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I.D. Systems, Inc. Reports Fourth Quarter And Year-End Financial Results For Fiscal 2010

Stocks in this article: IDSY

"Safe Harbor" Statement

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, 2009. 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, and expressly disclaims any obligation to do so, whether as a result of new information, future events or otherwise.                                                      

         
         
               
I.D. Systems, Inc. and Subsidiaries
Statement of Operations Data
     
  Three Months Ended Year Ended
  December 31, December 31,
  2009 2010 2009 2010
Revenues:        
Product revenues $2,103,000 $3,089,000   $6,470,000 $9,483,000
Service revenues 754,000 4,145,000   3,846,000   16,378,000
  2,857,000 7,234,000 10,316,000 25,861,000
Cost of revenues:        
Cost of products 1,591,000 1,730,000 3,882,000 5,077,000
Cost of services 463,000 1,472,000   1,672,000   6,363,000
  2,054,000 3,202,000 5,554,000 11,440,000
         
Gross profit 803,000 4,032,000 4,762,000 14,421,000
         
Selling, general and administrative expenses 4,924,000 5,739,000 16,543,000 23,326,000
Research and development expenses 582,000 1,067,000   2,604,000   4,429,000
Loss from operations (4,703,000) (2,774,000) (14,385,000) (13,334,000)
Interest income 19,000 100,000 933,000 675,000
Interest expense (43,000) (130,000) (56,000)
Other income (loss) (32,000) 10,000   390,000   104,000
         
Net loss $(4,759,000) $(2,664,000) $(13,192,000) $(12,611,000)
           
Net loss per share – basic and diluted $ (0.43) $ (0.24) $ (1.20) $ (1.12)
         
Weighted average common shares outstanding – basic and diluted 11,075,000 11,263,000   10,991,000   11,239,000
                       
I.D. Systems, Inc. and Subsidiary
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
         
  Three Months Ended December 31, 2009 Three Months Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2010
Net loss attributable to common stockholders     $ (4,759,000)    $ (2,664,000)   $ (13,192,000)     $ (12,611,000)  
Depreciation and amortization of intangible assets    129,000    988,000   533,000   2,435,000
Stock-based compensation     540,000   376,000   2,157,000    1,558,000
Non-GAAP net loss   $ (4,090,000)  $ (1,300,000)  $ (10,502,000)  $   (8,618,000)
Non-GAAP net loss per share – basic and diluted  $  (0.37)   $ (0.12)   $   (0.96)   $   (0.77) 
I.D. Systems, Inc. and Subsidiaries
Balance Sheet Data
     
  December 31, 2009* December 31, 2010
ASSETS    
Cash and cash equivalents  $   19,481,000 $  14,491,000
Investments – short term 33,909,000  4,565,000
Accounts receivable, net 3,252,000 7,044,000
Note and lease receivable – current --  353,000
Inventory, net 4,487,000 7,295,000
Interest receivable 97,000  53,000
Deferred costs – current -- 1,159,000
Prepaid expenses and other current assets 686,000 1,211,000
 Total current assets 61,912,000 36,171,000
     
Investments – long term 6,752,000 9,364,000
Note and lease receivable – less current portion -- 839,000
Deferred costs – less current portion -- 2,978,000
Fixed assets, net 917,000 3,853,000
Other assets -- 272,000
Goodwill 619,000 1,837,000
Intangible assets, net 375,000 5,571,000
  $  70,575,000  $ 60,885,000
     
LIABILITIES    
Accounts payable and accrued expenses $  2,094,0000  $ 9,141,000
Line of credit 11,638,000 --
Deferred revenue, current 501,000 2,186,000
 Total current liabilities 14,233,000 11,327,000
Deferred rent -- 199,000
Deferred revenue, less current portion 461,000 4,614,000
 Total liabilities 14,694,000  16,140,000
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; 12,284,000    and 12,491,000 shares issued at December 31, 2009 and 2010,  respectively; shares outstanding, 11,075,000 and 11,242,000 at  December 31, 2009 and 2010, respectively       120,000       121,000
Additional paid-in capital 103,596,000 105,156,000
Accumulated deficit (36,859,000) (49,470,000)
Accumulated other comprehensive (loss) income (60,000) (37,000)
  66,797,000 55,770,000
Treasury stock, at cost (10,916,000) (11,025,000)
 Total stockholders' equity 55,881,000 44,745,000
 Total liabilities and stockholders' equity  $      70,575,000 $    60,885,000
     
*Derived from audited balance sheet as of December 31, 2009.    
I.D. Systems, Inc. and Subsidiaries
Statement of Cash Flows Data
   
  Year ended December 31,
  2009 2010
Cash flows from operating activities:    
Net loss $  (13,192,000) $ (12,611,000)
Adjustments to reconcile net loss to cash used in operating activities:  
Inventory reserve 621,000 --
Accrued interest income 120,000 44,000
Stock-based compensation expense 2,157,000 1,558,000
Depreciation and amortization 533,000 2,435,000
Deferred rent expense (22,000) 188,000
Change in fair value of investments (338,000) --
Bad debt reserve -- 65,000
Changes in:    
Restricted cash 230,000 --
Accounts receivable  5,049,000 (611,000)
Note and lease receivable -- 199,000
Unbilled receivables 168,000 --
Inventory (1,815,000) 2,428,000
Prepaid expenses and other assets (320,000) 105,000
Deferred costs -- (3,442,000)
Deferred revenue 307,000 4,454,000
Accounts payable and accrued expenses (369,000) 1,593,000
Net cash used in operating activities (6,871,000) (3,595,000)
Cash flows from investing activities:    
Purchase of fixed assets (358,000) (1,459,000)
Business acquisition (518,000)  (15,000,000)
Purchase of investments (59,408,000)  (15,330,000)
Proceeds from sales and maturities of investments 62,439,000 42,107,000
Net cash provided by investing activities 2,155,000  10,318,000
Cash flows from financing activities:    
Proceeds from exercise of stock options 2,000 3,000
Borrowing on line of credit 12,900,000 --
Principal payments on line of credit  (1,262,000)  (11,638,000)
Purchase of treasury shares --  (99,000)
Net cash provided by (used in) financing activities 11,640,000 (11,734,000)
Effect of foreign exchange rate changes on cash and equivalents (1,000) 21,000
Net increase (decrease) in cash and cash equivalents 6,923,000 (4,990,000)
Cash and cash equivalents - beginning of period  12,558,000 19,481,000
Cash and cash equivalents - end of period  $ 19,481,000 $ 14,491,000
Supplemental disclosure of cash flow information:    
 Cash paid for interest  $ 130,000  $  56,000 
 Noncash activities:    
 Unrealized (loss) gain on investments  $ (107,000)  $ 46,000
 Shares withheld pursuant to stock issuance  $ 65,000  $ 10,000
Acquisition:    
Fair value of assets acquired $    748,000 $  20,746,000
Liabilities assumed (104,000)   (5,746,000)
Less contingent consideration (110,000) --
Less cash acquired (16,000) --
Net cash paid $ 518,000 $ 15,000,000
CONTACT: Ned Mavrommatis, CFO
         201-996-9000; fax: 201-996-9144
         ned@id-systems.com

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