I.D. Systems' (IDSY) CEO Ken Ehrman on Q1 2014 Results - Earnings Call Transcript

May. 7.14 | About: I.D. Systems, (IDSY)

I.D. Systems, Inc. (NASDAQ:IDSY)

Q1 2014 Earnings Conference Call

May 7, 2014 4:45 p.m. ET

Executives

Kenneth S. Ehrman – President and Interim Chief Executive Officer

Ned Mavrommatis – Treasurer and Chief Financial Officer

Analysts

Bryan Prohm – Cowen & Co.

Morris B. Ajzenman – Griffin Securities

Mathew Paul – Sidoti & Company

Morris Ajzenman – Griffin Securities, Inc.

Jason Revland - Blueprint Capital

Operator

Good day ladies and gentlemen and welcome to the I.D. Systems' Q1 2014 Conference Call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions).

I would now like to introduce your host for today’s conference, Mr. Ken Ehrman. You may begin.

Kenneth Ehrman.

Thank you. Welcome to I.D. Systems’ fiscal 2014 first quarter conference call. Thank you for joining us today. I’m Ken Ehrman, President and Interim CEO of I.D. Systems. I will be reviewing our Q1 highlights in a moment. Joining me is our CFO, Ned Mavrommatis who will detail our financials quarter following my remarks. We will then open the call for questions.

Before we begin, let me remind everyone about forward-looking statements. The following discussion contains forward-looking statements within the meaning of federal securities laws, which are subject to risks and uncertainties, including, but not limited to; the impact of competitive products, product demand and market acceptance risks, fluctuations in operating results, and other risks that are detailed from time to time in I.D. Systems' filings with the SEC. 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 first quarter of 2014 marked the start of a new growth strategy for I.D. Systems. With our world-class customer base and leading intellectual property portfolio which we believe is unique in the wireless M2M technology space, we are convinced that the most significant investment we can make is in our own company. Accordingly, since my appointment as interim CEO in March, we’ve launched an initiative called I.D. Systems 2.0, which includes a detailed review of customer requirements to accelerate enterprise adoption of our solutions. We have a meeting with our key customers and drilling down into every detail of every barrier that is preventing or slowing down the transition from single site deployments to enterprise wide rollouts.

A transformation of our implementation approach so we can scale up with enterprise customer demand to deliver higher quality, more easily replicable prophesies in support of multiple simultaneous customer rollouts a Six Sigma analysis of our internal process controls and quality management. So we are continuously improving as we move forward. And an acceleration of the engineering projects currently on our product roadmap which we expect to expedite revenue growth by helping us better penetrate untapped markets for our solutions, for example international multilingual industrial VMS applications as well as domestic chassis and intermodal container tracking.

We are ear marking roughly $2.5 million for this initiative which Ned will describe further in a few minutes and targeting year end for completion of the investment cycle. We believe that this injection of resources will put I.D systems in a much stronger position to support the enterprise scale roll outs and capitalize on the opportunities that are in front of us. In our core markets alone, we estimate there are more than 7.5 million assets to which our solutions could be applied, including at least 750,000 industrial vehicles operated by our current customers alone.

Although our investment to jump start I.D systems 2.0 will meet an increase in R&D expenses this year, we expect that at the conclusion of this investment period, we’ll be able to return to today’s recurring expense levels. One of the key strategic elements of I.D. systems 2.0 is our cloud based analytic software which measures key performance indicators to optimize supply chain efficiency, which we are now developing for the transportation asset management sector of our business as well. Although it has not yet made a significant impact on revenue, analytics gives us a significant competitive advantage and has helped us indirectly in many important ways.

Analytics has positioned our vehicle management systems as a best practice for material handling operations worthy of the attention of corporate executives as well as line managers. Analytics has elevated VMS as part of a strategic set of technologies for the supply chain, along with warehouse managing and labor managing. It has also in some cases helped establish I.D Systems as a corporate mandated VMS vendor, for example a global automotive manufacturer recently instructed every lift track OEM feeding on its business at a manufacturing complex in Mexico to include I.D. Systems’ power fleet VMS in their proposals. In another example, a global CPG company has incorporated I.D. Systems’ VMS solutions in to a worldwide initiative to optimize the safety and productivity of its material handling operations.

