FREMONT, California, February 12 /PRNewswire/ --

- Company delivers 12 percent quarter over quarter revenue growth

ActivIdentity Corporation (Nasdaq: ACTI), a global leader in digital identity assurance, today announced its financial results for its fiscal first quarter ended December 31, 2007.

(Logo: http://www.newscom.com/cgi-bin/prnh/20051108/SFTU161LOGO)

Revenue for the quarter ended December 31, 2007 was US$15.4 million, compared to US$13.8 million for the quarter ended September 30, 2007, representing quarter-over-quarter revenue growth of 12%.

Net loss for the quarter ended December 31, 2007 was US$3.9 million, or US$0.09 per basic and diluted share, compared to a net loss of US$1.7 million, or US$0.04 per basic and diluted share for the three months ended September 30, 2007. The net loss included US$0.9 million and US$0.2 million of severance expenses related to our global cost reduction program for the December quarter and the September quarter, respectively. Excluding these charges, our non-GAAP net loss for the first quarter of fiscal 2008 was US$3.0 million or US$0.07 per basic and diluted share, compared to a non-GAAP net loss of US$1.6 million or US$0.03 per share for the fourth quarter of fiscal 2007.

Fiscal First Quarter Financial Highlights: -- Operating expenses during the quarter were US$14.7 million including approximately US$0.9 million for headcount related expenses as a result of our global cost reduction efforts. -- Gross profit, including amortization of technology and stock based compensation in the first quarter of fiscal 2008 was US$9.7 million compared to US$9.4 million in the fourth quarter of fiscal 2007. Gross margins were 63% in the first quarter of fiscal 2008 versus 68% in the fourth quarter of fiscal 2007. -- Cash, cash equivalents, and short-term investments were US$121.3 million at December 31, 2007 compared to US$121.7 million in the quarter ending September 30, 2007.

"We continue to work diligently to improve our top-line as we see the current demand environment for smart cards growing in the enterprise sector," said Thomas Jahn, ActivIdentity's CEO.

Conference Call Details

ActivIdentity will host its earnings conference call to discuss results of its first quarter fiscal 2008 at 1:30 p.m. PST (4:30 p.m. EST) this afternoon. There will be a live audio web cast and dial in to the conference call.

Live audio web cast: The conference call web cast will be available on the investor relations section of the Company's website at http://www.actividentity.com/en/investors/index.php. A replay of the web cast will be available approximately two hours after the conclusion of the call through February 25, 2008.

Dial-in conference call: To access the conference call within the U.S. or Canada, please dial +1-877-292-2820 and enter conference ID 33525185. To access the conference call outside the U.S. or Canada please dial +1-706-679-4390 and enter conference ID 33525185.

Audio Replay: An audio replay of the conference call will also be available approximately two hours following the conclusion of the call and will remain available through February 25, 2008. To access the audio replay, please dial +1-800-642-1687 or, from outside the U.S., +1-706-645-9291 and enter conference ID number 33525185.

About ActivIdentity

ActivIdentity(R) Corporation (Nasdaq: ACTI) identity solutions secure the business of enterprise, government, healthcare, and financial services organizations worldwide. Trusted identity is the core of the ActivIdentity platform enabling security for data, networks, applications, passwords and credentials, web, email and documents, transactions as well as converged security.

ActivIdentity solutions support the convergence of physical and logical identity through strong authentication with smart card lifecycle management, adding enterprise single sign on, and data encryption and digital signature.

ActivIdentity customers experience multiple benefits including increased network security, protection against identity theft and online fraud, enhanced workforce productivity, business process efficiencies, and regulatory compliance.

For more information, visit http://www.actividentity.com.

ActivIdentity and ActivCard are registered trademarks in the United States and/or other countries. All other trademarks are the property of their respective owners in the United States and/or other countries.

Forward-Looking Statements Safe Harbor

The statements in this press release that are not historical facts are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include risks relating to our history of losses and need for revenue growth and cost containment, the integration of acquired business and technologies, the variability of our quarterly results, and other risks identified under the caption "Risk Factors" in our most recent Annual Report on Form 10-K, and in subsequent Quarterly Reports on Form 10-Q, which are filed with the United States Securities and Exchange Commission (SEC). Copies of these filings are available from the Company and on the SEC's Web site at http://www.sec.gov. Actual results, events and performance may differ materially from our forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

(All amounts in US$ unless otherwise noted) ActivIdentity Corporation Condensed Consolidated GAAP Statement of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended December 31, September 30, December 31, 2007 2007 2006 Revenue: Software $5,928 $5,768 $6,780 Hardware 4,182 3,116 3,729 Maintenance and support 5,323 4,886 4,106 Total revenue 15,433 13,770 14,615 Cost of revenue: Software 873 936 756 Hardware 2,367 1,500 1,906 Maintenance and support 1,910 1,298 1,047 Amortization of acquired developed technology and patents 602 618 792 Total cost of revenue 5,752 4,352 4,501 Gross profit 9,681 9,418 10,114 Operating expenses: Sales and marketing 6,899 6,229 5,820 Research and development 4,753 5,022 4,993 General and administration 3,114 2,340 2,885 Restructuring expense (recovery) (73) - - Amortization of acquired intangible assets 41 42 48 Total operating expenses 14,734 13,633 13,746 Loss from operations (5,053) (4,215) (3,632) Other income (expense): Interest income, net 1,620 1,714 1,388 Other income (expense), net (477) 1,009 867 Total other income, net 1,143 2,723 2,255 Loss before income tax and minority interest (3,910) (1,492) (1,377) Income tax provision (43) (274) (15) Minority interest 6 20 (2) Net loss $(3,947) $(1,746) $(1,394) Basic and diluted net loss per share $(0.09) $(0.04) $(0.03) Shares used to compute basic and diluted net loss per share 45,741 45,728 45,625

