Kenneth S. Ehrman – President and Interim Chief Executive Officer :

Matthew Paul – Sidoti & Co. LLC Morris B. Ajzenman – Griffin Securities, Inc. Bryan J. Prohm – Cowen & Co. LLC

Good day ladies and gentlemen and welcome to the I.D. Systems' Q4 2013 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). Now I would like to turn the call over to Ken Ehrman, President and Interim CEO. Mr. Ehrman you may begin.

Welcome to I.D. Systems; fiscal 2013 year-end 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 2013 highlights in a moment. Joining me is our CFO, Ned Mavrommatis; who will detail our financials for the fourth quarter and full year 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 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. I would like to open my remarks with some comments about our announcement this past Monday, March 3 regarding the management changers at I.D. Systems. As I am sure all of you know Jeff Jagid resigned as the Company’s CEO and stepped down as Chairman of the Board although he will continue his term as a Director on our Board. Jeff and I have been business partners for a long time and the Company has come a long way with Jeff as our CEO. We truly appreciate his leadership, the many contributions he has made to help I.D. Systems become a leader in the wireless M2M solution space and we wish him nothing but the best in his future endeavors. However I am gratified that our board of directors has entrusted me with guiding…

Thank you, Ken. And hello to everyone on the call. Revenue for the three months ended December 31, 2013 increased 7% to $11.4 million from $10.7 million in the fourth quarter of 2012. Revenue from industrial vehicle systems increased by 18% in the fourth quarter to $6.3 million from $5.3 million in the fourth quarter of 2012. Revenue from transportation asset management systems increased by 8% in the fourth quarter to $4.7 million from $4.4 million in the fourth quarter of 2012. The increase in revenue from industrial vehicle systems and transportation asset management systems in the fourth quarter was partially offset by a decrease in revenue of approximately $600,000 from rental fleet management systems as we completed the first phase of the Company's agreement with Avis Budget Group in 2012. Recurring revenue in Q4 was $4.5 million, or 40% of total revenue, attributable primarily to transportation asset management systems. As Ken noted, after taking a hard look at our inventory, particularly in light of the many new product developments we’re undertaking, we incurred a non-cash charge of $2.1 million for obsolete goods in the fourth quarter of 2013. The majority of these products were inherited from prior acquisitions. The inventory reserve charge had a direct impact on cost of sales and gross margins for the quarter and full year, however, it had no effect on cash. Excluding the inventory reserve charge, our non-GAAP gross margin in Q4 was 48% compared to non-GAAP gross margin of 46% in the fourth quarter of 2012. Our GAAP margin in the fourth quarter was 30% compared to 45% in the same period a year ago. SG&A and Research and Development expenses in Q4 were unchanged at $5.7 million and $1 million respectively compared to the same period in 2012. Excluding the inventory reserve charge, stock-based compensation and depreciation and amortization, our non-GAAP net loss for the fourth quarter was $155,000 or $0.01 per basic and diluted share compared to non-GAAP net loss of $215,000 or $0.02 per basic and diluted share in the fourth quarter of 2012. Net loss in Q4 was $3.1 million or $0.26 per basic and diluted share compared to net loss of $1 million or $0.09 per basic and diluted share in Q4 of 2012. Our balance sheet remains strong, as of December 31, 2013 the company had $14.1 million in cash, cash equivalents and marketable securities, which equates to $1.15 per share outstanding and we had no debt. I would like to conclude by reiterating Ken’s optimism and enthusiasm about our future prospects. We’re encouraged by how 2014 has started and I look forward to reporting Q1 financial results in the near future. Thank you for the time today. I’ll be happy to respond to your questions in a moment. With that, I’d like to turn the call back over to Ken.

Thank you Matis, begin the Q&A session.

Thank you ladies and gentleman (Operator Instructions) and our first question comes from Matthew Paul of Sidoti & Co. Your line is now open. Matthew Paul – Sidoti & Co. LLC: Hi guys good afternoon and thanks for having me. If you could just limit this to the rental management business, I’d like to get some further color on your plans to further first expand within Avis, you touched upon looking into a new region and what have you and second maybe more importantly your efforts to further commercialize that IP and maybe develop new vertical new end-users for new verticals?

Yes, thank you for the question. In addition to what I have said in the script, really the rental car market represents a large uncapped, un-penetrated opportunity for our technology. We believe that we have the most advanced technology in the industry, the product automates the rental materials of the cars as well as automates the locking and unlocking of the cars and it is something that as we mentioned earlier we have multiple patterns protecting it. We are perusing in addition to the programs that we were working on with Avis, all the other major rental car companies as well as other companies that have large fleets of vehicles. So it definitely remains a large market opportunity for our company and we are looking forward to reporting progress in this area as we move forward. Matthew Paul – Sidoti & Co. LLC: Okay, maybe I guess I am in hurry, but there were comments on the call I guess for new uses for the same technology and then am I hearing that correctly or?

