ID Systems Inc. (IDSY) Q4 2011 Earnings Call March 01, 2012 04:45 pm ET Executives Jeff Jagid - Chairman & CEO Ned Mavrommatis - CFO Darryl Miller - COO Kenneth Ehrman - President Analysts Morris Ajzenman - Griffin Securities Orin Hirschman - AIGH Investment Partners Michael Cikos - Sidoti & Company Walter Schenker - MAZ Partners Presentation Operator
These risks could cause the company’s actual results for the current fiscal year and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of the company.The fourth quarter of 2011 continued the positive momentum we reported at the end of Q3. Our Q4 revenue of $11.8 million is our highest quarterly revenue achievement to date, a 64% year-over-year improvement from Q4 2010 and a 5% sequential increase over Q3, 2011. The fourth quarter 2011 also marks our sixth consecutive quarter of sequential revenue growth. Our performance was driven by increased sales across all of our wireless asset management product segments including continued expansion of our rental car management system for Avis, the continued strong resurgence of our material handling and fleet management business and robust growth from our trailer and container tracking solutions. In addition to achieving record revenue, we maintained a strong stable gross margin north of 50% for the quarter and continue to adhere to the cost reduction plan we put in place at the end of 2010. As a result, we broke even on a GAAP basis for Q4 and increased our non-GAAP net income to $0.07 per share from $0.06 in the prior quarter. For the full year, I am very pleased to report that we achieved essentially all of the goals we set out to accomplish. We increased revenue to 52% to a record 39.3 million with success in every strategic area including expansion of business with core customers, new product and market developments and new customer wins through both direct and indirect sales channels. We continue to book a substantial volume of recurring revenue, $16.4 million or 42% of total revenue in 2011. We maintained a healthy 52% gross margin for the year, exceeding our historical target of 50%. We reduced overhead expenses by $2.3 million or 8% overall which is a particularly notable achievement when you consider it side by side with our 52% revenue increase. And we significantly reduced our net loss by more than two-thirds on a GAAP basis and by 94% on a non-GAAP basis as Ned will discuss in a moment.
Needless to say, we are gratified by the success of our growth strategy in 2011 and very happy to meet so many goals for our shareholders. We look forward to carrying the positive momentum of 2011 forward in to 2012 and continuing our efforts to grow top line revenue, increase predictable recurring revenue, extend our technical market leadership, expand in vertical and international markets, maintain our cost discipline and increase shareholder value.Thank you for your time today. I’ll look forward to your questions later on the call. Now let me turn the discussion over to Ned Mavrommatis, our CFO to detail our financial results for the fourth quarter and full year 2011. Ned Mavrommatis Thank you Jeff and hello to everyone on the call today. As Jeff noted, our revenue for the fourth quarter ended December 31 2011 increased 64% to a record $11.8 million from $7.2 million for the fourth quarter of 2010. For the full year, revenue increased 52% to $39.3 million another record compared to $25.9 million in 2010. Recurring revenues for the quarter and year were $4.1 million and $16.4 million respectively or a 35% and 42% of total revenues respectively. Our Vehicle Management Business including rental fleet management contributed $6.7 million in revenue for the quarter while our transportation asset management business contributed $5.2 million. For the full year, the corresponding contributions were $22.1 million and $17.2 million respectively. Our gross margins for the fourth quarter and full year were 51% and 52% respectively in line with expectations and past performance. Our consistent strong margins reflect continued price stability for our systems, high margins on recurring revenue from our Asset Intelligence Business and controlled operating cost. Read the rest of this transcript for free on seekingalpha.com