Identive Group, a provider of products, services and solutions for the identification, security and RFID industries, reported its financial results for the second quarter (Q2) ended June 30, 2013.
Identive Group, a provider of products, services and solutions for the identification, security and RFID industries, reported its financial results for the second quarter (Q2) ended June 30, 2013.
“In the second quarter 2013, we delivered growth in target markets and gained traction with key offerings, demonstrating Identive's strategy is coming to fruition,” said Ayman S. Ashour, CEO of Identive Group. “Focused on becoming the leader in Secure ID, we have been investing in emergent markets with hyper-growth potential, including NFC and mobility solutions, cashless payment, and Identity-as-a-Service. Our Q2 results included successes that we believe are the early stages of important positive trends.
“For example, our increased transponder capacity drove 50% growth in RFID tag and inlay shipments. On the cutting edge of cashless payments, we have established a strong business model and sealed it with additional stadium contracts. In addition, we created a foothold with early adopters of identity on-demand and have begun to build a stable recurring SaaS revenue stream.
“While our revenue growth momentum was offset by delays in project implementation and sales in our normally stable Access Control & Security business, we view the effects of the U.S. Government federal budget sequester as a temporary setback. We are confident this business will improve and augment the growth in our target emergent markets.
“Revenues excluding our U.S. Government business grew 13% year-over-year. During Q2, more than one-quarter of transponders shipped were NFC, and more intelligent products sales continued to improve transponder margins. These factors, combined with good cost management, resulted in improvements to the bottom line,” added Ashour.
Financial Results for Q2 2013 Compared with Q2 2012
- Revenues were $23.6 million, compared with $23.9 million.
* Revenues from the Identity Management Services and Solutions segment were $10.6 million, compared with $14.2 million.
1. Access Control & Security revenue decreased 41% related to the U.S. Government federal budget sequester, the effects of which management believes are temporary.
2. ID Solutions revenue decreased 16% due to the timing of orders in Europe and lower demand in the U.S.
3. Cloud-based Identity Management recorded its first meaningful revenue, won a major international healthcare customer and signed a $2 million long-term SaaS contract with a leading technology company.
* Revenues from the ID Products segment grew 34% to $13.0 million, compared with $9.7 million.
1. Transponders revenues increased 81%, reflecting several large NFC product orders for mobility and M2M applications.
2. ID Infrastructure revenues remained stable with orders from several regions supporting a variety of applications.
- GAAP gross profit margin was 39%, compared with 40%, primarily due to lower Access Security & Control sales.
- GAAP operating expenses were $11.9 million, compared with $52.9 million of which $39.7 million were related to goodwill and intangible asset impairment costs and related adjustments.
- Non-GAAP operating expenses were $10.8 million, compared with $11.9 million; the 9% reduction reflects 2012 restructuring and ongoing initiatives to improve operational efficiencies.
- GAAP net loss was $(2.9) million, or $(0.05) per share, compared with net loss of $(36.4) million, or $(0.61) per share, including the aforementioned impairment costs.
- Non-GAAP net loss was $(2.5) million, or $(0.04) per share, compared with non-GAAP net loss of $(1.1) million, or $(0.02) per share.
- Adjusted EBITDA was $(1.0) million, compared with $(1.1) million.
- Backlog at the end of Q2 was $19 million, reflecting orders over the next 12 months for NFC and reader products as well as payment and cloud-based systems; also on the order book is an additional $8 million from longer-term contracts.
- Cash and cash equivalents were $3.7 million at June 30, 2013, compared with $7.4 million at December 31, 2012. Today, the company announced that it has confirmed subscriptions in connection with a private placement of its equity securities that is expected to close this week.
Outlook for Q3 2013
Based on its current expectations and the continued uncertainty associated with the U.S. Government business, management expects revenues of $23.0 million to $25.0 million for the third quarter of 2013, and further expects adjusted EBITDA of $(0.5) million to $0.5 million. For full year 2013, management expects revenues of $98.0 million to $105.0 million and adjusted EBITDA of $(1.0) million to $1.0 million.