News Release

I.D. Systems Reports First Quarter 2018 Results

May 2, 2018
Quarterly Revenue Up 20% Sequentially and 67% Year-over-Year to $13.4 Million

WOODCLIFF LAKE, N.J., May 02, 2018 (GLOBE NEWSWIRE) -- I.D. Systems, Inc. (NASDAQ:IDSY), a leading provider of enterprise asset management technology, reported results for the first quarter ended March 31, 2018. 

Management Commentary
“The first quarter marked a strong start to the fiscal year, highlighted by 20% sequential and 67% year-over-year growth,” said I.D. Systems CEO Chris Wolfe. “Our impressive growth was driven by solid contributions across all three of our businesses. Of particular note, our Connected Vehicle Solutions business shipped 13,000 Universal Telematics Platform (UTP) devices to Avis, demonstrating our ability to rapidly certify new vehicles and scale production. We also realized strong sales in our Industrial Truck Management business in the U.S., as well as continued large-scale roll outs of PowerFleet at several of the world’s largest automotive manufacturers.

“Our improving financial and operational performance is the result of our innovative and expanding product portfolio. Along that line, during the first quarter we introduced a new class of industrial truck telematics platforms called ‘106’ for small to mid-sized fleets used in manufacturing, distribution, logistics and retail centers. We plan to launch this next-generation platform in the U.S. and Europe this summer, helping us to better address the vast majority of the more than 10 million industrial trucks globally. In addition, we plan to commercially release three new Logistics Visibility Solutions products, which will significantly expand our market opportunity.

“2018 is a year of product innovation, market excitement and large-scale roll outs. To that end, we expect to ship the majority of the remaining 37,000 units ordered by Avis predominately in the second quarter with the balance in the third quarter, depending on Avis’ certification requests and vehicle deliver schedules. Overall, our operational momentum, strong balance sheet and leading technology have established a solid foundation for us to leverage in 2018 and the years ahead.”

First Quarter 2018 Financial Results
Revenue increased 67% to $13.4 million from $8.0 million in same year-ago period. The increase was primarily due to higher Connected Vehicle Solutions revenue and Industrial Truck revenue.

Gross margin decreased to 48.3% from 51.9% in the same period a year ago. The decrease in gross margin was primarily due to the initial deliveries of Connected Vehicle Solutions hardware, which have lower upfront margins, but which grow over time making for high lifecycle profitability over the contract term.

Selling, general and administrative expenses were $5.7 million, compared to $4.7 million in the same year-ago period. The increase was primarily due to the inclusion of expenses from Keytroller, which were absent in the same period a year ago, as well as higher marketing expenses.

Research and development expenses were $1.7 million, compared to $1.4 million in the same year-ago quarter. The increase in research and development expense was due to investments in new product development as well as the inclusion of expenses from Keytroller, which were absent in the same period a year ago.

Excluding stock-based compensation, depreciation and amortization, foreign currency translation losses, and acquisition-related expenses, non-GAAP net loss totaled $105,000 or $(0.01) per basic and diluted share (based on 17.0 million weighted average shares outstanding), an improvement from non-GAAP net loss of $1.1 million or $(0.08) per basic and diluted share (based on 13.3 million weighted average shares outstanding) in the same year-ago quarter.

Net loss totaled $990,000 or $(0.06) per basic and diluted share (based on 17.0 million weighted average shares outstanding), an improvement from a net loss of $1.9 million or $(0.14) per basic and diluted share in the same year-ago quarter (based on 13.3 million weighted average shares outstanding). 

At quarter-end, the company had $14.3 million in cash, cash equivalents and marketable securities.

Investor Conference Call
I.D. Systems management will discuss the results of the company’s operations and business outlook on a conference call today (Wednesday, May 2, 2018) at 4:45 p.m. Eastern time (1:45 p.m. Pacific time).

Company CEO Chris Wolfe and CFO Ned Mavrommatis will host the call, followed by a question and answer session where financial analysts and major institutional shareholders can ask questions.

U.S. dial-in: (877) 307-1379
International dial-in: (443) 877-4066
Conference ID: 2468678

The conference call will be broadcast simultaneously and available for replay in the investor section of the company’s website at www.id-systems.com.

If you have any difficulty connecting with the conference call, please contact I.D. Systems’ investor relations team at (949) 574-3860. 

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. Because I.D. Systems’ method for calculating the non-GAAP measures may differ from other companies’ methods, the non-GAAP measures may not be comparable to similarly titled measures reported by other companies. 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, Florida, 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 such as 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.id-systems.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; potential contract values; market forecasts; projections of earnings, revenues, synergies, accretion or other financial information; emerging new products; and plans, strategies and objectives of management for future operations, including growing revenue, controlling operating costs, increasing production volumes, and expanding business with core customers. 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, 2017. 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.

