Good day, ladies and gentlemen. And welcome to the I.D. Systems’ Fourth Quarter 2012 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. (Operator Instructions) I would like to introduce our host for today, Mr. Jeffery Jagid, Chairman and CEO of I.D. Systems. Sir, please go ahead.

Thank you. Welcome to I.D. Systems fiscal 2012 year end conference call. Thank you for joining us today. I’m Jeffrey Jagid, the Chairman and CEO of I.D. Systems. Joining me are our CFO, Ned Mavrommatis; and Kenneth Ehrman, the President of I.D. Systems. I will provide an overview of our results for the quarter, Ned will detail our financials results for both the fourth quarter and full year, and Ken will review our recent sales and operational highlights. We will then open the call to your questions. Before we begin, let me remind everyone regarding forward-looking statements. The following discussion contains forward-looking statements within the meaning of federal security 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 detailed from time to time in I.D. Systems’ filings with the Securities and Exchange Commission. 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. 2012 was a year of progress and accomplishment for I.D. Systems. We achieved topline revenue growth across every segment of our wireless technology business, industrial fleet management, rental car management and transportation asset management. We build up our recurring revenue stream. We maintain strong gross margins. We invested more in our patented technology to further differentiate our solutions from the competition and we continued to closely manage costs. The result was record annual revenue of almost $45 million, a 14% increase over 2011 and our second consecutive record year. We also achieved non-GAAP net income of $0.06 per share also an annual record. At the same time, we held SG&A expenses in…

Thank you, Jeff, and hello to everyone on the call. I’d like to detail our fourth quarter numbers first and then review our full year financial results. Revenue for the three months ended December 31, 2012 was $10.7 million, compared to $11.8 million in Q4 of 2011. The decrease in revenue was due to lower sales of rental car management systems reflecting the fulfillment of our first phase of work for Avis Budget Group, which culminated in the third quarter of 2012. During the fourth quarter, revenue from our industrial vehicle management business increased 10% to $5.4 million, compared to $4.9 million in the same period last year. Recurring revenue also increased by 10% in the fourth quarter to $4.5 million, compared to $4.1 million in the same period a year ago, and deferred revenue increased to $10.6 million at the end of the year. Gross margin for the quarter was 45% slightly lower than the historical levels as a result of short-term increase in production and shipping costs to meet year end demand and a one-time sales of surplus inventory built several years ago exclusively from the U.S. Postal Service. SG&A, and research and development expenses were $5.7 million and $1 million in Q4 respectively, compared to $5.5 million and $900,000, respectively, in the same period a year ago. For the 12 months ended December 31, 2012, revenues increased 14% to a record $44.6 million from $39.3 million in 2011, driven by year-over-year sales increases across all of our product segments. Rental car management revenue increased 86% to $8 million from $4.3 million in 2011. Industrial vehicle management revenue increased 7% to $19.1 million versus $17.9 million a year ago. Transportation asset management revenue increased 2% to $17.6 million, compared to $7.2 million in 2011 and deferred revenue attributable…

Thank you, Ned and hello to everyone on the call. I’m glad you could join us today. I’d like to begin by first mentioning that in the fourth quarter of 2012, I.D. Systems was named to Deloitte’s Technology Fast 500 Ranking of the fastest growing technology companies in North America. This award which was based on our five-year revenue growth of 130% is a nice token of achievement to end our second consecutive year of record annual revenue. In our core business of wireless industrial vehicle management, the fourth quarter of 2012 was strong with revenue up 10% year-over-year as Ned mentioned. We continue to receive repeat orders from many of our core enterprise customers such as Ford Motor, General Mills, Kelloggs, Nestle, Procter & Gamble, Walgreens and Wal-Mart, which is a reflection of the ongoing value our systems provide. Our technology is truly a best practice to optimize material handling safety, efficiency and improve velocity for large enterprises. Procter & Gamble is especially notable and that they are gradually expanding the use of our PowerFleet systems globally, which represent a significant growth opportunity for I.D. Systems. Having reference installations in Asia, the Middle East and Africa, as well as the Americas and the EU that should ultimately help us capitalize on the growing demand for material handling information technology in international markets. We expect Procter & Gamble and many other enterprise customers to continue to expand their use of our solutions in 2013. In the fourth quarter of 2012, we also won business from new enterprise customers with significant expansion potential, including one of the world’s largest tire producers, a leading global manufacturer of heavy equipment, a major European automaker, a multi-national packaging producer, a major U.S. food producer and a multi-billion dollar manufacturer of machine components. I.D. Systems’…

Thank you, Ken. That concludes our prepared remarks. We are now pleased to open the Q&A segment of the call. Operator?

