75% Sales Growth and Cost Reductions Yield Positive Adjusted EBITDA
of $1.2 million
Corporate news transmitted by euro adhoc. The issuer/originator is solely
responsible for the content of this announcement.
Subtitle: 75% Sales Growth and Cost Reductions Yield Positive
Adjusted EBITDA of $1.2 million
Santa Ana, Calif. and Ismaning, November 10, 2010 (euro adhoc) -
Identive Group, Inc. (NASDAQ: INVE; Frankfurt Stock Exchange: INV), a
provider of products, services and solutions for the security,
identification and RFID industries, today announced results for the
third quarter (Q3) of fiscal 2010, ended September 30, 2010.
"Our sales momentum in Q3 and further cost reductions drove up
adjusted EBITDA to $1.2 million, validating the financial model we
put in place at the beginning of the year," commented Ayman S.
Ashour, chairman and chief executive officer of Identive Group.
"Identive´s ability to provide secure ID solutions at all levels of
the value chain enabled us to capitalize on significant demand trends
within the global identity management market in Q3. We also
benefitted from growing synergies within the Group, as individual
businesses leveraged each other´s technologies, geographic presence
and market expertise to expand sales. Our cost structure is still
higher than we want it to be. We are pleased with the progress we
have made but are continuing to work to improve efficiency across the
Q3 2010 Results
Identive´s Q3 2010 results include the operating results of acquired
companies since the dates of their respective acquisition. These
include Hirsch Electronics Corporation, acquired April 30, 2009;
Bluehill ID AG, acquired January 4, 2010; and Multicard U.S.
(formerly RockWest Technology Group, Inc.), acquired April 14, 2010.
All figures are reported in U.S. GAAP, except as noted. A discussion
of non-GAAP measures and reconciliation to the applicable GAAP
measures is included below. Revenue in Q3 2010 was $23.3 million, up
75% from $13.3 million in Q3 2009 and up 10% from $21.2 million in
the second quarter (Q2) of 2010. The year over year increase
primarily was due to the inclusion of additional revenue from the
acquired Bluehill ID and Multicard U.S. businesses, while sequential
growth primarily was driven by strong sales of ID security solutions
for government applications in the U.S. and Germany.
Sales in the Americas accounted for 55%, sales in EMEA accounted for
36% and sales in the Asia/Pacific region accounted for 9% of total Q3
Highlights in Q3 2010 included continued strong orders from U.S.
government agencies for Hirsch security systems, which reflect the
high activity in the sector around compliance with security mandates
under programs such as Homeland Security Presidential Directive 12.
In the Company´s SCM business, the shipment of 165,000 secure IT kits
to fulfill the first of four large orders related to the German
government´s implementation of a new electronic citizen ID card
contributed $2.5 million of revenue in the quarter. Sales from the
Multicard businesses were relatively stable in the quarter, with
strong demand in the U.S. and Netherlands offsetting project delays
and uneven order flow elsewhere. During Q3, Multicard U.S. was
selected to provide equipment and systems for state and county
programs to identify and coordinate first responders, patients and
assets in case of emergency or pandemic events. Multicard Netherlands
provided personalization and fulfillment services including RFID
labels for a cashless payment program for Rabobank`s 45,000
employees. Record sales in the TagStar business were driven by new
applications, including the RFID labels used in the Rabobank program,
limited use tickets for transit programs in the U.S. and Europe,
secure tracking of pharmaceutical consumables, and electronic
authentication and tracking for the rental car market in Europe.
Non-GAAP gross profit margin, excluding overhead allocation,
amortization and equity-based compensation expense, was 47% in Q3
2010, compared with 54% in Q3 2009 and 51% in Q2 2010. Strong and
stable margins at Hirsch and improved margins at Multicard were
offset by unfavorable product mix in the SCM business and production
ramp issues at TagStar during the quarter.
Non-GAAP overhead costs (operating expenses before amortization,
depreciation, overhead allocation, equity-based compensation,
acquisition, transition and integration costs), were $9.8 million in
Q3 2010, up 22% from $8.1 million in Q3 2009 and down 3% with $10.1
million in Q2 2010. The increase in overhead costs in Q3 2010
compared with the previous year is due to the inclusion of the
incremental expenses from the acquired businesses, offset by cost
reductions initiated at the beginning of 2010, which included
facility consolidations; reductions in headcount, executive salaries
and Board of Director fees; as well as consolidation of
administrative services and programs.
Non-GAAP adjusted EBITDA (EBITDA before equity-based compensation,
acquisition, transition and integration costs) was $1.2 million in Q3
2010, compared with adjusted EBITDA loss of $(0.9) million in Q3 2009
and positive adjusted EBITDA of $0.7 million in Q2 2010.
Non-GAAP earnings per share (earnings per share before amortization
of intangibles of acquired companies) in Q3 2010 was $0.00, compared
with non-GAAP loss per share of $(0.08) in Q3 2009 and a positive
non-GAAP EPS of $0.01 in Q2 2010.
On a GAAP basis, gross profit margin in Q3 2010 was 43%, compared
with 50% in Q3 2009 and 46% in Q2 2010. Total GAAP operating expenses
in Q3 2010 were $11.2 million, compared with $8.3 million in Q3 2009
and $11.5 million in Q2 2010. GAAP operating loss was $(1.1) million
in Q3 2010, compared with $(1.6) million in Q3 2009 and $(1.7)
million in Q2 2010.
GAAP net loss from continuing operations attributable to Identive
Group, Inc. in Q3 2010 was $(0.9) million, or $(0.02) per share,
compared with $(2.2) million, or $(0.09) per share in Q3 2009 and
$(0.7) million, or $(0.02) per share in Q2 2010. Cash and cash
equivalents at the end of Q3 2010 were $6.2 million, up from $4.6
million at the end of the previous quarter, reflecting funding of
working capital and acquisition, transition and integration costs,
offset by early payments received for the German eID program.
"Governments around the world are implementing secure ID projects at
all levels, from regional programs to credentialize and track
emergency workers, to national schemes to deploy citizen ID cards.
Enterprises are also embracing the economic and security benefits of
identity management and RFID solutions to protect their IT
infrastructure and physical assets," continued Mr. Ashour. "Identive
is focused on addressing the diverse needs of customers across the
range of RFID applications and technologies. Our planned acquisition
of Smartag will further support our market strategy, as it
strengthens our core technology base with a strong IP portfolio,
additional manufacturing capacity and enhances our presence in the
Conference Call and Webcast Information Identive Group will host a
conference call and webcast today at 8:00 AM Eastern Time, which can
be accessed by dialing 866.788.0542 (toll free within the U.S.) or +1
857.350.1680 (outside the U.S.) and using pass code 22371207. A
webcast of the call that includes presentation slides can be accessed
by visiting the investor page of the Company´s website at
www.identive-group.com, 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 73164924.
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Further inquiry note:
Herr Fabien B. Nestmann
Tel.: +49 89 9595-5544
Branche: Computing & Information Technology
Index: Prime All Share, NASDAQ
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