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8-K - FORM 8-K - Identiv, Inc.d108821d8k.htm

Exhibit 99.1

 

LOGO

Identiv Reports Fourth Quarter and Fiscal Year 2020 Results

Fourth Quarter Revenue Increases 31% and RFID Revenue Increases over 100% Year-over-Year, Positioning the Company for a Strong 2021

FREMONT, Calif. — March 4, 2021 — Identiv, Inc. (NASDAQ: INVE), a global leader in digital security and identification, reported financial results for the fourth quarter and fiscal year ended December 31, 2020, demonstrating the increasingly broad adoption of RFID and expansion within the federal government.

Fourth Quarter and Subsequent Financial and Operational Highlights

 

   

Total revenue grew 31% year-over-year to $24.8 million

 

   

RFID grew over 100% year-over-year for the second consecutive quarter

 

   

Revenue in Identity grew 53% year-over-year to $15.8 million; revenue in Premises grew 5% year-over-year

 

   

Exited the fourth quarter of 2020 with backlog for Q1 2021 of $10.5 million, up 121% compared to the same time last year

 

   

Improved profitability over prior year comparable period in both GAAP net loss at $0.7 million and non-GAAP adjusted EBITDA at $1.4 million

 

   

Generated positive GAAP net cash flows from operations of $3.6 million

 

   

Strengthened balance sheet after repaying term debt with East West Bank (EWB) and the first of two promissory notes to 21 April Funds ahead of schedule

 

   

In fiscal year 2020, shipped more than 130 million RFID units while increasing average unit prices (AUP) by 20%, and grew federal sales approximately 30% over comparable prior year period

Fourth Quarter 2020 Financial Results

Revenue for the fourth quarter of 2020 was $24.8 million, an increase of 31% from $19.0 million in the fourth quarter of 2019.

Revenues in the Identity segment grew 53% year-over-year to $15.8 million from $10.3 million, primarily due to higher sales of RFID products and higher sales of smart card readers. Revenues in the Premises segment grew 5% year-over-year to $9.0 million from $8.6 million.

GAAP gross margin was 35% in the fourth quarter of 2020, compared to 40% in the prior quarter and 40% in the fourth quarter of 2019, temporarily compressed due to investments in technology and manufacturing processes and systems to meet the short- and long-term growth profiles of customers, as well as by the mix of products as high growth RFID customers ramped in the second half of 2020.


GAAP operating expenses, including research and development, sales and marketing, and general and administrative were $8.9 million in the fourth quarter of 2020, compared to $9.3 million in the fourth quarter of 2019 reflecting leverage in the business model as expenses were reduced by 4% while revenues increased 31%.

GAAP net loss in the fourth quarter of 2020 was $0.7 million, or $(0.05) per basic and diluted share, compared to GAAP net income of $0.4 million, or $0.01 per basic and diluted share, in the prior quarter and GAAP net loss of $1.8 million, or $(0.12) per basic and diluted share, in the fourth quarter of 2019.

Non-GAAP adjusted EBITDA in the fourth quarter of 2020 was $1.4 million, compared to $0.2 million in the fourth quarter of 2019.

Fiscal Year 2020 Financial Results

Revenue for the fiscal year 2020 was $86.9 million, an increase of 4% from $83.8 million in the fiscal year 2019.

Revenues in the Identity segment increased 25% to $52.7 million from $42.2 million in the fiscal year 2019 primarily due to higher sales of RFID products and smart card readers. Revenues in the Premises segment decreased to $34.2 million from $41.6 million in the fiscal year 2019 primarily due to lower sales of video technology and analytics into retail and other markets impacted by COVID-19. Federal sales within the Premises segment grew 30% year-over-year reflecting continued strength in the federal market.

GAAP gross margin was 39% in the fiscal year 2020 compared to 44% in the fiscal year 2019. The change in gross margin was primarily due to investments in quality and technology to support high-end RFID customers along with a change in product mix driven by rapid RFID growth.

