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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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22-3270799
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification No.)
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123 Tice Boulevard, Woodcliff Lake,
New Jersey
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07677
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
þ
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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PART I — FINANCIAL INFORMATION
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Item 1. Financial Statements
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Condensed Consolidated Balance Sheets as of December 31, 2010 and June 30, 2011 (unaudited)
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1
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Condensed Consolidated Statements of Operations (unaudited) — for the three and six months ended June 30, 2010 and 2011
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2
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Condensed Consolidated Statement of Changes in Stockholders’ Equity (unaudited) — for the six months ended June 30, 2011
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3
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Condensed Consolidated Statements of Cash Flows (unaudited) — for the six months ended June 30, 2010 and 2011
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4
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Notes to Unaudited Condensed Consolidated Financial Statements
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5
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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22
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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32
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Item 4. Controls and Procedures
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33
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PART II — OTHER INFORMATION
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Item 1. Legal Proceedings
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34
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Item 1A. Risk Factors
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34
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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34
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Item 6. Exhibits
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34
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Signatures
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35
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Exhibit 10.1
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Exhibit 10.2
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Exhibit 31.1
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Exhibit 31.2
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Exhibit 32
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December 31,
2010*
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June 30,
2011
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|||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$ | 14,491,000 | $ | 8,688,000 | ||||
Investments – short term
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4,565,000 | 6,207,000 | ||||||
Interest receivable
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53,000 | 50,000 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $161,000 and $287,000 in 2010 and 2011, respectively
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7,044,000 | 6,177,000 | ||||||
Notes and sales-type lease receivable - current
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353,000 | 187,000 | ||||||
Unbilled receivables
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— | 135,000 | ||||||
Inventory, net
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7,295,000 | 7,311,000 | ||||||
Prepaid expenses and other current assets
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1,211,000 | 1,821,000 | ||||||
Deferred costs – current
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1,159,000 | 2,087,000 | ||||||
Total current assets
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36,171,000 | 32,663,000 | ||||||
Investments – long term
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9,364,000 | 9,050,000 | ||||||
Notes and sales-type lease receivable – less current portion
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839,000 | 943,000 | ||||||
Deferred costs – less current portion
