Good afternoon. Welcome to I.D. Systems Second Quarter 2019 Conference Call. Joining us for today's presentation is the company's CEO, Chris Wolfe; and CFO, Ned Mavrommatis. Following their remarks, we will open up the call for questions. Before we begin, I would like to provide I.D. Systems' Safe Harbor statement that includes cautions regarding forward-looking statements during this call. During the call, there will be forward-looking statements made regarding future events including I.D. Systems' future financial performance. All statements other than present and historical facts, which include any statements regarding the company's plans for future operations, anticipated future financial position, anticipated result of operation, business strategy, competitive position, company's expectations regarding opportunities for growth, demand for the company's product offering and other industries, industry trends are considered forward-looking statements. Such statements include but are not limited to the company's financial expectations for 2019 and beyond. All such forward-looking statements imply the presence of risks, uncertainties and contingencies, many of which are beyond the company's control. The company's actual results performance or achievements may differ materially from those projected or assumed in any forward-looking statements. Factors that could cause actual results to differ materially could include amongst others SEC filings, overall economic and business conditions, demand for the company's products and services, competitive factors, emergence of new technologies and the company's cash position. The company does not intend to undertake any duty to update any forward-looking statements to reflect future events or circumstances. Finally, I would like to remind everyone that this call will be made available for replay in the Investor Relations section of the company's website at www.id-systems.com. Now I would like to turn the call over to I.D. Systems' CEO, Mr. Chris Wolfe. Sir, please proceed.

Thank you, Victor. Good afternoon and thank you for joining us today. After the market closed, we issued our financial results for the second quarter and six-months ended June 30, 2019, and a press release, a copy of which is available in the Investors section of our website. The second quarter continued the acceleration of our growth strategy, as we delivered another quarter of solid results and made significant progress executing on our near- and long-term growth plan. From a financial standpoint, Q2 was highlighted by a record quarterly revenue, which was up 20% sequentially and 10% year-over-year. We also achieved our second consecutive quarter of adjusted EBITDA profitability, demonstrating our continued focus on driving profitable growth. Overall, we believe these results are a solid reflection of the building operational momentum in our business. I look forward to sharing more details on our progress. But first I'd like to turn the call over to Ned, who will walk us through on financial results for the second quarter and the first six months of 2019. Ned?

Thank you, Chris, and good afternoon, everyone. Turning to our financial results for the second quarter ended June 30, 2019. Revenue for the second quarter of 2019 increased 20% to a record $16.3 million from $13.6 million in the prior quarter and increased 10% from $14.8 million in the same year-ago period. The increase in revenue compared to the prior year was driven by our Industrial Truck segment, which increased 14% compared to the prior year second quarter, and our Logistics Visibility segment which increased 24% compared to the prior year second quarter. Product revenue for the second quarter of 2019 was $10.6 million compared to $10.8 million in Q2 of last year. The decrease in product revenue was primarily due to timing of unit deliveries to Avis which vary from year-to-year. Service revenue for the second quarter of 2019 were $5.6 million, compared to $4 million in Q2 of last year. The increase in services revenue is due to development service revenue related to the program with Avis, as well as an increase in high margin recurring revenue. Recurring revenue for the second quarter of 2019 increased 10% to $5.4 million from $5 million in Q2 of last year. We expect that growth in recurring revenue to continue to grow as every unit we sell in all three of our segments comes with a long-term recurring revenue contract. Gross profit for the second quarter of 2019 increased 10% to $7.1 million or 43.4% of total revenue from $6.4 million or 43.3% of total revenue in Q2 of last year. Turning to our expenses. Selling, general, and administrative expenses for the second quarter of 2019 were $6 million, up slightly from $5.8 million in Q2 of last year. The increase in SG&A expenses was primarily due to the inclusion of…

