Transformative $145 Million Agreement Approved
by Stockholders on June 28; On Track to Close in Q3 2024, Subject
to Regulatory Approval
IoT Strategic Growth and Go-to-Market Plan
Advances; Conclusion Expected in Q4 2024
Thailand Production Facility Earns ISO
9001:2015 and ISO 14001:2015 Certifications
Identiv, Inc. (NASDAQ: INVE), a global digital
security and identification leader in the Internet of Things (IoT),
today released its financial results for the second quarter ended
June 30, 2024.
Status of Asset Sale Transaction
On April 2, 2024, Identiv entered into a definitive asset
purchase agreement to sell its physical security, access card, and
identity reader operations and assets (the “Physical Security
Business”) to a wholly owned subsidiary of Vitaprotech, a security
solutions provider. Under the terms of the agreement, Identiv will
receive a cash payment of $145 million upon closing of the
transaction, subject to customary adjustments. As of August 8,
2024, Identiv has received approval or cleared applicable waiting
periods under the Hart-Scott Rodino Antitrust Improvements Act of
1976, as amended, and the United Kingdom National Security and
Investment Act 2021. The transaction was approved by Identiv’s
stockholders on June 28, 2024, and remains subject to approval by
the Committee on Foreign Investment in the United States (CFIUS).
Identiv anticipates that the transaction will close in the third
quarter of 2024. The proceeds from the sale will significantly
strengthen Identiv’s financial position, providing capital to
pursue growth opportunities for its specialty IoT solutions
business.
Management Commentary
"We achieved significant milestones in the second quarter toward
concluding the previously announced asset sale transaction,” said
Identiv CEO Steven Humphreys. “This included a highly supportive
stockholder vote in favor of the transaction, affirming our
decision to focus exclusively on growing our IoT solutions
business. At the same time, we made progress expanding RFID
production in Thailand and advancing our strategic plan for
RFID-enabled IoT applications. We are excited for the future of
Identiv and remain on track for an expected close of the asset sale
transaction in the third quarter.”
“I am excited to lead the IoT team through this transformational
period in Identiv’s history,” said Identiv President, IoT Solutions
Kirsten Newquist. “With a clear vision, a comprehensive and
disciplined plan, and focused execution, we believe we can
capitalize on the opportunity before us.”
GAAP Financial Results for Fiscal Second Quarter 2024
GAAP Earnings for second quarter 2024 reflect the continuing
operations of the company, the “IoT Business,” as of June 30, 2024.
GAAP earnings do not include revenue and operating expenses from
our discontinued operations, the Physical Security Business, due to
the pending sale of the assets of this business.
Revenue from continuing operations for the second quarter of
2024 was $6.7 million, compared to $11.5 million in the second
quarter of 2023. Second quarter 2024 GAAP gross margin was 9.1% and
non-GAAP gross margin was 14.6%, compared to second quarter 2023
GAAP gross margin of 14.2% and non-GAAP gross margin of 16.6%.
GAAP operating expenses from the IoT Business, including
research and development, sales, and marketing, and general and
administrative, were $7.3 million in the second quarter of 2024,
compared to $5.0 million in the second quarter of 2023. Non-GAAP
operating expenses from the IoT Business were $4.7 million in the
second quarter of 2024, compared to $4.4 million in the second
quarter of 2023. Strategic transaction-related costs included in
second quarter 2024 GAAP operating expenses totaled $1.6 million.
As of June 30, 2024, cumulative strategic transaction-related costs
totaled $3.0 million.
GAAP net loss from the IoT Business in the second quarter of
2024 was ($6.9) million, or ($0.31) per basic and diluted share,
compared to GAAP net loss of ($3.5) million, or ($0.16) per basic
and diluted share, in the second quarter of 2023.
Non-GAAP adjusted EBITDA for the IoT Business in the second
quarter of 2024 was ($3.7) million, compared to ($2.6) million in
the second quarter of 2023.
