Identiv Reports Fourth Quarter and Fiscal Year 2014 Results
March 12 2015 - 4:10PM
Fourth Quarter Revenue of $19.4 Million
and Adjusted EBITDA of $0.16 Million Fiscal Year 2014 Revenue of
$81.2 Million and Adjusted EBITDA of $(1.3) Million
Identiv, Inc. (Nasdaq:INVE) today announced financial results for
the fourth quarter (Q4) and fiscal year ended December 31, 2014.
For the fourth quarter, total revenues for continuing operations
were $19.4 million, GAAP gross profit margin was 41.5%, adjusted
EBITDA was $0.16 million, and GAAP net loss was $(6.2) million. For
the fiscal year, total revenues for continuing operations were
$81.2 million, GAAP gross profit margin was 41.2%, adjusted EBITDA
was $(1.3) million, and GAAP net loss was $(17.8) million.
"In 2014, we successfully completed two substantial tasks —
creating a fiscally stable business delivering quality security
products to our customers; and aligning Identiv to take the
leadership position in providing privacy and security as the
Internet of Things continues to expand exponentially," said Jason
Hart, Identiv CEO. "During the fourth quarter and throughout the
year, we invested extensively in new products, increased our
penetration into new markets with new distribution, OEM, and
integrator partnerships, and expanded our direct sales
organization. This investment in 2014, along with our realignment
of the business, has enabled us to focus on growth in 2015 and the
years to come. We are at an incredible intersection of
unprecedented connectivity and the new demand for privacy and
security at all levels of our society, creating a marketplace for
our solutions and enabling us to create value for
shareholders."
Fourth Quarter Financial Highlights Review
In reviewing the results for the fourth quarter of fiscal year
2014, all figures are compared to the fourth quarter of fiscal year
2013, unless stated otherwise:
- Total revenues were $19.4 million, a decrease of 1% from $19.5
million, primarily due to a decrease in Identity reader sales,
partially offset by an increase in premises sales to the U.S.
government customers.
- GAAP gross profit margin was 42%, compared to 44%, primarily
due to a decrease in credentials margin.
- Base operating expenses, which include research and
development, sales and marketing, and general and administrative
costs were $9.8 million, compared to $9.2 million, up 7%. This is
primarily a result of increased expenditures in research and
development, partially offset by a $0.4 million non-recurring
R&D tax credit in the fourth quarter of 2013.
- Adjusted EBITDA for the quarter was $0.16 million, compared to
$0.37 million. Adjusted EBITDA in the prior year quarter benefited
from the non-recurring R&D tax credit.
- GAAP net loss from continuing operations was $(6.2) million in
the fourth quarter of 2014, or $(0.58) per share, compared with
GAAP net loss of $(3.0) million, or $(0.88) per share. Fourth
quarter 2014 results included restructuring costs of $0.2 million
and earn-out consideration charge of $3.5 million, while there were
restructuring costs of $0.5 million and impairment charges to
goodwill and long lived assets of $4.6 million in the fourth
quarter of 2013.
Fiscal Year 2014 Financial Highlights
In reviewing the results for fiscal year 2014, all figures are
compared to fiscal year 2013 unless stated otherwise:
- Total revenue was $81.2 million in 2014, up 9% from $74.3
million. The results include a significant contribution from sales
of credentials products, primarily due to demand for electronic
game toys. This was offset by lower sales of identity readers.
- GAAP gross profit margin was 41%, compared to 45%, primarily
due to product mix and lower margins experienced in the Credential
segment.
- Base operating expenses, which include research and
development, sales and marketing, and general and administrative
costs, were $40.3 million, compared to $39.3 million, up 2%. The
company increased its investment in sales and marketing by 9% and
in research and development by 10%, partially offset by a reduction
in general and administrative expenses of 10%.
- Adjusted EBITDA in 2014 was $(1.3) million, compared with
$(1.3) million.
- GAAP net loss from continuing operations was $(18.4) million in
2014 or $(2.12) per share, compared with GAAP net loss from
continuing operations of $(25.0) million or $(3.62) per share.
Fiscal year 2014 results included restructuring costs of $3.1
million and earn-out consideration charge of $3.5 million, while
there were restructuring costs of $1.8 million and impairment
charges to goodwill and long lived assets of $15.6 million in the
fourth quarter of 2013.
- Cash was $36.5 million at December 31, 2014, compared with $5.1
million at December 31, 2013, reflecting proceeds from a
refinancing of debt in March 2014 (and amended in November 2014)
and an underwritten offering of common stock in September
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.
Guidance
The company is providing guidance for fiscal year 2015 of
revenue between $95 million and $105 million and positive adjusted
EBITDA on an annual basis.
Webcast and Conference Call Information
Identiv will hold an audio webcast and conference call to
discuss its fourth quarter and fiscal year 2014 results today,
March 12, 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
39040664. 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 39040664.
