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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,
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
"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.
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:
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
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
stockmarkets: Nasdaq: New York, free trade: Berlin, Hamburg, Stuttgart,
Düsseldorf, München, Open Market / Entry Standard: Frankfurt