EANS-News: Identive Group Inc. / IDENTIVE GROUP ANNOUNCES FOURTH QUARTER AND FISCAL 2011 RESULTS

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annual result

Subtitle: -21% growth to over $100 million in 2011 -Positive adjusted
EBITDA and second consecutive quarter of positive cash flow from
operations in Q4

SANTA ANA, Calif. and ISMANING, Germany, March 1, 2012 (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 fourth quarter (Q4)
and year ended December 31, 2011.

Highlights of 2011 included:

• 21% revenue growth to $102.7 million
• Delivery of a broad range of near field communications (NFC)
infrastructure products globally, including multiple types of NFC tags, tag
customization, readers, tokens and software development kits
• Launch of idOnDemand Software as a Service (SaaS)-based credential
management solution
• Expansion of IP portfolio to address larger and emerging growth markets,
including radio frequency identification (RFID) tags, smart card manufacturing
and innovative credential management products
• 80% expansion in transponder manufacturing capacity
• Significant improvement in cash performance

"2011 was a year of important accomplishments for Identive," said
Ayman S. Ashour, chairman and CEO of Identive. "Our diverse revenue
base enabled us to achieve strong growth despite an estimated $3.6
million decline in sales to the U.S. Government sector, which
continued to experience budget uncertainties and resulting project
delays. Building on our unique expertise in both RFID and smart card
technologies, we have positioned ourselves as a leading
infrastructure player in the emerging NFC ecosystem. Our launch of
idOnDemand as a pioneering Identity as a Service solution is gaining
traction and spinning off innovative technology to enhance our
product offerings. Increased investment in R&D has generated new
patent pending-technology that, together with our increased
transponder production capacity, will allow us to expand our
addressable markets for physical access and cyber security. We also
made significant improvements particularly in the last two quarters
in our cash performance, which increasingly allows us to fund our
growth from our own operations."

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.

Full Year 2011 Results

Revenue for the full year 2011 was $102.7 million, up 21% from $84.8
million in 2010 and reflecting organic growth outside the U.S.
Government market of 17%, as well as growth from acquisitions.

Revenue from Identive´s Identity Management services and solutions
segment was $56.5 million in 2011, up 19% from $47.5 million in 2010
and benefitting from strong sales of credential management solutions
to support consumer and citizen ID programs and growing demand in the
education market and for payment applications. This growth was offset
by a decline in sales of enterprise security and identity management
systems to the U.S. Government due to ongoing budget uncertainty and
project delays.

Revenue from the Company´s ID Product segment was $46.2 million in
2011, up 24% compared with $37.3 million in 2010, driven by a 64%
increase in sales of RFID transponder inlays, tags and other products
for a variety of applications including transit and event ticketing,
NFC advertising and payment and secure asset tracking. Growth was
also supported by sustained demand for smart card and contactless
reader technology for the German electronic health card program,
national ID and corporate ID programs in Europe, and increased demand
from a variety of markets in Asia. Sales in the ID Products segment
grew despite lower sales of readers used to provide secure access to
PCs and computer networks in the U.S. Government sector. Gross profit
margin in 2011 was 42%, compared with 44% in 2010. Non-GAAP gross
profit margin (excluding amortization and depreciation, overhead
allocations, transition and acquisition costs and stock-based
compensation) was 46% in 2011, compared with 48% in 2010. Lower sales
to the U.S. Government market decreased overall gross profit margin
in 2011, partially masking gross profit margin improvement in other
parts of the Company´s business, particularly in the ID Products
segment.

Research and development expenses in 2011 grew nearly 50% from 2010
as the Company increased its investments in core technology and new
product and solutions offerings. Sales and marketing expenses as a
percentage of sales remained relatively consistent year over year
despite continued market development for existing and emerging
opportunities. General and administrative expenses declined 4
percentage points as a percentage of sales year over year, reflecting
the Company´s ongoing focus on improving efficiency and emphasizing
synergies across the business.

