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Subtitle: Strengthening revenue trend and continued expense reductions drive
return to positive adjusted EBITDA
SANTA ANA, Calif. and ISMANING, Germany, March 7, 2013 (euro adhoc) - Identive
Group, Inc. (NASDAQ: INVE; Frankfurt: INV), a provider of products, services and
solutions for the identification, security and RFID industries, today announced
results for the fourth quarter (Q4) and year ended December 31, 2012.
Q4 2012 Highlights:
- Record quarter for NFC and RFID transponder sales
- Improved smart card reader market in Europe and strong demand in Asia
- 22% reduction in base operating expenses compared to fourth quarter
2011, further lowering breakeven point
- Return to profitability on adjusted EBITDA basis - year over year
improvement of $1.0 million
- Cash of $7.4 million at year end
"The strengthening trend we saw beginning late in Q3 continued through Q4 with
increased order flow and improved traction in much of our business. Pent up
demand following the resumption of delayed customer projects, plus several new
orders, drove NFC and RFID transponder sales in Q4 to more than double from the
previous quarter and grow 34% year over year. It was particularly good to see
improved order activity in Europe after several difficult quarters, and we also
saw strong demand from a variety of our markets in Asia. Our U.S. Government
sales remained stable and we have seen an increase in program activity at the
state level," stated Ayman S. Ashour, CEO and chairman of Identive. "Our
improved revenue performance combined with further reductions in base operating
expenses allowed us to return to profitability on an adjusted EBITDA basis in
Q4, and at a higher level than in the past."
As reported in accordance with U.S. generally accepted accounting principles
(GAAP), Q4 2012 revenues were $26.6 million, down 5% from $27.9 million in Q4
2011. By segment, Identity Management Services and Solutions (Identity
Management) revenues were $13.4 million and ID Products revenues were $13.2
million in Q4 2012.
GAAP gross profit margin was 39% in Q4 2012, compared with 41% in Q4 2011,
reflecting a higher mix of product revenues versus systems and services. Total
base operating expenses (consisting of research and development, sales and
marketing, and general and administrative expenses) were $10.5 million in Q4
2012, down 22% from $13.4 million in Q4 2011 as a result of cost reductions
implemented under the restructuring plan the Company initiated in June 2012 and
from ongoing initiatives to improve the efficiency of the business.
In Q4 2012, Identive recorded GAAP net income of $0.2 million, or $0.00 per
share in Q4 2012, compared with net loss of $(2.6) million, or $(0.05) per share
in Q4 2011. Net income in Q4 2012 includes a $1.4 million benefit for income
taxes mainly related to impairment charges taken earlier in the year.
On a non-GAAP basis, gross profit margin was 41% in Q4 2012, compared with 43%
in Q4 2011. Non-GAAP net income was $0.6 million, or $0.01 per share in Q4 2012,
compared with non-GAAP net loss of $(1.2) million, or $(0.02) per share in Q4
2011. Adjusted EBITDA was $1.2 million in Q4 2012, compared with $0.2 million in
Non-GAAP gross profit margin, adjusted EBITDA and non-GAAP net loss and net loss
per share all exclude various items that are detailed in the financial table and
accompanying footnotes reconciling GAAP to non-GAAP results contained in this
release. An explanation of these measures is also included below under the
heading "Non-GAAP Financial Measures."
Cash and cash equivalents were $7.4 million at December 31, 2012 and reflected
proceeds of $6.9 million from a secured loan facility and a $3.6 million
increase in working capital during the quarter. This compares with $6.3 million
of cash and cash equivalents (net of restricted cash) at September 30, 2012.
Outlook for Q1 and Full Year 2013
Commenting on management's outlook, Ashour said, "The positive demand trends we
saw in Q4 are continuing, setting the stage for a favorable outlook for 2013.
