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Form 8-K Identiv, Inc. For: May 09

May 9, 2019 4:58 PM

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 9, 2019

 

 

IDENTIV, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   000-29440   77-0444317

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2201 Walnut Avenue, Suite 100,

Fremont, California

  94538
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, Including Area Code: (949) 250-8888

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.001 par value per share   INVE   The Nasdaq Stock Market LLC

 

 

 


Item 2.02. Results of Operations and Financial Condition

The information contained in Item 2.02 of this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information contained in this Current Report shall not be incorporated by reference into any registration statement or other document or filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

On May 9, 2019, Identiv, Inc. (the “Company”) issued a press release announcing financial results for its first quarter ended March 31, 2019. A copy of the Company’s press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

 

Exhibit No.

  

Description

99.1    Press release dated May 9, 2019 issued by Identiv, Inc.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Identiv, Inc.

May 9, 2019

    By:  

/s/ Sandra Wallach

      Chief Financial Officer

Exhibit 99.1

 

LOGO

IDENTIV REPORTS FIRST QUARTER 2019 RESULTS

18% Revenue Growth versus Q1 2018

Premises Up 24%, Identity Up 13%, Software and Services Revenues Up 68%

FREMONT, Calif. — May 9, 2019 — Identiv, Inc. (NASDAQ: INVE), a global provider of physical security and secure identification, reported financial results for the first quarter ended March 31, 2019.

Recent Financial and Operational Highlights

 

 

18% year-over-year revenue growth, with Premises up 24% and Identity up 13%

 

 

Software and services revenue up 68%, comprising 14% of total revenue, up from 10% of revenues Q1 2018

 

 

Margin expansion: 45% GM Q1 2019 vs 39% GM Q1 2018; year-over-year net loss attributable to Identiv, Inc. decrease of 65%

 

 

11th consecutive quarter of positive non-GAAP adjusted EBITDA

 

 

Awarded multi-year contract for delivery of 5+ million RFID inlays for medical device authentication

 

 

Awarded $6+ million contract for delivery of RFID inlays for transit applications over twelve months starting Q2 2019

 

 

Delivered 300,000 dual interface (HF and UHF) credentials serving a government-mandate for personnel authentication in Europe, with a backlog of $1+ million

 

 

Accelerating adoption of Thursby SubRosa and R2S mobile security apps

 

 

Launched new line of RFID tags for IoT security and low cost NFC tags

 

 

Launched Freedom and Enterphone product lines through combined channel & expanded distribution

 

 

Nominated Retired U.S. Navy Vice Admiral Robin R. Braun for Election to Board of Directors

 

 

Major platform release for ICPAM: new capabilities, scalability, performance, security and reliability

 

 

Launched integrated video and access platform, combining Hirsch Velocity and 3VR VisionPoint VMS

First Quarter 2019 Financial Results

Revenue for the first quarter of 2019 was $19.5 million, an increase of 18% from $16.5 million in the first quarter of 2018 and a decrease of 8% from $21.3 million in the fourth quarter of 2018.


Revenue in the Premises segment increased 24% from the first quarter of 2018 and increased 5% from the prior quarter to $9.3 million. Revenue in the Identity segment increased 13% from the first quarter of 2018 and decreased 18% from the prior quarter to $10.2 million.

GAAP gross margin was 45% in the first quarter of 2019, an increase of 600 basis points compared to 39% in the first quarter of 2018 and a decrease from 48% in the fourth quarter of 2018. The year-over-year gross margin improvement mainly reflects product mix including the higher-margin contribution of mobile logical access product revenue.

GAAP operating expenses, including research and development (R&D), sales and marketing (S&M), general and administrative (G&A), and restructuring and severance charges, were $9.1 million in the first quarter of 2019, compared to $8.3 million in the first quarter of 2018 and $9.1 million in the fourth quarter of 2018. The year-over-year increase was primarily due to the inclusion of three acquisitions in February and November of 2018 and January of 2019, partly offset by synergies achieved among the consolidated businesses.