Yes, so in another words, so the device is themselves that we have are intelligent. They have firmware on them and they are capable of being program that provide different functionalities, so with either specifically, we’ve deployed the system in a new region, so that they can test additional functions that they weren’t using when they deployed the system in the Northeast and in Seattle. So those additional functions further enhance and streamline our rental car operation and add to the return on investment side of the equation. Matthew Paul – Sidoti & Co. LLC: Okay, got you. My third question, I just wanted to ask if there is a time horizon for your source to replace I guess for yours executive services?

Well, really that would be a good question for the Board, but my answer to that is that the Board is going to look for the best person for the job that may take anywhere from two to four months, perhaps as long as six months, but obviously I’m putting my hand in the ring and I intend to do everything I can to try to win it. Matthew Paul – Sidoti & Co. LLC: Okay good to hear, thanks guys.

Thanks.

The next question comes from Morris Ajzenman with Griffin Securities your line is now open. Morris B. Ajzenman – Griffin Securities, Inc.: Hi guys.

Hi Morris. Morris B. Ajzenman – Griffin Securities, Inc.: :

No, it’s not really. I wouldn’t call at that negotiations per se. So when we originally signed the Avis contract, the plan was to put the system into 25,000 callers which brought the number up to 30,000 callers throughout the Avis Budget Enterprise. So that’s something that was based on the existing technology when we signed the contract back in 2012 or 2011, 2011. So since we began on that project and we’re successfully able to complete those first 30,000 unit deployment, technology has changed, the requirements of the industry have evolved. So we were obviously disappointed that they simply didn’t just move forward with the 300,000 extra units that we had pre-negotiate, but we could kind of understand where they were coming from because of the changes that took place over time. They wanted to re-evaluate the different requirements from a operational standpoint in their business. They bought Zipcar, I know you know that something we mentioned kind of disrupted things in many ways and as a result of all of the changes that took place over that time frame, they basically want to re-evaluate their decision and make sure if they were going to move forward with such a large technology deployment that they had the specification – that they had the functionality that would take them for the next five years to 10 years. So that’s something that they are still in a process of evaluating together with us and we are hopeful that between us we can finally come to the conclusion around what specification is truly required to take them for the next several years forward and help them improve their business. So no matter what kind of return on investment they were able to get, they wanted more and I can understand that. Morris B. Ajzenman – Griffin Securities, Inc.: Any can you give us some examples of new geographic regions, about new functionality, what if you can kind of give us an example of what you are talking about here?

Sure. Some of the kind of things that we’re testing are automated inventory tracking systems. So the ability to keep track of where the cars are in the various processes, automating the rental and return of the cars through processes that don’t require hand-held. : Morris B. Ajzenman – Griffin Securities, Inc.: :

No I think, it’s normally more. So on the non-cash basis the gross margins for the fourth quarter were 48%, a couple of points lower than our normal 50% but nothing significant going forward, especially towards the back half of the year with the introduction of the new products. We expect to see margins, become even better than the 50% level, so we feel very good about our gross margins going forward. Morris B. Ajzenman – Griffin Securities, Inc.: Okay, certainly last question, one more question and I’ll jump back in queue. SG&A, third quarter was $5 million and $5.7 million fourth quarter sequentially, was third quarter went anomaly, I’ll figure what went on there, what is the normal run rate, what should we use?

Yes, the third quarter was a little bit of an anomaly. The run rate going forward is both for SG&A and R&D is very similar to the fourth quarter that we just reported. Morris B. Ajzenman – Griffin Securities, Inc.: Thank you.

Welcome.

Your next question comes from Bryan Prohm of Cowen. Your line is now open. Bryan J. Prohm – Cowen & Co. LLC: Hi good afternoon Ken, good afternoon Ned. Just to follow up on Avis, just a little bit, from your comments in the prepared remarks and the Q&A so for, maybe we have drawn the wrong conclusions about when and how Avis expansion might take place, given the technology, the complexity of the technology required a future proof and is there anyway to characterize, I mean to negotiate especially start from scratch, post that first proof-of-concept phase of deployment and is that a better way to look at where we might be in the negotiations relative to when they started on this next phase?