ActivIdentity Corporation Condensed Consolidated GAAP Balance Sheets (In thousands) December 31, September 30, 2007 2007 (1) (Unaudited) ASSETS Current assets: Cash and cash equivalents $34,726 $30,639 Short-term investments 86,600 91,084 Accounts receivable, net of allowance for doubtful accounts 13,321 14,566 Inventories, net 2,200 2,146 Prepaid and other current assets 1,554 2,077 Total current assets 138,401 140,512 Property and equipment, net 3,829 4,267 Other intangible assets, net 6,052 6,695 Other long-term assets 1,105 1,104 Goodwill 35,874 35,874 Total assets $185,261 $188,452 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,369 $2,116 Accrued compensation and related benefits 6,376 6,942 Current portion of accrual for restructuring liability 659 733 Accrued and other current liabilities 3,965 3,484 Current portion of deferred revenue 10,674 10,349 Total current liabilities 23,043 23,624 Deferred revenue, net of current portion 3,511 2,752 Accrual for restructuring liability, net of current portion 1,425 1,574 Long-term deferred rent 706 705 Other long-term liabilities 479 - Total liabilities 29,164 28,655 Minority interest 346 354 Stockholders' equity: Common stock 46 46 Additional paid-in capital 424,039 423,242 Accumulated deficit (250,543) (246,501) Accumulated other comprehensive loss (17,791) (17,344) Total stockholders' equity 155,751 159,443 Total liabilities and stockholders' equity $185,261 $188,452 (1) Derived from audited consolidated financial statements.

ActivIdentity Corporation Condensed Consolidated GAAP Statement of Cash Flows (In thousands) (Unaudited) Three Months Ended December 31, 2007 2006 Cash flows from operating activities: Net loss from operations $(3,947) $(1,394) Adjustments to reconcile net loss to net cash provided by (used in) operating activities used by operating activities: Depreciation and amortization of fixed assets 469 399 Amortization of acquired developed technology and patents 602 792 Non-realized foreign exchange (gain) loss 362 (971) Amortization of acquired intangible assets 41 48 Stock-based compensation expense 772 711 Loss on disposal of property and equipment 21 - Minority interest in ActivIdentity Europe S.A (6) 2 Changes in: Accounts receivable 1,297 8,845 Inventories (32) (613) Prepaid and other current assets 343 148 Accounts payable (755) 1,633 Accrued compensation and related benefits (571) (701) Accrual for restructuring liability (225) (165) Accrued and other liabilities 945 219 Deferred revenue 1,063 (564) Net cash provided by operating activities 379 8,389 Cash flows from investing activities: Purchases of property and equipment (55) (846) Purchases of short-term investments (23,062) (34,515) Proceeds from sales and maturities of short-term investments 26,805 32,041 Cash used in acquisitions, net of cash received - - Other long-term assets 1 - Net cash provided by (used in) investing activities 3,689 (3,320) Cash flows from financing activities: Proceeds from exercise of options, rights and warrants 25 - Net cash provided by financing activities 25 - Effect of exchange rate changes (6) 335 Net increase in cash and cash equivalents 4,087 5,404 Cash and cash equivalents, beginning of period 30,639 11,477 Cash and cash equivalents, end of period $34,726 $16,881 ActivIdentity Corporation Reconciliation of GAAP Net Loss to Non-GAAP Net Loss (In thousands, except per share amounts) (Unaudited) Three Months Ended December 31, September 30, December 31, 2007 2007 2006 Reported net loss (GAAP basis) $(3,947) $(1,746) $(1,394) Severance expenses 908 211 30 Tax effect of non-GAAP adjustments (10) (39) - Non-GAAP net loss (net of taxes) $(3,049) $(1,574) $(1,364) Non-GAAP basic and diluted loss per share excluding the effects of severance expenses: Loss per share basic and diluted $(0.07) $(0.03) $(0.03) Shares used in the calculation of non-GAAP basic and diluted loss per share 45,741 45,728 45,625 The Company's non-GAAP measures set forth above exclude charges related to severance. The Company's management uses non-GAAP net loss and non-GAAP net loss per share to evaluate the Company's current operating results and financials results and to compare them against historical financial results. The Company excludes severance expenses and the related tax effects primarily because they are significant estimates which management separates for consideration when evaluating and managing business operations. In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company's business against that of its many competitors who employ and disclose similar non-GAAP measures. This financial measure may be different from non-GAAP methods of accounting and reporting used by the Company's competitors to the extent their non-GAAP measures include other items. The presentation of this additional information should not be considered a substitute for net loss or net loss per share prepared in accordance with GAAP.

Web site: http://www.actividentity.com

Mahima Patnaik, Director of Investor Relations of ActivIdentity Corporation, +1-510-745-6275 ; Photo: http://www.newscom.com/cgi-bin/prnh/20051108/SFTU161LOGO , AP Archive: http://photoarchive.ap.org, PRN Photo Desk, photodesk@prnewswire.com