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2,978,000 | 2,774,000 | ||||||
Fixed assets, net
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3,853,000 | 3,310,000 | ||||||
Goodwill
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1,837,000 | 1,837,000 | ||||||
Intangible assets, net
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5,571,000 | 4,984,000 | ||||||
Other assets
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272,000 | 272,000 | ||||||
$ | 60,885,000 | $ | 55,833,000 | |||||
LIABILITIES
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||||||||
Current liabilities:
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||||||||
Accounts payable and accrued expenses
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$ | 9,141,000 | $ | 7,441,000 | ||||
Deferred revenue
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2,186,000 | 2,963,000 | ||||||
Total current liabilities
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11,327,000 | 10,404,000 | ||||||
Deferred rent
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199,000 | 284,000 | ||||||
Deferred revenue
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4,614,000 | 4,172,000 | ||||||
16,140,000 | 14,860,000 | |||||||
Commitments and Contingencies (Note 23)
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||||||||
STOCKHOLDERS’ EQUITY
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||||||||
Preferred stock; authorized 5,000,000 shares, $0.01 par value; none issued
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— | — | ||||||
Common stock; authorized 50,000,000 shares, $0.01 par value; 12,491,000 and 12,546,000 shares issued at December 31, 2010 and June 30, 2011, respectively; shares outstanding, 11,242,000 and 11,124,000 at December 31, 2010 and June 30, 2011, respectively
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121,000 | 121,000 | ||||||
Additional paid-in capital
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105,156,000 | 105,846,000 | ||||||
Accumulated deficit
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(49,470,000 | ) | (53,278,000 | ) | ||||
Accumulated other comprehensive (loss) income
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(37,000 | ) | 81,000 | |||||
55,770,000 | 52,770,000 | |||||||
Treasury stock; 1,249,000 shares and 1,422,000 shares at cost at December 31, 2010 and June 30, 2011, respectively
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(11,025,000 | ) | (11,797,000 | ) | ||||
Total stockholders’ equity
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44,745,000 | 40,973,000 | ||||||
Total liabilities and stockholders’ equity
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$ | 60,885,000 | $ | 55,833,000 |
Three months ended
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Six months ended
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|||||||||||||||
June 30,
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June 30,
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|||||||||||||||
2010
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2011
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2010
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2011
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|||||||||||||
Revenue:
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||||||||||||||||
Products
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$ | 1,829,000 | $ | 3,959,000 | $ | 3,852,000 | $ | 7,763,000 | ||||||||
Services
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4,184,000 | 4,374,000 | 8,285,000 | 8,404,000 | ||||||||||||
6,013,000 | 8,333,000 | 12,137,000 | 16,167,000 | |||||||||||||
Cost of revenue:
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||||||||||||||||
Cost of products
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865,000 | 2,345,000 | 1,840,000 | 4,526,000 | ||||||||||||
Cost of services
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1,532,000 | 1,510,000 | 3,296,000 | 3,002,000 | ||||||||||||
2,397,000 | 3,855,000 | 5,136,000 | 7,528,000 | |||||||||||||
Gross profit
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3,616,000 | 4,478,000 | 7,001,000 | 8,639,000 | ||||||||||||
Selling, general and administrative expenses
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6,689,000 | 5,726,000 | 13,163,000 | 10,821,000 | ||||||||||||
Research and development expenses
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1,119,000 | 870,000 | 2,273,000 | 1,776,000 | ||||||||||||
Loss from operations
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(4,192,000 | ) | (2,118,000 | ) | (8,435,000 | ) | (3,958,000 | ) | ||||||||
Interest income