Non-GAAP operating expenses (adjusted to exclude restructuring and severance costs and certain non-cash charges, such as stock-based compensation, depreciation and amortization as well as other non-GAAP items consisting of acquisition-related transaction costs) for the first quarter of 2019 were $7.9 million, compared to $6.6 million in the first quarter of 2018 and $7.4 million in the fourth quarter of 2018, reflecting a sequential increase of 6% and a year-over-year increase of 20%, primarily in Engineering and Sales.

GAAP net loss attributable to common stockholders per share was $(0.06) in the first quarter of 2019, compared to a net loss of $(0.15) per share in the first quarter of 2018, and $(0.01) per share in the fourth quarter of 2018.

Non-GAAP adjusted EBITDA in the first quarter of 2019 totaled $1.2 million, an increase of approximately 500% compared to $0.2 million in the first quarter of 2018, and $3.1 million in the fourth quarter of 2018. The year-over-year increase reflects higher revenues as well as higher gross margins.

Management Commentary

“We had a fast start to the year, building on the strong momentum of 2018. In the first week of January, we welcomed the Freedom, Liberty, and Enterphone MESH team to Identiv, rounding out our product line following the acquisitions of Thursby and 3VR in 2018. We believe this completes the core components of our platform to digitize the physical world, bringing us much closer to our vision of cloud, software-centric and mobile-enabled digital access,” said Steven Humphreys, Identiv CEO. “We grew 18% year-over-year in the first quarter, faster than the industry. Coupled with the positive customer feedback during recent industry shows, we believe this reflects the combination of positive industry trends and our customers’ increasing desire to secure critical information and infrastructure, address mobility and BYOD, and to do so with Identiv’s integrated and IT centric solutions.

Our business’ resiliency also was demonstrated in two key respects: our growth sustained through two federal government shutdowns; and as we’re growing, gross margins are expanding, reflecting both lack of price pressure across our businesses and our successful progress towards more software and services based solutions.”


Sandra Wallach, Identiv CFO, added: “During Q1, we achieved our 11th consecutive quarter of positive adjusted EBITDA and made further progress on closing the gap to net income profitability. We believe that by continuing to execute on our key initiatives, we will realize greater scale, operating expense leverage, and higher margins. The year-over-year adjusted EBITDA and bottom line increase in the first quarter demonstrated that the process of integrating and leveraging the acquisitions is well underway, and that we are continuing to manage costs efficiently to reach our targets for the year.”

Conference Call

Identiv management will hold a conference call today (May 9, 2019) at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss these financial results. A question and answer session will follow management’s presentation.

Toll-free dial-in number: +1-800-895-3361

International number: +1-785-424-1062

Call ID: IDENTIV

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway IR (formerly Liolios) at +1-949-574-3860.

The conference call will be broadcast simultaneously and available for replay here.

The replay of the call will be available after 8:00 p.m. Eastern time on the same day through June 9, 2019 under +1-844-512-2921 (Toll-Free Replay Number) and +1-412-317-6671 (International Replay Number) with Replay ID: 134407.

About Identiv

Identiv, Inc. is a global provider of physical security and secure identification. Identiv’s products, software, systems, and services address the markets for physical and logical access control, video analytics and a wide range of RFID-enabled applications. Customers in the government, enterprise, consumer, education, healthcare, banking, retail, and transportation sectors rely on Identiv’s access and identification solutions. Identiv’s mission is to secure the connected physical world: from perimeter to desktop access, and from the world of physical things to the Internet of Everything. Identiv is a publicly traded company and its common stock is listed on the NASDAQ Capital Market in the U.S. under the symbol “INVE.” For more information, visit identiv.com.


