Hello, and welcome to the Q3 2014 Identiv Earnings Conference Call. My name is Manisha. I will be your operator for today’s call. With me on the call today are Jason Hart, CEO of Identiv; and Brian Nelson, CFO. In a moment, we will hear remarks from both of them. Then we will take questions from sell-side analysts and registered investors. Before we begin, please note that during this call, we will also be making reference to non-GAAP results or projections, including non-GAAP gross margins, operating expenses and adjusted EBITDA. A complete reconciliation between each of these non-GAAP measures and the most directly comparable GAAP financial measure is included in today’s press release, which is available on the website at www.identiv.com. In addition, during our call today, we will be making forward-looking statements. Any statement that refers to expectations, projections or other characteristics of future events, including financial projections and future market conditions is a forward-looking statement. Actual results may differ materially from those expressed in these forward-looking statements. For more information, please refer to the risk factors discussed in the documents filed from time-to-time with the SEC, including the annual report on Form 10-K for fiscal year 2013 and our subsequent quarterly reports on Form 10-Q. Identiv assumes no obligation to update these forward-looking statements, which speak as of today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note, this conference is being recorded. Now, it is my pleasure to turn the call over to Jason Hart. Mr. Hart, you may now begin.

Simplified, now focused, now growing. Thanks, Manisha. I appreciate the comments. I am joined today by telephone in California, by Brian Nelson, our CFO and members of our senior team. Welcome to all. Q3 has been a turning point for the operations of the business. With the completion of much of the simplification that was started approximately three quarters ago. We completed the capitalization of the business, bringing stability to the company, providing confidence with our strategic partners, strengthening our relationships with our financial partners and deepening our relationship with most of our major customers. Identiv not just now has the team and the technology, but now also has the fiscal resources to support all of their constituents on their missions well into the future. I wanted to give a quick recap on some of the restructuring milestones. Ones that particularly relate to Q3, but just let me give a little bit of a flavor of the change in the business over the last 12 months, but majority of this call you will find the tone is changing with the company, rather than spending a lot of time now on what has been being done, we feel it is time to focus on our future and we think we have a platform now to be able to do that. The remainder of this call, I will focus on the growth and how we have used many of the simplification tasks to position the company for of both, the shareholder value creation but just as importantly operational efficiency and growing our internal numbers, particularly our revenue and how we are improving our margins. To understand the journey, you really have to cast yourselves back to one year ago. One year ago, the business was in a pretty bad shape. It was…

Thank you, Jason. Now turning to our financial results for the third quarter, revenues in the third quarter were $22.7 million as compared with $20.9 million in the third quarter of 2013, an increase of 9%. This performance also reflects a sequential increase of 2% from the $22.3 million we reported in Q2. Approximately 56% of our third quarter revenue or $12.8 million was derived from sales in our Credential segment as compared to revenue of $8.6 million in the third quarter of 2013, a 49% year-over-year increase. Our Q3 credential revenues had a sequential decrease of approximately 3% from the $13.2 million revenue achieved in the second quarter of 2014. Again, as in Q1 and Q2 of this year, the growth year-over-year is primarily a result of the increased demand for our tags and our [ph] to support electronic gaming, the transit ticketing and other internet of things applications. Our premises segment provided $4.9 million in revenue in the third quarter, up 7% sequentially from $4.6 million in the second quarter and a decrease of 21% or $1.3 million from $6.2 million in the comparable quarter of 2013. The growth sequentially is primarily a result of our continued investment in sales and marketing efforts in the U.S. federal government sector. The year-over-year decrease, we believe, is in part due to the federal government's continuing resolution, which was adopted in September 2014, which provides agency this budgetary certainty to the latter portion of 2014. This is in contrast to the government shutdown in 2013, which accelerated government spending in the third quarter. Revenue from our identity products, which include smart card readers reader, reader modules and tokens and our cloud-based credential provisioning and management services was $3.8 million in the third quarter of 2014, a decrease of 24% over the…

Thanks, Brian. I always love it when you give me good news, so the company has a strong cash position, the best it has ever had. We have been getting the cost under control as everyone can see and we have a great understanding now I think of the matrix. As I said at the beginning of the call, our focus as management time has freed up has begun to become very focused on the forward strategy of the business, specifically in terms of how do we get accelerated growth in the company. As I mentioned, the world has changed in the 12 months, and with all of the hard work of the past 12 months, this business is now well positioned. We do have the fuel and we have the lead customers to be a definitive market leader in this new identity category, but a word of precaution. It does take time to build, and I understand that everyone is anxious for immediate, an overnight results, but it does take time and we have come from a very low starting point, so I am actually thrilled with the state of the business as it is today. By the end of this year, we will have completed the bulk of the transformation of the sales organization. The new approach to the organization is clearly solutions selling instead of widget selling. This is and has begun to yield some positive results. With that, we are talking too much into the future as sales pipeline, has doubled in the past couple of quarters, so we have begun to see a very solid improvement in leads. This does not necessarily equate to revenue and we are not predicting growth rate of any more than 20% in 2015, but we are getting now a…

Yes. Thank you, Jason. At this point, I would hand it back to the operator to see if there are any live questions and we have also received some questions via e-mail in advance of the calls, so I am prepared to read some of them out as well.

