Identive Group Inc.

EANS-News: Identive Group Inc.
Identive Group announces second quarter 2011 results

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
quarterly report

Subtitle: 21% sales growth driven by broad market demand for Secure ID
solutions; Boosting RFID production capacity to address increasing market

Santa Ana,Calif. and Ismaning, Germany, August 4, 2011 (euro adhoc) - Identive
Group, Inc. (NASDAQ: INVE; Frankfurt: INV), a provider of products, services and
solutions for the security, identification and RFID industries, today announced
results for the fiscal second quarter (Q2), ended June 30, 2011. 

Revenue in Q2 2011 was $25.6 million, up 21% from $21.2 million in Q2 2010 and
up 14% from $22.4 million in the first quarter (Q1) of 2011. Sales in Q2 were
driven by strong demand for identity management solutions for consumer and
citizen ID applications globally as well as ongoing implementations of employee
physical and IT access control systems, offset by continued temporary project
delays with some U.S. government customers. Q2 2011 sales reflected 14% organic
growth year over year net of the effect of acquisitions. 

"In this time of continued economic uncertainty and various project delays, we
have been able to deliver solid sales growth and continue to win important new
business globally," said Ayman S. Ashour, chairman and chief executive officer
of Identive Group. "Sales in Q2 again showed increasing momentum across nearly
all our markets, as the need for secure ID solutions continues to grow to
support new mobile applications, citizen ID programs, and more
single-credential, multi-function campus environments." 

Sales highlights in Q2 2011 included:

• 126% growth in the Company´s Transponder division fueled by the growing demand
for core RFID inlays to support transit, library, pharmaceutical and NFC mobile
applications, including more than seven million RFID inlays for the Los Angeles
Metro. To meet increasing demand, Identive is expanding its production capacity
for high-performance RFID products to support emerging applications such as NFC
tagging, mobile payment and pharmaceutical tracking.

• 66% growth in the Company´s ID Systems Integration & Services division,
reflecting a broad range of identity management programs including cashless
payment systems, one-card campus IDs and smart city applications.

• $1.9 million of revenue related to continued fulfillment of secure readers for
the German national ID programs.

Additional business highlights in Q2 2011 included:

• The acquisition of idOnDemand, which delivers managed identity Software as a
Service (SaaS) that allows organizations to use a single, globally trusted
credential for secure access to buildings, computers, mobile devices and
corporate information stored in the cloud.

• Identive´s selection to provide NFC tags for Google´s smart poster campaign in
Austin, Texas to promote its Google Places service. The smart tags are used by
local businesses to create "smart posters" that promote products and services by
directly downloading information onto consumer´s NFC-enabled smartphones.
Identive has since been authorized to offer direct fulfillment of an expanded
range of Google Places tags through its online marketplace at

• The completion of a common stock offering with net proceeds of $18.3 million,
which will be used to fund continued growth and acquisitions and to expand the
Company´s production capacity.

• Expansion of Identive´s partnership with Rabobank for the consumer roll-out of
the Company´s Cashless Betalen™ mobile payment solution to hockey clubs in
Holland. The solution allows club members to make purchases using a club bank
account via NFC stickers affixed to their smart phones. With more than 200,000
members, Holland´s 250 hockey clubs are targets for the cashless payment
solution, as are other sports clubs where there are frequent group activities
paid for with shared funds.

Mr. Ashour added, "We have continued to reduce our G&A costs as a percentage of
sales while boosting our selling and R&D investment, particularly in SaaS, NFC
and mobility solutions areas. To meet increasing demand for our NFC smartags,
readers and development kits we launched an online NFC solutions marketplace at To address the growing market for RFID solutions, we expect
to bring added inlay manufacturing capacity online before year end." 

The following results are reported in U.S. GAAP, except as noted. Identive uses
certain non-GAAP measures as a way to compare the underlying performance of our
business from period to period, and a discussion of non-GAAP measures and
reconciliation to the applicable GAAP measures is included below.