With customer mandates like these, analytics has helped and will continue to help reduce the cost and time of our sales efforts at individual sites. And finally with its unique ability to extract ROI live data and quantify the value of a VMS deployment, analytics is helping compel customers to expand their VMS implementations, for example, using analytics data, one customer was able to support the opening of a new distribution center by reallocating investor vehicles from other sites without having to purchase or lease any new vehicles whatsoever.

Significantly, the ability of analytics to generate RO data makes it easily scalable no matter how many facilities a customer may add to their enterprise VMS deployment. We are still at the very early stages with analytics. Many of our large customers are looking to expand their VMS deployment with the goal of applying I.D. Systems’ analytics in the future. I should also emphasize however that we now have two outstanding individuals leading our analytics team. The first is Roger Tenney, who came on board as our Director of Business Intelligence in the first quarter of 2014. Roger was previously Director of Fleet Services from Malin Integrated Handling Solutions, an industrial truck dealer affiliated with Raymond Corporation. Roger was also previously a manager of Industrial Vehicle Strategy at Ford Motor Company where he was directly involved in the roll out of I.D. Systems’ VMS technology across all Ford plants in North America.

Joining Roger this quarter as our new Director of Retail and Distribution Practice, is Matt Rhodes. Matt has previously been director of supply chain engineering at Walgreens where he oversaw the VMS rollout across all Walgreens DCs in the United States. These industry experts not only have a wealth of general knowledge about material handling operations and wireless technology for managing industrial fleets, but they’ve also lived the experience of deploying I.D. Systems’ technology specifically across a lot of scale enterprise. We couldn’t ask for better ambassadors or evangelists to demonstrate the value of I.D. Systems analytics.

Another key element of I.D Systems 2.0 is to press our advantage in technology, one of the founding principles of our company. We were awarded two more patents in the first quarter of 2014, expanding our intellectual property portfolio to a total of 76 patents issued and pending. We believe these patents provide I.D. Systems with significant protection against competitors in all three of our core market segments, Industrial vehicle, rental fleet and transportation asset management because the patents address many essential functional aspects of this applications. One of the new patents covers a wide range of core processes for industrial fleet management, from wireless communication architecture and access control to techniques for implementing vehicle impact management and allows electronic safety checklist. Our other new patent covers processes for managing a rental vehicle remotely and wirelessly and is I.D. Systems’ third patent pertaining specifically to the rental car market. In this application, our system is an enabling technology with proven concrete financial benefits.

Our primary rental fleet customer remains Avis Budget Group which is in year three of a five year contract and is using our system every day on 30,000 vehicles in North America. We also continue to pursue other opportunities for our wireless rental fleet management solution, both in and out of the rental car market. We remain very optimistic about the long term growth opportunities for this application. In addition to securing intellectual property rights, we also focus on product development to maintain our leadership position in the markets we serve. In the first quarter of 2014, we introduced I.D. Systems’ fourth generation vehicle-mounted device for our VMS solutions. This new product, the VAC4 is currently in beta test with multiple customers and is scheduled for commercial availability in the third quarter of 2014. That force simplifies installation, enhances functionality, improves the user experience and will have significant cost benefits for I.D. Systems.

We’ve also been conducting beta test and trial deployments with two new transportation asset management products under our VeriWise brand which utilize low cost cellular technology. One of these products is designed specifically for tracking trailer chassis, a market with over 500,000 available assets in the United States. The other device is engineered to track intermodal containers, a market with close to 400,000 available assets as well as an opportunity to win market share from incumbent competitors. For each product, we’re currently engaged with the largest potentially users in the North America.

Before Ned details our financial performance for the first quarter of 2014, I want to review a few sales highlights during the period. Our VMS revenue grew 42% compared to Q1 2013, with strong contributions from both North America and Europe. That result hasn’t taken into account approximately $1.5 million in orders we received in Q1 that are scheduled for shipment in Q2. So our order run rate continued as expected in the first quarter. Revenue from transportation asset management systems was also up 5% quarter over quarter. Overall our Q1 revenue increased 21% to $9.7 million while we continued to maintain strong gross margins at 51%.

We saw repeat business during the quarter from core end users including 3M, Audi, Bridgestone, CNH, Deere, Ford, Estenson Logistics, Forward Air, Kellogg’s, Knight Transportation, Nestle, Niagara Bottling, Procter & Gamble, Royal Freight, Sonoco, the U.S. Postal Service as well as Walmart. The Postal Service awarded an indefinite delivery/ indefinite quality contract valued to up to $4 million through the end of September 2014, for the initial phase of an upgrade and expansion of our VMS systems across the Postal Services mail distribution network. Under this contract, we have received $736,000 in delivery orders to date, of which approximately $200,000 was recognized as revenue in Q1.