Our transponder production is booked at full capacity through the middle of Q2
and new sales activity remains strong for NFC tags, SmartCore card technology
and RFID products for electronic payment, ticketing, M2M and ID applications. We
continue to extend our activities in the payment sector with new customer
contracts and additional applications. The U.S. budget sequestration introduces
uncertainty and potential disruption into our otherwise stable U.S. Government
business, but we believe any effects would be confined to the near term as the
majority of programs we address are mandate-driven and tied to security
Based on its current expectations, management expects revenues of $22.0 million
to $24.0 million in the first quarter of 2013, which is seasonally the weakest
of the year, and further expects non-GAAP, adjusted EBITDA of $ (1.5) million to
(0.75) million. For full year 2013, management expects revenues of $105.0
million to $115.0 million and non-GAAP, adjusted EBITDA of $4.0 million to $6.0
Full Year 2012 Results
Commenting on 2012 full year results, Identive's CFO, David Wear said, "2012 was
a challenging year as economic austerity measures impacted Citizen ID programs
in Europe and contributed to a 25% drop in sales in the region. Customer project
deferrals also impacted sales of our transponder products for the first three
quarters. We took action in June to accelerate expense reduction and lowered our
breakeven point by taking out more than $6 million in costs. At the same time,
we increased our R&D investment and made significant progress in the development
of core identification technologies as well as new and enhanced offerings to
drive future sales. We entered 2013 with a leaner operating model and a stronger
portfolio of products and solutions for Secure ID."
Revenue for the full year 2012 was $94.6 million, down 8% from $102.7 million in
2011. Revenue from Identive's Identity Management services and solutions segment
was $54.1 million in 2012, down 4% from $56.5 million in 2011 primarily as a
result of the completion of a large European Citizen ID program in the previous
year, for which there were no new orders in 2012. Revenue from the Company's ID
Product segment was $40.4 million, down 13% from $46.2 million in 2011 as a
result of weaker demand for the Company's smart card readers for Citizen ID
programs in Europe and deferrals of transponder product orders. These factors
were partially offset by stronger sales of smart card readers to the U.S.
government market to enable cyber security programs in 2012.
Including the effect of significant non-cash impairment charges and associated
adjustments recorded in the second and third quarters of the year, GAAP net loss
in 2012 was $(50.3) million, or $(0.84) per share, of which $(0.76) per share
related to impairment. This compares with net loss of $(9.8) million, or $(0.18)
per share in 2011.
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 888.771.4371 (toll free within the U.S.)
or +1 847.585.4405 (for international callers) and using pass code 34372133. 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 888.843.7419 (toll free within the U.S.) or +1 630.652.3042
(for international callers) and using pass code 34372133.
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 (Unaudited)
Identive has provided in this release financial information that has not been
prepared in accordance with GAAP, including non-GAAP gross profit margin,
adjusted EBITDA and non-GAAP net income (loss) and net income (loss) per share.
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 non-GAAP financial results discussed above exclude various
items which are detailed in the reconciliation table and accompanying footnotes
contained within this release. 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
expectations regarding continued demand for our products, solutions and services
in 2013, our expectations regarding the successful deployment of and market
acceptance of our NFC, cashless payment and cloud-based solutions, our
expectations regarding future results, including Q1 and full year 2013 results,
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
compete in the markets in which we participate or target; our ability to meet
our sales forecasts; our ability to meet financial covenants of our loan
agreement; our ability to meet growing demand for our products; 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.
Note: Identive and the Identive logo are trademarks of Identive Group, Inc,
registered in many jurisdictions worldwide. All other company, product or
service names may be trademarks or registered trademarks of others and are the
property of their respective owners.
Further inquiry note:
US: Darby Dye, +1 949 553-4251, firstname.lastname@example.org
Europe: Lennart Streibel, +49 89 9595-5195, email@example.com
end of announcement euro adhoc
company: Identive Group Inc.
Carnegie Ave., Bldg. B 1900
US-CA 92705 Santa Ana
phone: +1 949 553 4280
FAX: +49 89 9595-5555
sector: Computing & Information Technology
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Nasdaq: New York, Open Market / Entry Standard: Frankfurt