On a GAAP basis, Identive recorded net loss of $(1.6) million, or $(0.03) per
share in Q2 2011.  This compares to net loss of $(0.7) million, or $(0.02) per
share in Q2 2010 and net loss of $(1.9) million, or $(0.04) per share in Q1
2011. Non-GAAP adjusted EBITDA (EBITDA before equity-based compensation,
acquisition, transition and integration costs) was $(0.3) million in Q2 2011,
compared with $0.7 million in Q2 2010 and $(0.3) million in Q1 2011. 

GAAP gross profit margin was 40% in Q2 2011, compared with 46% in Q2 2010 and
42% in Q1 2011. Non-GAAP gross profit margin (excluding amortization and
overhead allocations) was 44% in Q2 2011, compared with 51% in Q2 2010 and 46%
in Q1 2011. Margins in Q2 were impacted by the relative weakness of identive´s
Enterprise Security business due to US Government project delays and to lower
margin product mix.

Cash and cash equivalents at June 30, 2011 were $20.6 million, compared with
$9.9 million at March 31, 2011, primarily reflecting $18.3 million received from
Identive´s common stock offering, partly offset by a $3.6 million increase in
working capital, $3.6 million of acquisition consideration, integration and
other acquisition-related costs, $0.9 million for payment down of debts and $0.3
million of capital expenditures primarily associated with the set up of a new
Transponder production facility.

Conference Call and Webcast Information
Identive Group will host a conference call and webcast today at 10:00 AM Eastern
Time, which can be accessed by dialing 800.591.6930 (toll free within the U.S.)
or +1 617.614.4908 (for international callers) and using pass code 49255614. A
webcast of the call that includes presentation slides can be accessed by
visiting the investor relations section of the Company´s website at, 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 73813860.

About Identive Group
Identive Group, Inc. (NASDAQ: INVE; Frankfurt: INV) is an international
technology company focused on building the world´s signature group in secure
identification-based technologies. The businesses within Identive Group have
deep industry expertise and are well-known global brands in their individual
markets, providing leading-edge products and solutions in the areas of physical
and logical access control, identity management and RFID systems to governments,
commercial and industrial enterprises and consumers. Identive´s growth model is
based on a combination of strong technology-driven organic growth from the
businesses within the group and disciplined acquisitive development. For
additional info visit:

Use of Non-GAAP Financial Information
In evaluating our business, our adjusted EBITDA and non-GAAP gross profit margin
differ from GAAP net income (loss) and GAAP gross profit margin due to the
exclusion of certain items detailed in the reconciliation table within this
press release. Our management uses each of these non-GAAP measures internally
and believes that they provide investors with a meaningful way to evaluate the
Company´s operating performance. However, we caution investors to consider these
non-GAAP financial measures in addition to, and not as a substitute for, our
GAAP financial measures.

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 about our
expectations regarding increased demand for our secure ID products and
solutions, trends in the secure ID market, our ability to identify emerging and
growth technologies in the secure ID market, our expected expansion of our
manufacturing capacity, and our future growth and profitability. These
statements are based on current expectations or beliefs, as well as a number of
assumptions about future events that are subject to risks and uncertainties that
may cause actual results to differ materially from those contemplated herein.
Our financial results may not meet expectations, our cost savings may not be in
the amounts or the time frames we expect, and we may not be successful in our
strategy of pursuing both organic and acquisitive growth. 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
successfully integrate acquired businesses into ours; our ability to grow the
Company based on a strategy of providing products, components and services for
the identification systems value chain; our ability to successfully develop and
introduce new products 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
secure identity markets that we are targeting; our ability to acquire the
components we need to build our own products; and our ability to successfully
compete in the markets in which we participate or target. 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, 2010 and subsequent reports filed with the U.S. Securities
and Exchange Commission.

All trade names are trademarks or registered trademarks of their respective

Further inquiry note:
Frau Annika Oelsner
Tel.: +49 89 9595-5220

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
ISIN:        US45170X1063
indexes:     NASDAQ
stockmarkets: Nasdaq: New York, free trade: Berlin, Hamburg, Stuttgart,
             Düsseldorf, München, Open Market / Entry Standard: Frankfurt 
language:   English

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