Thank you. We will now begin the question and answer session. [Operator Instructions] Our first question is from Bryan Prohm with Cowen & Company. Please go ahead your question or comment. Bryan Prohm - Cowen & Company: Hey, good afternoon, Jason, Brian and Leonard.

Hey, Bryan. Bryan Prohm - Cowen & Company: Good to see that you made continuing momentum in simplification and focus in this business quarter, I got a bunch of questions. First, on the 4Q outlook, you are maintaining revenue guidance for the year. As you mentioned, Jason, that implies a pretty wide range given we are roughly halfway through the quarter now. Can you speak to this a bit more? It sounded like this was a timing issue that is preventing you from tightening the range, but are there particular segments that are impacted more than others? I asked because, obviously, there's a mixed impact on gross margin quarter-by-quarter and that's fairly meaningful based on this mix we saw this quarter. Thanks.

Good. I think just under the caveat of forward-looking statements, we just need to be bit cautious on some of the answers to this, the range for the $80 million to $90 million as you know was set in Q4 last year. It has proven to be relatively accurate based on what we knew at that time. What we are still finding in the business is that, while we have a number of orders in-house, our ability to deliver on some of them, all the customers acceptance clauses may cause that number to vary quite widely. To answer the second question part of the question, the product mix we are seeing actually come from some of their new higher-margin product sectors. We won a few new customers that we are not ready to disclose yet, but are substantial to the company and at least one of those may come in partly into Q4, but again there is a lot of caveats of that as we fine-tune our contracts and get more efficient in the process of forecasting. The predictability over our low margin products set as you know has been there for some time. We tend to know a fair way out and with the new capital raise, we have now had the ability to improve credit terms with a number of our suppliers. Although, we have been a more efficient without inventory management, we have been out predict and pre-purchase things that we know we need. In the lower margin stuff, there is a little bit of movement that will come from top-three customers, where we have received some additional orders and we may not be able to deliver mostly because they were unexpected. We were expecting them in Q1, Again, that is where you are the variation. Bryan Prohm - Cowen & Company: No. Fair enough. I mean, so eventually it is going to fall either very late in the quarter or early in next quarter.

Yes. That's the kind of prediction. Bryan Prohm - Cowen & Company: Okay. On the partnerships then, if you can't name names, may be talk a little bit about the raw growth numbers here. I think last quarter on the call you mentioned there are 150 partners. Has that number grown over the course of the year? What was it at the beginning of the year? What do you expect it to be in '15. The reason I asked is maybe - discounting some growth potential for you guys, given the lack of big names. One maybe there is some of other [ph] here happening.

Yes. Again, thanks for raising the question. I mean, it is probably as you the number one thing that that I get asked about is, why can't you put at a press release on Verizon? Why can't you put out a press release on the large security distributor and alike. We don't put press releases out without customers' permission. I was asked this morning about Verizon and videos that has gone out. That remarkably looks like one of their technologies and it is we work closely to blame our product and Verizon's product into a unique Verizon offering that we are now taking globally. We do talk about that. As the partnership develops and we secure more customers through that relationship, we are obviously pushing very heavily on them to help us and help him announce the customer wins that sit behind Verizon. Verizon continues to be a good customer and a good partner for us, not just a number of new leads, but also a couple of customer wins very early on, so we expect you will slow right now. The customers that we are winning with them meaningful customers and have the potential to move our revenue needle in 2015 and 2016. I should point out that we tend to find the strategic OEMs a much larger deals that they work on, so they have longer sales lead times. Again, meaningful deals, and as I said, they move the needle for a $80 million to $90 million-company. I have also being asked about the presentation that we put out for the agency conference on a number of the customers that we talk about in there such as the FBI, the IRS, the U.S. Marshals service, technology companies, public utility companies like Pacific Gas & Electric. Again, when we…

That is a very fair statement. Bryan Prohm - Cowen & Company: Okay. Last question, zinged me the last quarter I think for not asking me about NFC, so I will now. High-profile devices featuring NFC had recently entered the market and more are coming. Does this play to your strengths in any particular way?

Yes. That does. It is almost like a set up question, Bryan. Clearly you are referring to the Apple iPhone product. Bryan Prohm - Cowen & Company: Yes.

The iPad and the iWatch all coming out with tag-based functionality under the NFC umbrella, the first thing is it is a major endorsement of NFC, no matter in which way anyone cuts it, the fact that Apple have built an ecosystem that leverages the technology ties into payments is a major endorsement of the technology. It is good for us, because as you know as one of the larger producers of NFC tags and credentials and NFC compatible tags and credentials in the market that helps drive more interest in the technology. Now, while we are not specifically working with Apple on any of these particular technology activities or products and we obviously are compatible with a lot of the things they are doing and we will continue to be and continue to work in that space. Clearly, the Android platform, the BlackBerry platform and other platforms that are currently a little bit more open, we have good hooks into what that will continue to provide solutions over 2015 that drive physical access in that space, so yes it does begin to open up some opportunity for us, but heavily dependent upon Apple and what they choose to do in terms of their ecosystem. Bryan Prohm - Cowen & Company: I under, so maybe we should be watching the other ecosystems for some horizontal developments for '15?