Non-GAAP Financial Measures (Unaudited)

This press release includes financial information that has not been prepared in accordance with GAAP, including non-GAAP adjusted EBITDA and non-GAAP operating expenses. Identiv uses 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 adjusted EBITDA discussed above exclude items that are included in GAAP net income (loss), GAAP operating expenses, and GAAP gross margin, and excludes provision (benefit) for income taxes, net income (loss) attributable to non-controlling interest, interest expense, foreign currency (gains) losses, stock-based compensation, amortization and depreciation, acquisition related transaction costs, and restructuring and severance, and inventory reserve adjustments. Non-GAAP operating expenses exclude stock-based compensation, amortization and depreciation, acquisition related transaction costs and restructuring and severance. For historical periods, the exclusions are detailed in the reconciliation table included in this press 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 press 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 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 regarding the Company’s expectations regarding future operating and financial performance, the Company’s belief that its most recent acquisition completes the core components of its platform to digitize the physical world and the benefits of its acquisitions, the Company’s beliefs regarding its ability to achieve its business and strategic objectives and expected benefits thereof, the drivers of momentum in its business, the Company’s progress to profitability, the Company’s beliefs regarding growth in 2019, the Company’s belief that by continuing to execute on its key initiatives, it will realize greater scale, operating expense leverage, and higher margins, the Company’s belief that it is continuing to manage costs efficiently to reach its targets for the year, and the Company’s beliefs regarding the benefits and attributes of its platform, and its status in the market and with customers 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 actual 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, actual results for fiscal 2019 and beyond, the Company’s ability to continue the momentum in its business, its ability to


successfully execute its business strategy, the actual benefits achieved through acquisitions, the level of customer orders, the success of its products and partnerships, industry trends and seasonality, and factors discussed in its public reports, including its Annual Report on Form 10-K for the year ended December 31, 2018 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:

Matt Glover and Najim Mostamand, CFA

Gateway IR (formerly Liolios)

949-574-3860

[email protected]

Media Contact:

[email protected]

— Financials Follow —


Identiv, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended  
     March 31,     December 31,     March 31,  
     2019     2018     2018  

Net revenue

   $ 19,522     $ 21,298     $ 16,528  

Cost of revenue

     10,818       11,111       10,020  
  

 

 

   

 

 

   

 

 

 

Gross profit

     8,704       10,187       6,508  

Operating expenses:

      

Research and development

     2,026       1,851       1,687  

Selling and marketing

     4,498       4,215       3,903  

General and administrative

     2,622       2,872       2,555  

Restructuring and severance

     (12     156       110  
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     9,134       9,094       8,255  
  

 

 

   

 

 

   

 

 

 

(Loss) income from operations

     (430     1,093       (1,747

Non-operating income (expense):

      

Interest expense, net

     (279     (279     (476

Foreign currency losses, net

     (2     (150     (38
  

 

 

   

 

 

   

 

 

 

(Loss) income before income taxes and noncontrolling interest

     (711     664       (2,261

Income tax provision

     (104     (34     (40
  

 

 

   

 

 

   

 

 

 

(Loss) income before noncontrolling interest

     (815     630       (2,301

Less: loss attributable to noncontrolling interest

     —         —         (5
  

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Identiv, Inc.

     (815     630       (2,306

Cumulative dividends on Series B preferred stock

     (258     (833     —    
  

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (1,073   $ (203   $ (2,306
  

 

 

   

 

 

   

 

 

 

Net loss per common share:

      

Basic

   $ (0.06   $ (0.01   $ (0.15

Diluted

   $ (0.06   $ (0.01   $ (0.15

Weighted average common shares outstanding, basic and diluted

     16,837       16,157       15,111  
  

 

 

   

 

 

   

 

 

 


Identiv, Inc.