Non-GAAP Aggregated Information for Fiscal Second Quarter
2024
In accordance with GAAP, revenue and operating expenses directly
related to the Physical Security Business must be removed from
their applicable statements of operations captions for continuing
operations and reported for all periods presented as net income
from discontinued operations in the GAAP financial statements. For
this transition quarter, Identiv is presenting non-GAAP aggregated
summary data to provide investors with an aggregated view of the
entire business, including the Physical Security Business, to
facilitate a direct comparison to prior historical results and
guidance. A reconciliation of this non-GAAP aggregated information
to the most directly comparable GAAP measures is included at the
end of this press release.
Total revenue from continuing operations and revenue included in
discontinued operations for the second quarter 2024 would have been
$24.3 million, compared to GAAP revenue of $29.6 million in the
second quarter of 2023. Second quarter 2024 non-GAAP aggregated
gross margin would have been 35.0% and adjusted non-GAAP aggregated
gross margin would have been 37.3%.
Non-GAAP aggregated operating expenses would have been $14.5
million in the second quarter of 2024, compared to GAAP operating
expenses of $11.9 million in the second quarter of 2023. Adjusted
non-GAAP aggregated operating expenses would have been $11.1
million in the second quarter of 2024, compared to adjusted
non-GAAP operating expenses of $10.6 million in the second quarter
of 2023.
Non-GAAP aggregated net loss for the second quarter of 2024
would have been ($6.2) million, or ($0.27) per basic and diluted
share, compared to GAAP net loss of ($1.1) million, or ($0.06) per
basic and diluted share, in the second quarter of 2023.
Non-GAAP aggregated adjusted EBITDA in the second quarter of
2024 would have been ($2.0) million, compared to non-GAAP adjusted
EBITDA $0.7 million in the second quarter of 2023.
Financial Outlook
Identiv provides guidance based on current market conditions and
expectations, including macroeconomic conditions and customer
demand. For fiscal Q3 2024, management currently expects revenue
from continuing operations to be in the range of $5.8 million to
$6.1 million. If the asset sale transaction has not closed by the
end of the third quarter of 2024 as anticipated, then management
expects total revenue from continuing operations and revenue
included in discontinued operations to be in the range of $24
million to $26 million.
Conference Call
Identiv management will hold a conference call today, August 8,
2024, at 5:00 p.m. EDT (2:00 p.m. PDT) to discuss the company’s
second quarter 2024 financial results. A question-and-answer
session will follow management's presentation.
Toll-Free: 888-506-0062 International Number: +1 973-528-0011
Call ID: 242005 Webcast link: Register and Join
The teleconference replay will be available through August 22,
2024, by dialing 877-481-4010 (Toll-Free Replay Number) or +1
919-882-2331 (International Replay Number) and entering passcode
50852.
If you have any difficulty connecting with the teleconference,
please contact Identiv Investor Relations at IR@identiv.com.
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. 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, non-GAAP gross margin 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 ongoing operational
performance. Identiv believes that the use of these non-GAAP
financial measures provides an additional tool for investors to use
in evaluating ongoing operating results and trends. Non-GAAP gross
margin excludes stock-based compensation and amortization and
depreciation. Non-GAAP adjusted EBITDA excludes items that are
included in GAAP net income (loss), GAAP operating expenses, and
GAAP gross margin, and excludes income tax provision (benefit),
interest expense, net foreign currency gains (losses), net
stock-based compensation, amortization and depreciation,
restructuring and severance, and strategic review-related costs.
Non-GAAP operating expenses exclude stock-based compensation,
amortization and depreciation, strategic review-related expenses,
and restructuring and severance. In addition, Identiv is providing
a non-GAAP aggregated summary to provide an aggregated view of the
entire business, including the Physical Security Business, to
facilitate a direct comparison by investors to prior historical
results and guidance. In accordance with GAAP, revenue and
operating expenses directly related to the Physical Security
Business must be removed from their applicable statements of
operations captions for continuing operations and reported for all
periods presented as net income from discontinued operations in the
GAAP financial statements. 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 management of Identiv and
can be identified by words such as “anticipate,” “believe,”
“continue,” “plan,” “will,” “intend,” “expect,” “outlook,” and
similar references to the future. Any statement that is not a
historical fact is a forward-looking statement, including
statements regarding: Identiv’s expectations regarding future
operating and financial outlook and performance, including 2024
third quarter guidance and outlook; Identiv’s strategy,
opportunities, focus and goals; Identiv’s belief that the
stockholder vote in favor of the proposed asset sale transaction
reflects high interest in and support of the company’s strategic
direction and focus on its IoT solutions business; the timing of
the closing of the transaction; expected amount of proceeds from
the transaction; the terms and conditions related to the
transaction, including regulatory approvals; Identiv’s expectations
with respect to the use of proceeds from the proposed transaction;
Identiv’s beliefs regarding access to future capital; and Identiv’s
expectations relating to the growth of its IoT business.