Net loss in 2011 was $(9.5) million, or $(0.18) per share, compared
with net loss in 2010 of $(9.5) million, or $(0.22) per share. Net
loss in 2011 included non-cash charges of $7.7 million, of which $4.1
million was primarily due to amortization expense related to
acquisitions. On a non-GAAP basis, adjusted EBITDA (EBITDA before
equity-based compensation, adjustments to earnout estimates, and
acquisition, transition and integration costs) was $(0.7) million in
2011, compared with adjusted EBITDA of $1.1 million in 2010.

Net cash used in operating activities improved to $4.6 million used
in 2011, compared with $9.3 million used in 2010.

Q4 2011 Results

Revenue in Q4 2011 was $27.9 million, compared with $27.8 million in
Q4 2010 and up 4% from $26.8 million in the third quarter (Q3) of
2011.

Revenue from the Company´s Identity Management services and solutions
segment was $14.2 million in Q4 2011 and reflected sales of
credential management and payment solutions for a diverse range of
consumer and citizen ID programs, offset by a more pronounced drop in
sales to the U.S. Government market. Revenue from the Company´s ID
Product segment was $13.7 million in Q4 2011 and reflected strong
demand for readers from the Japanese telecommunications market that
drove near 100% growth in sales to Japan year over year, as well as
shipments of terminals for the German eHealth card program and
increased sales of RFID inlays, tags and other products for
contactless ticketing and other applications.

Gross profit margin was 41% in Q4 2011, compared with 43% in Q4 2010
and 44% in Q3 2011. Non-GAAP gross profit margin (excluding
amortization and depreciation, overhead allocations, transition and
acquisition costs and stock-based compensation) was 45% in Q4 2011,
compared with 46% in Q4 2010 and 48% in Q3 2011. Gross profit margin
in Q4 2011 was negatively impacted by lower sales of enterprise
security systems to the U.S. Government market, while gross profit
margin in the Company´s ID Products segment improved year over year.

Net loss was $(2.4) million, or $(0.04) per share in Q4 2011. This
compares to net loss of $(0.8) million, or $(0.02) per share in Q4
2010 and net loss of $(3.7) million, or $(0.06) per share in Q3 2011.
Net loss in Q4 2011 included non-cash charges of $2.2 million, of
which $1.2 million was primarily due to amortization expense related
to acquisitions. Non-GAAP adjusted EBITDA (EBITDA before stock-based
compensation, adjustments to earnout estimates, and acquisition,
transition and integration costs) was $0.2 million in Q4 2011,
compared with $2.9 million in Q4 2010 and $(0.3) million in Q3 2011.

Cash and cash equivalents at December 31, 2011 were $17.2 million,
compared with $17.7 million at September 30, 2011 as a result of
ongoing payment of debt obligations offset by improvements in
operating cash flow. "We generated traction in important growth
markets in Q4 as we increased sales in Japan, expanded deployments of
our payment solutions and began selling our first purpose-built
products for converged physical and cyber access," added Ashour.
"Even as we continued to invest in new technology, product and market
development and production capacity, we also reduced G&A spending and
generated $0.9 million in cash from operating activities in the
quarter. We expect that typical seasonality will result in a lower
revenue trend in the first quarter but are confident that our market
position, robust portfolio of technology and offerings as well as our
sound financial base position us to make further progress in 2012
towards our strategy to be the signature company in Secure ID."

Conference Call and Webcast Information Identive Group will host a
conference call and webcast today at 9:00 AM Eastern Time, which can
be accessed by dialing 866.831.6247 (toll free within the U.S.) or +1
617.213.8856 (for international callers) and using pass code
18753357. 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 thirty days 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
30673076.

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, NFC and a host of RFID-enabled applications for customers in
the government, enterprise, consumer, education, healthcare and
transportation 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. 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 continued demand for our products, solutions and services,
our ability to capitalize on our position in markets for secure
identification technologies, our ability to achieve results from
increased investment in R&D, our ability to capitalize on our
technology portfolio, 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; 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, 2010 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.

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