EANS-News: Identive Group Inc. / Identive Group announces second quarter 2011 results

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quarterly report

Subtitle: 21% sales growth driven by broad market demand for Secure
ID solutions; Boosting RFID production capacity to address increasing
market opportunity

Santa Ana,Calif. and Ismaning, Germany, August 4, 2011 (euro adhoc) -
Identive Group, Inc. (NASDAQ: INVE; Frankfurt: INV), a provider of
products, services and solutions for the security, identification and
RFID industries, today announced results for the fiscal second
quarter (Q2), ended June 30, 2011.

Revenue in Q2 2011 was $25.6 million, up 21% from $21.2 million in Q2
2010 and up 14% from $22.4 million in the first quarter (Q1) of 2011.
Sales in Q2 were driven by strong demand for identity management
solutions for consumer and citizen ID applications globally as well
as ongoing implementations of employee physical and IT access control
systems, offset by continued temporary project delays with some U.S.
government customers. Q2 2011 sales reflected 14% organic growth year
over year net of the effect of acquisitions.

"In this time of continued economic uncertainty and various project
delays, we have been able to deliver solid sales growth and continue
to win important new business globally," said Ayman S. Ashour,
chairman and chief executive officer of Identive Group. "Sales in Q2
again showed increasing momentum across nearly all our markets, as
the need for secure ID solutions continues to grow to support new
mobile applications, citizen ID programs, and more single-credential,
multi-function campus environments."

Sales highlights in Q2 2011 included:

• 126% growth in the Company´s Transponder division fueled by the
growing demand for core RFID inlays to support transit, library,
pharmaceutical and NFC mobile applications, including more than seven
million RFID inlays for the Los Angeles Metro. To meet increasing
demand, Identive is expanding its production capacity for
high-performance RFID products to support emerging applications such
as NFC tagging, mobile payment and pharmaceutical tracking.

• 66% growth in the Company´s ID Systems Integration & Services
division, reflecting a broad range of identity management programs
including cashless payment systems, one-card campus IDs and smart
city applications.

• $1.9 million of revenue related to continued fulfillment of secure
readers for the German national ID programs.

Additional business highlights in Q2 2011 included:

• The acquisition of idOnDemand, which delivers managed identity
Software as a Service (SaaS) that allows organizations to use a
single, globally trusted credential for secure access to buildings,
computers, mobile devices and corporate information stored in the
cloud.

• Identive´s selection to provide NFC tags for Google´s smart poster
campaign in Austin, Texas to promote its Google Places service. The
smart tags are used by local businesses to create "smart posters"
that promote products and services by directly downloading
information onto consumer´s NFC-enabled smartphones. Identive has
since been authorized to offer direct fulfillment of an expanded
range of Google Places tags through its online marketplace at
www.identiveNFC.com.

• The completion of a common stock offering with net proceeds of
$18.3 million, which will be used to fund continued growth and
acquisitions and to expand the Company´s production capacity.

• Expansion of Identive´s partnership with Rabobank for the consumer
roll-out of the Company´s Cashless Betalen™ mobile payment solution
to hockey clubs in Holland. The solution allows club members to make
purchases using a club bank account via NFC stickers affixed to their
smart phones. With more than 200,000 members, Holland´s 250 hockey
clubs are targets for the cashless payment solution, as are other
sports clubs where there are frequent group activities paid for with
shared funds.

Mr. Ashour added, "We have continued to reduce our G&A costs as a
percentage of sales while boosting our selling and R&D investment,
particularly in SaaS, NFC and mobility solutions areas. To meet
increasing demand for our NFC smartags, readers and development kits
we launched an online NFC solutions marketplace at
www.IdentiveNFC.com. To address the growing market for RFID
solutions, we expect to bring added inlay manufacturing capacity
online before year end."

The following results are reported in U.S. GAAP, except as noted.
Identive uses certain non-GAAP measures as a way to compare the
underlying performance of our business from period to period, and a
discussion of non-GAAP measures and reconciliation to the applicable
GAAP measures is included below.