About Identiv
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 the Private Securities Litigation Reform Act of
1995. Forward-looking statements are those involving future events
and future results that are based on current expectations,
estimates, forecasts, and projections as well as the current
beliefs and assumptions of the Company's management and can be
identified by words such as "anticipates", "believes", "plans",
"will", "intends", "expects", and similar references to the future.
Any statement that is not a historical fact, including the
statements made under the caption "Guidance" and any other
estimates, projections, future trends and the outcome of events
that have not yet occurred, is a forward-looking
statement. Forward-looking statements are only predictions 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 materially and adversely from those
expressed in any forward-looking statements. Factors that could
cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, factors
discussed in our public company reports, including our Annual
Report on Form 10-K for the year ended December 31, 2013 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.
— Financials Follow —
| Identiv,
Inc. |
| Consolidated Statements
of Operations |
| (in thousands, except per share
data) |
| (unaudited) |
| |
Three Months
Ended |
Year
Ended |
| |
December,
31 |
December,
31 |
| |
2014 |
2013 |
2014 |
2013 |
| Net revenue |
$ 19,382 |
$ 19,539 |
$ 81,249 |
$ 74,284 |
| Cost of revenue |
11,330 |
10,869 |
47,793 |
40,888 |
| Gross profit |
8,052 |
8,670 |
33,456 |
33,396 |
| Operating expenses: |
|
|
|
|
| Research and development |
1,856 |
1,071 |
6,902 |
6,277 |
| Selling and marketing |
4,791 |
4,935 |
20,635 |
18,907 |
| General and administrative |
3,156 |
3,147 |
12,751 |
14,149 |
| Impairment of long-lived
assets |
-- |
-- |
-- |
178 |
| Impairment of goodwill |
-- |
4,637 |
-- |
15,572 |
| Earnout consideration |
3,510 |
-- |
3,510 |
-- |
| Restructuring and severance |
224 |
518 |
3,098 |
1,770 |
| Total operating expenses |
13,537 |
14,308 |
46,896 |
56,853 |
| Loss from operations |
(5,485) |
(5,638) |
(13,440) |
(23,457) |
| Interest expense, net |
(465) |
(566) |
(3,619) |
(2,169) |
| Foreign currency (loss) gain, net |
(318) |
249 |
(1,270) |
710 |
| Loss from continuing operations before
income taxes and noncontrolling interest |
(6,268) |
(5,955) |
(18,329) |
(24,916) |
| Income tax (provision) benefit |
54 |
209 |
(95) |
(47) |
| Loss from continuing operations before
noncontrolling interest |
(6,214) |
(5,746) |
(18,424) |
(24,963) |
| Income (loss) from discontinued
operations, net of income taxes |
(25) |
3,545 |
521 |
(10,835) |
| Consolidated net loss |
(6,239) |
(2,201) |
(17,903) |
(35,798) |
| Less: Loss (income) attributable to
noncontrolling interest |
36 |
(775) |
109 |
933 |
| Net loss attributable to Identiv, Inc.
stockholders´ equity |
$ (6,203) |
$ (2,976) |
$ (17,794) |
$ (34,865) |
| Basic and diluted net loss per share
attributable to Identiv, Inc. stockholders´ equity: |
|
|
|
|
| Loss from continuing operations |
$ (0.58) |
$ (0.88) |
$ (2.12) |
$ (3.62) |
| Income (loss) from discontinued
operations |
-- |
0.48 |
0.06 |
(1.64) |
| Net loss |
$ (0.58) |
$ (0.40) |
$ (2.06) |
$ (5.26) |
| Weighted average shares used to compute basic
and diluted loss per share |
10,627 |
7,413 |
8,648 |
6,633 |
| |
| |
| Identiv,
Inc. |
| Consolidated Balance
Sheets |
| (in thousands) |
| |
|
|
| |
December 31, |
December 31, |
| |
2014 |
2013 |
| |
(unaudited) |
| ASSETS |
|
|
| Current assets: |
|
|
| Cash |
$ 36,547 |
$ 5,095 |
| Accounts receivable, net of allowances |
13,612 |
13,289 |
| Inventories |
9,254 |
8,995 |
| Prepaid expenses |
1,002 |
957 |
| Other current assets |
1,200 |
1,766 |
| Current assets of discontinued
operations |
-- |
2,727 |
| Total current assets |
61,615 |
32,829 |
| Property and equipment, net |
5,311 |
5,888 |
| Goodwill |
8,853 |
8,991 |
| Intangible assets, net |
8,730 |
10,184 |
| Other assets |
1,371 |
867 |
