EANS-News: Identive Group Inc. / IDENTIVE GROUP ANNOUNCES SECOND QUARTER 2012 RESULTS

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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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quarterly report

Subtitle: Performance improvements include sequential sales growth of
12% and decline in base operating cost

SANTA ANA, Calif. and ISMANING, Germany, August 7, 2012 (euro adhoc)
- Identive Group, Inc. (NASDAQ: INVE; Frankfurt: INV), a provider of
products, services and solutions for the identification, security and
RFID industries, today announced results for the fiscal second
quarter (Q2), ended June 30, 2012.

Q2 2012 Highlights: - Revenues of $23.9 million, up 12% from the
first quarter (Q1) of 2012

- Continued improvement in U.S. government business
- Launched innovative product and service offerings for emerging NFC and
payment markets
- Impairment of goodwill and intangibles; reduced impact of depreciation
and amortization charges on earnings in future periods

"Our Q2 results were in line with expectations, despite ongoing weakness in the
global economic environment. Continued recovery in sales of both ID products and
identity management systems in the U.S. government sector helped offset slowdown
of citizen ID programs in Europe and continued customer project delays in our
transponder sales," stated Ayman S. Ashour, CEO and Chairman of Identive. "Our
ongoing focus on reducing expenses, together with our restructuring program put
in place in June, helped drive a sequential decline in base operating expenses,
and we expect further savings as we realize the full effect of our restructuring
actions later this year. We also reinforced our position in both existing and
emerging markets with the launch of several important new products that
represent the fruits of our investments in new technology. These industry-first
offerings included tomPAY™ cashless payment cards that can be converted into NFC
tags for mobile devices; desktop readers for integrated physical and cyber
security; and our secure cloud-based, NFC tag management platform."

Q2 Results As reported in accordance with U.S. generally accepted
accounting principles (GAAP), revenues were $23.9 million in Q2 2012,
up 12% from $21.2 million in Q1 2012 and down 7% from $25.6 million
in Q2 2011. By segment, Identity Management Services and Solutions
(Identity Management) revenues were $14.2 million and ID Products
revenues were $9.7 million in Q2 2012.

GAAP gross profit margin was 40% in Q2 2012, compared with 41% in Q1
2012 and 40% in Q2 2011. Total research and development, sales and
marketing and general and administrative expenses (referred to in
this release as base operating expenses) were $13.3 million in Q2
2012, down 11% from $15.0 million in Q1 2012 and unchanged from $13.3
million in Q2 2011. Total base operating expenses in Q2 2012 reflect
a significant increase in technology investment compared with the
same quarter a year ago, partially offset by lower general and
administrative spending.

During the quarter we experienced a sharp and sustained decline in
our market capitalization, triggering a required impairment analysis
of our goodwill, intangible and long-lived assets. Based on this
review, we concluded that some assets are impaired and recognized
preliminary non-cash charges totaling $45.4 million in the quarter.
These charges have no impact on our day-today operations or liquidity
and will not result in any future cash expenditures. However, the
amount of amortization and depreciation will be significantly reduced
and consequently there will be lower non-cash charges to net earnings
in future quarters.

The non-cash impairment charges contributed to a net loss of $(41.9)
million, or $(0.70) per share in Q2 2012, compared with a net loss of
$(1.6) million, or $(0.03) per share in Q2 2011 and a net loss of
$(6.2) million, or $(0.11) per share in Q1 2012. The impairment
charges and other non-cash adjustments related to the above
referenced review accounted for $(0.66) per share of the net loss per
share recorded in Q2 2012. Non-GAAP gross profit margin was 45% in Q2
2012, up from 44% in Q1 2012, reflecting a higher contribution of
systems, software and services sales. Non-GAAP base operating
expenses were $11.9 million in Q2 2012, compared with $12.8 million
in Q1 2012. Adjusted EBITDA was $(1.2) million in Q2 2012, compared
with $(3.5) million in Q1 2012.

Non-GAAP gross profit margin, non-GAAP operating expenses and
adjusted EBITDA all exclude various items that are detailed in the
financial table and accompanying footnotes reconciling GAAP to
non-GAAP results contained in this release. An explanation of these
measures is also included below under the heading "Non-GAAP Financial
Measures."

Cash and cash equivalents at June 30, 2012 were $6.3 million, in line
with management guidance and compared with $13.3 million at March 31,
2012, reflecting funding of operational losses, reductions in
accounts payable associated with seasonal commitments to stadium
concessions, and funding of financial liabilities. David Wear, CFO of
Identive added, "We remain on target to achieve cost reductions of
$4.0 million to $5.0 million by the end of 2012, which annualized,
are expected to be close to $7.0 million. At the same time we
continue to commit to investment in the future growth of the Company.
With the reduction in our EBITDA loss in the current quarter and the
stabilization of our cash position after the first four months of the
year, we believe we can continue to support our operational cash flow
requirements through internal means. However, we will also seek to
strengthen the balance sheet by a moderate amount to allow us to
withstand unexpected or unforeseen market changes."