Thank you, sir. (Operator Instructions) Our first question comes from the line of Morris Ajzenman from Griffin Securities.

Hi, guys. First question, you talked about gross margins in the quarter of 45%. Can you just put a little -- help us little with the -- actually dollar amount of the some, increase on cost of goods sold. So the short-term increase in production shipping cost and secondly, what the one-time sales of inventory, what that would cause to the income statement?

Hey, Morris. It’s Ned. The sale to United States processor was for $220,000 and the additional expense that came regarding production and shipping expenses had a lot to do with a big percentage of our orders that came in during the quarter, came in December. So we needed to stack up our production capabilities to make sure we get the product out. If you exclude those two items, the margins would’ve been very close to historical levels of 51% to 52%.

All right. And then a follow-up is, that SG&A of being up sequentially about $200,000 or whatever the amount is sequentially, is that part of this build up you were discussing right now?

No. Not in the SG&A. The build up was temporary that allowed us to get some shipments in December and it’s not permanent. It was just a temporary shipment build-up. So the SG&A as you can see year-over-year and even quarter-over-quarter is primarily flat.

All right. So then the 5.4, 5.5 run rate is what’s the run rate going forward?

That’s exactly right.

Okay. And last question, I think I know the answer, last year the fourth quarter, was AVIS budget by $2 million revenues?

I’ll give you the exact number. $1.8 million.

1.8. I’ll get back in queue now. Thank you.

Welcome.

Thank you. (Operator Instructions) Our next question comes from the line of Shai Dardashti from DCM.

Thank you so much for hosting the call. I really want to thank you for the opportunity to ask the question before anything else. It’s appreciated. Well, you used the word cornerstone, where you described the patent in February. I’m obviously very excited by this word. I’m curious how I should think about it in terms of setting appropriate expectations. Would you comment what this means from a bird’s eye view, please?

Absolutely Shai. And I appreciate you asking the question because it provides me with an opportunity to once again highlight the significance of the patent. I think that if you follow closely what’s happening in the car rental industry. What you quickly conclude is that both large and small entities are moving in the direction of technology deployment to streamline the customer experience. And this is something that I think will prove to be very valuable for us because we’ve been working in this space as Ken noted. And I think I might have mentioned in my prepared remarks, we were -- I think filed for our first patent in 1999. We believe that we have a technology that’s very innovative, that’s unique and that will be very important as companies move toward automating the car handling process in that industry. So obviously, we’re proud of what we’ve done with AVIS. But I think as a result of the strength of our patent portfolio, I think the impact goes well beyond AVIS budget. And as I mentioned in my prepared remarks, the board of I.D. Systems has made the decision to start the process of monetizing that patent portfolio. We are evaluating what’s happening with the competitor solutions. And we will proceed to vigorously and force our patent rights.

And I’ve a follow-up.

Sure.

If there’s going to be enforcement going forward. Should I -- should I budget -- is there any cash expenses for legal proceedings or is it premature to have that conversations?

I don’t know how premature it actually is. Obviously, we’re going to go about it in an intelligent manner. And we want to continue to be revenue driven. So it’s not really an emotional decision. However, if theirs is an -- if we are being damaged by infringement, if there was an opportunity to generate revenue than absolutely it’s an investment that we would make.

And I see you have 71 patents from a Google search. Are there any appropriate case studies of other patents you’ve previously tried to enforce using force?

We’ve had success on a smaller scale with some of our patents over the course of several years. But I believe that in light of the patent protection awarded to us on the car rental application that it’s a bit more prevalent. And I firmly believe again without having the benefit of doing the detailed study at this point that we are going to be in a position where we’re going to be enforcing that -- the protection of those inventions.

All right. Thank you very much. Good luck.

Thank you.

Thank you. And we have a follow-up question from the line of Morris Ajzenman from Griffin Securities.