Consolidated Balance Sheets

(in thousands)

 

     March 31,
2019
     December 31,
2018
 

ASSETS

     

Current assets:

     

Cash

   $ 8,930      $ 10,866  

Accounts receivable, net of allowances

     15,456        14,952  

Inventories

     12,460        13,631  

Prepaid expenses and other assets

     2,361        2,743  
  

 

 

    

 

 

 

Total current assets

     39,207        42,192  

Property and equipment, net

     2,669        2,624  

Operating lease right-of-use assets

     5,970        —    

Intangible assets, net

     11,997        10,980  

Goodwill

     10,441        9,286  

Other assets

     1,322        1,224  
  

 

 

    

 

 

 

Total assets

   $ 71,606      $ 66,306  
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

     

Accounts payable

   $ 6,304      $ 5,654  

Current portion—payment obligation

     1,050        1,025  

Current portion—financial liabilities

     11,787        11,554  

Operating lease liabilities

     2,067        —    

Notes payable

     —          2,000  

Deferred revenue

     2,779        2,174  

Accrued compensation and related benefits

     1,779        1,794  

Other accrued expenses and liabilities

     4,165        5,277  
  

 

 

    

 

 

 

Total current liabilities

     29,931        29,478  

Long-term payment obligation

     1,569        1,860  

Long-term operating lease liabilities

     4,072        —    

Long-term deferred revenue

     625        636  

Other long-term liabilities

     559        632  
  

 

 

    

 

 

 

Total liabilities

     36,756        32,606  
  

 

 

    

 

 

 

Total stockholders’ equity

     34,850        33,700  
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 71,606      $ 66,306  
  

 

 

    

 

 

 


Identiv, Inc.

Reconciliation of GAAP and Non-GAAP Financial Information

(in thousands)

(unaudited)

 

     Three Months Ended  
     March 31,     December 31,     March 31,  
     2019     2018     2018  

Reconciliation of GAAP gross profit margin and non-GAAP gross profit margin

      

GAAP cost of revenue

   $  10,818     $  11,111     $  10,020  

Reconciling items included in GAAP cost of revenue:

      

Stock-based compensation

     (29     (25     (19

Amortization and depreciation

     (302     (297     (288
  

 

 

   

 

 

   

 

 

 

Total reconciling items included in GAAP cost of revenue

     (331     (322     (307
  

 

 

   

 

 

   

 

 

 

Non-GAAP cost of revenue

   $ 10,487     $ 10,789     $ 9,713  
  

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit margin

     46     49     41
  

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP operating expenses to non-GAAP operating expenses

      

GAAP operating expenses

   $ 9,134     $ 9,094     $ 8,255  

Reconciling items included in GAAP operating expenses:

      

Stock-based compensation

     (658     (634     (616

Amortization and depreciation

     (550     (497     (452

Acquisition related transaction costs

     (58     (379     (485

Restructuring and severance

     12       (156     (110
  

 

 

   

 

 

   

 

 

 

Total reconciling items included in GAAP operating expenses

     (1,254     (1,666     (1,663
  

 

 

   

 

 

   

 

 

 

Non-GAAP operating expenses

   $ 7,880     $ 7,428     $ 6,592  
  

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP net income (loss) to non-GAAP adjusted EBITDA

      

GAAP net (loss) income attributable to Identiv, Inc.

   $ (815)     $ 630     $  (2,306)  

Reconciling items included in GAAP net income (loss):

      

Provision for income taxes

     104       34       40  

Net income attributable to noncontrolling interest

     —         —         5  

Interest expense, net

     279       279       476  

Foreign currency losses, net

     2       150       38  

Stock-based compensation

     687       659       635  

Amortization and depreciation

     852       794       740  

Acquisition related transaction costs

     58       379       485  

Restructuring and severance

     (12     156       110  
  

 

 

   

 

 

   

 

 

 

Total reconciling items included in GAAP net income (loss)

     1,970       2,451       2,529  
  

 

 

   

 

 

   

 

 

 

Non-GAAP adjusted EBITDA

   $ 1,155     $ 3,081     $ 223  
  

 

 

   

 

 

   

 

 

 

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