Q2 2012 Business Highlights

Sales and product highlights from the 2012 second quarter include:
- The announcement of an innovative cloud-based, NFC (near field
communication) tag management platform that allows advertisers, retailers and
organizations in the education, hospitality and other markets to securely manage
the delivery of dynamic, targeted content and services to consumers' NFC-enabled
mobile devices.
- Continued expansion of the user base for Identive's cashless payment
products and solutions globally, with new customer wins in India and significant
growth in Europe.
- Expanded penetration of transponders into the Japanese market with more
than 300,000 inlays supplied for payment and loyalty applications.
- The introduction of tomPay™, an innovative convertible contactless payment
card / NFC tag that enables consumers to add NFC cashless payment capabilities
to their existing mobile phones.
- The introduction of a new line of NFC magnets and dual-sided window stickers
that provide retailers with new ways to advertise to and communicate with their
customers using NFC technology.
- The launch of a new NFC tag online customization service that allows customers
to order NFC tags, stickers and smart posters personalized with their own
designs, photos or logos, as well as a URL destination, phone number or other
data.

Mr. Ashour concluded, "Identive's true strength in Secure ID is our
core vision of identity as a fundamental industry serving multiple
verticals. Our global presence and our strong position across the
many identity markets provide resilience to weather fluctuations in
any single sector. These strengths also put us at the head of the
pack as the industry prepares to capitalize on emerging opportunities
for mass deployments of consumer ID, citizen ID and employee ID
solutions. We remain convinced that NFC, cashless payment and
cloud-based identity management are emerging mega trends and that
Identive is uniquely positioned in these markets. This propels our
strategy to provide new ID products, software and services that these
potential hyper-growth areas will require. Our cost reduction program
and the changes we made in our balance sheet should help improve our
financial position as we continue to work to lower our breakeven
point."

Outlook for Q3 2012 Based on its current expectations, management
expects revenues of $24.0 million to $27.0 million, non-GAAP,
adjusted EBITDA of $(0.7) million to $0.7 million, and non-GAAP EPS
of $(0.03) to $(0.02) in the third quarter of 2012.

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 800.638.4930 (toll free within the U.S.) or +1
617.614.3944 (for international callers) and using pass code
37733064. 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 92565832.

About Identive Group Identive Group, Inc. (NASDAQ: INVE; Frankfurt:
INV) is focused on building the world's signature company in Secure
ID. The company's products, software, systems and services address
the markets for identity management, physical and logical access
control, cashless payment, NFC solutions and a host of RFID-enabled
applications for customers in the government, enterprise, consumer,
education and healthcare sectors. Identive's mission is to build a
lasting business of scale and technology based on a combination of
strong technology-driven organic growth and disciplined acquisitive
expansion. The company delivers up-to-date information on its
activity as well as industry trends through its industry-leading
social media initiatives and educational resource, AskIdentive.com.
For additional information, please visit www.identive-group.com or
follow on Twitter at @IdentiveGroup.

Non-GAAP Financial Measures Identive has provided in this release
financial information that has not been prepared in accordance with
GAAP, including non-GAAP operating expenses, non-GAAP gross profit
margin and adjusted EBITDA. Identive uses these non-GAAP financial
measures internally in analyzing its financial results and believes
they are useful to investors, as a supplement to GAAP measures, in
evaluating Identive's ongoing operational performance. Identive
believes that the use of these non-GAAP financial measures provides
an additional tool for investors to use in evaluating ongoing
operating results and trends. As noted, the non-GAAP financial
results discussed above exclude various items which are detailed in
the reconciliation table and accompanying footnotes contained within
this release. Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Investors are encouraged to review
the reconciliation of these non-GAAP measures to their most directly
comparable GAAP financial measures as detailed in this release.

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 regarding our expectations
regarding continued demand for our products, solutions and services,
our expectations regarding market acceptance of our NFC, cashless
payment and cloud-based solutions, our ability to realize savings
from our cost savings and restructuring plans, our ability to
capitalize on our technology portfolio, our expectations regarding
future results, including Q3 2012 results, our preliminary estimate
of impairment charges, and our expectations for future growth and
profitability. 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 grow our company based on a
strategy of providing products, components and services for the
secure identification market; to successfully develop and
commercialize new products and solutions 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 markets
that we are targeting; our ability to successfully integrate acquired
businesses; our ability to successfully compete in the markets in
which we participate or target; our ability to meet our sales
forecasts and general global political and economic factors which are
beyond our control but may unduly impact our markets and our
business. 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, 2011 and subsequent reports filed with the U.S. Securities and
Exchange Commission. All forward-looking statements are based on
information available to us on the date hereof, and we assume no
obligation to update such statements. ### All trade names are
trademarks or registered trademarks of their respective holders.
Contacts: Darby Dye Lennart Streibel +1 949 553-4251 +49 89
9595 5195 ddye@identive-group.com lstreibel@identive-group.com
- FINANCIALS FOLLOW -

Further inquiry note:
Mr. Lennart Streibel
Tel.: +49 89 9595-5195
E-Mail: lstreibel@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: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart,
Nasdaq: New York, Open Market / Entry Standard: Frankfurt
language: English