SANTA ANA, Calif. and ISMANING, Germany, May 10, 2012 - Identive Group, Inc. (NASDAQ: INVE; Frankfurt: INV), a provider of products, services and solutions for the identification, security and RFID industries, today announced preliminary results for the fiscal first quarter (Q1), ended March 31, 2012. These results are subject to the completion of the review of the Company's financial results for the quarter. Final results will be disclosed in the Company's Quarterly Report on Form 10-Q.

"Our Q1 revenue performance was at the lower end of our expectations, reflecting typical seasonality, the absence of new contracts for the German national ID program, which contributed $2.9 million in the 2011 first quarter, and order deferrals from two large Transponder customers. Sales of our higher-margin enterprise security systems grew 10% due to a widening customer base in the U.S. and Europe, as well as a small amount of movement on delayed projects with some U.S. Government agencies. With the acquisition of Payment Solution AG in Germany and the expansion of our Cashless Betalen™ payment system in The Netherlands, our cashless payment business accounted for over 13% of our total non-GAAP revenue of $21.9 million in Q1 and further expanded our recurring revenue base," said Ayman S. Ashour, chairman and chief executive officer of Identive Group, Inc. "Operating expense levels in Q1 reflected our continued investments for the near field communication, converged access and Software as a Service markets. As we enter Q2 we are encouraged by market reception for our NFC and SaaS offerings and by the build-up of our order book."

Q1 Results
As reported in accordance with U.S. generally accepted accounting principles (GAAP) and on a preliminary basis, revenue was $21.2 million in Q1 2012, compared with $22.4 million in Q1 2011 and $27.9 million in the fourth quarter (Q4) of 2011. By segment, revenue from Identity Management Services and Solutions was $12.7 million and revenue from ID Products was $8.5 million in Q1 2012. GAAP gross profit margin was 41% in Q1 2012, compared with 42% in Q1 2011 and 41% in Q4 2011. Net loss was $(6.2) million, or $(0.11) per share in Q1 2012. This compares to net loss of $(1.9) million, or $(0.04) per share in Q1 2011 and net loss of $(2.4) million, or $(0.04) per share in Q4 2011. Net loss in Q1 2012 included non-cash charges of $2.2 million, of which $0.9 million was primarily due to amortization expense related to acquisitions.

Non-GAAP revenue of $21.9 million in Q1 2012 includes the assumed breakage from consumer payment cards where, based on historical experience the likelihood of redemption is remote as well as timing differences on revenue associated with the personalization of preprinted payment cards and tags.

Non-GAAP gross profit margin was 45% in Q1 2012, compared with 46% in Q1 2011 and 45% in Q4 2011. Adjusted EBITDA was $(3.1) million in Q1 2012, compared with $(0.3) million in Q1 2011 and $0.2 million in Q4 2011. Non-GAAP gross profit margin excludes amortization and depreciation, overhead allocations, transition and acquisition costs and stock-based compensation and includes the assumed breakage from consumer payment cards where, based on historical experience the likelihood of redemption is remote as well as timing differences on revenue associated with the personalization of preprinted payment cards and tags. Adjusted EBITDA reflects EBITDA before stock-based compensation, adjustments to earn-out estimates, and acquisition, transition and integration costs, and includes the assumed breakage from consumer payment cards where, based on historical experience the likelihood of redemption is remote as well as timing differences on revenue associated with the personalization of preprinted payment cards and tags.

A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Cash and cash equivalents at March 31, 2012 were $13.3 million, compared with $17.2 million at December 31, 2011, reflecting expenditures of $1.5 million for capital equipment, $0.5 million for the purchase of the remaining shares of idOnDemand, $0.2 million related to the acquisition of Payment Solutions AG, $0.6 million for quarterly payments on financial liabilities and funding of operations.

Q1 2012 Business Highlights
Identive won several large projects in the government and critical infrastructure markets in Q1 2012, including:
• Orders for 266,000 smart card readers for secure network logon for a U.S. Government agency;
• Expansion of a contract for enterprise security systems valued at $1.6 million for an agency within the U.S. Department of Justice;
• Expansion of a contract to secure switching facilities for a telecommunications company in the EMEA region; and
• Selection to provide systems and professional services for a terminal access upgrade project at El Paso International Airport, which follows the Company's earlier selections for similar projects at airports in Austin, Long Beach, Palm Springs, Sacramento and San Diego.
In March 2012, Identive launched important products in which the Company has made significant investments:
• The next-generation Hirsch Identive access control system seamlessly bridges physical and IT infrastructures, enabling organizations to improve security, reduce data redundancy and comply with current and evolving information and physical security standards;
• The TouchSecure line of readers enable customers to upgrade quickly their facilities to include integrated network access without added cost or disruption to existing physical access systems; and
Integrated solutions using Hirsch Identive's new access control platform and the TouchSecure reader enable customers use NFC-enabled mobile phones as secure credentials to access their facilities and log on to computer networks.

