For the three-month period ended December 31, 2009, revenues were $2.9 million, compared to $7.9 million for the three months ended December 31, 2008. Net loss for the fourth quarter of 2009 was $4.8 million, or ($0.43) per basic and diluted share, compared to net loss of $1.2 million, or ($0.11) per basic and diluted share, for the fourth quarter of 2008. The fourth quarter loss was impacted by $1.3 million in acquisition costs, a charge of $621,000 for inventory obsolescence, and $540,000 in stock-based compensation. Excluding these expenses, non-GAAP net loss for the fourth quarter of 2009 was $2.3 million, or ($0.21) per basic and diluted share. Gross margin for the fourth quarter of 2009 was 28%. Excluding the inventory reserve charge, gross margin for the period was 50%.
Revenues for the year ended December 31, 2009, were $10.3 million, compared to $27.0 million for 2008, and net loss for 2009 was $13.2 million, or ($1.20) per basic and diluted share, compared to net loss of $4.2 million, or ($0.38) per basic and diluted share, for 2008. Excluding the aforementioned acquisition costs, inventory reserve charge, and $2.2 million in stock-based compensation, non-GAAP net loss for the year was $9.1 million, or ($0.83) per basic and diluted share. Gross margin for the year was 46%. Excluding the inventory reserve charge, gross margin for 2009 was 52%.
Jeffrey Jagid, I.D. Systems’ chairman and CEO, said, “Our short term results did not meet our goals, as the global recession impacted technology spending across industrial markets. However, we established over 20 new customers in 2009, including global leaders in the automotive, aviation, food, and consumer packaged goods industries. This expansion of our customer base is a continuing testament to the economic value of our wireless technology and reflects our strategy of diversifying sources of revenue and transitioning initial system deployments into enterprise-scale implementations to drive long-term growth.
“I.D. Systems also achieved a significant milestone in the rental fleet management market in 2009, executing a multi-year contract with a leading U.S. rental car company to deploy our latest rental fleet management solutions in 2010.
“In addition,” continued Mr. Jagid, “we made two strategic acquisitions, most notably the Asset Intelligence business unit of General Electric, as announced in January, 2010. This is a transformational event for I.D. Systems, positioning us to become a preeminent provider of wireless technology for managing high-value corporate assets. Integrating Asset Intelligence into our business expands our range of asset tracking solutions, provides a recurring revenue stream that should help reduce quarterly revenue volatility, gives us immediate access to new customers, and enables operational efficiencies that should reduce our consolidated expenses by an estimated $8 million in 2010. With these revenue and cost synergies, we expect I.D. Systems to continue achieving strong gross margins and achieve profitability in 2011.
“Our balance sheet remains strong,” concluded Mr. Jagid. “As of December 31, 2009, before we closed on the acquisition of Asset Intelligence, I.D. Systems had cash, cash equivalents and investments of $48.5 million, excluding the Company’s $11.6 million line of credit, and more than $47 million of working capital.”
While maintaining investments in growth opportunities, I.D. Systems’ management continued to focus on cost controls in 2009.
Selling, general and administrative (SG&A) expenses for the fourth quarter and year ended December 31, 2009, were $4.9 million and $16.5 million, respectively, which included $1.3 million in acquisition costs. Excluding acquisition and stock-based compensation costs, SG&A expenses were $3.2 million for the quarter and $13.5 million for the year, 6% lower than the comparable figure for the year ended December 31, 2008.
Research and development (R&D) expenditures for the three months ended December 31, 2009, were $582,000. R&D expenses for the year were $2.6 million, 10% lower than the comparable figure in 2008.
Investor Conference Call
I.D. Systems will host a conference call for investors and analysts at 4:45 pm Eastern Standard Time on March 10, 2010. Jeffrey Jagid, I.D. Systems’ chairman and CEO, will lead a discussion on the year’s results and highlights. After opening remarks, there will be a question and answer period. The conference call will be broadcast live over the Internet via the Investors section of I.D. Systems’ website. To listen to the live call, go to the website at least 10 minutes early to download and install any necessary audio software.
To supplement its consolidated financial statements presented in accordance with 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. All non-GAAP measures included in this press release are accompanied by information for a reconciliation to the nearest GAAP measures.
About I.D. Systems
Based in Hackensack, New Jersey, with subsidiaries in Texas, Germany, and the United Kingdom, I.D. Systems (id-systems.com) is a leading provider of wireless solutions for securing, controlling, tracking, and managing high-value enterprise assets, including vehicles, powered equipment, trailers, containers, baggage, and cargo. The Company’s patented technologies address the needs of organizations to monitor and analyze their assets to improve safety, security, efficiency, and productivity.
“Safe Harbor” Statement
This press release contains forward looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, such as the Company’s prospects for additional customers and revenues. Forward-looking statements include statements with respect to the Company’s 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 the Company’s 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 forwardlooking statements. These forward-looking statements are subject to risk and uncertainties, including, but not limited to, future economic and business conditions, the loss of any of the Company’s key customers or reduction in the purchase of its products by any such customers, the failure of the market for the Company’s products to continue to develop, the inability to protect the Company’s intellectual property, the inability to manage the Company’s 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 the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2008. These risks could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the Company. The Company assumes no obligation to update the information contained in this press release.