EANS-News: Identive Group Inc. IDENTIVE GROUP ANNOUNCES SECOND QUARTER 2012
RESULTS
--------------------------------------------------------------------------------
Corporate news transmitted by euro adhoc. The issuer/originator is solely
responsible for the content of this announcement.
--------------------------------------------------------------------------------
quarterly report
Subtitle: Performance improvements include sequential sales growth of 12% and
decline in base operating cost
SANTA ANA, Calif. and ISMANING, Germany, August 7, 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 second quarter (Q2), ended June 30, 2012.
Q2 2012 Highlights:
- Revenues of $23.9 million, up 12% from the first quarter (Q1) of 2012
- Continued improvement in U.S. government business
- Launched innovative product and service offerings for emerging NFC and
payment markets
- Impairment of goodwill and intangibles; reduced impact of depreciation
and amortization charges on earnings in future periods
"Our Q2 results were in line with expectations, despite ongoing weakness in the
global economic environment. Continued recovery in sales of both ID products and
identity management systems in the U.S. government sector helped offset slowdown
of citizen ID programs in Europe and continued customer project delays in our
transponder sales," stated Ayman S. Ashour, CEO and Chairman of Identive. "Our
ongoing focus on reducing expenses, together with our restructuring program put
in place in June, helped drive a sequential decline in base operating expenses,
and we expect further savings as we realize the full effect of our restructuring
actions later this year. We also reinforced our position in both existing and
emerging markets with the launch of several important new products that
represent the fruits of our investments in new technology. These industry-first
offerings included tomPAY cashless payment cards that can be converted into NFC
tags for mobile devices; desktop readers for integrated physical and cyber
security; and our secure cloud-based, NFC tag management platform."
Q2 Results
As reported in accordance with U.S. generally accepted accounting principles
(GAAP), revenues were $23.9 million in Q2 2012, up 12% from $21.2 million in Q1
2012 and down 7% from $25.6 million in Q2 2011. By segment, Identity Management
Services and Solutions (Identity Management) revenues were $14.2 million and ID
Products revenues were $9.7 million in Q2 2012.
GAAP gross profit margin was 40% in Q2 2012, compared with 41% in Q1 2012 and
40% in Q2 2011. Total research and development, sales and marketing and general
and administrative expenses (referred to in this release as base operating
expenses) were $13.3 million in Q2 2012, down 11% from $15.0 million in Q1 2012
and unchanged from $13.3 million in Q2 2011. Total base operating expenses in Q2
2012 reflect a significant increase in technology investment compared with the
same quarter a year ago, partially offset by lower general and administrative
spending.
During the quarter we experienced a sharp and sustained decline in our market
capitalization, triggering a required impairment analysis of our goodwill,
intangible and long-lived assets. Based on this review, we concluded that some
assets are impaired and recognized preliminary non-cash charges totaling $45.4
million in the quarter. These charges have no impact on our day-today operations
or liquidity and will not result in any future cash expenditures. However, the
amount of amortization and depreciation will be significantly reduced and
consequently there will be lower non-cash charges to net earnings in future
quarters.
The non-cash impairment charges contributed to a net loss of $(41.9) million, or
$(0.70) per share in Q2 2012, compared with a net loss of $(1.6) million, or
$(0.03) per share in Q2 2011 and a net loss of $(6.2) million, or $(0.11) per
share in Q1 2012. The impairment charges and other non-cash adjustments related
to the above referenced review accounted for $(0.66) per share of the net loss
per share recorded in Q2 2012.
Non-GAAP gross profit margin was 45% in Q2 2012, up from 44% in Q1 2012,
reflecting a higher contribution of systems, software and services sales.
Non-GAAP base operating expenses were $11.9 million in Q2 2012, compared with
$12.8 million in Q1 2012. Adjusted EBITDA was $(1.2) million in Q2 2012,
compared with $(3.5) million in Q1 2012.