I.D. Systems Contact
Ned Mavrommatis, CFO
ned@id-systems.com
(201) 996-9000                                                                  

Investor Contact
Matt Glover
Liolios Group, Inc.
IDSY@liolios.com
(949) 574-3860

       
I.D. Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations Data
(Unaudited)
       
    Three Months Ended
March 31,
 
    2017     2018  
Revenue:                
Products   $ 4,334,000     $ 9,898,000  
Services     3,665,000       3,481,000  
      7,999,000       13,379,000  
                 
Cost of revenue:                
Cost of products     2,815,000       5,842,000  
Cost of services     1,034,000       1,075,000  
      3,849,000       6,917,000  
Gross profit     4,150,000       6,462,000  
Operating expenses:                
Selling, general and administrative expenses     4,653,000       5,696,000  
Research and development expenses     1,367,000       1,743,000  
      6,020,000       7,439,000  
Loss from operations     (1,870,000 )     (977,000 )
Interest income     56,000       77,000  
Interest expense     (73,000 )     (57,000 )
Other income (loss), net     1,000       (33,000
Net loss   $ (1,886,000 )   $ (990,000 )
Net loss per share - basic and diluted   $ (0.14 )   $ (0.06 )
Weighted average common shares outstanding - basic and diluted     13,261,000       16,981,000  
                 


       
I.D. Systems, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
       
    Three Months Ended
March 31,
 
    2017     2018  
             
Net loss attributable to common stockholders   $ (1,886,000 )   $ (990,000 )
Depreciation and amortization     159,000       393,000  
Stock-based compensation     713,000       494,000  
Foreign currency translation gains     (62,000 )     (181,000 )
Acquisition-related fees     -       179,000  
                 
Non-GAAP net loss   $ (1,076,000 )   $ (105,000 )
                 
Non-GAAP net loss per share - basic and diluted   $ (0.08 )   $ (0.01 )
                 

 

             
I.D. Systems, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
             
    December 31, 2017     March 31, 2018  
            (Unaudited)  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 5,097,000     $ 4,545,000  
Restricted cash     306,000       306,000  
Investments - short term     1,201,000       761,000  
Accounts receivable, net     8,746,000       9,505,000  
Financing receivables - current, net     1,295,000       943,000  
Inventory, net     4,586,000       4,737,000  
Deferred costs - current     4,296,000       4,312,000  
Prepaid expenses and other current assets     3,627,000       5,618,000  
                 
Total current assets     29,154,000       30,727,000  
                 
Investments - long term     10,278,000       8,674,000  
Financing receivables - less current portion     1,557,000       1,742,000  
Deferred costs - less current portion     4,302,000       3,896,000  
Fixed assets, net     2,747,000       2,613,000  
Goodwill     7,318,000       7,318,000  
Intangible assets, net     5,417,000       5,239,000  
Other assets     159,000       159,000  
    $ 60,932,000     $ 60,368,000  
                 
LIABILITIES                
Current liabilities:                
Accounts payable and accrued expenses   $ 7,440,000     $ 8,596,000  
Deferred revenue - current     9,711,000       8,654,000  
Acquisition related contingent consideration - current     1,923,000       1,956,000  
                 
Total current liabilities     19,074,000       19,206,000  
                 
Deferred revenue - less current portion     7,738,000       7,954,000  
Acquisition related contingent consideration - less current portion     854,000       877,000  
Deferred rent     295,000       274,000  
                 
      27,961,000       28,311,000  
                 
STOCKHOLDERS’ EQUITY                
Preferred stock     -       -  
Common stock     183,000       186,000  
Additional paid-in capital     133,569,000       134,485,000  
Accumulated deficit     (95,368,000 )     (96,358,000 )
Accumulated other comprehensive loss     (578,000 )     (775,000 )
Treasury stock     (4,835,000 )     (5,481,000 )
                 
Total stockholders’ equity     32,971,000       32,057,000  
Total liabilities and stockholders’ equity   $ 60,932,000     $ 60,368,000  
                 


       
I.D. Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flow Data
(Unaudited)
       
    Three Months Ended
March 31,
 
    2017     2018  
Cash flows from operating activities:                
                 
Net loss   $ (1,886,000 )   $ (990,000 )
Adjustments to reconcile net loss to cash used in operating activities:                
Bad debt expense     93,000       48,000  
Stock-based compensation expense     713,000       494,000  
Depreciation and amortization     159,000       393,000  
Inventory reserve     90,000       60,000  
Change in contingent consideration     -       56,000  
Other non-cash items     (15,000 )     13,000  
Changes in:                
Accounts receivable     47,000       (796,000
Financing receivables     357,000       167,000  
Inventory     734,000       (211,000
Prepaid expenses and other assets     377,000       (1,991,000
Deferred costs     153,000       390,000  
Deferred revenue     2,905,000       (841,000
Accounts payable and accrued expenses     (1,386,000 )     747,000  
Net cash provided by (used in) operating activities     2,341,000       (2,461,000
Cash flows from investing activities:                
Capital expenditures     (72,000 )     (81,000 )
Purchase of investments     (204,000 )     (709,000 )
Proceeds from the sale and maturities of investments     217,000       2,659,000  
Net cash (used in) provided by investing activities     (59,000 )     1,869,000  
Cash flows from financing activities:                
Borrowings under revolving credit facility     9,855,000       -  
Repayments under revolving credit facility     (11,581,000 )     -  
Proceeds from exercise of stock options     1,165,000       187,000  
Net cash (used in) provided by financing activities     (561,000 )     187,000  
Effect of foreign exchange rate changes on cash and cash equivalents     (26,000 )     (147,000 )
Net (decrease) increase in cash, cash equivalents and restricted cash     1,695,000       (552,000
Cash, cash equivalents and restricted cash - beginning of period     5,277,000       5,403,000  
Cash, cash equivalents and restricted cash - end of period   $ 6,972,000     $ 4,851,000  

 

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Source: I.D. Systems, Inc.