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Identive Group Announces Fourth Quarter And Fiscal 2012 Results

– FINANCIALS FOLLOW –

IDENTIVE GROUP, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
           
  Three Months Ended (A) Twelve Months Ended (A)
  December 31, 2012 September 30, 2012 December 31, 2011 December 31, 2012 December 31, 2011 (B)
Net revenues  $ 26,592  $ 22,945  $ 27,924  $ 94,599  $ 102,708
Cost of revenue   16,214  13,225  16,546  56,163  59,906
Gross profit  10,378  9,720  11,378  38,436  42,802
Operating expenses:          
Research and development  1,771  2,019  2,202  8,665  7,025
Selling and marketing  5,010  5,440  6,131  23,988  23,563
General & Administrative  3,681  4,603  5,108  18,218  22,066
Impairment of long-lived assets  --  870  --  24,785  --
Impairment of goodwill  655  4,979  --  27,084  --
Remeasurement of contingent consideration  --  --  256  (5,657)  510
Restructuring  47  --  --  325  --
Total operating expenses   11,164  17,911  13,697  97,408  53,164
Loss from operations  (786)  (8,191)  (2,319)  (58,972)  (10,362)
Other (expense) income  29  23  7  (106)  262
Interest expense, net  (579)  (379)  (244)  (1,602)  (1,049)
Foreign currency (losses) gains, net  396  (29)  --  288  (398)
Loss before income taxes and non-controlling interest  (940)  (8,576)  (2,556)  (60,392)  (11,547)
Benefit (provision) for income taxes  1,409  (15)  (224)  6,824  1,326
Consolidated net income (loss)  469  (8,591)  (2,780)  (53,568)  (10,221)
Less: net income (loss) attributable to non-controlling interest  (292)  678  132  3,232  468
Net income (loss) attributable to Identive Group, Inc.  $ 177  $ (7,913)  $ (2,648)  $ (50,336)  $ (9,753)
Basic and diluted income (loss) per share attributable to Identive Group, Inc.  $ 0.00  $ (0.13)  $ (0.05)  $ (0.84)  $ (0.18)
Weighted average shares used to compute basic and diluted income (loss) per share  60,165  60,033  57,574  59,623  53,748
           
(A)  Results for the three and twelve months ended December 31, 2012 include the operating results of acquired companies since their respective dates of acquisition. Results of other periods presented in the table above may not fully include the operating results of these business units; as a result, the amounts in the table are not comparable. 
 
(B)  In connection with the preparation of its annual financial statements for the year ended December 31, 2012, the Company identified an immaterial error related to the accounting of assumed pension plans. As a result, amounts shown in the table above have changed as compared to amounts reported in the Form 10-K for the year ended December 31, 2011. As a result of correcting this error, general and administrative expenses increased by $0.1 million, income tax benefit decreased by $0.1 million, and net loss increased by $0.2 million as compared to the amounts reported in the consolidated statements of operations in the 2011 fiscal Form 10-K.
 
IDENTIVE GROUP, INC.
Condensed Consolidated Balance Sheets
(In thousands) 
     
  December 31, 2012 December 31, 2011
ASSETS (unaudited) (C)(D)
Current assets:    
Cash and cash equivalents  $7,378 $17,239
Accounts receivable, net of allowances 17,261 13,578
Inventories 8,892 9,263
Other current assets 3,659 2,426
Total current assets 37,190 42,506
Property and equipment, net 8,892 6,699
Goodwill 45,270 59,044
Intangible assets, net 11,882 36,001
Other assets 1,671 501
Total Assets $104,905 $144,751
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $12,926 $11,941
Liability to related party 1,552 1,076
Liability for consumer cards 5,811 -- 
Financial liabilities 4,532 884
Deferred revenue 2,843 2,085
Accrued compensation and related benefits 4,617 3,527
Other accrued expenses and liabilities 6,490 6,249
Total current liabilities 38,771 25,762
Long-term earn-out liability  --  5,663
Long-term liability to related party 6,177 7,303
Long-term financial liabilities 9,795 1,189
Deferred tax liability 120 6,094
Other long-term liabilities 452 1,807
Total liabilities 55,315 47,818
Total equity 49,590 96,933
Total liabilities and stockholders' equity $104,905 $144,751
     
(C)  The condensed consolidated balance sheet has been derived from the audited consolidated financial statements at December 31, 2012 but does not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.
 
(D) In connection with the preparation of its annual financial statements for the year ended December 31, 2012, the Company identified an immaterial error related to the accounting of assumed pension plans. As a result, amounts shown in the table above have changed as compared to amounts reported in the Form 10-K for the year ended December 31, 2011. As a result of correcting this error, goodwill increased by $0.6 million, other long-term liabilities increased by $1.2 million, and total equity decreased by $0.5 million as compared to the amounts reported in the consolidated balance sheets in the 2011 fiscal Form 10-K.
 
IDENTIVE GROUP, INC.
Reconciliation of GAAP and Non-GAAP Financial Information (E)
(In thousands)
(unaudited) 
           