"In recent months we have experienced increasing synergy between the different parts of our business in product development and sales, as we are now moving beyond the build-out of Identive's component parts to focus on a shared approach in our target markets," continued Ashour. "Changes in our organization and management are accelerating the marriage of innovation from our newer technology growth areas with our established sales channels and customer base."

Conference Call and Webcast Information
Identive Group will host a conference call and webcast today at 9:00 AM Eastern Time, which can be accessed by dialing 866.271.0675 (toll free within the U.S.) or +1 617.213.8892 (for international callers) and using pass code 92881906. A webcast of the call that includes presentation slides can be accessed by visiting the investor relations section of the Company's website at www.identive-group.com, and by clicking on "Presentations, Reports & Webcasts," where it also will be archived for those unable to listen to the live webcast.  An audio replay of the call also will be available for one week and can be accessed by dialing 888.286.8010 (toll free within the U.S.) or +1 617.801.6888 (for international callers) and using pass code 96548996.

About Identive Group
Identive Group, Inc. (NASDAQ: INVE; Frankfurt: INV) is focused on building the world's signature company in Secure ID. The company's products, software, systems and services address the markets for identity management, physical and logical access control, cashless payment, NFC solutions and a host of RFID-enabled applications for customers in the government, enterprise, consumer, education and healthcare sectors. Identive's mission is to build a lasting business of scale and technology based on a combination of strong technology-driven organic growth and disciplined acquisitive expansion. The company delivers up-to-date information on its activity as well as industry trends through its industry-leading social media initiatives and educational resource, AskIdentive.com. For additional information, please visit www.identive-group.com or follow on Twitter at @IdentiveGroup.

Non-GAAP Financial Measures
Identive has provided in this release selected preliminary financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP revenue, gross profit margin, and adjusted EBITDA. Identive uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Identive's ongoing operational performance. Identive believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. As noted, the preliminary non-GAAP financial results discussed above add back or exclude various items which are detailed in the reconciliation table contained within this release. Assumed breakage from consumer payment cards where, based on historical experience the likelihood of redemption is remote, relates to our Payment Solutions AG business and timing differences related to cards and tags relates to the two-step process under which preprinted customized payment cards and tags are provided to customers for subsequent personalization for their end-users. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures as detailed in this release.

Note Regarding Forward Looking Information:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as "anticipates," "believes," "plans," "will," "intends," "expects," and similar references to the future. Examples of such statements include, without limitation, statements we make regarding our preliminary results for Q1 2012, our expectations regarding continued demand for our products, solutions and services, our expectations regarding market acceptance of our NFC and SaaS offerings, our ability to achieve results from increased investment in R&D, our ability to capitalize on our technology portfolio, and our expectations for future growth and profitability. Readers should not unduly rely on these forward-looking statements, which are not a guarantee of future performance and are subject to a number of risks and uncertainties, many of which are outside our control, which could cause our actual business and operating results to differ. Factors that could cause actual results to differ materially from those in the forward-looking statements include our ability to grow our company based on a strategy of providing products, components and services for the secure identification market; to successfully develop and commercialize new products and solutions that satisfy the evolving and increasingly complex requirements of customers; whether the markets in which we participate or target may grow, converge or standardize at anticipated rates or at all, including the markets that we are targeting; our ability to successfully integrate acquired businesses; our ability to successfully compete in the markets in which we participate or target; and general global political and economic factors which are beyond our control but may unduly impact our markets and our business. For a discussion of further risks and uncertainties related to our business, please refer to our public company reports, including our Annual Report on Form 10-K for the year ended December 31, 2011 and subsequent reports filed with the U.S. Securities and Exchange Commission. All forward-looking statements are based on information available to us on the date hereof, and we assume no obligation to update such statements.

All trade names are trademarks or registered trademarks of their respective holders.

Contacts:
Darby Dye, +1 949 553-4251, This e-mail address is being protected from spambots. You need JavaScript enabled to view it     
Lennart Streibel, +49 89 9595 5195, This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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