Forward-looking statements are only predictions and are subject to
a number of risks and uncertainties, many of which are outside
Identiv’s 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 risk that the conditions to
the closing of the transaction are not satisfied, including the
risk that CFIUS approval is not obtained; the occurrence of any
event, change or other circumstances that could give rise to the
termination of the asset purchase agreement; the failure of the
proposed transaction to close for any reason; potential litigation
relating to the transaction and the effects of any outcome related
thereto; any purchase price adjustments to the amount of proceeds
from the transaction; the timing of closing of the proposed
transaction and its effect on third quarter guidance and outlook;
risks that the proposed transaction disrupts current business,
plans and operations of Identiv or its business prospects;
diversion of management’s attention from Identiv’s ongoing
business; the ability of Identiv to retain and hire key personnel;
the effect of the change in management following the completion of
the proposed transaction; competitive responses to the proposed
transaction; potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
proposed transaction; Identiv’s ability to continue the momentum in
its business; Identiv’s ability to successfully execute its
business strategy; Identiv’s ability to capitalize on trends in its
business; Identiv’s ability to satisfy customer demand and
expectations; the level and timing of customer orders and
changes/cancellations; the loss of customers, suppliers or
partners; the success of Identiv’s products and strategic
partnerships; industry trends and seasonality; the impact of
macroeconomic conditions and customer demand, inflation and
increases in prices; and the other factors discussed in its
periodic reports, including its Annual Report on Form 10-K for the
year ended December 31, 2023, Quarterly Report on Form 10-Q for the
quarter ended March 31, 2024 and subsequent reports filed with the
Securities and Exchange Commission. All forward-looking statements
are based on information available to Identiv on the date hereof,
and Identiv assumes no obligation to update such statements.
Condensed Consolidated Statements of Operations (in
thousands, except per share data) (unaudited)
Three
Months Ended Six Months Ended June 30, June
30, June 30, June 30,
2024
2023
2024
2023
Net revenue
$
6,741
$
11,476
$
13,399
$
20,365
Cost of revenue
6,127
9,844
12,302
17,515
Gross profit
614
1,632
1,097
2,850
Operating expenses: Research and development
966
1,151
1,863
2,131
Selling and marketing
1,828
1,602
2,997
3,121
General and administrative
4,540
2,161
8,020
4,362
Restructuring and severance
—
45
—
46
Total operating expenses
7,334
4,959
12,880
9,660
Loss from continuing operations
(6,720
)
(3,327
)
(11,783
)
(6,810
)
Non-operating income (expense): Interest expense, net
(149
)
(90
)
(236
)
(140
)
Foreign currency gains (losses), net
(59
)
(34
)
(285
)
62
Loss from continuing operations before income tax benefit
(provision)
(6,928
)
(3,451
)
(12,304
)
(6,888
)
Income tax benefit (provision)
5
—
(1
)
(2
)
Net loss from continuing operations
(6,923
)
(3,451
)
(12,305
)
(6,890
)
Income from discontinued operations, net of tax
707
2,307
1,531
3,027
Net loss
(6,216
)
(1,144
)
(10,774
)
(3,863
)
Cumulative dividends on Series B convertible preferred stock
(232
)
(315
)
(481
)
(628
)
Net loss available to common stockholders
$
(6,448
)
$
(1,459
)
$
(11,255
)
$
(4,491
)