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187,000 | 53,000 | 396,000 | 100,000 | ||||||||||||
Interest expense
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(25,000 | ) | - | (55,000 | ) | - | ||||||||||
Other income, net
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4,000 | 22,000 | 5,000 | 50,000 | ||||||||||||
Net loss
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$ | (4,026,000 | ) | $ | (2,043,000 | ) | $ | (8,089,000 | ) | $ | (3,808,000 | ) | ||||
Net loss per share — basic and diluted
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$ | (0.36 | ) | $ | (0.19 | ) | $ | (0.72 | ) | $ | (0.35 | ) | ||||
Weighted average common shares outstanding — basic and diluted
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11,138,000 | 10,819,000 | 11,158,000 | 10,866,000 |
Accumulated
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||||||||||||||||||||||||||||
Common Stock
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Additional
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Other
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||||||||||||||||||||||||||
Number of
Shares
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Amount
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Paid-in
Capital
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Accumulated
Deficit
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Comprehensive
Loss
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Treasury
Stock
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Stockholders’
Equity
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||||||||||||||||||||||
Balance at December 31, 2010
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12,491,000 | $ | 121,000 | $ | 105,156,000 | $ | (49,470,000 | ) | $ | (37,000 | ) | $ | (11,025,000 | ) | $ | 44,745,000 | ||||||||||||
Net loss
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(3,808,000 | ) | (3,808,000 | ) | ||||||||||||||||||||||||
Comprehensive gain— unrealized gain on investments
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— | — | — | — | 46,000 | — | 46,000 | |||||||||||||||||||||
Foreign currency translation adjustment
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— | — | — | — | 72,000 | — | 72,000 | |||||||||||||||||||||
Total comprehensive loss
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(3,690,000 | ) | ||||||||||||||||||||||||||
Shares repurchased
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— | — | — | — | — | (725,000 | ) | (725,000 | ) | |||||||||||||||||||
Shares issued pursuant to exercise of stock options
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32,000 | — | 74,000 | 74,000 | ||||||||||||||||||||||||
Issuance of restricted stock
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63,000 | — | — | — | — | — | — | |||||||||||||||||||||
Forfeiture of restricted shares
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(40,000 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Shares withheld pursuant to stock issuances
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(47,000 | ) | (47,000 | ) | ||||||||||||||||||||||||
Stock based compensation —restricted stock
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— | — | 178,000 | — | — | — | 178,000 | |||||||||||||||||||||
Stock based compensation — options and performance shares
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— | — | 438,000 | — | — | — | 438,000 | |||||||||||||||||||||
Balance at June 30, 2011 (Unaudited)
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12,546,000 | $ | 121,000 | $ | 105,846,000 | $ | (53,278,000 | ) | $ | 81,000 | $ | (11,797,000 | ) | $ | 40,973,000 |
Six Months Ended
June 30,
|
||||||||
2010
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2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
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$ | (8,089,000 | ) | $ | (3,808,000 | ) | ||
Adjustments to reconcile net loss to cash used in operating activities:
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||||||||
Bad debt expense
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53,000 | 158,000 | ||||||
Accrued interest income
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23,000 | 3,000 | ||||||
Stock-based compensation expense
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893,000 | 616,000 | ||||||
Depreciation and amortization
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970,000 | 1,212,000 | ||||||
Deferred rent expense
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- | 86,000 | ||||||
Changes in:
|
||||||||
Accounts receivable
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571,000 | 752,000 | ||||||
Unbilled receivables
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— | (135,000 | ) | |||||
