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I.D. Systems CEO Discusses Q2 2011 Results - Earnings Call Transcript

Stocks in this article: IDSY

The second quarter of 2011 was encouraging for I.D. Systems. We made progress toward our goals of growing revenue, controlling costs and achieving net profitability by the end of the year. Compared to the second quarter a year ago, revenues were up 39% to $8.3 million, SG&A and R&D expenses decreased 14% and 22% respectively, while gross margins remained strong and stable at 54%, and our GAAP net loss was cut in half.

On a non-GAAP basis, excluding stock-based compensation and depreciation and amortization of intangible assets, our net loss for the second quarter of 2011 was reduced by almost two-thirds compared to the second quarter of 2010.

Our strong revenue growth in the second quarter was driven by increased sales of our wireless industrial vehicle management systems to both new and existing customers, while recurring service contract revenue from Asset Intelligence remained stable and predictable.

Overall, revenue contribution was roughly equal between our vehicle management and transportation asset management businesses. We also had a relatively balanced mix of product and service revenue.

In our vehicle management business, our channel partners continued to make significant revenue contributions during the quarter, which is one of the keys to our growth. Our strategy of offering multiple tiers of vehicle management solutions also continued to be successful in the second quarter with customers often expressing initial interest in our simplified remotely-hosted subscription-based PowerBox system, then ultimately upgrading to our full feature, full service PowerFleet system.

Having more flexible options in functionality, support requirements, pricing and financing has helped increase the number of deals we win, resulting in an expanding customer base.

Further, roughly 150 organizations have deployed our technology at well over 500 sites. Including our transportation asset management business, we now have close to 600 customers at roughly 2,000 deployment sites. Our expanding growth result in more diversified sources of revenue for I.D. Systems, which is also one of our primary strategic goals.

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