Good afternoon. Welcome to Identiv’s Fourth Quarter and Full Year 2017 Earnings Call. My name is Vicki, and I will be your operator this afternoon. Joining us for today’s presentation are the company’s CEO, Steven Humphreys; and CFO, Sandra Wallach. Following management’s remarks, we will open the call for questions. Before we begin, please note that during this call, management may make references to non-GAAP measures or projections, including adjusted EBITDA. In addition, during the call, management 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 documents filed from time to time with the SEC, including the company’s annual report on Form 10-K for fiscal year 2016. Identiv assumes no obligation to update these forward-looking statements, which speak as of today. I will now turn the conference over to CEO, Steven Humphreys, for his comments. Sir, please proceed.

Thanks, Vicki. Good afternoon, and good evening, everyone, and thank you for joining us. This is one of the most exciting moments for our company in years. Our turnaround is well behind us. We went out of the year with 13% year-over-year organic growth and 7% sequential growth. This is the fastest organic growth that came right at the end of the year and also the first sequential growth in Q4 over Q3 in years. We also delivered positive adjusted EBITDA for the full year, the first time since 2010. Add to this our first acquisition in years of 3VR [Technical Difficulty] video and analytics platform we can leverage across our entire company, and we’re anticipating total revenue growth this year of well over 20% versus 2017. The most important growth is broad-based. [Technical Difficulty] transponder [Technical Difficulty] groundbreaking applications last year had such success that they’re expanding, both in pure volume and their initial products and across more products in their company. We’re also winning new customers in the space who we expect will follow the same cycle of initial products, growth and then product line expansion, all of which become additive to our revenue base. Our smart card readers are continuing their technology leadership across government security applications, payments and some new major design-ins that support growth even in 2019. Our Premises business across our core federal government market and our Cisco channel had key customer expansion wins and has now been augmented with a natural fit of video technology and especially analytics. Now let me take a couple of minutes and focus on this last part about analytics. To be clear, near term, our core drive is to sell more access points, more RFID transponders, more loss prevention platforms. But longer term when you think about it,…

Thanks, Steve, for providing the context for our financial results for the fourth quarter and full year 2017. On February 15, after the close of the market, we provided a set of preliminary results with total revenues in the range of $16.5 million to $16.7 million for the fourth quarter and $60.2 million to $60.4 million for fiscal year 2017. Our preliminary non-GAAP adjusted EBITDA ranged from $1.3 million to $1.5 million for the fourth quarter and $2.7 million to $2.9 million for fiscal year 2017. Today, we will provide the full financial results as committed. Revenue in the fourth quarter was $16.6 million, a 7% sequential increase compared with $15.4 million in third quarter 2016 and an increase of 13% compared with $14.6 million in fourth quarter of 2016. For the full year, we recorded revenue within our guidance range at $60.2 million, a 7% increase from $56.2 million in 2016. [Technical Difficulty] fourth quarter results came in especially from the top line perspective, Q4 [Technical Difficulty] not only within our previously stated guidance, but [Technical Difficulty] sequentially, which historically has not been the case. Our full year 2017 represents our [Technical Difficulty] having reestablished growth and we believe that the new growth in 2017 over 2016 emphasizes strength in our core businesses and our relationship with our channel partners and customers and continuing [Technical Difficulty] solutions based on online technology progress. In addition, we entered 2018 with a healthy backlog for a strong start. I’ll give a few lines [Technical Difficulty] segment. Premises segment generated $7.1 million of revenue in the fourth quarter 2017, up [Technical Difficulty] percent, $5.9 million in the third quarter and 5% from $6.8 million recorded in the comparable quarter of 2016. On a full year basis, our total premises revenue [Technical Difficulty] $24.2…

All right. Thanks, Sandra. So as you’ve heard, 2017 was a year of major progress for Identiv. We returned to organic growth on an annual basis. We substantially strengthened the business, moving closer to our midterm target business model, which has led to our first full year of positive non-GAAP adjusted EBITDA since 2010. And these results really demonstrate the increasing strength of our core business, and that strength sets the critical foundation for our inorganic growth strategy. Additionally, our improved business performance has let us strengthen our balance sheet, which is fundamental to any business’s health, providing the strength to deliver on our organic and inorganic growth in 2018 and beyond. We also executed the first step in our inorganic strategy with the acquisition of 3VR in early February. As many of you might remember from our update call a few weeks ago, our combination with 3VR demonstrates our ability to find a great complementary business and execute inorganically. It’s an excellent fit for us, strengthening our position in the Premises security market and getting a beachhead in the fast-growing higher-margin video and especially the analytics segment, which is 3VR’s strength. And strategically, it perfectly complements our vision of simple, secure, convenient, and ultimately, frictionless access. Now the remainder of 2018 will see a continuation of this dual approach to growth across organic and inorganic. I’ll go into detail in the segments in a couple of minutes, but just as an overview, in our core businesses, we’re really going to be focusing on accelerating the conversion of our pipeline in the transponder market, both through expansion of current customers and adding substantial new ones, leveraging the cross-selling opportunities from our new video customers and our access control customers across commercial and federal segments. And in particular, I just want…

[Operator Instructions] And we’ll go first to Mike Latimore with Northland Capital Markets.

