. By year end,
the Wireless Asset Net was being implemented in six Walgreens
distribution centers.
o Target Corporation also continued to order the Wireless Asset Net
system for its distribution centers. By year end, the Wireless Asset
Net was being deployed on more than 400 material handling vehicles
in Target distribution facilities across the United States.
o I.D. Systems was awarded a U.S. General Services Administration
contract for its Wireless Asset Net system, enabling any federal
government entity to order system components without seeking further
competitive bids.
With respect to establishing relationships with important new customers,
highlights of 2005 included the following accomplishments:
o Wal-Mart Stores, Inc. entered into an agreement with I.D. Systems to
implement the Wireless Asset Net system at a distribution center in
Texas.
o Rite Aid Corporation initiated a similar pilot program to evaluate
the Wireless Asset Net at a distribution center in Maryland.
With respect to enhancing core technology and capitalizing on new application
opportunities, highlights of 2005 included the following activities:
o I.D. Systems introduced two new RFID-based products to complement
the Wireless Asset Net industrial vehicle management system:
o The Battery Charger Monitoring Point (Battery ChaMP) provides
automatic data uploads, real time system visibility and data
collection for batteries and chargers used to power fleets of
electric vehicles.
o The Machine Asset Communicator provides 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.
o I.D. Systems continued to develop its wireless solutions for rental
fleet management:
o Avis Rent A Car System, Inc. continued to utilize a version of
the Wireless Asset Net system to streamline the return process
and enhance rental revenues for its rental fleet in Puerto
Rico.
o I.D. Systems was awarded a United States patent for a fully
automated wireless vehicle rental and return which keeps track
of vehicle data such as mileage, fuel level and location of
the vehicle.
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, 2006. 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 period 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 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.
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About I.D. Systems
I.D. Systems, Inc. is a leading provider of wireless solutions for managing and
securing high-value enterprise assets. These assets include industrial vehicles,
such as forklifts and airport ground support equipment, and rental vehicles.
I.D. Systems' patented Wireless Asset Net system, which utilizes radio frequency
identification, or RFID, technology, addresses the needs of organizations to
control track, monitor and analyze their assets. For more information on I.D.
Systems, Inc., visit www.id-systems.com.
Trademarks
Wireless Asset Net and Battery ChaMP are 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, future economic and business conditions, the loss of any of I.D. Systems'
key customers or reduction in the purchase of its products by any such
customers, the failure of the market for I.D. Systems' products to continue to
develop, the inability to protect I.D. Systems' intellectual property, the
inability to manage I.D. Systems' growth, the effects of competition from a wide
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 I.D. Systems' registration
statement on Form S-3. 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.
-- Tables to Follow --
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I.D. Systems, Inc.
Statements of Operations
Year Ended December 31, Quarter Ended December 31,
---------------------------- ----------------------------
2004 2005 2004 2005
------------ ------------ ------------ ------------
Revenue $ 13,741,000 $ 19,004,000 $ 3,983,000 $ 6,030,000
Cost of revenue 6,509,000 9,708,000 1,901,000 2,966,000
------------ ------------ ------------ ------------
Gross profit 7,232,000 9,296,000 2,082,000 3,064,000
------------ ------------ ------------ ------------
Operating expenses:
Selling, general and administrative expenses 5,879,000 7,140,000 1,721,000 2,212,000
Research and development expenses 1,234,000 1,625,000 424,000 490,000
------------ ------------ ------------ ------------
7,113,000 8,765,000 2,145,000 2,702,000
------------ ------------ ------------ ------------
Income (loss) from operations 119,000 531,000 (63,000) 362,000
Interest income 195,000 222,000 57,000 42,000
Interest expense (63,000) (53,000) (14,000) (10,000)
Other income 147,000 151,000 36,000 38,000
------------ ------------ ------------ ------------
Net income (loss) $ 398,000 $ 851,000 $ 16,000 $ 432,000
============ ============ ============ ============
Net income (loss) per share - basic $ 0.05 $ 0.11 $ 0.00 $ 0.06
============ ============ ============ ============
Net income (loss) per share - diluted $ 0.05 $ 0.09 $ 0.00 $ 0.05
============ ============ ============ ============
Weighted average common shares outstanding - basic 7,455,000 7,771,000 7,679,000 7,847,000
============ ============ ============ ============
Weighted average common shares outstanding - diluted 8,783,000 9,355,000 9,271,000 9,600,000
============ ============ ============ ============
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I.D. Systems, Inc.
