The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Walter Schenker - Titan Capital - Analyst: Hello. Thank you. I am a recent shareholder. I think I bought about half the volume over the last two weeks. The opening discussion -- there is a question here -- talked about the "significant bargain" for investors. Given the fact that the stock trades at dramatic discounts to cash and book value, and given the growth prospects for the Company, can you give me some sense, or explain why not, that we are not, or will not be pursuing an active share buyback going forward since it is extraordinarily accretive to shareholder value?
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
Question: Walter Schenker - Titan Capital - Analyst: Well, let me just respond by saying it is inconceivable -- I will underline "inconceivable" -- that virtually any inorganic growth will be at a valuation cheaper than your own stock. And therefore, it seems to me fairly clear for this board meeting that this policy should be reconsidered. That's a statement. Now, just one other quick question and I'll be done. Since you'll probably disclose it in the Q, how much or roughly what percentage of the business was Wal-Mart this quarter?
Answer By: Ned Mavrommatis - I.D. Systems, Inc. - CFO
Question: Walter Schenker - Titan Capital - Analyst: Okay. Thanks a lot.
Question: Chris Ryder - Lucrum Capital - Analyst: Hi. Regarding the SG&A line of $3.4 million, should I be thinking that as the run rate SG&A for the balance, quarterly balance of the year?
Answer By: Ned Mavrommatis - I.D. Systems, Inc. - CFO
Question: Chris Ryder - Lucrum Capital - Analyst: Okay, so that -- and that incorporates the $1 million annualized savings target?
Answer By: Ned Mavrommatis - I.D. Systems, Inc. - CFO
Question: Chris Ryder - Lucrum Capital - Analyst: Okay. So then when I think about a gross revenue dollar to get to breakeven, do I assume a 54% gross margin is the stable gross margin?
Answer By: Ned Mavrommatis - I.D. Systems, Inc. - CFO
Question: Chris Ryder - Lucrum Capital - Analyst: So what should I be thinking of a cash breakeven -- to get to cash breakeven, what should the gross revenue dollar be?
Answer By: Ned Mavrommatis - I.D. Systems, Inc. - CFO
Question: Chris Ryder - Lucrum Capital - Analyst: Okay. And then just a clarification question, Pete. When you were talking about the Nestle Water contract, with an extension into 100 facilities, was that all of Nestle or just the division Nestle Water?
Answer By: Peter Fausel - I.D. Systems, Inc. - EVP Sales and Marketing
Question: Chris Ryder - Lucrum Capital - Analyst: So that 100 sites is a subset of what Nestle's potentially able to do?
Answer By: Peter Fausel - I.D. Systems, Inc. - EVP Sales and Marketing
Question: Chris Ryder - Lucrum Capital - Analyst: Okay. And then in past conferences you've had some discussion about government applications. Anything going on there, whether it's Department of Defense and/or Security?
Answer By: Peter Fausel - I.D. Systems, Inc. - EVP Sales and Marketing
Question: Chris Ryder - Lucrum Capital - Analyst: Can you give some sense of timetable, or what our reasonable expectation should be about contract awards or potential significant wins?
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
Answer By: Ken Ehrman - I.D. Systems, Inc. - President and COO
Question: Chris Ryder - Lucrum Capital - Analyst: So just to get sort of a sense of what the -- the significance of it, you talked about a 2010 budgetary process. Are we talking about hundreds of thousands of dollars or a top ten kind of customer?
Answer By: Ken Ehrman - I.D. Systems, Inc. - President and COO
Question: Chris Ryder - Lucrum Capital - Analyst: Okay. Thank you.
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Great. Thank you very much. Can you give us a breakdown of the revenue by customer this quarter?
Answer By: Ned Mavrommatis - I.D. Systems, Inc. - CFO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. Anybody from Europe? You've talked a lot about in the past of European opportunities. Can you talk a little bit about what opportunities you're close to over there?
Answer By: Peter Fausel - I.D. Systems, Inc. - EVP Sales and Marketing
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. You said 6% of your revenue came from Europe in the quarter?
Answer By: Peter Fausel - I.D. Systems, Inc. - EVP Sales and Marketing
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. Plans for additional cost cutting from these levels -- $2.7 million in revenue. I think before -- I think previous quarters you said you need to be at $13 million in order to break even or make a profit. Is that still the case and what are your plans, then, for additional cost cuts?
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. So how many heads did you cut and how many -- from quarter to quarter how many heads are you down?
Answer By: Ned Mavrommatis - I.D. Systems, Inc. - CFO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. And that's from March to June or what?
Answer By: Ned Mavrommatis - I.D. Systems, Inc. - CFO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. And what's the bare bones minimum that you think you can operate at?
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay.
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Is one of the things -- I know a previous questioner, caller, asked about buybacks. It seems like you need to get scale. Are you guys aggressively looking at acquisitions in order to build scale?
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. And then final question -- do you anticipate this as your trough quarter, in terms of revenue?
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. And there's no word about Wal-Mart or Postal kicking back in this quarter [heavily]?
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
Question: Brian Ruttenbur - Morgan Keegan and Co. - Analyst: Okay. Thank you very much.
Answer By: Jeffrey Jagid - I.D. Systems, Inc. - Chairman and CEO
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