Note and lease receivable
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149,000 | 61,000 | ||||||
Inventory
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1,131,000 | (13,000 | ) | |||||
Prepaid expenses and other assets
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(625,000 | ) | (611,000 | ) | ||||
Deferred costs
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(1,104,000 | ) | (723,000 | ) | ||||
Deferred revenue
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919,000 | 336,000 | ||||||
Accounts payable and accrued expenses
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(401,000 | ) | (1,623,000 | ) | ||||
Net cash used in operating activities
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(5,510,000 | ) | (3,689,000 | ) | ||||
Cash flows from investing activities:
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||||||||
Expenditures for fixed assets including website development costs
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(961,000 | ) | (82,000 | ) | ||||
Business acquisition
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(15,000,000 | ) | — | |||||
Purchase of investments
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(2,751,000 | ) | (2,889,000 | ) | ||||
Proceeds from sales and maturities of investments
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22,017,000 | 1,606,000 | ||||||
Net cash provided by (used in) investing activities
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3,305,000 | (1,365,000 | ) | |||||
Cash flows from financing activities:
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||||||||
Proceeds from exercise of stock options
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3,000 | 35,000 | ||||||
Purchase of treasury shares
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— | (725,000 | ) | |||||
Principal payments on line of credit
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(10,477,000 | ) | — | |||||
Net cash used in financing activities
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(10,474,000 | ) | (690,000 | ) | ||||
Effect of foreign exchange rate changes on cash and cash equivalents
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(34,000 | ) | (59,000 | ) | ||||
Net decrease in cash and cash equivalents
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(12,713,000 | ) | (5,803,000 | ) | ||||
Cash and cash equivalents — beginning of period
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19,481,000 | 14,491,000 | ||||||
Cash and cash equivalents — end of period
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$ | 6,768,000 | 8,688,000 | |||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for:
|
||||||||
Taxes
|
- | — | ||||||
Interest
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$ | 55,000 | — | |||||
Noncash activities:
|
||||||||
Unrealized gain on investments
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$ | 88,000 | $ | 46,000 | ||||
Shares withheld pursuant to stock issuance
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$ | 10,000 | $ | 47,000 | ||||
Acquisition:
|
||||||||
Fair value of assets acquired
|
$ | 19,695,000 | ||||||
Liabilities assumed
|
(4,695,000 | ) | ||||||
Net cash paid in 2010
|
$ | 15,000,000 |
Fair Value
|
||||
Due within one year
|
$ | 2,673,000 | ||
Due one year through three years
|
8,656,000 | |||
Due after three years
|
394,000 | |||
$ | 11,723,000 |
Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Fair
Value
|
|||||||||||||
Investments — short term
|
||||||||||||||||
Available for sale
|
||||||||||||||||
U.S. Treasury Notes
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Mutual funds
|
3,562,000 | - | (28,000 | ) | 3,534,000 | |||||||||||
Corporate bonds and commercial paper
|
1,210,000 | 10,000 | - | 1,220,000 | ||||||||||||
Government agency bonds
|
1,452,000 | 1,000 | - | 1,453,000 | ||||||||||||
Total available for sale — short term
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6,224,000 | 11,000 | (28,000 | ) | 6,207,000 | |||||||||||
Marketable securities — long term
|
||||||||||||||||
Available for sale
|
||||||||||||||||
U.S. Treasury Notes
|
5,707,000 | 18,000 | - | 5,725,000 | ||||||||||||
Government agency bonds
|
766,000 | 4,000 | - | 770,000 | ||||||||||||
Corporate bonds and commercial paper
|
2,529,000 | 26,000 | 2,555,000 | |||||||||||||
Total available for sale — long term
|
9,002,000 | 48,000 | - | 9,050,000 | ||||||||||||
Total investments
|
$ | 15,226,000 | $ | 59,000 | $ | (28,000 | ) | $ | 15,257,000 |
|
•
|
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
|
|
•
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
|
•