Balance Sheets
As of December 31,
ASSETS 2004 2005
------------ ------------
Current assets:
Cash and cash equivalents $ 8,440,000 $ 2,138,000
Investments available for sale 3,195,000 5,463,000
Accounts receivable, net 1,432,000 6,068,000
Unbilled receivables 402,000 1,293,000
Inventory 1,739,000 2,952,000
Investment in sales type leases 39,000 34,000
Interest receivable 50,000 --
Officer loan 10,000 11,000
Prepaid expenses and other current assets 225,000 140,000
------------ ------------
Total current assets 15,532,000 18,099,000
Fixed assets, net 1,009,000 1,159,000
Investment in sales type leases 34,000 433,000
Officer loan 20,000 8,000
Deferred contract costs 476,000 53,000
Other assets 88,000 88,000
------------ ------------
$ 17,159,000 $ 19,840,000
============ ============
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 2,541,000 $ 3,881,000
Long term debt - current portion 199,000 209,000
Deferred revenue 95,000 155,000
------------ ------------
Total current liabilities 2,835,000 4,245,000
Long term debt 449,000 240,000
Deferred revenue 191,000 90,000
Deferred rent 112,000 99,000
------------ ------------
3,587,000 4,674,000
------------ ------------
Commitments and Contingencies (Note J)
STOCKHOLDERS' EQUITY
Preferred stock; authorized 5,000,000 shares, $0.01 par value; none issued
Common stock; authorized 15,000,000 shares, $0.01 par value; issued and
outstanding 7,690,000 and 7,851,000 shares at December 31, 2004 and 2005,
respectively
77,000 79,000
Additional paid-in capital 24,994,000 25,735,000
Accumulated deficit (11,386,000) (10,535,000)
------------ ------------
13,685,000 15,279,000
------------ ------------
Less: Treasury stock; 40,000 shares at cost (113,000) (113,000)
------------ ------------
Total stockholders equity 13,572,000 15,166,000
Total liabilities and stockholders' equity $ 17,159,000 $ 19,840,000
============ ============
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I.D. Systems, Inc.
Statements of Cash Flows
Year Ended December 31,
----------------------------
2004 2005
------------ ------------
Cash flows from operating activities:
Net income (loss) $ 398,000 $ 851,000
Adjustments to reconcile net income (loss) to cash (used in)
provided by operating activities:
Inventory reserve -- 105,000
Depreciation and amortization 255,000 362,000
Deferred rent expense 23,000 (13,000)
Deferred revenue (88,000) (41,000)
Bad debt expense (7,000) 20,000
Deferred contract costs 199,000 423,000
Accrued interest income 119,000 42,000
Changes in:
Accounts receivable 779,000 (4,656,000)
Unbilled receivables (402,000) (891,000)
Inventory (1,063,000) (1,318,000)
Prepaid expenses and other assets (87,000) 85,000
Investment in sales type leases 37,000 (394,000)
Accounts payable and accrued expenses 1,485,000 1,340,000
------------ ------------
Net cash (used in) provided by operating activities 1,648,000 (4,085,000)
------------ ------------
Cash flows from investing activities:
Purchase of fixed assets (419,000) (512,000)
Purchase of investments (1,235,000) (5,963,000)
Maturities of investments 3,385,000 3,703,000
Collection of officer loan 11,000 11,000
------------ ------------
Net cash (used in) provided by investing activities 1,742,000 (2,761,000)
------------ ------------
Cash flows from financing activities:
Repayment of term loan (188,000) (199,000)
Repayment of line of credit (137,000) --
Proceeds from exercise of stock options 1,171,000 743,000
Proceeds from exercise of warrants 1,025,000 --
------------ ------------
Net cash provided by financing activities 1,871,000 544,000
------------ ------------
Net (decrease) increase in cash and cash equivalents 5,261,000 (6,302,000)
Cash and cash equivalents - beginning of period 3,179,000 8,440,000
------------ ------------
Cash and cash equivalents - end of period $ 8,440,000 $ 2,138,000
============ ============
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 63,000 $ 53,000
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