We also won an order from a longtime multinational CPG customer, valued at $935,000 and scheduled to be shipped in the second quarter for I.D. Systems' first ever VMS implementations in China. This version of our VMS system will incorporate Chinese translations and technical wireless certifications, which open new growth opportunities for our companies in Asia. We will naturally target facilities operated by our multinational core customers as our first priority in this market. In addition to growing business with core customers in Q1, we also added new VMS customers with enterprise scale potential, including a global healthcare product company, a leading specialty food producer and one of the world’s largest seafood processors.

Our channel partners also continued to make significant contributions to our revenue. One OEM partner a series of orders valued in excess of $800,000 to deploy I.D. Systems’ VMS on fleets of [inaudible] at multiple distribution Centers at [inaudible] the company. This roll out has continued in Q2 with another $1.2 million in orders as we announced in April 22, 2014. Our channel partners help diversify our revenue sources as well. In Q1 we received VMS partner orders from end-users across a diverse range of industries, including automotive, cosmetics, CPG, food, logistics, pharmaceutical and retail.

We expect partners to continue growing and diversifying their contribution to our revenue stream. One very significant event I want to highlight is that in March 2014, we executed an authorized reseller agreement with Toyota Material Handling USA, the largest U.S arm of the -- the largest industrial truck manufacturer in the world. Our interaction will involve technical integration as well as sales and support of wireless VMS systems. So we believe that this is the beginning of a long and very fruitful relationship.

I would like to conclude my remarks by iterating my enthusiasm about and dedication to I.D. Systems 2.0. We have unrealized potential and shareholder value that we are determined to unlock. Thank you for your time today. I look forward to your questions later on the call and to report to you in the future on the opportunities and successes ahead.

Now let me turn it over to our CFO Ned Mavrommatis, to detail our financial results.

Ned Mavrommatis

Thank you, Ken. Hello to everyone on the call. As Ken mentioned, revenue for the three months ended March 31, 2014. Increased 21% to $9.7 million from $8 million in the first quarter of 2013, driven by a 42% increase in sales of I.D. Systems VMS solutions for industrial vehicles and a 5% increase in revenue from our asset intelligence transportation asset management business.

Gross margin increased to 51%, consistent with historical levels compared to 48% in Q1 2013. Recurring revenue was $4.3 million or 44% of total revenue for the quarter.

Selling, general and administrative expenses were $6.8 million, including $1.1 million in nonrecurring expenses related to our executive management change in March 2014. Excluding this nonrecurring cost which included severance, accelerated stock compensation, legal and other fees, our SG&A expenses were sequentially flat for the quarter at $5.7 million compared to the fourth quarter of 2013.

Research and development expenses remained relative consistent at $1.1 million in the first quarter of 2014 compared to $1.1 million in the first quarter of 2013 and $ I million in the fourth quarter of 2013.

Excluding stock based compensations, depreciation and amortization and nonrecurring expenses related to our executive management change, non-GAAP net loss was $947,000 or $0.08 per basic and diluted share compared to a non-GAAP net loss of $1.8 million or $0.15 per basic and diluted share. Net loss for Q1 2014 was $2.8 million or $0.24 per basic and diluted share compared to a net loss of $2.6 million or $0.22 per basic and diluted share in the first quarter of 2013.

Our balance sheet remained strong. As of March 31, I.D. Systems had $13.4 million in cash, cash equivalence and marketable securities and no debt.

I’d like to expand on our planned $2.5 million investment in launching I.D. Systems 2.0 which Ken emphasized in his remarks. This additional research and development cost will be incurred over the next three quarters, including the current quarter ending on June 30. At a high level, the major focal point of our investments will be information technology and engineering resources to improve our back end systems, data management, hardware, software and firmware capabilities, testing and quality management resources to improve our QC processes and customer experience and also reduce avoidable burdens on our customer support resources and implementation and support resources to improve our training, documentation and deployment methodologies with an emphasis on scalability.