I wouldn’t say, it was like one single-point in time where they kind of change their mind. I think it was more of an evolution as more people got involved in the project, as more people started to using this day-in and day-out in their rental car operations, you had a lot more people involved in the negotiations and involved in determining what type of technology they would want. Every area of the business could potentially be impacted in a positive way and every area of the business might not have been involved when they first move forward with the project, now want to get their saying. So as we deployed it and as lessons were learned, somewhere along the way, there was a decision that they should reevaluate the final specification for the remaining 250,000 units. Bryan J. Prohm – Cowen & Co. LLC: Okay, but does the later number is still potentially the objective, I mean that hasn’t really changed the entirety of the fleet is a potential under rental car as you said?

Yes, and by the way I mean there has been a lot of questions around Avis. I just want to say that we are not an Avis company. I don’t want anyone to think that we are. The market opportunity for our products goes well beyond Avis, I mean if we can just monetize our existing customer base at the levels that they have as far as assets are conserved plus the new products we’ve introduced in the container tracking business, the inter-molar container tracking business as well as safety business, those market opportunities represent significant opportunity for growth for this company. So rental car definitely remains a strategic part of our business, but we also are absolutely very focused on taking our core base of VMS customers and expanding those implications enterprise-wide. If you look at the number of assets that our current customers have, it’s very, very significant and it represents really the safest and easiest path for growth compared to really virtually any other approach we might take. So we definitely want to change the perception, it’s that’s what it seems it’s out there, that we are the Avis company, we are just as excited about some of the opportunities in each one of our business segments. Bryan J. Prohm – Cowen & Co. LLC: You surely have the perfect segway because my next question was going to be about the deal you signed mid last month with China, is that I believe it’s roughly $1 million deal. Can you tell me a little bit more about that? Is that a one-time deployment or is there more of a – is a small percentage of the shipping companies fleet being penetrated with this deal or is there a upside there and then China more generally. Is this the first major deal that you guys have in China?

It’s the first major deal that we have in China. It definitely, is a significant opportunity along the way. We used to think that China really didn’t represent a market opportunity for our products because the cost of labor was so low, but again from an evolving market opportunity standpoint, we have seen the business need from a safety side, from a fleet reduction side, the cost of the vehicle operation that the companies that we’re currently leveraging our technology in the U.S. and the EU are finding just as many needs for it, in China and we do believe that it’s the first of potentially many different applications of our technology in the Far East. Bryan J. Prohm – Cowen & Co. LLC: Great, all right. I’ll seat back to the queue. Thanks guys, good luck.

Thank you.

Thank you.

(Operator Instructions) We do have a follow-up question from Morris Ajzenman of Griffin Securities. Your line is now open. Morris B. Ajzenman – Griffin Securities, Inc : Ken, let me ask you this question, clearly you are very optimistic looking forward as far as further penetration of the existing customer base which I clearly could be very lucrative. Based under optimism, I know you don’t give guidance, going to ask the question anyhow, not on the quality basis but for the next 12 months. Should we be optimistic where we can see double-digit top line growth at least 10% top line growth based on the penetration and new business rewards that are out there?

It’s a little too early for me to give my assessment of where the business is going to go this year from a specific revenue number. I mean I’m still trying to get around, my hands around this transition process. I mean, you read me into a comment that I wanted to kind of close with, which is that, this team is, while I obviously, Jeff and I have known each other a long time bring significant opportunity for a fresh look at the business. I’ve been sticking to, like I said earlier all of our employees, our suppliers, our investors, our analysts and our customers, I’m still in the process of gathering all that information, but they all share my enthusiasm for the opportunity that this change can bring. So what I’m trying to do is create an environment where we have steady predictable growth and that’s going to be my primary objective as we move forward. Morris B. Ajzenman – Griffin Securities, Inc: Yes, thank you.

Question comes from [indiscernible]. Your line is now open.

: :

Yes. There is no question that at this point we can sell to their competitors. We can sell to large fleet. The exclusive period is over I think they were okay with that because they weren’t even 100% sure what they wanted. So you now at arms length business negotiation and business discussion and we are going to hopefully do everything they need to serve their needs.

As a follow up, can you characterize the quantity or the seriousness with which you are having conversations with other rental car agencies?

The discussions are at very high levels, are very serious and they are definitely interested, but it is way too soon, Avis is definitely a way ahead. They deploy the 30,000 vehicles, so we are basically starting from scratch with the other guys, but they definitely like what they see in our technology, there are things our technology does that haven’t seen and so again the opportunity in the rental car market remains one that we are very enthusiastic about.

Okay, thanks again and best of luck in the transition.

Thank you.

Ehrman, I am showing no further questions at this time. You can proceed with any further remarks.

No, I think I already made my last closing remark before the net Avis question was answered, but to make a long story short, we are definitely going to work very hard to try to make this company what we originally wanted at the beginning and we are looking forward to reporting to you in the near future.

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