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EANS-Adhoc: Identive Group Inc.
Identive Group announces second quarter 2010
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+++ 93% Revenue Growth, Cost Reductions Drive Positive Adjusted EBITDA +++ Plans to move from Prime Standard to Entry Standard segment
SANTA ANA, Calif. and ISMANING, Germany, August 16, 2010 - 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 second quarter (Q2) of fiscal 2010, ended June 30, 2010. The Company also announced plans to move its German stock listing to the Entry Standard segment of the Frankfurt Stock Exchange.
Q2 2010 Results
Identive´s Q2 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 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 Q2 2010 was $21.2 million, up 93% from $11.0 million in Q2 2009 and up 39% from $15.3 million in the first quarter (Q1) of 2010. The year over year increase primarily was due to the inclusion of additional revenue from the acquired Hirsch, Bluehill ID and RockWest businesses, while sequential growth was driven by strong sales levels within the Company´s Identity Management Solutions & Services segment and the addition of RockWest.
Sales in the Americas accounted for 66%, sales in EMEA accounted for 24% and sales in the Asia/Pacific region accounted for 10% of total Q2 2010 revenue. Sales in EMEA are mostly denominated in euro and the relative weakness of this currency in Q2 impacted the geographic mix, as did strong sales to the U.S. government and the addition of RockWest to Americas revenue.
Highlights in Q2 2010 included more than $4.0 million in U.S. government agency orders for Hirsch security systems, which reflect the continued high activity of government agencies to enhance their security systems as mandated under programs such as Homeland Security Presidential Directives 5 and 12. Sales from the Company´s Multicard business remained stable overall in the second quarter, and Multicard Germany received a large order for products and services to support the German electronic ID program, for which delivery is expected to begin in November 2010 and continue over a twelve-month period. The Company´s SCM Microsystems business will also participate in this program as the original design architect and manufacturer of the RFID based contactless card readers. SCM´s U.S. government business remained stable in Q2 2010, although semiconductor shortages constrained sales of SCM readers in Asia. Sales of RFID inlays within the Company´s TagStar business showed good improvement in Q2 and orders activity was strong. Identive´s most recent acquisition, RockWest, performed as expected, generating approx $2.1 million in sales, and experienced increased integration activity in the state and local government and education markets during the quarter.
Non-GAAP gross profit margin, excluding overhead allocation, amortization and equity-based compensation expense, was 51% in Q2 2010 compared with 57% in Q2 2009 and 49% in Q1 2010. Strong and stable margins at Hirsch and improved margins at SCM were partially offset by low margins due to unfavorable product mix in the Company´s Multicard and TagStar businesses.
Non-GAAP overhead costs (operating expenses before amortization, depreciation, overhead allocation, equity-based compensation, acquisition, transition and integration costs), were $10.1 million in Q2 2010, up 40% from $7.2 million in Q2 2009 and basically flat with $10.0 million in Q1 2010. The increase in overhead costs in Q2 2010 compared with the previous year is due to the inclusion of the incremental expenses from the acquired businesses, offset by cost reductions initiated in the previous quarter. The cost reduction measures implemented in Q1 2010 included facility consolidations, streamlining of the Company´s existing and acquired organizations in Germany and India, and reductions in headcount, executive salaries and Board of Director fees. Additionally, during Q2 2010 Identive began consolidating administrative services and programs including payroll, banking and health benefits across all employees in the U.S., which the Company expects will yield incremental savings going forward. All together, the Company expects its cost reduction programs will result in savings of approximately $6.0 million per year, of which approximately $4.5 million will be realized in 2010. Benefits from the cost savings measures were limited in Q1, more fully realized in Q2 and expected to be fully realized in the second half of 2010. Savings in overhead costs in Q2 were offset by the additional overheads associated with RockWest.
Non-GAAP adjusted EBITDA (EBITDA before equity-based compensation, acquisition, transition and integration costs) was $0.7 million in Q2 2010, compared with a loss of $(1.0) million in Q2 2009 and a loss of $(2.5) million in Q1 2010. Cash and cash equivalents at the end of Q2 2010 were $4.6 million, down from $6.8 million at the end of the previous quarter, reflecting limited changes in working capital and funding of the acquisition, transition and integration costs. On a GAAP basis, gross profit margin in Q2 2010 was 46%, compared with 53% in Q2 2009 and 44% in Q1 2010. Total GAAP operating expenses in Q2 2010 were $11.5 million, compared with $7.6 million in Q2 2009 and $12.2 million in Q1 2010. GAAP operating loss was $(1.7) million in Q2 2010, compared with $(1.9) million in Q2 2009 and $(5.5) million in Q1 2010.
GAAP loss from continuing operations attributable to Identive Group, Inc, in Q2 2010 was $(0.9) million, or $(0.02) per share, compared with $(0.6) million, or $(0.03) per share in Q2 2009 and $(6.0) million, or $(0.15) per share in Q1 2010.
Move to Entry Standard Listing on Frankfurt Stock Exchange
Identive has decided to apply to the Frankfurt Stock Exchange to move its German stock listing from the regulated market/Prime Standard to the Entry Standard market of the German Stock Exchange. The process is expected to take approximately four months from the date of application, which has not yet occurred. The Group expects to retain the same symbol, "INV", and anticipates normal trading on the German exchanges during the application and transition process.
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ots Originaltext: Identive Group Inc.
Im Internet recherchierbar: http://www.presseportal.ch
Further inquiry note:
Mr. Fabien B. Nestmann
+41 44 839 7007 & +1 949 610-5114
Branche: Computing & Information Technology
Index: Prime All Share, NASDAQ
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
München / free trade
New York / regulated dealing