Identive Group Announces Preliminary 1Q 2012 Results

Identive Group, Inc. announced preliminary results for the fiscal first quarter (Q1), ended March 31, 2012.

“Our Q1 revenue performance was at the lower end of our expectations, reflecting typical seasonality, the absence of new contracts for the German national ID program, which contributed $2.9 million in the 2011 first quarter, and order deferrals from two large Transponder customers. Sales of our higher-margin enterprise security systems grew 10% due to a widening customer base in the U.S. and Europe, as well as a small amount of movement on delayed projects with some U.S. Government agencies. With the acquisition of Payment Solution AG in Germany and the expansion of our Cashless Betalen payment system in The Netherlands, our cashless payment business accounted for over 13% of our total non-GAAP revenue of $21.9 million in Q1 and further expanded our recurring revenue base,” said Ayman S. Ashour, chairman and chief executive officer of Identive Group, Inc. “Operating expense levels in Q1 reflected our continued investments for the near field communication, converged access and Software as a Service (SaaS) markets. As we enter Q2 we are encouraged by market reception for our NFC and SaaS offerings and by the build-up of our order book.”

As reported in accordance with U.S. generally accepted accounting principles (GAAP) and on a preliminary basis, revenue was $21.2 million in Q1 2012, compared with $22.4 million in Q1 2011 and $27.9 million in the fourth quarter (Q4) of 2011. By segment, revenue from Identity Management Services and Solutions was $12.7 million and revenue from ID Products was $8.5 million in Q1 2012.

GAAP gross profit margin was 41% in Q1 2012, compared with 42% in Q1 2011 and 41% in Q4 2011. Net loss was $(6.2) million, or $(0.11) per share in Q1 2012. This compares to net loss of $(1.9) million, or $(0.04) per share in Q1 2011 and net loss of $(2.4) million, or $(0.04) per share in Q4 2011. Net loss in Q1 2012 included non-cash charges of $2.2 million, of which $0.9 million was primarily due to amortization expense related to acquisitions.

Q1 2012 Business Highlights:

Identive won several large projects in the government and critical infrastructure markets in Q1 2012, including:
• Orders for 266,000 smart card readers for secure network logon for a U.S. Government agency;
• Expansion of a contract for enterprise security systems valued at $1.6 million for an agency within the U.S. Department of Justice;
• Expansion of a contract to secure switching facilities for a telecommunications company in the EMEA region; and
• Selection to provide systems and professional services for a terminal access upgrade project at El Paso International Airport, which follows the Company’s earlier selections for similar projects at airports in Austin, Long Beach, Palm Springs, Sacramento and San Diego.
In March 2012, Identive launched important products in which the Company has made significant investments:
• The next-generation Hirsch Identive access control system seamlessly bridges physical and IT infrastructures, enabling organizations to improve security, reduce data redundancy and comply with current and evolving information and physical security standards;
• The TouchSecure line of readers enable customers to upgrade quickly their facilities to include integrated network access without added cost or disruption to existing physical access systems; and
Integrated solutions using Hirsch Identive’s new access control platform and the TouchSecure reader enable customers use NFC-enabled mobile phones as secure credentials to access their facilities and log on to computer networks.

“In recent months we have experienced increasing synergy between the different parts of our business in product development and sales, as we are now moving beyond the build-out of Identive’s component parts to focus on a shared approach in our target markets,” continued Ashour. “Changes in our organization and management are accelerating the marriage of innovation from our newer technology growth areas with our established sales channels and customer base.”