Thanks, Ned. Similar to our last call, I'd like to review the highlights from our three business segments and then spend the balance of my prepared remarks on the status of our acquisition of Pointer and the evolution to PowerFleet, which will be the rebranded company post closing. In our Industrial Truck Management business where we sell analytics Software-as-a-Service and purpose-built ruggedized telemetry units, we had a good quarter and missed having a great quarter due to one significant order worth over $1 million that slipped into Q3. In addition, we were off to a very encouraging start with our new partner Jungheinrich, the third largest forklift manufacturer in the world. To recap the strategic partnership, which we forged in Q1, this affords I.D. Systems an opportunity to provide a sophisticated white label solution to Jungheinrich's customer base. During Q2, we successfully finished white labeling our SaaS solution; we developed a Jungheinrich-specific telemetry unit, and recently began shipping initial units to their end customers in Europe. We see growing excitement and momentum through the Jungheinrich worldwide dealer network as the product launch is being rolled out and ramped up. Beyond Jungheinrich partnership, we also secured multiple new wins and follow-on orders across all of our geographies, not only in Europe with Jungheinrich but also in North America with companies like Paccar, Bayer Pharma, Nestlé, and Georgia Pacific. Lastly, our launch of PowerFleet Essence product is gaining ground. As we mentioned previously, this product is targeting small fleets that are used in stores and small facilities. As planned and hoped, we have entered a large-scale trial with PowerFleet Essence that has significant potential for 2020. We believe our continued success demonstrates the growing demand for I.D. Systems solutions and how our technology empowers these customers to effectively manage our assets, keep…

Of course. [Operator Instructions] And our first question comes from the line of Josh Nichols from B. Riley FBR. You may begin.

Yeah. Thanks for taking my question and great to hear things are moving along pretty quickly with Jungheinrich. I was wondering if you could help frame a little bit more about the size of this opportunity longer term as we think about; one, how many of these materials handling units Jungheinrich is selling and what the ultimate penetration rate of this white label solutions could be as we progress through this year and next?

Yeah. Thanks, Josh. Our deal with the Jungheinrich, which we signed initially is for a minimum of 2,000 units a year for the next two years. To be quite honest with you, I think both companies would be, I would say disappointed would be the least of what I would say. Jungheinrich ships about 150,000 forklifts and material handling trucks a year. We believe and I hope our goal is that we'll shoot at the 10% penetration rate of what they ship out a year. However, we have to earn that. We have to get the channel up and running. We have to train their people, but right now the excitement is there to be successful.

Thanks. And then is that right you said the LVS segment was up 24% year-over-year in 2Q? Did I hear that right?

Correct. That’s Q2 -- Q2.

Great. And then, I guess could you just -- that segment seems to be performing quite well. Could you just talk a little bit about the expectations a little bit for the industrial truck in the second half? And how things are going?

Yeah. I think in the industrial truck, the pipeline looks very strong. Actually, through the dealer channel -- I'm not mentioning the OEM channel with Jungheinrich, you're talking industrial truck, right? So, the strategic accounts look strong, the dealer channel looks strong. So again, I feel fairly confident in the rest of the years holding very good numbers. And we haven't -- we didn't ship one Jungheinrich private labeled unit in the first half. So, all those units will start coming in the second half.

And then last question for me, and then I'll hop back into the queue. Great to hear -- it seems like things are moving along, proxies out for the acquisition with Pointer. I guess how are things going as far as the integration planning front and opportunities that you think that you could talk about as far as Pointer or some of the 4G product offerings? And how you could maybe incorporate some of that into your existing offerings?

Yeah. That's probably important for everyone to know that the $150 million target is really based on the current growth plans for both companies and that -- it doesn't take into consideration any what we call cross-selling opportunities, which there are some fairly significant opportunities for us to pursue. Number one, taking our Industrial Truck products and selling them through geographies that Pointer and Cellocator are in today. And number two, looking at their fleet management systems that they sell globally and bringing those back into the United States. And a matter of fact, we're already starting some pilots in the states with those products. And just so you understand what those products are that really goes after smaller vehicle fleets for service and utility and delivery. Typically, what we call the Class 1 to 5 fleets. There is 25 million to 30 million of those vehicles in the U.S. market. And historically, in our Logistics Visibility side as an example, we typically go after the Class 7 and 8, which you -- most people would consider like a semi truck and tractor. So again, it's brand new opportunities on selling on both of those sides. We've had in the last two months what we call speed dating sessions between all the business leads to come up to speed on all the business activities across all geographies and verticals as well as product road map meetings et cetera. I mean there is a lot of opportunity for us to consolidate platforms. We already have people working on the strategies there, as well as even where people are hosting. The good thing is we're both on the same technology stack. So, we're a Microsoft stack the technology wise and so is Pointer and Cellocator. So, that actually helps us out quite a bit.

Thanks, guys. I will hop back in the queue.

Okay, thanks, Josh.

Thank you. And our next question comes from the line of Glenn Mattson from Ladenburg. You may begin.

Hi. Thanks for taking the question. So, jump right in on the Jungheinrich. Nice to see that you've gotten all the work done there to move forward, I guess. Can you talk a little bit about what you think the first deployments would look like? What kind of customers are taking the first ones? Is there like a test period or trial period? And how should we judge success over the first quarter or 2? Like, I know you said expect a minimum of 2,000 a year, hopefully much more than that. But what does it look like in the early stages of the rollout here?