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Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
|
December 31,
2010
|
June 30,
2011
|
|||||||
Deferred activation fees
|
$ | 96,000 | $ | 173,000 | ||||
Deferred industrial equipment installation revenue
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367,000 | 105,000 | ||||||
Deferred maintenance revenue
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798,000 | 1,263,000 | ||||||
Deferred remote asset management product revenue
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5,539,000 | 5,594,000 | ||||||
6,800,000 | 7, 135,000 | |||||||
Less: Current portion
|
2,186,000 | 2,963,000 | ||||||
Deferred revenue – less current portion
|
$ | 4,614,000 | $ | 4,172,000 |
Year ending December 31:
|
||||
July - December 2011
|
$ | 120,000 | ||
2012
|
255,000 | |||
2013
|
276,000 | |||
2014
|
177,000 | |||
2015
|
16,000 | |||
Thereafter
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5,000 | |||
849,000 | ||||
Less: Current portion
|
120,000 | |||
Sales-type lease receivable – less current portion
|
$ | 729,000 |
December 31,
2010
|
June 30,
2011
|
|||||||
Deferred contract costs
|
$ | 694,000 | $ | 1,409,000 | ||||
Deferred product costs
|
3,443,000 | 3,452,000 | ||||||
4,137,000 | 4,861,000 | |||||||
Less: Current portion
|
1,159,000 | 2,087,000 | ||||||
$ | 2,978,000 | $ | 2,774,000 |
December 31,
2010
|
June 30,
2011
|
|||||||
Components
|
$ | 4,244,000 | $ | 3,972,000 | ||||
Finished goods
|
3,051,000 | 3,339,000 | ||||||
$ | 7,295,000 | $ | 7,311,000 |
December 31,
2010
|
June 30,
2011
|
|||||||
Equipment
|
$ | 1,026,000 | $ | 1,030,000 | ||||
Computer software
|
2,982,000 | 3,082,000 | ||||||
Computer hardware
|
1,751,000 | 1,729,000 | ||||||
Furniture and fixtures
|
329,000 | 329,000 | ||||||
Automobiles
|
47,000 | 47,000 | ||||||
Leasehold improvements
|
246,000 | 246,000 | ||||||
6,381,000 | 6,463,000 | |||||||
Accumulated depreciation and amortization
|
(2,528,000 | ) | (3,153,000 | ) | ||||
$ | 3,853,000 | $ | 3,310,000 |
Current assets, excluding inventory
|
$ | 4,709,000 | ||
Inventory
|
5,236,000 | |||
Other assets, net
|
3,218,000 | |||
Current liabilities
|
(5,746,000 | ) | ||
Intangibles
|
6,365,000 | |||
Goodwill
|
1,218,000 | |||
Fair value of assets acquired
|
$ | 15,000,000 |
Three Months
|
Six Months
|
|||||||
Ended
|
Ended
|
|||||||
June 30, 2010
|
June 30, 2010
|
|||||||
Revenues
|
$ | 3,847,000 | $ | 7,772,000 | ||||
Operating loss
|
(1,319,000 | ) | (2,121,000 | ) |
Six Months
|
||||||||
Six Months
|
Ended
|
|||||||
Ended
|
June 30, 2010
|
|||||||
June 30, 2010
|
Pro Forma
|
|||||||
Historical
|
Combined
|
|||||||
Revenue
|
$ | 12,137,000 | $ | 12,379,000 | ||||
Net loss
|
(8,089,000 | ) | (8,020,000 | ) | ||||
Net loss per share — basic and diluted
|
(0.72 | ) | (0.71 | ) |
June 30, 2011
|
Useful
Lives
(In Years)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||||
Amortized:
|
||||||||||||||
Patents
|
11
|
$ | 1,489,000 | $ | (203,000 | ) | $ | 1,286,000 | ||||||
Tradename
|
5
|
200,000 | (60,000 | ) | 140,000 | |||||||||
Non-competition agreement
|
3
|
234,000 | (117,000 | ) | 117,000 | |||||||||
Technology
|
5
|
50,000 | (17,000 | ) | 33,000 | |||||||||
Workforce
|
5
|
33,000 | (11,000 | ) | 22,000 | |||||||||
Customer relationships
|
5
|
4,499,000 | (1,352,000 | ) | 3,147,000 | |||||||||
6,505,000 | (1,760,000 | ) | 4,745,000 | |||||||||||
Unamortized:
|
||||||||||||||
Customer list
|
104,000 | — | 104,000 | |||||||||||
Trademark and Tradename
|
135,000 | — | 135,000 | |||||||||||
239,000 | — | 239,000 | ||||||||||||
Total
|
$ | 6,744,000 | $ | (1,760,000 | ) | $ | 4,984,000 |
December 31, 2010
|
Useful
Lives
(In Years)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||||
Amortized:
|
||||||||||||||
Patents
|
11
|
$ | 1,489,000 | $ | (135,000 | ) | $ | 1,354,000 | ||||||
Tradename
|
5
|
200,000 | (40,000 | ) | 160,000 | |||||||||
Non-competition agreement
|
3
|
234,000 | (78,000 | ) | 156,000 | |||||||||
Technology
|
5
|
50,000 | (12,000 | ) | 38,000 | |||||||||
Workforce
|
5
|
33,000 | (8,000 | ) | 25,000 | |||||||||
Customer relationships
|
5
|
4,499,000 | (900,000 | ) | 3,599,000 | |||||||||
6,505,000 | (1,173,000 | ) | 5,332,000 | |||||||||||
Unamortized:
|
||||||||||||||
Customer list
|
104,000 | — | 104,000 | |||||||||||
Trademark and Tradename
|
135,000 | — | 135,000 | |||||||||||
239,000 | $ | — | 239,000 | |||||||||||
Total
|
$ | 6,744,000 | $ | (1,173,000 | ) | $ | 5,571,000 |
Year ending December 31:
|
||||
July – December 2011
|
$ | 583,000 | ||
2012
|
1,170,000 | |||
2013
|
1,091,000 | |||
2014
|
1,086,000 | |||
2015
|
135,000 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2010
|
2011
|
2010
|
2011
|
|||||||||||||
Basic and diluted loss per share
|
||||||||||||||||
Net loss
