EANS-News: Identive Group Inc. / Identive Group Announces First Quarter 2011 Results

46% sales growth and $2.1 million improvement in adjusted EBITDA

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quarterly report

Subtitle: 46% sales growth and $2.1 million improvement in adjusted
EBITDA

Santa Ana, Calif., and Ismaning, Germany, May 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 first quarter
(Q1), ended March 31, 2011. All 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.

Revenue in Q1 2011 was $22.4 million, up 46% from $15.3 million in Q1
2010 as a result of 24% organic growth and the inclusion of revenue
from the acquired Multicard U.S. and Smartag businesses. Sales in Q1
were driven by volume shipments of secure readers for German´s
electronic ID program; ongoing implementations of physical access
control systems; strong demand for identity management products and
solutions for citizen and consumer ID programs in Europe and
employee/government worker ID programs in the U.S., Australia and
Japan; and increased orders for RFID inlays and tags for applications
including ski and transit ticketing and high-value asset tracking. Q1
2011 revenue decreased 19% from revenue of $27.8 million in the
fourth quarter (Q4) of 2010 as a result of customary seasonal
patterns as well as temporary delays in implementation with some U.S.
government projects.

On a GAAP basis, Identive recorded net loss of $(1.9) million, or
$(0.04) per share in Q1 2011. This compares to net loss of $(6.1)
million, or $(0.15) per share in Q1 2010 and net loss of $(0.8)
million, or $(0.02) per share in Q4 2010.

Non-GAAP adjusted EBITDA (EBITDA before equity-based compensation,
acquisition, transition and integration costs) was $(0.3) million in
Q1 2011, compared with $(2.4) million in Q1 2010 and $2.9 million in
Q4 2010.

GAAP gross profit margin was 42% in Q1 2011, compared with 44% in Q1
2010 and 43% in Q4 2010. Non-GAAP gross profit margin (excluding
amortization and overhead allocations) was 46% in Q1 2011, compared
with 49% in Q1 2010 and 46% in Q4 2010. Margins in Q1 were
unfavorably impacted by product mix.

GAAP operating expenses were $11.4 million in Q1 2011, including $0.7
million of primarily non-cash costs. This compares with operating
expenses of $12.2 million in Q1 2010, which included $2.2 million of
primarily non-cash and acquisition related costs; and $12.3 million
in Q4 2010, which included $2.3 million of primarily non-cash costs.
GAAP operating loss was $(2.0) million in Q1 2011, compared with
operating loss of $(5.5) million in Q1 2010 and operating loss of
$(0.5) million in Q4 2010.

Cash and cash equivalents at March 31, 2011 were $9.9 million,
compared with $10.8 million at December 31, 2010.

"Our performance in Q1 demonstrated growing momentum in several of
our target markets, supported by our continued progress in reducing
costs and improving efficiency," commented Ayman S. Ashour, chairman
and chief executive officer of Identive Group. "The market´s adoption
of secure ID applications continues to accelerate, driven in some
cases by government security mandates and in others by new
technologies like NFC that promise to simplify and enrich our lives.
Demand is growing rapidly for secure and affordable applications to
support citizen, employee and consumer identity management. Cashless
payments and NFC-based applications that allow mobile devices to
handle secure transactions are early but exciting trends. Identive´s
competencies across the RFID and secure ID value chains position us
to participate in these markets as well as many others. Our
acquisition of idOnDemand, announced today, enhances our ability to
provide electronic security credentials for employees, citizens and
consumers and to deliver superior solutions to a growing base of
customers."

Highlights in Q1 2011 included:

• 123% organic growth in Identive´s RFID inlay business, fueled by the
growing demand for core RFID technology to support secure ID solutions from
smart posters to cashless payments to ticketing. The addition of the newly
acquired Smartag business further boosted core RFID product sales in the
quarter.
• Strong sales of SCM readers and other ID infrastructure products,
including initial shipments of card terminals for the German eHealth program and
continued volume shipments of secure IT kits related to the German government´s
implementation of a new electronic citizen ID card.
• Multicard was selected to develop and implement an emergency management
solution for the largest nuclear generating facility in the U.S. in Palo Verde,
Arizona. After implementing the system, Multicard also managed a full scale
exercise to test the facility´s plans, policies and procedures for emergency
response in the event of a radiation incident.
• Increased activity with a maritime worker identification program in
Australia, for which Multicard provides identity solutions that include worker
authentication, card issuance and program management.
• A major university in Germany selected Multicard to provide a secure
one-card, multi-application solution for kiosk ID issuance, RFID physical
access, ID as a Service-based PKI and IT access, and cashless payments for a
"smart community" of faculty, staff, students and employees.

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 866.578.5747 (toll free within the U.S.) or +1
617.213.8054 (for international callers) and using pass code
54025275. 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 62659718.

About Identive Group Identive Group, Inc. (NASDAQ: INVE; Frankfurt
Stock Exchange: 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
non-GAAP gross profit margin, non-GAAP overhead costs and adjusted
EBITDA differ from GAAP gross profit margin, GAAP operating expenses
and GAAP net income (loss) 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 worldwide demand for our ID products and solutions, trends
in the secure ID market, our position as an innovative leader in the
secure ID market, 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
identification and 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.

end of announcement euro adhoc
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ots Originaltext: Identive Group Inc.
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Frau Annika Oelsner
Tel.: +49 89 9595-5220
E-Mail: investorrelations@identive-group.com

Branche: Computing & Information Technology
ISIN: US45170X1063
WKN: A1C0ZG
Index: NASDAQ
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