Non-GAAP gross profit margin, non-GAAP operating expenses and adjusted EBITDA
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 and cash equivalents at June 30, 2012 were $6.3 million, in line with
management guidance and compared with $13.3 million at March 31, 2012,
reflecting funding of operational losses, reductions in accounts payable
associated with seasonal commitments to stadium concessions, and funding of
financial liabilities.
David Wear, CFO of Identive added, "We remain on target to achieve cost
reductions of $4.0 million to $5.0 million by the end of 2012, which annualized,
are expected to be close to $7.0 million. At the same time we continue to commit
to investment in the future growth of the Company. With the reduction in our
EBITDA loss in the current quarter and the stabilization of our cash position
after the first four months of the year, we believe we can continue to support
our operational cash flow requirements through internal means. However, we will
also seek to strengthen the balance sheet by a moderate amount to allow us to
withstand unexpected or unforeseen market changes."
Q2 2012 Business Highlights
Sales and product highlights from the 2012 second quarter include:
- The announcement of an innovative cloud-based, NFC (near field
communication) tag management platform that allows advertisers, retailers and
organizations in the education, hospitality and other markets to securely manage
the delivery of dynamic, targeted content and services to consumers' NFC-enabled
mobile devices.
- Continued expansion of the user base for Identive's cashless payment
products and solutions globally, with new customer wins in India and significant
growth in Europe.
- Expanded penetration of transponders into the Japanese market with more
than 300,000 inlays supplied for payment and loyalty applications.
- The introduction of tomPay, an innovative convertible contactless payment
card / NFC tag that enables consumers to add NFC cashless payment capabilities
to their existing mobile phones.
- The introduction of a new line of NFC magnets and dual-sided window stickers
that provide retailers with new ways to advertise to and communicate with their
customers using NFC technology.
- The launch of a new NFC tag online customization service that allows customers
to order NFC tags, stickers and smart posters personalized with their own
designs, photos or logos, as well as a URL destination, phone number or other
data.
Mr. Ashour concluded, "Identive's true strength in Secure ID is our core vision
of identity as a fundamental industry serving multiple verticals. Our global
presence and our strong position across the many identity markets provide
resilience to weather fluctuations in any single sector. These strengths also
put us at the head of the pack as the industry prepares to capitalize on
emerging opportunities for mass deployments of consumer ID, citizen ID and
employee ID solutions. We remain convinced that NFC, cashless payment and
cloud-based identity management are emerging mega trends and that Identive is
uniquely positioned in these markets. This propels our strategy to provide new
ID products, software and services that these potential hyper-growth areas will
require. Our cost reduction program and the changes we made in our balance sheet
should help improve our financial position as we continue to work to lower our
breakeven point."
Outlook for Q3 2012
Based on its current expectations, management expects revenues of $24.0 million
to $27.0 million, non-GAAP, adjusted EBITDA of $(0.7) million to $0.7 million,
and non-GAAP EPS of $(0.03) to $(0.02) in the third quarter of 2012.
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 800.638.4930 (toll free within the U.S.)
or +1 617.614.3944 (for international callers) and using pass code 37733064. 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 888.286.8010 (toll free within the U.S.) or +1 617.801.6888
(for international callers) and using pass code 92565832.
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 operating expenses,
non-GAAP gross profit margin and adjusted EBITDA. 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 on our technology
portfolio, our expectations regarding future results, including Q3 2012 results,
our preliminary estimate of impairment charges, 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 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.
###
All trade names are trademarks or registered trademarks of their respective
holders.
Contacts:
Darby Dye Lennart Streibel
+1 949 553-4251 +49 89 9595 5195
ddye@identive-group.com lstreibel@identive-group.com
- FINANCIALS FOLLOW -
Further inquiry note:
Mr. Lennart Streibel
Tel.: +49 89 9595-5195
E-Mail: lstreibel@identive-group.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: 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