Identiv Reports 4Q, Fiscal 2013 Results

Identive Group, Inc. reported its financial results for the fourth quarter (Q4) and year ended Dec. 31, 2013.

“We have made excellent progress in Q4 to simplify and focus the business as we lay the foundation for growth in 2014,” said Jason Hart, CEO of Identiv. “We have transformed from a group of separate businesses to a single, unified company focused on delivering high-growth trust solutions for the Internet of Things. The divestment of underperforming and non-core activities in addition to consolidating the remaining operations has eliminated over $12 million of debt from our balance sheet and reduced headcount by nearly 25%.”

Fourth quarter financial results reflect the continuing operations of Identiv only and exclude discontinued operations of non-core businesses sold in December 2013 and January 2014.

Total revenues for continuing operations were in line with guidance at $19.9 million, compared to $21 million. The quarter over quarter change is primarily a result of the October 2013 U.S. government shutdown.

Trust solutions for information grew, with sales of cloud-based credential provisioning and management services increasing 21% and smart card reader shipments increasing 11%. Sales of trust solutions for everyday items (RFID and NFC products) increased 13% to meet demand for electronic game toys and other Internet of Things applications.

GAAP gross profit margin improved to 44%, compared to 42%, primarily due to improving margins for RFID and NFC products arising from higher sales volumes and increased capacity utilization.

Identiv signed two new substantial sales partners: a global telecommunications and business solutions provider, and one of the largest global security distributors. As an early indication of success with these partners, initial product orders to support a government e-health program were received in Q4, with the bulk of delivery in 2014 and 2015.

Identiv achieved its second consecutive quarter of positive adjusted EBITDA, which was $0.4 million, compared with $0.9 million. Including impairment charges and restructuring costs totaling $5.2 million, GAAP loss from continuing operations was $(5.7) million, or $(0.09) per share, compared with GAAP gain from continuing operations of $1.2 million, or $0.01 per share in the comparable prior year period.

Full year 2013 revenue was $75.6 million in 2013, up 4% from $72.4 million in 2012. Sales of trust solutions for everyday items grew more than 50%, driven by strong demand as Identiv delivered more than 100 million RFID tags for electronic game toys. Sales of trust solutions for information grew as shipments of smart card reader products increased 10%, and sales of cloud-based credential services climbed 68% with the receipt of first significant long-term contracts. The U.S. budget sequester and government shutdown contributed to a 29% decrease in sales of trust solutions for premises.

Adjusted EBITDA in 2013 was $(1.1) million, compared with $(2.9) million in 2012. Identiv signed an OEM relationship with one of North America’s largest security system integrators.

“Q4 was the first full quarter for the new management team as we focused on simplifying the business and addressing the cost structure,’ Hart said. ”The significant shift in costs from G&A to sales, marketing and engineering represent an investment in growth. We will soon launch our new corporate vision, which embraces the strengths of our people and technology as we align to the high growth trust solutions for the rapidly expanding connected world.”

The company is providing guidance for fiscal year 2014 of revenue between $80 million and $90 million and adjusted EBITDA positive on an annual basis.