Second Quarter Revenue of $15.6 Million and Adjusted EBITDA of $(4.2) Million
FREMONT, Calif., August 13, 2015 — Identiv, Inc. (NASDAQ: INVE) today announced financial results for the second quarter (Q2) of 2015. For the second quarter, total revenues were $15.6 million, GAAP gross profit margin was 43% and adjusted EBITDA was $(4.2) million.
“While we are disappointed in the slower than anticipated start to 2015, we are confident in Identiv’s overall strategy with the recent addition of new global customers and strategic partners. We are continuing to focus on the growth areas and have begun implementing cost-reduction activities focused on strengthening our core business of providing identities, as well as ensuring our resources are focused on customer roll-outs and revenue-generating products,” said Jason Hart, Identiv CEO.
“As we look forward, we expect to see roll-outs becoming more predictable with large government and multinational customers during the second half of 2015. For example, we are on schedule to release our new premises products as part of our partnership with Cisco this quarter. Additionally, our uTrust TS Reader line was recently certified and approved by the U.S. government, which will help improve the roll-out timeframes with U.S. government customers.”
Second Quarter Financial Highlights Review
In reviewing the results for the second quarter of fiscal year 2015, all figures are compared to the second quarter of fiscal year 2014, unless stated otherwise:
Total revenues were $15.6 million compared with $22.3 million in the second quarter of fiscal year 2014 and $14.9 million in the first quarter of 2015. The Company saw stable sales in its premises products but deferred more than $3.2 million in credential sales, which is expected to be recognized in the third quarter of 2015. The decline in the identity reader segment in international regions compared to 2014 continued.
The Company has experienced an increase in large customer wins including a major international airline, multiple government agencies and large technology companies, but has seen delays in deployment of these projects resulting in delayed revenue for the quarter.
GAAP gross profit margin increased to 43%, compared to 40%, primarily due to product mix and an increase in premises margin, partially offset by a decrease in identity reader margins.
Base operating expenses, which include research and development, sales and marketing, and general and administrative costs were $12.9 million, compared to $10.3 million, up 25%. This is primarily the result of an increase in general and administrative (G&A) related expenditures due to a significant increase in legal and accounting professional fees associated with non-core business activities.
Adjusted EBITDA for the quarter was $(4.2) million, compared to $(0.4) million, predominantly reflecting the decrease in revenues and the increase in legal and accounting professional fees.
GAAP net loss from continuing operations was $(7.4) million in the second quarter of 2015, or $(0.67) per share, compared to a GAAP net loss from continuing operations of $(2.7) million, or $(0.34) per share. The second quarter of 2015 included restructuring costs of $0.02 million and impairment charges related to goodwill of $1.0 million, compared to restructuring costs of $0.6 million and no impairment charges in the second quarter of 2014.
The Company was awarded two additional patents since the start of the second quarter.
Cash was $30.8 million at June 30, 2015, compared with $36.5 million at December 31, 2014.
Note: Financial results contained in this release reflect the continuing operations of Identiv only and exclude discontinued operations of non-core businesses sold in December 2013, February 2014, and June 2014.
As previously stated in a press release on August 4, 2015, the Company is providing guidance for fiscal year 2015 of revenue between $65 million and $70 million and expects adjusted EBITDA to be positive on a run rate basis in the fourth quarter of 2015.
Webcast and Conference Call Information
Identiv will hold an audio webcast and conference call to discuss its second quarter 2015 results today, August 13, 2015, at 2:00 PM PT (5:00 PM ET). The audio webcast can be accessed at identiv.com/investors/ir-events. The conference call can be accessed by dialing 888-771-4371 (toll-free within the U.S.) or +1 847-585-4405 (for international callers) using passcode 40421793. For those unable to attend the live webcast, it will be archived following the event for 30 days at identiv.com/investors/ir-events. A replay of the call will also be available for one week and can be accessed by dialing 888-843-7419 (toll-free within the U.S.) or +1 630-652-3042 (for international callers) using passcode 40421793#.
Identiv is a global security technology company that establishes identity in the connected world, including premises, information, and everyday items. CIOs, CSOs, and product departments rely upon Identiv’s trusted identity solutions to reduce risk, achieve compliance, and protect brand identity. Identiv’s trust solutions are implemented using standards-driven products and technology, such as digital certificates, trusted authentication, mobility, and cloud services. For more information, visit identiv.com.
Non-GAAP Financial Measures (Unaudited)
This release includes financial information that has not been prepared in accordance with GAAP, including non-GAAP gross profit margin, non-GAAP operating expenses and adjusted EBITDA. Identiv 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 our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. The non-GAAP financial results discussed above exclude items detailed in the reconciliation table 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 regarding our expectations for additional revenue from new sales partnerships, including but limited to sales under our agreement with Cisco; our ability to establish a stable financial platform on which to execute our strategy to deliver trust solutions; our expectations with respect to sales to government and multinational customers; our expectations from increased investments in sales, marketing and engineering; and our ability to achieve the level of revenues and adjusted EBITDA results for which we have provided guidance. 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 realize cost savings from the restructuring of our operations; our ability to increase revenues through new sales and marketing programs and sales partnerships; our ability to develop successfully and commercialize new products and solutions that satisfy the evolving and increasingly complex requirements of customers; our ability to finance continued investments in technology, products and manufacturing capacity in order to develop products and solutions for our markets; whether the markets in which we participate or target grow, converge or standardize at anticipated rates or at all, including the markets that we are targeting; our ability to compete successfully in the markets in which we participate or target; our ability to meet our sales forecasts; our ability to meet financial covenants of our loan agreement; our ability to meet growing demand for our products; and general global political and economic factors that 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, 2014 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.
Investor Relations Contact:
David Isaacs/Leah Polito
Sard Verbinnen & Co