These resources are being applied to more than a dozen detailed projects, ranging from expedited new product launches and a major software user interface upgrade to automate data mining and system health monitoring to test and quality system automation. As Ken indicated, we plan to complete this investment by the end of 2014 at which point we expect to return to our current operating expense level. We believe this investment will help us exploit opportunities in our existing customer base and core markets, drive revenue growth and ultimately put as on a path to consistent profitability.

Thank you for your time today. I look forward to reporting further to you as our company makes progress towards our goals. With that let me turn the call back to Ken Ehrman, our President and Interim CEO.

Ken Ehrman

Thank you, Ned. That concludes our prepared remarks and we are now pleased to open the Q&A segment of the call. Thank you for participating today.

Question-and-Answer Session

Operator

(Operator Instructions). And our first question comes from the line of Bryan Prohm. You may proceed, Sir.

Bryan Prohm – Cowen & Co.

Hey. Good afternoon Ken and Ned. How are you doing guys? There’s a lot going on here this quarter so a few questions. First, nice growth momentum of 21% year-over-year and there’s a bunch of Fortune 500 follow on VMS deployments in the US PS in the last two months. Ken, is it fair to categories this as the result of your new growth strategy and you’re becoming more aggressive? Or is there maybe some overall VMS market tailwind technology transitions in play here as well?

Ken Ehrman

I don’t think that this has yet been impacted by the I.D. Systems’ 2.0 initiative. So I think that this is part of what was kind of the momentum we had coming out of Q4 and Q3 of last year that were fairly strong. So I’m pretty optimistic that the initiatives that we’re pursuing should definitely take us to another level of revenue growth and predictability.

Bryan Prohm – Cowen & Co.

Great. Okay so if I met all of the one timers related to the transition, you guys cut the loss in half year-over-year but we’re still shy of the revenue base line to get to consistent profitability and now R&D is going to go up I think $2.5 million between now and the balance of the year. Where is the breakeven run rate likely to be now as we go into the end of the year and into next year? What can you see and tell?

Ned Mavrommatis

On a non-GAAP basis our break-even levels is approximately about $10.5 million. Now with the additional investment, it will go over the next three quarters. It’ll go up by $1.5 million to $12 million. However our goal is at the end of the three quarters, it’s to bring the expense level at the same rate. So we expect to break-even levels starting in Q1 of the following year to be up in $10.5 million and the purpose of the investments is obviously to help us accelerate the growth.

Bryan Prohm- Cowen & Co.

Understood. Okay can you talk generally about or maybe first specifically about this new 670 patent? From what I’ve read it sounds as though it could be a fairly meaningful wireless industrial vehicle management implementation patent. And then on the back end of that, is there a core group of infringers that didn’t need to license this or other parts of your portfolio and how you guys are moving to monetize that patent portfolio more broadly? Thanks.

Ken Ehrman

I think that’s a great question. Right now, what we’re really focusing on is obtaining patents for our very unique technology in our core markets, but obviously we all can acknowledge that we haven’t done much yet to monetize those patents. The concept of trying to put those patents to use to either license our technology or to help enhance our revenue capabilities with our current customers is a big part of I.D. Systems’ 2.0, but it’s really a little too early to provide specifics.

Bryan Prohm- Cowen & Co.

Okay. Fair enough. So last question, anything new on the rental car market since the last time we talked?

Ken Ehrman

It was only a month since we spoke last. I think that though it’s not -- and that is a decent amount of time, but before this call I communicated with Avis, just to make sure that they were okay with what I put in the script. But to make a long story short with then because I know it’s going to come up, it’s definitely not dead. They remain a key prospect. They’re using the system every day in 30,000 cars as part of our five year contract. But the technology roadmap that they want to implement has really changed here as well as the Zip acquisition. So I think we are very well positioned but we are just unsure when they will take any type of decisive actions. So in the meantime we are focusing on our patents as well as continue to innovate in that industry.

Operator

And our next question comes from Morris Ajzenman from Griffin Securities.

Morris B. Ajzenman – Griffin Securities

Just a top on an even better question, assuming that his budget continues to trigger long life as in decisions just out and out and up before there’s a platform decision, how long hypothetically would it say for you to ramp up what another car rental company where something comes to fruition? Is that a longer term prospect? How long is this going to play out?