On a GAAP basis, Identive recorded net loss of $(1.6) million, or
$(0.03) per share in Q2 2011. This compares to net loss of $(0.7)
million, or $(0.02) per share in Q2 2010 and net loss of $(1.9)
million, or $(0.04) per share in Q1 2011. Non-GAAP adjusted EBITDA
(EBITDA before equity-based compensation, acquisition, transition and
integration costs) was $(0.3) million in Q2 2011, compared with $0.7
million in Q2 2010 and $(0.3) million in Q1 2011.

GAAP gross profit margin was 40% in Q2 2011, compared with 46% in Q2
2010 and 42% in Q1 2011. Non-GAAP gross profit margin (excluding
amortization and overhead allocations) was 44% in Q2 2011, compared
with 51% in Q2 2010 and 46% in Q1 2011. Margins in Q2 were impacted
by the relative weakness of identive´s Enterprise Security business
due to US Government project delays and to lower margin product mix.

Cash and cash equivalents at June 30, 2011 were $20.6 million,
compared with $9.9 million at March 31, 2011, primarily reflecting
$18.3 million received from Identive´s common stock offering, partly
offset by a $3.6 million increase in working capital, $3.6 million of
acquisition consideration, integration and other acquisition-related
costs, $0.9 million for payment down of debts and $0.3 million of
capital expenditures primarily associated with the set up of a new
Transponder production facility.

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 800.591.6930 (toll free within the U.S.) or +1
617.614.4908 (for international callers) and using pass code
49255614. 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 73813860.

About Identive Group Identive Group, Inc. (NASDAQ: INVE; Frankfurt:
INV) is an international technology company focused on building the
world´s signature group in secure identification-based technologies.
The businesses within Identive Group have deep industry expertise and
are well-known global brands in their individual markets, providing
leading-edge products and solutions in the areas of physical and
logical access control, identity management and RFID systems to
governments, commercial and industrial enterprises and consumers.
Identive´s growth model is based on a combination of strong
technology-driven organic growth from the businesses within the group
and disciplined acquisitive development. For additional info visit:
www.identive-group.com.

Use of Non-GAAP Financial Information In evaluating our business, our
adjusted EBITDA and non-GAAP gross profit margin differ from GAAP net
income (loss) and GAAP gross profit margin due to the exclusion of
certain items detailed in the reconciliation table within this press
release. Our management uses each of these non-GAAP measures
internally and believes that they provide investors with a meaningful
way to evaluate the Company´s operating performance. However, we
caution investors to consider these non-GAAP financial measures in
addition to, and not as a substitute for, our GAAP financial
measures.

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 about our expectations
regarding increased demand for our secure ID products and solutions,
trends in the secure ID market, our ability to identify emerging and
growth technologies in the secure ID market, our expected expansion
of our manufacturing capacity, and our future growth and
profitability. These statements are based on current expectations or
beliefs, as well as a number of assumptions about future events that
are subject to risks and uncertainties that may cause actual results
to differ materially from those contemplated herein. Our financial
results may not meet expectations, our cost savings may not be in the
amounts or the time frames we expect, and we may not be successful in
our strategy of pursuing both organic and acquisitive growth. 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
successfully integrate acquired businesses into ours; our ability to
grow the Company based on a strategy of providing products,
components and services for the identification systems value chain;
our ability to successfully develop and introduce new products 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 secure identity markets that we are targeting; our
ability to acquire the components we need to build our own products;
and our ability to successfully compete in the markets in which we
participate or target. 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, 2010 and subsequent reports filed with the
U.S. Securities and Exchange Commission.

All trade names are trademarks or registered trademarks of their
respective holders.

Further inquiry note:
Frau Annika Oelsner
Tel.: +49 89 9595-5220
E-Mail: aoelsner@identive-group.com

end of announcement euro adhoc
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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: Nasdaq: New York, free trade: Berlin, Hamburg, Stuttgart,
Düsseldorf, München, Open Market / Entry Standard: Frankfurt
language: English