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I.D. Systems Reports Fourth Quarter And Full Year 2013 Results

WOODCLIFF LAKE, N.J., March 6, 2014 (GLOBE NEWSWIRE) -- I.D. Systems, Inc. (Nasdaq:IDSY), a leading provider of wireless M2M solutions for tracking, securing and managing high-value enterprise assets, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2013.

Fourth Quarter 2013 Financial Results

  • Revenue increased 7% to $11.4 million from $10.7 million in the fourth quarter of 2012, driven by sales of industrial vehicle and transportation asset management systems, which increased 18% and 8%, respectively, compared to the fourth quarter of 2012.  
  • Recurring revenue, derived primarily from the company's transportation asset management systems, was $4.5 million, or 40% of total revenue.  
  • Inventory reserve increased by $2.1 million, as a result of the company's latest generation of wireless M2M technology rendering older products obsolete. This non-cash charge had a direct impact on the cost of sales and gross margins for the quarter and year; however, it had no effect on cash.  
  • Excluding the inventory reserve charge, non-GAAP gross margin was 48%, compared to non-GAAP gross margin of 46% in the fourth quarter of 2012. GAAP gross margin was 30% for the quarter, compared to 45% in the same period a year ago.  
  • Fourth quarter selling, general and administrative costs and research & development expenses were unchanged year-over year, at $5.7 million and $1.0 million, respectively.  
  • Excluding the inventory reserve charge, stock-based compensation, and depreciation and amortization, non-GAAP net loss was $155,000, or $(0.01) per basic and diluted share, compared to non-GAAP net loss of $215,000, or $(0.02) per basic and diluted share, in the same period a year ago.  
  • Net loss totaled $3.1 million, or $(0.26) per basic and diluted share, compared to net loss of $1.0 million, or $(0.09) per basic and diluted share, in the fourth quarter of 2012. 

Fourth Quarter 2013 Operational Highlights

  • Recurring business from core customers, including 3M, Alcoa, Bridgestone, Caterpillar, CNH, Ford Motor Company, Forward Air, General Mills, John Deere, Knight Transportation, Meijer, Nestlé, Price Chopper, Procter & Gamble, Swift Transportation, the U.S. Postal Service, and Walmart.  
  • Initial orders for system implementations from new customers, including a global healthcare company, a major manufacturer of oil & gas production equipment, a U.S. airline, a leading aircraft components supplier, a frozen food distributor, and, in the U.K., the BMW Group.  
  • Significant revenue contributions from channel partners (primarily industrial truck manufacturers and their dealers), which sold I.D. Systems' solutions to a wide range of end users, including two Fortune 500 retailers, two national grocery chains, three leading specialty retailers, two global automotive industry manufacturers, the world's leading recreational products manufacturer, a major steel maker, a leading food producer, distributors of beverages and household goods, and a variety of other companies.  
  • New product developments, including a fourth-generation on-vehicle computer for controlling and monitoring industrial trucks, two new cellular products for tracking trailer chassis and intermodal containers, an enhanced rental vehicle management device, and advances in the metrics provided by I.D. Systems Analytics.

Full Year 2013 Financial Results

  • Revenue was $39.9 million, compared to $44.6 million in 2012. The decrease was attributable to a $6.9 million decrease in revenue from rental fleet management systems, from $8.0 million to $1.1 million, partially offset by a $2.2 million increase in revenue from industrial vehicle and transportation asset management systems. The decrease in rental fleet management revenue reflects completion of the first phase of the company's agreement with Avis Budget Group in 2012.  
  • Recurring revenue increased 2% to $17.7 million, or 44% of total revenue, from $17.3 million, or 39% of total revenue, in 2012.  
  • Excluding the inventory reserve charge, non-GAAP gross margin was 50%, compared to non-GAAP gross margin of 52% in 2012. GAAP gross margin was 45% for the year, compared to 51% in 2012.  
  • Selling, general & administrative expenses decreased 3% to $21.8 million from $22.4 million in 2012, as management continued to closely monitor labor and other overhead costs.  
  • Research and development expenses increased to $4.4 million from $4.3 million a year ago, reflecting the company's continued investments in a new generation of wireless M2M products.  
  • Excluding the inventory reserve charge, stock-based compensation, and depreciation and amortization, non-GAAP net loss was $2.1 million, or $(0.18) per basic and diluted share, compared to non-GAAP net income of $748,000, or $0.06 per basic and diluted share, in 2012.  
  • Net loss was $7.5 million, or $(0.63) per basic and diluted share, compared to a net loss of $2.6 million, or $(0.22) per basic and diluted share, in 2012.  
  • As of December 31, 2013, the company had $14.1 million in cash, cash equivalents and marketable securities, equating to $1.15 per share outstanding, and no debt. As of December 31, 2012, the company had $15.8 million in cash, cash equivalents and marketable securities.

Results for the fourth quarter and full year 2013 include an income tax benefit of $63,000, and results for the fourth quarter and full year 2012 include an income tax benefit of $662,000, from the sale of a portion of the company's New Jersey net operating losses under the State's Technology Business Tax Certificate Transfer Program, which allows qualified New Jersey-based technology businesses to sell unused amounts of net operating loss carryforwards and research and development tax credits for cash.

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