Published on January 21, 2010
IDENTIVE
GROUP ANNOUNCES PRELIMINARY FOURTH QUARTER RESULTS AND PREVIEW OF NEW BUSINESS
STRUCTURE
SANTA ANA, Calif. and ISMANING,
Germany, January 21, 2010 – SCM
Microsystems, Inc., d.b.a. Identive Group (NASDAQ: INVE; Frankfurt Stock
Exchange: INV), a provider of products, services and solutions for the security,
identification and RFID industries, today announced preliminary results for its
2009 fiscal fourth quarter (Q4) and year (FY) and outlined the Company’s cost
reduction program following the completion of its combination with Bluehill
ID.
Preliminary Financial
Results
For Q4
2009, Identive expects to report total revenue of approximately US$11.9 million,
compared with US$9.0 million in Q4 2008. The expected increase is due to the
inclusion of revenues from the Hirsch business, which was acquired on April 30,
2009. Continued strong performance from the Hirsch business in Q4 2009 was
partially offset by low sales levels from the SCM smart card reader and digital
media reader businesses. The Company expects to record a GAAP loss from
continuing operations before taxes of US$(7.3) million in Q4 2009, which
includes expenses of approximately US$1.0 million in transaction costs related
to the Company’s recently completed business combination with Bluehill ID and
approximately US$2.0 million related to the impairment of the Company’s
investment in TranZfinity, Inc. and the Company’s proportionate share of losses
realized by TranZfinity. This compares with GAAP loss from continuing operations
before taxes of US$(3.1) million recorded in Q4 2008, which included US$0.2
million for the Company’s proportionate share of losses realized by TranZfinity.
The above figures include the Hirsch business from May 2009 onwards and no
contribution from Bluehill ID, which will be included from Q1 2010
onwards.
The
Company’s investment in TranZfinity was accounted for using the equity method of
accounting. The Company determined during its process of year-end closing and
preparation of its financial statements that its investment in TranZfinity was
impaired, based on the Company's assessment of TranZfinity's performance and
future prospects.
For the
year as a whole, Identive expects to report total revenue from continuing
operations of approximately US$41.3 million, which includes seven months of
revenues from the Hirsch business, compared with US$28.4 million in 2008. The
Company further expects to record GAAP loss from continuing operations before
taxes of US$(14.7) million for the full year 2009, which includes approximately
US$4.0 million in transaction costs related to the business combination with
Bluehill ID and the Company’s merger with Hirsch Electronics; a charge of
approximately US$3.0 million for impairment of the Company’s investment in
TranZfinity and the Company’s share of losses realized by TranZfinity during
2009; approximately US$1.0 million in severance costs; and US$1.4 million
recorded on the gain from sale of assets during the year. This compares with
GAAP loss from continuing operations before taxes of US$(9.7) million recorded
in fiscal 2008, which included US$0.2 million for the Company’s proportionate
share of losses realized by TranZfinity.
Organizational
Structure
Identive
Group was created from the recently completed business combination of SCM
Microsystems with Bluehill ID, and is now a group comprised of leading
technology providers in the security and identity market. The individual
business units within Identive Group include SCM Microsystems, Hirsch
Electronics, Multicard, Arygon, ACiG, TagStar and Syscan ID. Ayman S. Ashour has
been appointed executive chairman of the board of Identive Group with overall
executive responsibility for the Company. Felix Marx, formerly CEO of SCM
Microsystems, has been named CEO of Identive Group, focusing on sales organic
growth opportunities for the group. Melvin Denton-Thompson has been appointed
CFO and COO of Identive Group.
Cost Reduction
Program
Alongside
its integration efforts, Identive plans to implement a cost reduction program
designed to lower overhead costs at both the corporate and individual business
unit levels and support a rapid push to profitability. The program is expected
to include the consolidation of facilities, organizational streamlining and
other cost savings measures. John Rogers, formerly an executive with Bluehill
ID, has been appointed as executive vice president of Identive Group in charge
of transition management and acquisition integration and will direct the
integration and reorganization activities within the Company.
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“Identive
aims to build a lasting business of scale and technology to capitalize on the
growth of our markets,” said Ashour. “We are moving rapidly and aggressively to
reduce our cost base and enhance our ability to execute our buy, build and grow
strategy. Strengthening our financial position will bolster our ability to take
advantage of the tremendous and exciting opportunities in the identity
market.”
About
Identive Group
Identive
Group (NASDAQ: INVE; Frankfurt Stock Exchange: INV) is an international
organization focused on building the world’s signature company in secure
identification-based technologies. Through its group of
recognized brands, Identive provides 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. The
organization’s growth model is based on a combination of disciplined acquisitive
development and
strong technology-driven organic growth from its member companies. For
additional info visit: www.identive-group.com.
Note:
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. These include, without limitation,
the statements by Ayman S. Ashour about our ability to create a lasting business
of scale and about our ability to take advantage of opportunities in our market
by reducing costs; statements about expected revenue and GAAP operating loss
from continuing operations before taxes for the 2009 fiscal fourth quarter and
year; and statements about our ability to reduce overhead costs and other
expenses through the consolidation of offices, organizational streamlining and
other measures. 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. We have not yet completed the review of our results for the
fourth quarter or full year ended December 31, 2009, and our auditors have not
yet completed their audit of such results. Additionally, we have not yet
completed our testing of goodwill and intangibles for possible impairment, and
while we do not expect to take additional charges other than the impairment for
TranZfinity described in this release, we cannot assure you that no additional
impairment will be discovered. Therefore, the expected results set forth in this
press release are based on a preliminary review of our results and actual
results may differ. Additionally, we may not be able to identify or effect
sufficient reductions in our costs and expenses to offset expected losses, which
could prevent us from becoming profitable. 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. These risks and uncertainties include, but are not
limited to, our ability to successfully integrate the Bluehill ID business into
ours; our ability to successfully develop and introduce new products that
satisfy the evolving and increasingly complex requirements of customers; the
markets in which we participate or target may not grow, converge or standardize
at anticipated rates or at all; we may not successfully compete in our target
markets; unfavorable economic conditions could negatively impact customer
demand, our ability to source key components of our products, and/or our ability
to access capital. 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, 2008 and subsequent
reports filed with the U.S. Securities and Exchange Commission for SCM
Microsystems, Inc.
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Contacts:
|
United
States:
|
Europe:
|
|
Darby
Dye
|
Fabien
B. Nestmann
|
|
+1
949 553-4251
|
+41
44 783 8043
|
|
ddye@identive-group.com
|
fnestmann@identive-group.com
|
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