Look, I wouldn't rule out things there, but we have to wait for Apple to make some announcements. Bryan Prohm - Cowen & Company: Understood. All right. I will pass it on the next person on the line. Thanks for taking my call.

Thanks, Bryan.

Thank you. Our next question is Phil [indiscernible] with TCF Financial. Please go ahead.

Hi. Thank you, gentlemen, for taking my call and congratulations on the success on your restructuring in the last year.

Thanks, Phil.

A question that I have from your press release today said that there was a significant contribution to your revenue from an increased demand for electronic game toys. My question is, is that essentially a seasonal factor or can we expect that to continue to grow after the Christmas holiday season?

Yes. I think, again, to be fair, Phil, it is seasonal. We see it, we saw it last year as well. I think we are seeing an increased demand overall, so while it is a seasonal peak, I think if you were to look at the line from 12 months ago in this category for us, it is beginning to move up. We do have projects underway in the medical space and in the consumer electronics space as well as some of the standardized consumer ticketing that we expect will also help us in 2015. The electronic toys space, again, is also an area that is growing, not just with the one particular project that we are quite well known for, but in other projects as well, so I think as more and more organizations look at Disney and Skylanders and Nintendo and others, they are beginning to want to add similar functionality or advanced functionality into their product line and that suits us very, very well. It is one of the main reasons we created this carve out of Identiv labs with some engineers and they are just working day and night creating cool stuff with for everyone from toy vendors through to electronic consumer vendors through the through manufacturers.

Okay. Well, I appreciate that and I appreciate all the other comments you gave on the revenue. One question I do have about your guidance for revenue, I think for year it was $80 million to $90 million and to make sure that I am comparing apples-to-apples if I want translate that into guidance for the fourth quarter am I backing out the nine-month figure from your earnings report of the this $61.867 million?

Yes. That is correct. On a year-to-date basis, we are at $62 million and our guidance for the complete year is $80 million to $90 million.

Okay. This is all revenue from continuing operations only?

That is correct.

Okay. All right. Well, thank you very much.

You are welcome, Phil. Thanks for the questions.

[Operator Instructions] We have no further questions at this time.

Thank you, Manisha. Maybe it is time to read just a couple of questions from investors who sent in question prior to the call. Jason, one question that came one was, Cisco and Verizon, how can we find out more details on these arrangements given there is no detailed PR on these yet?

Yes. Thanks Leonard. We don't disclose contracts and we are not permitted to disclose contracts with many of our major customers for a number of commercial reasons both, for them and for us, so we do talk to and they do talk to customers about the types of products that they take to market in Verizon's case. In Cisco's case, their technical people talk at various conferences a bit, what they are doing with the product. Only to leave it to both of those organizations to make any specific disclosures a bit, how they use it and I like just because the sensitivity of what it is. In general, large technology and public utility companies and aviation organizations use our technology to solve the username and password problem. They typically pay a per user per credentials fee and that allows them to tap the card to get in at the door in the morning, tap the computer to log onto the computer, tap the mobile device to log onto their mobile device and quick e-mail and quick messaging, be able to store sensitive data and in effect stop the bad guys from getting into their systems, all done in a standards compliant way, so that's typically what these two customers are in need, the nature of the arrangements that we have with them.

Okay. Thank you. Then one more question, is that the Internet of things is frequently mentioned? What are the applications that Identiv is work on.

IOT is a major driver, and I think no one in the industry really knows where it's going and what it means, so for us we have taken a cautious, but we have made some investments in this space to take a leadership position in the identity area. As people are deploying more and more connected devices in their home, the thing that's always left out our forgotten or mostly forgotten is the security and identity of the object and we have seen frames and hacks of cameras and webcams and fridges and alike and it will continue to grow as like become more intelligent and addressable. Identiv is and has developed some technology already in the space, where we are embedding secure microchips with provisioning these devices from our cloud services and we are able to manage them while they are in the field. We will continue to develop these solutions against the range of new standards and you will see Identiv take positions in a number of the forming standards committees to help drive - this will become a major activity, I think, for the identity and security industry over the next five years.

Okay. I think at this point, there are no more questions.

Excellent. Well, thank you.

We have.

I appreciate, we have gone over time, so with that I would like to thank everyone for their time. Again, we had a good Q3. We are on track to change from simplifying the business into growth mode and we are very optimistic, we are bullish about the 2015. With that operator, I would like to close the call.

Thank you, ladies and gentlemen. This concludes today's Q3 2014 Identiv earnings conference call. Thank you all for participating. You may now disconnect.