Revenue Up 20% Year-Over-Year to $10.7 Million, Driving Non-GAAP Profitability
Woodcliff Lake, NJ — August 3, 2017 — I.D. Systems, Inc. (NASDAQ: IDSY), a leading provider of enterprise asset management technology and solutions for the Industrial Internet of Things, reported results for the second quarter ended June 30, 2017.
Management Commentary
“We are encouraged by the strong topline growth we delivered in the second quarter, which marked the highest revenue level in two years,” said I.D. Systems CEO Chris Wolfe. “This achievement was driven by solid contributions across our business, particularly our industrial truck management segment, where we received significant orders from two leading auto manufacturers, as well as the initial contribution from our multi-year agreement with Avis Budget Group. The second quarter was also highlighted by non-GAAP profitability for the period, enabled by our reduced level of operating expenses.
“A key initiative going forward in the industrial truck management market is to target the small- and mid-tier segment―which represents a considerable growth opportunity―while continuing to pursue the enterprise market. To supplement this organic growth strategy, we acquired substantially all of the assets of Keytroller, a manufacturer and marketer of electronic products for managing forklifts and construction vehicles. Keytroller bolsters I.D. Systems’ distribution and market position in the small to mid-tier space through its expansive network of lift truck dealers, and by adding its highly synergistic product mix, sales cycle and customer base.
“We have entered the second half of 2017 with strong financial and operational momentum, putting us on track to achieve our financial goal of achieving sustained non-GAAP profitability. Our acquisition of Keytroller positions us to achieve a more predictable, profitable revenue stream from a more diverse and expansive customer base. Today, I.D. Systems is an unmatched single source of fleet management technology for industrial truck owners and operators, which will help us compete more effectively and diversify our revenue sources and, ultimately, drive long-term sustainable growth and shareholder value.”
Second Quarter 2017 Financial Results
Revenue increased 34% to $10.7 million from $8.0 million in the prior quarter and increased 20% from $8.9 million in same year-ago period. The increase was primarily due to higher vehicle management systems (VMS) revenue and initial revenue contribution from the company’s agreement with Avis Budget Group.
Recurring revenue increased 9% to $4.7 million from $4.3 million in the same period a year ago.
Gross margin was 51.8% compared to 53.1% in the same period a year ago.
Selling, general and administrative expenses were $5.2 million, compared to $5.0 million in the same year-ago period. The increase was due to professional fees related to the company’s acquisition of Keytroller, which was announced in July.
Research and development expenses were $0.9 million, compared to $1.2 million in same year-ago quarter.
Excluding stock-based compensation, depreciation and amortization, and foreign currency translation losses, non-GAAP net income totaled $83,000 or $0.01 per basic and diluted share, compared to non-GAAP net loss of $(623,000) or $(0.05) per basic and diluted share in the same year-ago quarter.
Net loss totaled $524,000 or $(0.04) per basic and diluted share, compared to a net loss of $1.5 million or $(0.12) per basic and diluted share in the same year-ago quarter.
For the six-month period ended June 30, 2017, net cash provided by operations was $5.7 million, compared to net cash used in operations of $17,000 in the same period of 2016.
At quarter-end, the company had $10.3 million in cash, cash equivalents and marketable securities, compared to $8.6 million at the end of the prior quarter. On a pro forma basis, including the net proceeds from the sale of common stock in an underwritten public offering completed in July 2017 and the acquisition of Keytroller, the company had $19.5 million in cash, cash equivalents and marketable securities, and 17.4 million shares outstanding.
Investor Conference Call
I.D. Systems management will discuss the results of the company’s operations and business outlook on a conference call today (Thursday, August 3, 2017) 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: 55295290
The conference call will be broadcast simultaneously and available for replay for 90 days in the investor section of the company’s website at idsy2019.wpengine.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.