| Total assets |
$ 85,880 |
$ 58,759 |
| |
|
|
| LIABILITIES AND STOCKHOLDERS´
EQUITY |
|
|
| Current liabilities: |
|
|
| Accounts payable |
$ 8,372 |
$ 9,353 |
| Current portion - payment obligation |
635 |
1,073 |
| Financial liabilities |
-- |
2,971 |
| Deferred revenue |
508 |
729 |
| Accrued compensation and related
benefits |
2,139 |
3,383 |
| Other accrued expenses and liabilities |
4,471 |
5,239 |
| Current liabilities of discontinued
operations |
-- |
1,630 |
| Total current liabilities |
16,125 |
24,378 |
| Long-term payment obligation |
5,545 |
5,648 |
| Long-term financial liabilities |
13,938 |
3,051 |
| Other long-term liabilities |
630 |
938 |
| Total liabilities |
36,238 |
34,015 |
| Total stockholders´ equity |
49,642 |
24,744 |
| Total liabilities and
stockholders´equity |
$ 85,880 |
$ 58,759 |
| |
| |
| Identiv,
Inc. |
| Reconciliation of GAAP
and Non-GAAP Financial Information |
| (in thousands) |
| (unaudited) |
| |
Three Months
Ended |
Year
Ended |
| |
December,
31 |
December,
31 |
| |
2014 |
2013 |
2014 |
2013 |
| Reconciliation of GAAP gross profit
margin and non-GAAP gross profit margin |
|
|
|
|
| GAAP cost of revenue |
$ 11,330 |
$ 10,869 |
$ 47,793 |
$ 40,888 |
| Reconciling items included in GAAP cost of
revenue: |
|
|
|
|
| Stock-based compensation |
(13) |
(12) |
(36) |
(68) |
| Amortization and depreciation |
(374) |
(359) |
(1,477) |
(1,371) |
| Total reconciling items included in GAAP cost
of revenue |
(387) |
(371) |
(1,513) |
(1,439) |
| Non-GAAP cost of revenue |
$10,943 |
$10,498 |
$46,280 |
$39,449 |
| Non-GAAP gross profit margin |
44% |
46% |
43% |
47% |
| Reconciliation of GAAP operating
expenses and overhead costs |
|
|
|
|
| GAAP operating expenses |
$ 13,537 |
$ 14,308 |
$ 46,896 |
$ 56,853 |
| Impairment of goodwill and long-lived
assets |
-- |
(4,637) |
-- |
(15,750) |
| Earnout consideration |
(3,510) |
-- |
(3,510) |
-- |
| Stock-based compensation |
(1,070) |
(313) |
(2,125) |
(1,352) |
| Pension expenses |
-- |
143 |
-- |
68 |
| Gain of disposal of fixed assets |
(5) |
(28) |
(4) |
(27) |
| Amortization and depreciation |
(386) |
(365) |
(1,538) |
(1,625) |
| Acquisition costs |
-- |
-- |
-- |
(13) |
| Transition and integration costs |
-- |
77 |
-- |
(267) |
| Restructuring and severance |
(284) |
(518) |
(3,467) |
(1,770) |
| Total reconciling items included in GAAP
operating expenses |
(5,255) |
(5,641) |
(10,644) |
(20,736) |
| Non-GAAP overhead costs |
$ 8,282 |
$ 8,667 |
$ 36,252 |
$ 36,117 |
| Reconciliation of GAAP net loss to
adjusted EBITDA loss |
|
|
|
|
| GAAP net loss attributable to Identiv,
Inc. |
$ (6,203) |
$ (2,976) |
$ (17,794) |
$ (34,865) |
| Reconciling items included in GAAP net
loss: |
|
|
|
|
| Provision (Benefit) for income taxes |
(54) |
(209) |
95 |
47 |
| Net (loss) gain attributable to
noncontrolling interest |
(36) |
775 |
(109) |
(933) |
| (Income) loss from discontinued operations,
net of income taxes |
25 |
(3,545) |
(521) |
10,835 |
| Interest expense, net |
465 |
566 |
3,619 |
2,169 |
| Foreign currency losses (gains), net |
318 |
(249) |
1,270 |
(710) |
| Impairment of goodwill and long lived
assets |
-- |
4,637 |
-- |
15,750 |
| Earnout consideration |
3,510 |
-- |
3,510 |
-- |
| Stock-based compensation |
1,083 |
325 |
2,161 |
1,420 |
| Pension expenses |
-- |
(143) |
-- |
(68) |
| Amortization and depreciation |
760 |
724 |
3,015 |
2,996 |
| Acquisition costs |
-- |
-- |
-- |
13 |
| Transition and integration costs |
-- |
(77) |
-- |
267 |
| (Gain) on disposal of fixed assets |
5 |
28 |
4 |
27 |
| Restructuring and severance |
284 |
518 |
3,467 |
1,770 |
| Total reconciling items included in GAAP net
loss |
6,360 |
3,350 |
16,511 |
33,583 |
| Adjusted EBITDA gain ( loss) |
$ 157 |
$ 374 |
$ (1,283) |
$ (1,282) |
CONTACT: Investor Relations Contacts:
David Isaacs/Leah Polito
Sard Verbinnen & Co
415-618-8750
identiv-IR@sardverb.com
Media Contacts:
Angela Lestar/David Sikorski
MSLGROUP
781-684-0770
identiv@mslgroup.com
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