|
$ | (4,026,000 | ) | $ | (2,043,000 | ) | $ | (8,089,000 | ) | $ | (3,808,000 | ) | ||||
Weighted-average shares outstanding
|
11,138,000 | 10,819,000 | 11,158,000 | 10,866,000 | ||||||||||||
Basic and diluted net loss per share
|
$ | (0.36 | ) | $ | (0.19 | ) | $ | (0.72 | ) | $ | (0.35 | ) |
Options
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding at beginning of year
|
2,666,000 | $ | 7.34 | ||||||||||
Granted
|
135,000 | 4.55 | |||||||||||
Exercised
|
(32,000 | ) | 2.35 | ||||||||||
Expired
|
(17,000 | ) | 5.60 | ||||||||||
Forfeited
|
(67,000 | ) | 7.58 | ||||||||||
Outstanding at end of period
|
2,685,000 | $ | 7.26 |
6 years
|
$ | 1,372,000 | |||||||
Exercisable at end of period
|
1,583,000 | $ | 9.63 |
4 years
|
$ | 162,000 |
June 30,
|
||||||||
2010
|
2011
|
|||||||
Expected volatility
|
53% - 59 | % | 54.1% - 57.2 | % | ||||
Expected life of options
|
3 - 5 years
|
3 - 5 years
|
||||||
Risk free interest rate
|
2 | % | 2 | % | ||||
Dividend yield
|
0 | % | 0 | % | ||||
Weighted average fair value of options granted during the period
|
$ | 1.34 | $ | 1.91 |
Non-vested
Shares
|
Weighted-
Average
Grant Date
Fair Value
|
|||||||
Non-vested, beginning of year
|
319,000 | $ | 3.07 | |||||
Granted
|
63,000 | 4.55 | ||||||
Vested
|
(15,000 | ) | 3.25 | |||||
Forfeited
|
— | — | ||||||
Non-vested, end of period
|
367,000 | $ | 3.32 |
Six Months Ended
June 30,
|
||||||||
2010
|
2011
|
|||||||
Accrued warranty reserve, beginning of period
|
$ | 2,053,000 | $ | 2,069,000 | ||||
Additional warranty reserve based on final allocation of the purchase price
|
604,000 | — | ||||||
2,657,000 | 2,069,000 | |||||||
Accrual for product warranties issued
|
57,000 | 140,000 | ||||||
Product replacements and other warranty expenditures
|
(598,000 | ) | (422,000 | ) | ||||
Expiration of warranties
|
(11,000 | ) | (147,000 | ) | ||||
Accrued warranty reserve, end of period
|
$ | 2,105,000 | $ | 1,640,000 |
For the three months ended
|
For the six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2010
|
2011
|
2010
|
2011
|
|||||||||||||
Net loss
|
(4,026,000
|
)
|
$
|
(2,043,000
|
)
|
$
|
(8,089,000
|
)
|
$
|
(3,808,000
|
)
|
|||||
Unrealized gain on available-for-sale marketable securities
|
22,000
|
56,000
|
88,000
|
46,000
|
||||||||||||
Foreign currency translation
|
(64,000
|
)
|
10,000
|
(89,000
|
)
|
72,000
|
||||||||||
Total other comprehensive loss
|
$
|
(4,068,000
|
)
|
$
|
(1,977,000
|
)
|
$
|
(8,090,000
|
)
|
$
|
(3,690,000
|
)
|
Foreign
currency
translation
gains
(losses)
|
Unrealized
gain (losses)
on
investments
|
Accumulated
other
comprehensive
income
|
||||||||||
Balance at January 1, 2011
|
$ | (22,000 | ) | $ | (15,000 | ) | $ | (37,000 | ) | |||
Net current period change
|
72,000 | 46,000 | 118,000 | |||||||||
Reclassification adjustments for gains (losses) reclassified into income
|
- | - | - | |||||||||
Balance at June 30, 2011
|
$ | 50,000 | $ | 31,000 | $ | 81,000 |
For the three months ended
|
For the six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2010
|
2011
|
2010
|
2011
|
|||||||||||||
Net revenue
|
$
|
31,000
|
$
|
320,000
|
$
|
388,000
|
$
|
569,000
|
||||||||
Net loss
|
(192,000
|
)
|
(87,000
|
)
|
(199,000
|
)
|
(152,000
|
)
|
For the three months ended
|
For the six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2010
|
2011
|
2010
|
2011
|
|||||||||||||
Net revenue
|
$
|
108,000
|
$
|
239,000
|
$
|
207,000
|
$
|
416,000
|
||||||||
Net (loss) income
|
(23,000
|
) |
6,000
|
|
(48,000
|
)
|
4,000
|
|
•
|
Asset Optimization—combining web-based asset visibility and advanced telemetry data to monitor the condition of fleet assets, streamline asset deployment, optimize utilization, and maximize return on investment.
|
|
•
|
Cold Chain Management—maintaining the condition and quality of temperature-sensitive cargo from point A to point B, and all the points in between.
|
|
•
|
Fleet Maintenance—utilizing sensor technologies, real-time data and a wealth of transportation maintenance knowledge to help control maintenance costs, improve preventative maintenance practices, increase asset up-time, extend asset life, and reduce overall cost of ownership.
|
|
•
|
Fuel Management—monitoring key factors in fuel consumption, such as tire pressure and engine idle time, to help optimize fuel performance and reduce transportation costs.
|
|
•
|
Security & Safety—protecting valuable assets and cargo throughout the supply chain.
|
|
•
|
increase sales of products and services to our existing customers;
|
|
•
|
convert our initial programs into larger or enterprise-wide purchases by our customers;
|
|
•
|
increase market acceptance and penetration of our products; and
|
|
•
|
develop and commercialize new products and technologies.