Ken Ehrman

That’s a decision for each individual rental car company. Let me put it to you this way, I think that it’s -- and you probably noticed already, but it’s pretty inevitable that the major rental car companies will move forward with some type of telematics platform in their cars. Zipcar today and I read in an announcement as recently as yesterday, has 10,000 cars installed with the Zip technology. Parts has probably a little bit less than that. So they are still in the early stages. So what we are trying to do is position the elements of our technology that are unique to either be a component or the full solution for each one of these companies. If it’s a component, it makes the integration a little bit more complicated and may take longer. If it’s the full solution, it would take shorter. But these companies are definitely looking are telematics. We are definitely a significant part of that discussion with all of the three major players. And we remain very optimistic about the potential of this market for the company. And we still are collecting about $3 million a year in money from Avis to maintain this five year contract.

Morris B. Ajzenman – Griffin Securities

Right. And you’ve had – let’s take recently [inaudible] growth. The sustainability of that, understand lumpy come quarter to quarter, but are we comfortable turning beside your new initiative at 2.0 that the top line can now grow on a more consistent basis, maybe not every quarter but double digit now come forward?

Ken Ehrman

That’s really the object, right? I’ll just try to position it a little bit differently. One of the major high level objectives of I.D systems 2.0 is to try to match our revenue with our customer list. We’ve all been frustrated for various reasons about why we have this world class customer base but the revenues simply haven’t been anywhere near what you would expect. So we’ve really done as best we can, a deep dive into what we need to improve. We’ve focused on improving in those areas. The kinds of things we are talking about is creating a scalable company from end to end.

So in other words, right now as you guys probably know Flextronics does our manufacturing and they are very scalable. They can produce as many units as we need. But when it comes to implementation, we do most of that ourselves or with a limited number of partners. And so that becomes the bottle neck. So we are trying to create a scalable process for implementation that can be just as successful and quality as I.D Systems’ people are, but allow us to be able to meet the demands of our large, large customer base. So that’s really what we are focused on with I.D Systems 2.0. And if we do it right, at the end of the initiative, we will have an end to end scalable implementation process as well as benefit generating capability through analytics. That should really take I.D systems to the next level.

Morris B. Ajzenman – Griffin Securities

Let me ask the question a little differently. Again you are developing this process to step up the growth rate incrementally. Should we give you time on this or during the interim can you still have 10% close growth rate until these initiatives kick in?

Ken Ehrman

Q2 started off very strong but on the other hand there’s still two months to go. So we have to see and continue to press our current customers to achieve those benefits and to order more. But we feel pretty good about even the things we’ve done so far and their ability to potentially impact the year-over-year revenue. Certainly it should grow over last year.

Operator

And our next question comes from Mathew Paul from Sidoti & Company. You may proceed.

Mathew Paul – Sidoti & Company

Hey guys. Good afternoon. Thanks for taking my questions. First question just drilling down a bit further into the expansion of your key accounts there. If I back out the 200,000 from the USPS and the $935,000 purchase order, am I going to get a figure that will give me more or less the year-over-year growth that’s limited to expansion in those big customers we’re talking about?

Ned Mavrommatis

No. I’m not sure I understand the question, Matt. If you look at the $935,000 in orders that we received related to China, that revenue hasn’t been recognized yet and will be recognized in the second quarter. It’s not included in the first quarter revenue.

Mathew Paul – Sidoti & Company

Okay. So just to further clarify the question, I was just trying to get an idea of how much growth in the quarter came from expansion within your key large accounts?

Ned Mavrommatis

Sure. So if you look at the growth of 21.1%, the majority of that growth came from existing customers buying more systems and rolling out to the enterprise.

Mathew Paul –Sidoti & Company

Okay. Within the $2.5 million increase that’s split three ways, a little bit over the 800,000, that sounds like a recognized evenly through the three quarters, right?

Ned Mavrommatis

That’s correct. About 90% of that $2.5 million will be R&D expenses and approximately 10% will be in SG&A.

Mathew Paul – Sidoti & Company

And that’s related to the -- it was -- the 10% that’s related to SG&A, can we revisit the expansion plans and talk about how much more in stuff are you guys looking to add?

Ned Mavrommatis

We’re adding temporary resources in many areas, primarily in the Information Technology Research and Development. We’re also adding some resources in quality control and project and product management. Our goal is by the end of the year to eliminate that expense and to bring back the expense to a steady state.

Mathew Paul – Sidoti & Company

Okay. And will there be anybody located, anybody from I.D Systems located over in China?