GAAP operating expenses, including research and development, sales and marketing, and general and administrative were $37.1 million in the fiscal year 2020, compared to $36.8 million in the fiscal year 2019.

GAAP net loss in the fiscal year 2020 was $5.1 million, or $(0.34) per basic and diluted share compared to a GAAP net loss of $1.2 million, or $(0.13) per basic and diluted share in the fiscal year 2019. The change for the full year was primarily due to impacts from COVID-19 in the first half of 2020, which has shown improvement as reflected in the fourth quarter results.

Non-GAAP adjusted EBITDA in the fiscal year 2020 was $4.4 million, compared to $6.8 million in the fiscal year 2019.

Cash was $11.4 million at December 31, 2020, which compares to $9.4 million at December 31, 2019.

Management Commentary

“As our fourth quarter and fiscal year results confirm, we’ve exceeded our growth metrics and believe we‘re well positioned to capitalize on the secular growth trends driving our business in 2021 and beyond,” said Identiv’s CEO, Steven Humphreys. “For the second consecutive quarter, our RFID business grew over 100% year-over-year. For the full year, we shipped more than 130 million RFID units while increasing average unit prices by 20%, and we grew federal sales approximately 30%.


“We entered 2021 with a backlog for the first quarter 121% greater than at the same time last year, and with total orders booked in the first month and a half of 2021 up 60% year-over-year. Given the strength of the business and our markets, we’re confident in our ability to execute against our growth strategy by leveraging our industry-leading reputation as a premier provider of sophisticated NFC-enabled RFID products, by expanding our presence with our federal government clients, and by improving our business’s predictability by driving recurring revenues while maintaining high customer retention rates.”

Sandra Wallach, Identiv’s CFO, added, “2020 was a challenging year for many, but due to our flexibility and the enduring momentum that we generated in the second half of the year, our revenues were above our initial expectations. Revenue, non-GAAP adjusted EBITDA, and GAAP cash flows from operations were all at the high end of the ranges published in our preliminary results, and GAAP net loss was within $0.1 million of the range provided. We exited 2020 with a strengthened balance sheet that includes $11.4 million in cash and reduced debt. As a result, we believe the business is on track for a solid 2021 that may exceed our revenue projections from last November and as such are providing updated guidance today.

Financial Outlook

Identiv provides guidance based on current market conditions and expectations. Total orders booked in 2021 through mid-February were 60% higher than the same period in 2020. This momentum combined with the strong backlog growth entering 2021 provides management with confidence that the Company’s growth expectations are on track. Management is therefore raising the low end of expected revenues from prior guidance of $96 million to a new low end of $100 million. Normal seasonality is expected to continue with momentum building quarter over quarter from the first quarter of 2021 through the end of the year. As a result, management anticipates growth of 20-25 % in the first half of 2021.

Given current business momentum, management believes full-year guidance ranges may still be somewhat conservative. Identiv expects to update its full year guidance ranges as it develops further visibility.

Conference Call

Identiv management will hold a conference call on Thursday, March 4, 2021 at 5 PM ET (2 PM PT) to discuss fourth quarter and fiscal year 2020 financial results. A question and answer session will follow management’s presentation.

Toll-Free Number: +1 888.506.0062

International Number: +1 973.528.0011

Call ID: 652950

Webcast link: Register and Join

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 Investor Relations 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 PM ET on the same day through March 18, 2021 under +1 877.481.4010 (Toll-Free Replay Number) and +1 919.882.2331 (International Replay Number) with Replay ID: 40070.


About Identiv

Identiv, Inc. is a global leader in digitally securing the physical world. Identiv’s platform encompasses RFID and NFC, cybersecurity, and the full spectrum of physical access, video, and audio security. Identiv is a publicly traded company, and its common stock is listed on the NASDAQ Stock Market LLC in the U.S. under the symbol “INVE.” For more information, visit identiv.com.