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2010
|
2011
|
2010
|
2011
|
|||||||||||||
Revenue:
|
||||||||||||||||
Products
|
30.4
|
%
|
47.5
|
%
|
31.7
|
%
|
48.0
|
%
|
||||||||
Services
|
69.6
|
52.5
|
68.3
|
52.0
|
||||||||||||
100.0
|
100.0
|
100.0
|
100.0
|
|||||||||||||
Cost of revenues:
|
||||||||||||||||
Cost of products
|
14.4
|
28.1
|
15.2
|
28.0
|
||||||||||||
Cost of services
|
25.5
|
18.1
|
27.2
|
18.6
|
||||||||||||
Total gross profit
|
60.1
|
53.8
|
57.6
|
53.4
|
||||||||||||
Selling, general and administrative expenses
|
111.2
|
68.7
|
108.5
|
66.9
|
||||||||||||
Research and development expenses
|
18.6
|
10.4
|
18.7
|
11.0
|
||||||||||||
Loss from operations
|
(69.7
|
)
|
(25.3
|
)
|
(69.6
|
)
|
(24.5
|
)
|
||||||||
Interest income, net
|
3.1
|
0.6
|
3.3
|
0.6
|
||||||||||||
Interest expense
|
(0.4
|
)
|
-
|
(0.5
|
)
|
-
|
||||||||||
Other income
|
0.1
|
0.3
|
-
|
0.3
|
||||||||||||
Net loss
|
(66.9
|
)%
|
(24.4
|
)%
|
(66.8
|
)%
|
(23.6
|
)%
|
Three Months Ended
June 30,
|
||||||||
2010
|
2011
|
|||||||
Product revenue:
|
||||||||
Industrial and rental fleet management
|
$ | 1,358,000 | $ | 3,148,000 | ||||
Transportation asset management
|
471,000 | 811,000 | ||||||
1,829,000 | 3,959,000 | |||||||
Services revenue:
|
||||||||
Industrial and rental fleet management
|
808,000 | 1,137,000 | ||||||
Transportation asset management
|
3,376,000 | 3,237,000 | ||||||
4,184,000 | 4,374,000 | |||||||
$ | 6,013,000 | $ | 8,333,000 |
Three Months Ended
June 30,
|
||||||||
2010
|
2011
|
|||||||
Cost of products:
|
||||||||
Industrial and rental fleet management
|
$ | 743,000 | $ | 1,753,000 | ||||
Transportation asset management
|
122,000 | 592,000 | ||||||
865,000 | 2,345,000 | |||||||
Cost of services:
|
||||||||
Industrial and rental fleet management
|
340,000 | 429,000 | ||||||
Transportation asset management
|
1,192,000 | 1,081,000 | ||||||
1,532,000 | 1,510,000 | |||||||
$ | 2,397,000 | $ | 3,855,000 |
Six Months Ended
June 30,
|
||||||||
2010
|
2011
|
|||||||
Product revenue:
|
||||||||
Industrial and rental fleet management
|
$ | 2,852,000 | $ | 6,205,000 | ||||
Transportation asset management
|
1,000,000 | 1,558,000 | ||||||
3,852,000 | 7,763,000 | |||||||
Services revenue:
|
||||||||
Industrial and rental fleet management
|
1,513,000 | 2,047,000 | ||||||
Transportation asset management
|
6,772,000 | 6,357,000 | ||||||
8,285,000 | 8,404,000 | |||||||
$ | 12,137,000 | $ | 16,167,000 |
Six Months Ended
June 30,
|
||||||||
2010
|
2011
|
|||||||
Cost of products:
|
||||||||
Industrial and rental fleet management
|
$ | 1,555,000 | $ | 3,384,000 | ||||
Transportation asset management
|
285,000 | 1,142,000 | ||||||
1,840,000 | 4,526,000 | |||||||
Cost of services:
|
||||||||
Industrial and rental fleet management
|
685,000 | 850,000 | ||||||
Transportation asset management
|
2,611,000 | 2,152,000 | ||||||
3,296,000 | 3,002,000 | |||||||
$ | 5,136,000 | $ | 7,528,000 |
|
•
|
a decrease in accounts receivable of $0.8 million resulting from increased cash collections;
|
|
•
|
an increase in prepaid expenses and other assets of $0.6 million primarily related to reimbursements due from our suppliers;
|
|
•
|
an increase in deferred costs of $0.7 million primarily related to deferred contract costs;
|
|
•
|
an increase in deferred revenue of $0.3 million;
|
|
•
|
a decrease in accounts payable and accrued expenses of $1.6 million, primarily due to the timing of payments to our vendors.