Ken Ehrman

There will be one during the implementation phase, absolutely.

Mathew Paul – Sidoti & Company

But that’s more or less temporary limited to 2014?

Ken Ehrman

It is, but again if we can mix the Chinese market, the area we’re trying to pursue is the Chinese manufacturing and distribution of our current existing clients. So obviously one has moved in that direction, the primary reason being safety as well as efficiency. And so we’re hoping that that first what I’ll call leader in making the move to China and the success we have there can translate to an opportunity to expand many of our existing clients who have operations in China.

Mathew Paul –Sidoti & Company

Okay. Just last question, just kind of one or two sentences on a general high level comparison between the United States and the Chinese market within the fleet management business, where are they in terms of adaption to your technology and how open is it?

Ken Ehrman

The Chinese market definitely is an untapped market opportunity for our company. Obviously the labor costs are lower over there, but they still care about safety and they absolutely have the expenses of the trucks themselves as well as the maintenance of those trucks. So the idea is to have essentially a multinational company who has implementations, manufacturing and distributions around the globe as a uniform technology to measure and monitor the performance of those systems against each other.

Operator

And our next question comes from Morris Ajzenman. You may proceed.

Morris Ajzenman – Griffin Securities, Inc.

Ken, where do we stand right now as far as a CEO, a permanent CEO? Where are we in this process right now?

Ken Ehrman

Where we are in the process is -- I’m assuming that many of you have seen the public fillings, we are definitely between the board and myself, the current board, we are trying to come to a resolution on the new board as quickly as possible. As soon as we have news to report we will do so, but I will tell you that as of today, it’s a pretty amicable process. And we are hoping to very shortly be able to move forward with the selection, the nomination of the new board and hopefully thereafter the CEO determination.

Morris Ajzenman – Griffin Securities, Inc.

And last question, Ned, this one is for you. VMS that’s 42% AI plus 5%, can you just give us the quarterly revenue run rate versus year-over-year?

Ned Mavrommatis

Sure. So if you look at the breakdown in the quarter for VMS, revenue was $5.3 million. $4 million came from product, $1 million came from service and $275,000 came from service from the rental car space. The break down on the AI was $4.4 million. $1.7 million came from product and $2.7 million came from service.

Morris Ajzenman – Griffin Securities, Inc.

And a year ago, just the total lumps of VMS and AI?

Ned Mavrommatis

Sure. Last year the total of VMS revenue was $3.8 million and $4.2 million for AI for a total of the $8 million.

Operator

(Operator Instructions) And our next question comes from Jason Revland from Blueprint. You may proceed.

Jason Revland - Blueprint Capital

Just a general question on the rental car. Other rental car companies that may be looking to implement some sort of advanced technology somewhat Avis has done. Can you give an example of companies that have moved forward on such projects?

Ken Ehrman

Hertz has the Hertz’s on demand or Hertz’s 24/7 technology that they’ve been using for several years, but like the Zipcar technology that could take anywhere from an hour, and hour and a half to install and it’s -- orders of magnitude if you look at the total cost of ownership, more expensive than the I.D. Systems solutions. So there are implementations from a pure number standpoint. Like I said, I read yesterday that Zip has about 10,000 units currently installed, that Hertz has probably roughly the same number and Enterprise probably has a little bit less than that. But the size of the fleets of those three companies together are more than three million rental cars. So they definitely represent a large untapped market opportunity for our patented technology.

Jason Revland - Blueprint Capital

It’s safe to say that really none of them have made any significant decisions. And safe to say that they are all looking at some type of technology solutions. Is that fair to say?

Ken Ehrman

I think that’s definitely fair to say. I think obviously we are probably the best positioned of any telematics provider because we currently are installed in 30,000 cars on a day -- and being used on a day in and day out basis. So there’s a tremendous amount that we’ve learned, a tremendous amount that we’ve had to just address from a technology standpoint and an implementation standpoint that give us really an advantage over any potential supplier because we’ve lived it day in and day out.

Operator

I’m not showing any further questions. I would now like to turn the call back over to Mr. Ken Ehrman for further remarks.

Ken Ehrman

All right, well as I’m hoping you can see, we are doing everything we can to try to match our revenues to our customer list as soon as possible. And I really look forward to keeping everyone apprised as we move forward with I.D. Systems 2.0. Thanks for joining.

Operator

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. You may all disconnect, everyone have a wonderful day.

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