Yes. Just so everyone's aware too, it's probably important to note Jungheinrich's been representing our product to the world's largest online retailer in Europe. So, they have a lot of familiarity with our product and our people and working with us. The only difference is in the products and it's significant. I mean on the white labeling it is a Jungheinrich product. But we actually did some specific vehicle integration to make their product easier to install as well as operate a little slightly differently for Jungheinrich. So, again, I think the nice thing is, they have a product that actually works phenomenally well with their trucks coming off the line. But, again, they're already familiar with selling our product. They've already been bringing their dealers up to speed. We see their -- basically hitting the ground running. We don't see there is any kind of pilot or field trialing going on.

Okay. So can you give us any sense of what kind of volumes you'd expect in the back half for instance?

Well, I think initially we're probably talking somewhere in neighborhood of 500 units in a quarter potential.

Right. Okay, great. That makes sense. And I missed something you said Chris about the -- an order that slipped that could've -- you said it was a $3 million order that slipped or something?

No. It was just slightly over $1 million.

Okay. And that was in what segment again?

That was in the Industrial Truck segment in North America.

Okay, great.

All indications even going into the quarter was we were going to land that. It just pushed out mainly due to vacations in Canada. So...

Okay, great. I will jump back in. Nice quarter guys.

Thanks, Glenn

Thank you. [Operator Instructions] Our next question comes from the line of Gary Prestopino from Barrington Research.

Hi. Good afternoon, everyone. You gave segment revenue growth I think two segments. What was the automotive growth? Or did I miss that in your narrative Ned.

Sure. It was actually down slightly. The Automotive business in this quarter it was about $4.7 million. Last quarter, it was $5 million that had to do with last year in Q2 we actually had a big delivery of hardware to Avis for the initial 50,000 units.

Okay. That's great. And then rather new to the story, but I just want to make sure I got this right the 75,000 of telemetry units that's targeted for Avis Europe. Is that correct?

No. That's actually targeted for Avis U.S. and...

Okay. Okay. I just wanted to – and you're doing certification for Avis vehicles in Europe but you don't – you haven't got any orders for anything shipped over there yet, right?

That's correct.

Okay. And then Chris you mentioned something I was trying to write this down. You said there was something 125,000 unit market in your narrative and I couldn't write it down. What is that pertain to?

Yeah. The 125,000 units is actually in our pipeline. So it actually represents a little over seven of the top 100 carriers that are in active pilots right now with our new LVS and Freight Cam platforms. Again, I can't reiterate enough what Freight Cam. Its like – it would be great one of these days to do a show and tell on this line, but maybe not the right venue. It literally when you can see the freight and you can see the behavior of the freight. How it's loaded, whether – how much percent of capacity you had back. Usually, the comments you get back is wow this is really good stuff. And this is like from some of the top logistics players in the field. So, again that, 125,000 is in our pipeline being worked right now as opportunities.

Okay. That's an opportunity nothing signed, right?

No, no but they are piloting, right? So –

Okay. No that's fine. I'm just trying to make sure I get it right here. And then that's in the LVS business, right?

Yes correct.

Okay. Thank you.

Thanks, Gary.

Thank you. [Operator Instructions] Our next question comes from the line of William Gibson from Roth Capital Partners. You may begin.

Thank you. Chris, we talked about – you talked about CarrierWeb and refrigerated truck – trucks and that business but what did they get on average on their in-cab installations?

So our in-cab product is about $800 retail for the actual hardware. And then the recurring in-cab is about $30 a month.

Okay. And for modeling purpose is – for the combination of PowerFleet is November 1st, a good date?

Hey, Bill, it's Ned. We're really going to push towards the early part of October. The vote is set for August 29. In Israel there is a 30-day waiting cooling-off period post the vote. So you have to wait 30 days prior to closing. And then there is some Jewish holidays in late September. So we're going to push hard for the first few days of October, but that's the plan.

Okay. Good. Appreciate it.

We want to start the fourth quarter as PowerFleet one combined organization.

Thank you.

Thanks, Bill.

Thank you. And I'm showing no further questions at this time. I'd like to turn the call back to Chris Wolfe for closing remarks.

Yeah. Thank you for joining us today. Again, I'd like to thank our employee's, customer's, partners and shareholders for their support. We look forward to updating you on our next call. Operator?

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