|
Total Number of
|
Approximate
|
|||||||||||||||
Shares Purchased
|
Dollar Value of
|
|||||||||||||||
as Part of
|
Shares that May
|
|||||||||||||||
Total Number
|
Publicly
|
Yet Be Purchased
|
||||||||||||||
of Shares
|
Average Price
|
Announced Plans
|
Under the Plans
|
|||||||||||||
Period
|
Purchased
|
Paid per Share
|
or Programs
|
or Programs
|
||||||||||||
April 1, 2011 –
|
||||||||||||||||
April 30, 2011
|
28,000 | $ | 4.65 | 28,000 | $ | 2,357,000 | ||||||||||
May 1, 2011 –
|
||||||||||||||||
May 31, 2011
|
28,000 | $ | 4.26 | 28,000 | $ | 2,240,000 | ||||||||||
June 1, 2011 –
|
||||||||||||||||
June 30, 2011
|
14,000 | $ | 4.51 | 14,000 | $ | 2,176,000 | ||||||||||
Total
|
70,000 | $ | 4.46 | 70,000 | $ | 2,176,000 |
10.1
|
Sublease Agreement, dated as of July 14, 2011, by and between AirSure Limited, LLC, as Sublessor, and Asset Intelligence, LLC, as Sublessee.
|
|
10.2
|
Amendment No. 1 to Sublease Agreement, dated as of July 14, 2011, by and between AirSure Limited, LLC, as Sublessor, and Asset Intelligence, LLC, as Sublessee.
|
|
10.3 | Guaranty of Sublease, dated as of July 14, 2011, made by I.D. Systems, Inc., in favor of AirSure Limited, LLC (incorporated by reference to Exhibit C to the Sublease Agreement filed as Exhibit 10.1 hereto). | |
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
I.D. SYSTEMS, INC.
|
|||
Dated: August 12, 2011
|
By:
|
/s/ Jeffrey M. Jagid
|
|
Jeffrey M. Jagid
|
|||
Chief Executive Officer
(Principal Executive Officer)
|
|||
Dated: August 12, 2011
|
By:
|
/s/ Ned Mavrommatis
|
|
Ned Mavrommatis
|
|||
Chief Financial Officer
(Principal Financial Officer)
|
10.1
|
Sublease Agreement, dated as of July 14, 2011, by and between AirSure Limited, LLC, as Sublessor, and Asset Intelligence, LLC, as Sublessee.
|
|
10.2
|
Amendment No. 1 to Sublease Agreement, dated as of July 14, 2011, by and between AirSure Limited, LLC, as Sublessor, and Asset Intelligence, LLC, as Sublessee.
|
|
10.3
|
Guaranty of Sublease, dated as of July 14, 2011, made by I.D. Systems, Inc., in favor of AirSure Limited, LLC (incorporated by reference to Exhibit C to the Sublease Agreement filed as Exhibit 10.1 hereto). | |
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Date: August 12, 2011
|
/s/ Jeffrey M. Jagid
|
|
Jeffrey M. Jagid
|
||
Chairman and Chief Executive Officer
|
||
(Principal Executive Officer)
|
Date: August 12, 2011
|
/s/ Ned Mavrommatis
|
|
Ned Mavrommatis
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
By:
|
/s/ Jeffrey M. Jagid
|
||
Jeffrey M. Jagid
|
|||
Chairman and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
|||
Date: August 12, 2011
|
|||
By:
|
/s/ Ned Mavrommatis
|
||
Ned Mavrommatis
|
|||
Chief Financial Officer
|
|||
(Principal Financial Officer)
|
|||
Date: August 12, 2011
|