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EANS-News: Identive Group Inc.
Identive Group announces third quarter 2011
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- quarterly report Subtitle: Broad demand for identity management solutions drives 30% growth Santa Ana, Calif. and Ismaning, Germany, October 31, 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 third quarter (Q3) ended September 30, 2011. Revenue in Q3 2011 was $26.8 million, up 30% from $20.5 million in Q3 2010 and up 4% from $25.6 million in the second quarter (Q2) of 2011. Sales in Q3 were driven by broad demand for identity management solutions for consumer and citizen ID applications globally as well as ongoing implementations of physical and IT access control systems for corporate and government facilities, offset by continued implementation delays with some U.S. government projects. Q3 2011 sales reflected 15% organic growth year over year net of the effect of acquisitions. "Our Q3 performance reflects continued strong momentum for Identive technology and solutions. Year-on-year quarterly growth of 30% was fueled by higher demand across nearly all parts of our business, underscoring the critical role of identity management in enabling applications from network access to mobile payments. Gross margin also improved throughout the business," said Ayman S. Ashour, chairman and chief executive officer of Identive Group. "It is particularly important that we have been able to deliver strong performance at a time when our Enterprise Security sales were again affected by continued deferrals of projects and spending in the federal government sector, coming in below last year´s levels and our own expectations. A stronger focus on commercial markets and professional services helped to offset some of the decrease. We also followed through on our plans to accelerate investment in R&D to develop our NFC and idOnDemand offerings and to expand our cashless payment solutions, which we believe provide underlying value and fundamental growth opportunities for Identive." Sales highlights in Q3 2011 included: 36% growth in the Company´s ID Infrastructure division, driven by sales of eHealth terminals for the German electronic healthcard program and smart card readers for a variety of citizen ID, employee ID and corporate projects in Europe, Japan and other parts of Asia. 34% growth in the Company´s Multicard Integrated ID Solutions business unit, reflecting demand for identity management solutions from a wide array of regions and markets, including one-card campus ID systems in Europe and government worker ID and cashless payment programs in Australia. Strong sales of integrated identity management, payment and loyalty solutions for the Swiss and German education and healthcare markets from Identive´s most recent acquisition, polyright. $1.4 million of revenue related to continued fulfillment of secure readers for the German national ID program. To date, the Company has recognized $12.1 million in revenue from sales of card readers for the program. Fulfillment of existing orders is expected to be completed by the end of the year. Additional business highlights in Q3 2011 included: The acquisition of polyright, which provides identity management solutions for the Swiss education and healthcare markets. Polyright´s core competence is the development, installation and life cycle management of single-credential, multi-function identity management and cashless payment solutions integrated with systems such as enterprise resource planning and access control. Identive´s selection by a leading mobile handset manufacturer to design and supply more than three million NFC tags in the third and fourth quarters of the current year. The tags will be included in-box with each purchase of an NFC-enabled smart phone to enhance consumers´ day-to-day mobile experience with a variety of NFC applications. A 66% increase in R&D spending over the previous quarter, reflecting accelerated development of Software as a Service (SaaS) offerings in the idOnDemand business unit, additional investment in the NFC solutions area, and the effect of strong R&D investment in polyright`s cashless payment and point of sale (POS) solutions. The launch of several new RFID inlays and tags, including a newly expanded TOM (TagOnMetal) product line that combines various shielding elements and tag surfaces for use with emerging NFC applications and the "Quadro" UHF (ultra high frequency) RFID inlay, which offers three-dimensional readability for industrial and logistics applications. "The ongoing proliferation of NFC-enabled mobile phones and the increasing adoption of cloud-based service models such as idOnDemand´s are clear industry trends, and our investments aim to ensure that Identive is positioned to capitalize on the opportunities they will generate. In addition we remain highly focused on achieving performance improvement in our base activity, which is providing solid growth even at these times of economic uncertainty," said Mr. Ashour. 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 $(3.7) million, or $(0.06) per share in Q3 2011. This compares to net loss of $(2.0) million, or $(0.05) per share in Q3 2010 and net loss of $(1.6) million, or $(0.03) per share in Q2 2011. Non-GAAP adjusted EBITDA (EBITDA before stock-based compensation, adjustments to earnout estimates, acquisition, transition and integration costs) was $(0.3) million in Q3 2011, compared with $(0.02) million in Q3 2010 and $(0.3) million in Q2 2011. GAAP net loss in Q3 2011 included non-cash charges of $0.5 million of unrealized foreign currency losses, $0.4 million associated with adjustments to the present value of the earnout estimate related to idOnDemand, and $1.2 million of amortization expense related to acquisitions. GAAP gross profit margin was 44% in Q3 2011, compared with 44% in Q3 2010 and 40% in Q2 2011. Non-GAAP gross profit margin (excluding amortization and depreciation, overhead allocations, transition and acquisition costs and stock-based compensation) was 48% in Q3 2011, compared with 48% in Q3 2010 and 44% in Q2 2011. Margins in Q3 primarily were impacted by favorable product mix across the majority of the Company´s business. Cash and cash equivalents at September 30, 2011 were $17.7 million, compared with $20.6 million at June 30, 2011, primarily reflecting $2.8 net cash paid for the polyright acquisition and $0.7 million for paydown of outstanding debts during the quarter. Conference Call and Webcast Information Identive Group will host a conference call and webcast today at 11:00 AM Eastern Time, which can be accessed by dialing 866.700.7477 (toll free within the U.S.) or +1 617.213.8840 (for international callers) and using pass code 55067512. 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 thirty days 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 26510070. 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, NFC and a host of RFID-enabled applications for customers in the government, enterprise, consumer, education, healthcare and transportation 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. For additional info visit: www.identive-group.com. 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 identity management solutions, our ability to identify and capitalize on trends in identity management markets, our ability to achieve results from increased investment in R & D, 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 identity management solutions; 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 identity management markets that we are targeting; 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 forward-looking statements are based on information available to us on the date hereof, and we assume no obligation to update such statements. All trade names are trademarks or registered trademarks of their respective holders. Further inquiry note: Frau Annika Oelsner Tel.: +49 89 9595-5220 E-Mail: 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 mail: firstname.lastname@example.org WWW: http://www.identive-group.com 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