Non-GAAP Financial Measures

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 excludes items that are included in GAAP net income (loss), GAAP operating expenses, and GAAP gross margin, and excludes provision for income taxes, interest expense, foreign currency (gains) losses, stock-based compensation, amortization and depreciation, change in fair value of earnout liability, acquisition related transaction costs, and restructuring and severance. Non-GAAP operating expenses exclude stock-based compensation, amortization and depreciation, change in fair value of earnout liability, 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 statements regarding the Company’s expectations regarding future operating and financial outlook and performance, including statements regarding 2021 expectations and 2021 guidance and its ability to meet such guidance, 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 beliefs regarding its ability to execute on its key initiatives and the potential benefits thereof, the Company’s beliefs regarding its ability to respond to market conditions, the Company’s beliefs regarding the benefits and attributes of its platform and products, and beliefs regarding future orders 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 the Company’s ability to continue the momentum in its business, its ability to successfully execute its business strategy, its ability to capitalize on trends in its business, the level and timing of customer orders, the success of its products and partnerships, industry trends and seasonality, the impact of COVID-19, and factors discussed in its periodic reports, including its Annual Report on Form 10-K for the year ended December 31, 2019 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 Charlie Schumacher

Gateway Investor Relations

+1 949.574.3860

IR@identiv.com

Media Contact:

press@identiv.com


Identiv, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     September 30,     December 31,     December 31,     December 31,  
     2020     2020     2019     2020     2019  

Net revenue

   $ 24,836     $ 24,859     $ 18,970     $ 86,920     $ 83,755  

Cost of revenue

     16,252       14,974       11,429       53,239       47,101  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     8,584       9,885       7,541       33,681       36,654  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Research and development

     2,383       2,380       2,387       9,781       8,616  

Selling and marketing

     4,292       4,245       4,449       17,270       18,138  

General and administrative

     2,163       2,118       1,953       8,623       9,445  

Increase (decrease) in fair value of earnout liability

     —         —         375       (261     550  

Restructuring and severance

     71       163       115       1,716       14  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     8,909       8,906       9,279       37,129       36,763  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

     (325     979       (1,738     (3,448     (109

Non-operating income (expense):

          

Interest expense, net

     (396     (407     (151     (1,462     (917

Gain on sale of investment

     —         —         142       —         142  

Foreign currency (losses) gains, net

     (3     (175     (37     (122     59  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income tax provision

     (724     397       (1,784     (5,032     (825

Income tax benefit (provision)

     26       (8     (37     (73     (326
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (698     389       (1,821     (5,105     (1,151

Cumulative dividends on Series B preferred stock

     (276     (275     (263     (1,094     (1,042
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to common stockholders

   $ (974   $ 114     $ (2,084   $ (6,199   $ (2,193
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share:

          

Basic

   $ (0.05   $ 0.01     $ (0.12   $ (0.34   $ (0.13

Diluted

   $ (0.05   $ 0.01     $ (0.12   $ (0.34   $ (0.13

Weighted average shares used in computing net (loss) income per common share:

          

Basic

     18,302       18,144       17,136       17,978       16,984  

Diluted

     18,302       18,650       17,136       17,978       16,984  


Identiv, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     December 31,      September 30,      June 30,      March 31,      December 31,  
     2020      2020      2020      2020      2019  
ASSETS               

Current assets:

              

Cash and cash equivalents

   $ 11,409      $ 12,294      $ 13,115      $ 8,696      $ 9,383  

Accounts receivable, net of allowances

     18,927        20,389        17,976        20,040        18,363  

Inventories

     20,296        20,399        18,747        15,943        16,145  

Prepaid expenses and other assets

     2,813        3,236        2,957        2,533        2,292  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

     53,445        56,318        52,795        47,212        46,183  

Property and equipment, net

     2,827        2,392        2,269        1,956        2,042  

Operating lease right-of-use assets

     3,405        3,463        3,492        4,102        4,629  

Intangible assets, net

     7,563        8,138        8,751        9,342        10,104  

Goodwill

     10,266        10,204        10,180        10,138        10,238  

Other assets

     1,171        1,053        1,011        1,051        1,122  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 78,677      $ 81,568      $ 78,498      $ 73,801      $ 74,318  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY               

Current liabilities:

              