Net income (loss) per common share: Basic and diluted -
continuing operations
$
(0.31
)
$
(0.16
)
$
(0.55
)
$
(0.33
)
Basic and diluted - discontinued operations
$
0.03
$
0.10
$
0.07
$
0.13
Basic and diluted - net loss
$
(0.27
)
$
(0.06
)
$
(0.48
)
$
(0.20
)
Weighted average common shares outstanding: Basic and
diluted
23,459
23,051
23,413
22,924
Identiv, Inc. Condensed Consolidated Balance Sheets
(in thousands) (unaudited)
June 30, December
31,
2024
2023
ASSETS Current assets: Cash and cash equivalents
$
18,435
$
23,312
Restricted cash
566
1,072
Accounts receivable, net of allowances
3,716
7,404
Inventories
11,267
13,560
Prepaid expenses and other current assets
1,797
1,222
Current assets held-for-sale
33,600
32,916
Total current assets
69,381
79,486
Property and equipment, net
7,669
8,472
Operating lease right-of-use assets
2,228
2,289
Other assets
681
678
Non-current assets held-for-sale
17,801
18,798
Total assets
$
97,760
$
109,723
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$
2,946
$
4,652
Financial liabilities
7,905
9,949
Operating lease liabilities
815
782
Accrued compensation and related benefits
1,191
1,376
Other accrued expenses and liabilities
3,036
1,021
Current liabilities held-for-sale
12,334
13,002
Total current liabilities
28,227
30,782
Long-term operating lease liabilities
1,393
1,507
Other long-term liabilities
27
26
Non-current liabilities held-for-sale
3,056
3,136
Total liabilities
32,703
35,451
Total stockholders' equity
65,057
74,272
Total liabilities and stockholders' equity
$
97,760
$
109,723
Identiv, Inc. Reconciliation of GAAP to Non-GAAP
Financial Information - Continuing Operations (in thousands)
(unaudited)
Three Months Ended Six Months
Ended June 30, June 30, June 30, June
30,
2024
2023
2024
2023
Reconciliation of GAAP gross margin to non-GAAP gross margin
GAAP gross profit
$
614
$
1,632
$
1,097
$
2,850
Reconciling items included in GAAP gross profit: Stock-based
compensation
5
9
12
19
Amortization and depreciation
364
262
768
509
Total reconciling items included in GAAP gross profit
369
271
780
528
Non-GAAP gross profit
$
983
$
1,903
$
1,877
$
3,378
Non-GAAP gross margin
15
%
17
%
14
%
17
%
Reconciliation of GAAP operating expenses to non-GAAP
operating expenses GAAP operating expenses
$
7,334
$
4,959
$
12,880
$
9,660
Reconciling items included in GAAP operating expenses: Stock-based
compensation
(981
)
(498
)
(1,492
)
(972
)
Amortization and depreciation
(65
)
(33
)
(90
)
(80
)
Strategic review-related costs
(1,616
)
—
(2,569
)
—
Restructuring and severance
—
(45
)
—
(46
)
Total reconciling items included in GAAP operating expenses
(2,662
)
(576
)
(4,151
)
(1,098
)
Non-GAAP operating expenses
$
4,672
$
4,383
$
8,729
$
8,562
Reconciliation of GAAP net loss from continuing
operations to non-GAAP adjusted EBITDA GAAP net loss
$
(6,923
)
$
(3,451
)
$
(12,305
)
$
(6,890
)
Reconciling items included in GAAP net loss: Income tax provision
(benefit)
(5
)
—
1
2
Interest expense, net
149
90
236
140
Foreign currency gains (losses), net
59
9
285
(155
)
Stock-based compensation
986
507
1,504
991
Amortization and depreciation
429
295
858
589
Strategic review-related costs
1,616
—
2,569
—
Restructuring and severance
—
(45
)
—
(46
)
Total reconciling items included in GAAP net loss from continuing
operations
3,234
856
5,453
1,521
Non-GAAP adjusted EBITDA
$
(3,689
)
$
(2,595
)
$
(6,852
)
$
(5,369
)
Identiv, Inc. Reconciliation of GAAP Financial
Information to Non-GAAP Aggregated View (in thousands)
(unaudited)
Three Months Ended Six Months
Ended June 30, June 30, June 30, June
30,
2024
2023
2024
2023
