EANS-News: Identive Group Inc. IDENTIVE GROUP ANNOUNCES THIRD QUARTER 2012
RESULTS
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9-month report
SANTA ANA, Calif. and ISMANING, Germany, November 1, 2012 (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 fiscal third quarter (Q3), ended September 30,
2012.
Q3 2012 Highlights:
- Continued operating expense reduction and further lowering of breakeven point
- Record smart card reader sales for US Government programs
- Recovery in demand for transponder products, creating a stronger Q4
forecast
- Continued progress in emerging growth opportunities for near field
communication (NFC), payment and cloud-based solutions
- Strong cash performance during quarter
"Our core business continued to be affected by global economic and budget
uncertainties, particularly in Europe. While some sales of access systems for US
Government customers slipped into October, new cyber security programs at
federal agencies drove a strong increase in smart card reader sales and
previously delayed transponder orders also began to recover towards the end of
the quarter," said Ayman S. Ashour, CEO and chairman of Identive. "Our continued
focus on cost reduction drove a further 9% sequential decline in our base
operating expenses and adjusted EBITDA also improved significantly, bringing us
close to breakeven on relatively weak revenues. Our cash performance in Q3 was
better than anticipated and in October we also secured additional non-dilutive
debt financing, strengthening our ability to manage our growth needs."
Q3 Results
As reported in accordance with U.S. generally accepted accounting principles
(GAAP), Q3 2012 revenues were $22.9 million, down 4% from $23.9 million in Q2
2012 and down 14% from $26.8 million in Q3 2011. By segment, Identity Management
Services and Solutions (Identity Management) revenues were $13.8 million and ID
Products revenues were $9.1 million in Q3 2012.
GAAP gross profit margin was 42% in Q3 2012, compared with 40% in Q2 2012 and
44% in Q3 2011. Total research and development, sales and marketing, and general
and administrative expenses (referred to in this release as base operating
expenses) were $12.1 million in Q3 2012, down 9% from $13.3 million in Q2 2012
and down 17% from $14.5 million in Q3 2011 as a result of the restructuring plan
we initiated in June of this year and from ongoing initiatives to improve the
efficiency of our business.
On a GAAP basis, Identive recorded net loss of $(7.9) million, or $(0.13) per
share in Q3 2012, compared with net loss of $(41.9) million, or $(0.70) per
share in Q2 2012 and net loss of $(3.7) million, or $(0.06) per share in Q3
2011. Reflected in our results for Q3 2012 are non-cash impairment charges of
$5.8 million, which accounted for $(0.10) of the $(0.13) GAAP net loss per share
recorded in the quarter. In Q2 2012, non-cash impairment charges and other
associated non-cash adjustments accounted for $(0.66) of the reported net loss.
As previously announced, during Q2 2012 a sharp decline in our market
capitalization triggered a required impairment analysis of our goodwill,
intangible and long-lived assets, and at the time of our second quarter earnings
announcement we had concluded that some assets were impaired and recognized
preliminary non-cash charges for this impairment in our Q2 2012 financial
statements. During Q3 2012 we completed our impairment analysis and recorded
further charges, as described above. These charges do not impact our day-to-day
operations or liquidity and will not result in any future cash expenditures.
They do, however, reduce the amount of non-cash amortization charges we must
record each quarter, which has a beneficial effect on our future net earnings.
Non-GAAP gross profit margin was 46% in Q3 2012, compared with 45% in Q2 2012.
We recorded non-GAAP net loss of $(1.6) million, or $(0.03) per share in Q3
2012, compared with a non-GAAP net loss of $(1.1) million, or $(0.02) per share
in Q2 2012. Adjusted EBITDA was $(0.3) million in Q3 2012, compared with $(1.2)
million in Q2 2012.
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, cash equivalents and restricted cash were $8.3 million at September 30,
2012 and included $2.1 million of cash generated from operations in the quarter,
compared with $6.3 million of cash, cash equivalents and restricted cash at June
30, 2012.
David Wear, CFO of Identive commented, "As we projected, we were able to
continue to reduce our costs and manage our cash effectively during the quarter.