Accounts payable

   $ 10,964      $ 9,460      $ 9,216      $ 8,473      $ 8,799  

Current portion - contractual payment obligation

     1,040        950        862        664        1,311  

Current portion - financial liabilities

     20,084        23,758        22,983        17,758        14,189  

Operating lease liabilities

     1,279        1,957        1,832        1,662        1,814  

Deferred revenue

     1,981        2,180        2,280        1,736        2,193  

Accrued compensation and related benefits

     2,985        2,845        2,144        1,877        1,671  

Other accrued expenses and liabilities

     3,240        2,757        2,296        4,015        4,498  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

     41,573        43,907        41,613        36,185        34,475  

Long-term contractual payment obligation

            246        486        720        360  

Long-term operating lease liabilities

     2,272        2,673        2,989        2,635        3,013  

Long-term deferred revenue

     385        495        512        550        640  

Other long-term liabilities

     258        381        385        357        364  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     44,488        47,702        45,985        40,447        38,852  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total stockholders’ equity

     34,189        33,866        32,513        33,354        35,466  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 78,677      $ 81,568      $ 78,498      $ 73,801      $ 74,318  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


Identiv, Inc.

Reconciliation of GAAP and Non-GAAP Financial Information

(in thousands)

(unaudited)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     September 30,     December 31,     December 31,     December 31,  
     2020     2020     2019     2020     2019  

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

          

GAAP gross profit

   $ 8,584     $ 9,885     $ 7,541     $ 33,681     $ 36,654  

Reconciling items included in GAAP gross profit:

          

Stock-based compensation

     33       45       32       160       130  

Amortization and depreciation

     329       318       318       1,235       1,298  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total reconciling items included in GAAP gross profit

     362       363       350       1,395       1,428  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 8,946     $ 10,248     $ 7,891     $ 35,076     $ 38,082  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit margin

     36     41     42     40     45
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP operating expenses to non-GAAP operating expenses

          

GAAP operating expenses

   $ 8,909     $ 8,906     $ 9,279     $ 37,129     $ 36,763  

Reconciling items included in GAAP operating expenses:

          

Stock-based compensation

     (812     (746     (549     (2,867     (2,520

Amortization and depreciation

     (514     (502     (561     (2,078     (2,285

(Increase) decrease in fair value of earnout liability

     —         —         (375     261       (550

Acquisition related transaction costs

     —         (31     (9     (35     (102

Restructuring and severance

     (71     (163     (115     (1,716     (14
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total reconciling items included in GAAP operating expenses

     (1,397     (1,442     (1,609     (6,435     (5,471
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating expenses

   $ 7,512     $ 7,464     $ 7,670     $ 30,694     $ 31,292  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

          

GAAP net (loss) income

   $ (698   $ 389     $ (1,821   $ (5,105   $ (1,151

Reconciling items included in GAAP net (loss) income:

          

Income tax (benefit) provision

     (26     8       37       73       326  

Interest expense, net

     396       407       151       1,462       917  

Foreign currency losses (gains), net

     3       175       37       122       (59

Stock-based compensation

     845       791       581       3,027       2,650  

Amortization and depreciation

     843       820       879       3,313       3,583  

Increase (decrease) in fair value of earnout liability

     —         —         375       (261     550  

Acquisition related transaction costs

     —         31       9       35       102  

Gain on sale of investment

     —         —         (142     —         (142

Restructuring and severance

     71       163       115       1,716       14  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total reconciling items included in GAAP net (loss) income

     2,132       2,395       2,042       9,487       7,941  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP adjusted EBITDA

   $ 1,434     $ 2,784     $ 221     $ 4,382     $ 6,790  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP net cash provided by (used in) operating activities to non-GAAP free cash flow

          

GAAP net cash provided by (used in) operating activities

   $ 3,559     $ (1,055   $ (943   $ (1,766   $ 427  

Capital expenditures

     (636     (314     (87     (1,564     (289
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP free cash flow

   $ 2,923     $ (1,369   $ (1,030   $ (3,330   $ 138