Hi. Clearly, there is a lot of buzz in the air with AVIS budget and again these new patents that you have been awarded. And clearly we’re going to extrapolate, however, we want it but let’s get back to the base business, the VMS and Asset Intelligence. Going forward, I know business is lumpy but if we look out over next year or two, should we able to have a sustainable growth rate that they purchase double-digits on the top line and again understanding the lumpiness to it. But looking at the base business and again understand wild card clearly, it’s the technology you have vis-à-vis potential upside to that technology with this AVIS budget and the patents there. But let’s talk at the base business and what is the sustainable growth rate over next few years?

Well, if you look at history, what you’d see is that the deferred revenue attributable to our transportation asset management sales increased 42% during 2012. So the short answer to your question is absolutely you should expect to see double-digit growth. The pipeline today is a strong as it’s ever been. It’s not stronger that could support and facilitate that growth. And obviously, we have a lot of work to do to bring in those orders.

Thank you.

Sure.

Thank you. And we also have a question now from the line of Bryan Prohm from Cowen & Company. Bryan Prohm - Cowen & Company: Hey, thanks. Good afternoon gentlemen. Jeff, you’re actually segue perfectly into my questions because I was going to ask you question about the growth outlet for ‘13. Since specifically I ask you to comment on the pipeline. So pipeline has to be in a position to drive double-digit growth, if I can just read between the lines of your last statement. Is there any particular area that’s going to grow more meaningfully over the course of ‘13 amongst the product segments that you outlined in their prepared remarks. Obviously, rental car management was up the most on a year-over-year basis in ‘12. But I’ll hand it over to you now.

Yeah. The pipeline as I mentioned a moment ago is pretty robust. It can certainly facilitate double-digit growth. I would expect and what we’re seeing is significant demand in the vehicle management side of the business. Ken mentioned in his opening remarks and it’s a very important piece of the puzzle here was the release of an analytics product. And that’s gaining some momentum that’s resulting in increased VMS sales. We’re now beginning to deploy it on the Asset Intelligence side of the business as well. And I would expect to see growth on VMS as a result primarily of analytics as well as Asset Intelligence. And then of course as you mentioned in framing your question, there is a business that we’re doing with -- in the rental car space. And as I said in my comments that exclusivity goes through July. Ken alluded to the fact that we’ll be getting significant enquiries from a number of players in the space around the world, obviously as a result of our agreement with AVIS. We’re not very responsive to those enquiries but there’s a lot of opportunity there. And the program with AVIS budget continues to move into a nice positive direction. Bryan Prohm - Cowen & Company: Great. Thanks for that. Quickly, Ned, could you go through the revenue breakdown for the quarter between asset intelligence and PowerFleet by hardware and services?

Sure. The asset intelligence revenue for the quarter was $4.4 million, $3 million came from services and $1.4 million came from product. The vehicle management business for the quarter was $5.4 million, $600,000 came from services and $4.8 million came from product. And the rental car revenue for the quarter was $887,000, $270,000 came from services and $617,000 came from product. Bryan Prohm - Cowen & Company: Great. Thanks a lot. I’ll talk to you guys soon.

Thank you.

Thank you. And we have another follow-up from the line of Shai Dardashti from DCM.

Hi. I’m still fixated on patent. So I’m sorry to go back to see moments. I’ve realized that AVIS acquired Zipcar. And there clearly is a strategic relationship with AVIS. So I’m wondering how the AVIS ownership of Zipcar impacts your thinking and your strategy from a high level?

I’ll take that Shai. Well, let me start by saying like you, we’re also fixated on the patent and the rest of patent portfolio. And as it’s specifically pertained to AVIS and Zipcar, they’re obviously a very important customer of ours. We have no intention of pursuing any type of infringement against the very key customer. But we’re certainly not okay with any one stealing our inventions. So to the extent that there is infringement beyond the customer, we will vigorously pursue the protection of our patents. But it’s -- right now, AVIS is a very key customer. And I don’t believe that it would be beneficial to the shareholder community for us to start fighting with the customer of ours.

Okay. Thank you.

Absolutely.

Thank you. And that concludes our question-and-answer session for today. I would like to turn the conference back over to Jeffery Jagid for any concluding remarks.

Thank you. I would just like to thank everyone for participating on the call today. And we look forward to continuing to report on our progress throughout 2013. Thank you very much everyone.