Expense reductions to date have helped to lower our EBITDA breakeven point
significantly to between $23 million and $24 million in revenue per quarter. Our
ongoing focus on cost efficiency and continued improvement in our revenue
outlook should allow us to take advantage of this lower breakeven point to
deliver EBITDA positive results on a consistent basis."
Q3 2012 Business Highlights
Ongoing investment in product development resulted in the announcement of
several important new products in the quarter, including:
- The launch of Hirsch Velocity 3.5, our next generation access control
software platform that now enables access to real-time system information across
a wide range of corporate and mobile devices and environments, enabling
enterprise customers greater levels of security and control.
- The TouchSecure® Desktop Reader, an innovative identity authentication
solution that allows enterprise customers to implement secure access to their
physical facilities, corporate networks, shared printers and copiers using a
single identity credential -- their employees' existing building access cards.
- A new family of multi-protocol LEGIC® card readers that address the
growing trend in corporate, campus and other environments towards the use of a
single smart ID card to perform many functions.
Identive gained visibility at the London Olympics this summer as more than
100,000 visitors used the Company's payment and identity management products and
solutions:
- Our Polyright identity management solution provided secure entry to the
Olympic Club for members of the International Olympic Committee (IOC), VIP
visitors and staff.
- In cooperation with the leading Dutch bank Rabobank, Identive enabled
cashless payment at one of the Olympics' largest hospitality venues. Using
innovative convertible payment cards based on the Company's patent pending
tomPAY tag technology, visitors were able to tap and pay for refreshments using
either the card or a removable NFC payment sticker that enables payment using a
mobile phone.
In addition, Identive's payment solution cashless payment system was selected
for use at various music festivals in Europe and for the Rat Verlegh Stadium in
Breda, The Netherlands.
Mr. Ashour concluded, "Looking forward, a higher than usual backlog of orders
for access control systems and readers for US Government agencies and the
commencement of both delayed and new NFC and other transponder projects are
creating an improved sales outlook for Q4. Successful development efforts also
continue to reinforce our early leadership position in emerging growth
opportunities. We have now expanded our www.IdentiveNFC.com online NFC
marketplace to sell to a wider and growing customer base. We also are encouraged
by the strong reception we are receiving from beta trials for our NFC marketing
platform and are preparing for the platform's public launch in Q4. The progress
we are making to position Identive as the signature company in Secure ID is
further supported by the improvements we have made to our financial base."
Outlook for Q4 2012
Based on its current expectations, for the fourth quarter of 2012, management
expects revenues of $26.0 million to $28.0 million and non-GAAP, adjusted EBITDA
of $1.5 million to $2.0 million.
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 888.771.4371 (toll free within the U.S.)
or +1 847.585.4405 (for international callers) and using pass code 33654779. 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.
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 financial information that has not been
prepared in accordance with GAAP, including non-GAAP gross profit margin,
adjusted EBITDA and non-GAAP net loss and net 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, our expectations regarding market acceptance of our NFC, cashless
payment and cloud-based solutions, our ability to realize savings from our cost
savings and restructuring plans, our ability to capitalize and improve upon our
technology portfolio, our expectations regarding future results, including Q4
and full year 2012 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 integrate acquired
businesses; 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.
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All trade names are trademarks or registered trademarks of their respective
holders.
Further inquiry note:
Darby Dye
Tel.: +1 949 553-4251
E-Mail: ddye@identive-group.com
Lennart Streibel
Tel.: +49 89 9595-5195
E-Mail: lstreibel@identive-group.com
end of announcement euro adhoc
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company: Identive Group Inc.
Carnegie Ave., Bldg. B 1900
US-CA 92705 Santa Ana
phone: +1 949 553 4280
FAX: +49 89 9595-5555
mail: investorrelations@identive-group.com
WWW: http://www.identive-group.com
sector: Computing & Information Technology
ISIN: US45170X1063
indexes: NASDAQ
stockmarkets: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart,
Nasdaq: New York, Open Market / Entry Standard: Frankfurt
language: English