  Three Months Ended Twelve Months Ended
  December 31, 2012 September 30, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Reconciliation of GAAP gross profit margin and non-GAAP gross profit margin          
GAAP cost of revenue $16,214 $13,225 $16,546 $56,163 $59,906
Reconciling items included in GAAP cost of revenue:        
 Stock-based compensation  (11)  (18)  (14)  (47)  (42)
 Transition and integration costs  (1)  (137)  62  (239)  (46)
 Amortization and depreciation  (505)  (568)  (664)  (2,610)  (2,123)
Total reconciling items included in GAAP cost of revenue  (517)  (723)  (616)  (2,896)  (2,211)
Non-GAAP cost of revenue  $15,697 $12,502 $15,930 $53,267 $57,695
Non-GAAP gross profit margin  41% 46% 43% 44% 44%
Reconciliation of GAAP and non-GAAP operating expenses        
GAAP operating expenses $11,164 $17,911 $13,697 $97,408 $53,164
 Impairment of goodwill  (655)  (4,979)  --   (27,084)  -- 
 Impairment of long-lived assets  --   (870)  --   (24,785)  -- 
 Stock-based compensation  (311)  (545)  (382)  (1,161)  (1,185)
 Re-measurement of contingent consideration  --   --   (256)  5,657  (510)
 Pension expenses  (289)  --   (136)  (289)  (136)
 Gain/loss on disposal of fixed assets  (59)  (6)  --   (74)  -- 
 Amortization and depreciation   (483)  (467)  (904)  (2,953)  (3,458)
 Acquisition costs  --   10  (143)  (240)  (720)
 Transition and integration costs  404  (362)  (94)  (1,056)  (1,435)
 Restructuring  (47)  --   --   (325)  --  
Total reconciling items included in GAAP operating expenses  (1,440)  (7,219)  (1,915)  (52,310)  (7,444)
Non-GAAP operating expenses $9,724 $10,692 $11,782 $45,098 $45,720
Reconciliation of GAAP net loss to adjusted EBITDA loss        
Net income (loss) attributable to Identive Group, Inc.  $ 177  $ (7,913)  $ (2,648)  $ (50,336)  $ (9,753)
Reconciling items included in GAAP net income (loss):        
 Provision (benefit) for income taxes  (1,409)  15  224  (6,824)  (1,326)
 Net loss attributable to noncontrolling interest   292  (678)  (132)  (3,232)  (468)
 Interest expense (income), net  579  379  244  1,602  1,049
 Foreign currency losses (gains), net  (396)  29  --   (288)  398
 Other expense (income), net  (29)  (23)  (7)  106  (262)
 Impairment of goodwill  655  4,979  --   27,084  -- 
 Impairment of long-lived assets  --   870  --   24,785  -- 
 Stock-based compensation  322  563  396  1,208  1,227
 Re-measurement of contingent consideration  --   --   256  (5,657)  510
 Pension expenses  289  --   136  289  136
 Amortization and depreciation   988  1,035  1,568  5,563  5,581
 Acquisition costs  --   (10)  143  240  720
 Transition and integration costs   (403)  499  32  1,295  1,481
 Gain/loss on disposal of fixed assets  59  6  --   74  -- 
 Restructuring  47  --   --   325  --  
 Total reconciling items included in GAAP net income (loss)  (994)  7,664  2,860  46,570  9,046
 Adjusted EBITDA gain (loss)  $ 1,171  $ (249)  $ 212  $ (3,766)  $ (707)
           
(E) Non-GAAP figures in the table above differ from GAAP results as they exclude some or all of the following: stock-based compensation expense, transition and integration costs, amortization and depreciation, impairment charges, acquisition costs, restructuring, re-measurement of contingent consideration, re-measurement of liability to a related party, pension expense and gain/loss on disposal of fixed assets. Adjusted EBITDA additionally excludes provision/benefit for income taxes, net loss attributable to noncontrolling interest, net interest expense/income, net foreign currency losses/gains, and other net expense/income. Prior year comparisons have been updated to remove overhead allocations which are no longer relevant. 
           
--- Continued on next page ----
`
IDENTIVE GROUP, INC.
Reconciliation of GAAP and Non-GAAP Financial Information
(In thousands)
(unaudited)
           
--- Continued ---- 
           
           
  Three Months Ended Twelve Months Ended
  December 31, 2012 September 30, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Reconciliation of GAAP net loss to GAAP net income (loss) before impairment, re-measurement of continent consideration and amortization          
Net income (loss) attributable to Identive Group, Inc. $177  $ (7,913)  $ (2,648)  $ (50,336)  $ (9,753)
Net income (loss) per share $0.00  $ (0.13)  $ (0.05)  $ (0.84)  $ (0.18)
Reconciling items included in GAAP net income (loss):          
Impairment of goodwill 655 4,979 -- 27,084 --
Impairment of long-lived assets -- 870   24,785  
Impairment related tax benefit  (636) -- --  (6,140) --
Total impairment included in GAAP net income (loss) 19 5,849 -- 45,729 --
Net income (loss) attributable to Identive Group, Inc., before impairment  $196  $ (2,064)  $ (2,648)  $ (4,607)  $ (9,753)
Net income (loss) per share before impairment $0.00  $ (0.03)  $ (0.05)  $ (0.08)  $ (0.18)
Additional reconciling item:          
Re-measurement of contingent consideration -- -- 256  (5,657) 510
Net income (loss) attributable to Identive Group, Inc., before impairment and re-measurement of contingent consideration $196  $ (2,064)  $ (2,392)  $ (10,264)  $ (9,243)
Net income (loss) per share before impairment and re-measurement of contingent consideration $0.00  $ (0.03)  $ (0.04)  $ (0.17)  $ (0.17)
Additional reconciling item:          
Amortization 433 424 1,165 3,277 4,097
Net income (loss) attributable to Identive Group, Inc., before impairment, re-measurement of contingent consideration and amortization $629  $ (1,640)  $ (1,227)  $ (6,987)  $ (5,146)
Net income (loss) per share before impairment, re-measurement of contingent consideration and amortization $0.01  $ (0.03)  $ (0.02)  $ (0.12)  $ (0.10)
Weighted average shares used to compute basic and diluted income (loss) per share 60,165 60,033 57,574 59,623 53,748
CONTACT: Darby Dye
         +1 949 553-4251
         ddye@identive-group.com
         
         
         Lennart Streibel
         +49 89 9595 5195
         lstreibel@identive-group.com

Identive Group, Inc. Logo

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