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
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Lennart Streibel, +49 89 9595 5195, This e-mail address is
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