Net Revenue: Continuing operations
$
6,741
$
11,476
$
13,399
$
20,365
Non-GAAP discontinued operations - Physical Security Business
17,592
18,079
33,428
35,187
Non-GAAP Total Aggregated
$
24,333
$
29,555
$
46,827
$
55,552
Gross Profit: Continuing operations
$
614
$
1,632
$
1,097
$
2,850
Non-GAAP discontinued operations - Physical Security Business
7,904
9,216
15,813
17,209
Non-GAAP Total Aggregated
$
8,518
$
10,848
$
16,910
$
20,059
Operating Expenses Continuing operations
$
7,334
$
4,959
$
12,880
$
9,660
Non-GAAP discontinued operations - Physical Security Business
7,148
6,919
14,189
14,161
Non-GAAP Total Aggregated
$
14,482
$
11,878
$
27,069
$
23,821
Net income (loss): Continuing operations
$
(6,923
)
$
(3,451
)
$
(12,305
)
$
(6,890
)
Non-GAAP discontinued operations - Physical Security Business
707
2,307
1,531
3,027
Non-GAAP Total Aggregated
$
(6,216
)
$
(1,144
)
$
(10,774
)
$
(3,863
)
Non-GAAP EBITDA: Continuing operations
$
(3,689
)
$
(2,595
)
$
(6,852
)
$
(5,369
)
Discontinued operations - Physical Security Business
1,678
3,285
3,425
5,131
Non-GAAP Total Aggregated
$
(2,011
)
$
690
$
(3,427
)
$
(238
)
Identiv, Inc. Reconciliation of GAAP to Adjusted Non-GAAP
Financial Information - Non-GAAP Aggregated View (in thousands)
(unaudited)
Three Months Ended Six Months
Ended June 30, June 30, June 30, June
30,
2024
2023
2024
2023
Reconciliation of GAAP gross margin to adjusted non-GAAP
aggregated gross margin GAAP gross profit - continuing
operations
$
614
$
1,632
$
1,097
$
2,850
Non-GAAP gross profit - discontinued operations
7,904
9,216
15,813
17,209
Non-GAAP Total Aggregated
8,518
10,848
16,910
20,059
Reconciling items included in non-GAAP gross profit: Stock-based
compensation
46
45
93
90
Amortization and depreciation
505
403
1,052
788
Total reconciling items included in non-GAAP aggregated gross
profit
551
448
1,145
878
Adjusted non-GAAP aggregated gross profit
$
9,069
$
11,296
$
18,055
$
20,937
Adjusted non-GAAP aggregated gross margin
37
%
38
%
39
%
38
%
Reconciliation of GAAP operating expenses to adjusted
non-GAAP aggregated operating expenses GAAP operating expenses
- continuing operations
$
7,334
$
4,959
$
12,880
$
9,660
Non-GAAP operating expenses - discontinued operations
7,148
6,919
14,189
14,161
Non-GAAP Total Aggregated
14,482
11,878
27,069
23,821
Reconciling items included in non-GAAP aggregated operating
expenses: Stock-based compensation
(1,429
)
(949
)
(2,401
)
(1,894
)
Amortization and depreciation
(234
)
(242
)
(472
)
(480
)
Strategic review-related costs
(1,616
)
—
(2,569
)
—
Restructuring and severance
(123
)
(81
)
(145
)
(272
)
Total reconciling items included in non-GAAP aggregated operating
expenses
(3,402
)
(1,272
)
(5,587
)
(2,646
)
Adjusted non-GAAP aggregated operating expenses
$
11,080
$
10,606
$
21,482
$
21,175
Reconciliation of GAAP net loss to non-GAAP adjusted
EBITDA GAAP net loss
(6,216
)
(1,144
)
(10,774
)
(3,863
)
Reconciling items included in non-GAAP net loss: Income tax
provision
29
15
49
41
Interest expense, net
149
90
236
140
Foreign currency gains (losses), net
74
9
330
(80
)
Stock-based compensation
1,475
994
2,494
1,984
Amortization and depreciation
739
645
1,524
1,268
Strategic review-related costs
1,616
—
2,569
—
Restructuring and severance
123
81
145
272
Total reconciling items included in non-GAAP net loss
4,205
1,834
7,347
3,625
Non-GAAP adjusted EBITDA
$
(2,011
)
$
690
$
(3,427
)
$
(238
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808713620/en/
Investor Relations Contact: IR@identiv.com
Media Contact: press@identiv.com
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