Thanks and congratulations on the year. On the 3VR products, you see most of the kind of near-term bookings coming from cross-sell or getting in the brand-new customer there?

A bit of both. Actually, the – sorry, Mike. The nearest term ones are cross-sell, obviously, because that’s dealers and channels that we already have relationships with and customers we’re in. So the cross-selling opportunity will have a shorter sales cycle is basically what’s going to happen. And then in new customers we’re going into, that will just be a longer sales cycle. That’s why it will be near term on the cross-sell side.

And then federal government, sounds like you’re encouraged by what you’re seeing there. I guess, do you see the federal government grow – growing this year as kind of percent of revenue? Or is it sort of holding there as kind of the same kind of position?

Yes, good question on percentage. It’s growing nicely. And in particular on the services side, we’re seeing some encouraging numbers. It will be keeping pace, whether it grows faster than some of the other segments and cross-selling opportunities in Premises and all, I don’t know. Probably about the same pace.

And then what should we model for kind of depreciation and amortization kind of on a full quarter basis like in the June quarter?

What’s the total amount of depreciation and amortization? I just want to make sure I heard the question right.

Yes, like what should we model on a quarterly basis?

Well, we don’t – yes, we don’t have a lot of additional capacity. We’re not heavy in a capital intensive. So let me just look at, we’ve been running about fourth quarter was $600,000. We’ve been running relatively flat with that. So I think $600,000 to $700,000 a quarter is reasonable for 2018.

Okay.And then just last, on your – you mentioned mid to long-term goals. Like how many years are we talking mid versus long term?

Mid, think in terms of this year and going into next year. And long term, no later than the year after next. And if we can hold that in…

Okay. All right. Thanks a lot.

[Operator Instructions] We’ll go next to the Nehal Chokshi with Maxim Group.

Yes, thanks. Do you have a thoughts on what CapEx will be for calendar 2018?

CapEx for calendar 2018 should probably be around $1 million in total. There’s only one piece of strategic equipment that we’re looking at to support our transponder capacity based on the strength of the demand that Steve spoke with, and there’s really nothing else besides some enterprise software applications that we may include in how we run our ERP system.

Okay, great. And then the way that I read through the guidance especially with the prior guidance on what 3VR will add is that you’re looking at about 10% organic growth. So first, is that correct? And I’ll have a follow-up on that.

Yes. We had initially said that 3VR would add $10 million to $11 million on the top line, so that’s a correct assessment.

Okay. And so that 10% organic growth, I think, is a very healthy growth rate. But given all the different synergies between the different product segments and what you guys have, what do you think is the possibility to deliver above that?

When you hear the various initiatives we’ve got going on and the opportunities, there are certainly possibilities. As we’ve said, it’s just its early days to really project those. And in particular, whether it falls into a particular quarter to start to hit, it gets to be pretty fraught, so that’s where we would just stay with the guidance, the way we have it laid out. But is there opportunity there? Absolutely.

Okay. And then what percent of engagements that you’re having right now are leveraging the synergies between the different product segments?

Yes, just to give you a snapshot on that. As I said, it’s very, very early days. Here we are at three weeks in since the close, and we actually haven’t yet given our salesforce a framework for joint selling. But we’ve got a substantial number of deals that have just come in over that ran some dealers on one side or the other that come to us and say, look, I’ve got an opportunity right now to sell these capabilities. So it’s, I can’t give you a trajectory or path, but actually, it’s been stronger than I at least expected.

All right. That’s helpful. Thank you.

At this time, this concludes the company’s question-and-answer session. If your question was not taken, you may contact Identiv’s Investor Relations team at inve@liolios.com. I’d now like to turn the call back over to Mr. Humphreys for his closing remarks.

All right. Thanks, Vicki. And thanks, everybody, for joining us today. As you can hear, we are very excited by the moment in time we’ve got right now and we’ll be working very hard to execute on the opportunity ahead of us. Hopefully, you all can stay following the company and we’ll be at the ROTH conference next week and investor conferences throughout. And then also, of course, at industry events, including ISC West, where we expect to have a very interesting set of demos and cross-sells there going on. So looking forward to sharing the journey with all of you. Thank you again, and have a great evening.

Thank you for joining us today. You may now disconnect.