No Slide TitleSafe Harbor Statement
Statements that representatives of Viisage make today that are not historical facts are accurate as of today and may be considered forward-looking statements that involve risks and uncertainties, including reliance on public sector markets, the possibility of customer delays, need for capital and competition.
You should refer to our Form 10-Q for the quarter ended April 3, 2005 filed with the Securities and Exchange Commission, under the heading “Certain Factors That May Affect Future Results” and subsequent SEC filings for more information on the risk factors that could cause actual results to differ, perhaps materially, from our statements today.
Viisage undertakes no obligation to publicly release any revision to any forward-looking statement made today.
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Core Strengths
Market Capitalization of $211M
2004 EBITDA of $8.5M
Produce more than 30 million secure credentials annually
Produce about one in every four of U.S. drivers’ licenses
Sole provider of passport production capability
Production platform for U.S. DOD Common Access Card
Worldwide leader in document authentication and verification
Recognized leader in face recognition biometric technology
Financial Highlights
Viisage is uniquely positioned as an end-to-end advanced identity solutions provider
IPO
Recognized the emergence of face-recognition biometrics ahead of competitors
Acquired three small strategic companies
Added six states in DL market through competitive wins
Re-focused company around identity solutions
Executive changes
Acquired ZN Vision Technologies to solidify leadership in face recognition capabilities and provide European foothold
Acquired Trans Digital Technologies to enhance presence in secure credentials and Federal Gov’t
Acquired Imaging Automation, the industry and market leader in automated identity document authentication technologies
Significant recent contract wins include:
DOS 5 yr Sole Source for US Passports ($65mm, 4Q03)
DOD Smart Card program (initial order: $10mm, 1Q04)
Key State Drivers’ License contracts – NC, IL, WV
Florida document authentication implementation
The World Has Changed
Begins with a claim to official identification such as drivers’ licenses, IDs, passports and visas (“official identification” is AAMVA language)
Therefore credential issuing organizations are the targets
Offenders include minors, organized crime, and terrorists
Once granted a credential, privileges follow
Right to operate a motor vehicle
Gain entrance to other areas of identity, namely finances and other identity information
Issuing credentials without proofing creates security risks
Community safety
Identity Substitution – lending a valid ID to another to use
Fake ID – “become” someone else
Access – buildings, military bases, airports/ports
2132.unknown
2133.unknown
2134.unknown
2135.unknown
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these credentials?
How do we know that this is the person who is uniquely connected
to these credentials and privileges?
Biometrics allow us to connect individuals to the credentials.
PERSON
CREDENTIALS
PRIVILEGES
Driving
Financial
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Multiple FR Applications
International passport and visa
Case Study: Civil Identification
Each night new images are sent to headquarters to be compared against the database of over 16 million images for possible fraud
Each morning State officials review possible matches from the day before and flag possible fraudulent activity
Each day over 15,000 new images are captured at 135 drivers license facilities throughout the State
STATE OF ILLINOIS
The more than 200,000 identity documents presented daily, including driver’s licenses, visas, passports and Canadian permanent residency cards, are authentic, therefore entitling the person to cross the border
The person trying to cross the border was not on a watch list
Problem:
CCRA needed to authenticate identity documents to ensure:
Scans of over 200,000 driver’s licenses, visas, passports and Canadian permanent residency cards daily for authentication and comparison to watch lists
A safer, more secure border
A system that ensured safer, but did not slow the border crossing process down
Solution:
CCRA deployed 400 iA-thenticate units in 40 of the most heavily used points of entry, resulting in:
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Viisage offers solutions that…
Increase homeland security
Solutions
Mobile (in vehicle) systems for checking identities
Investigation tools for facial matching
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Legislative initiatives around DL enhancements: REAL ID
Presidential directives around federal secure IDs: HSPD-12
Development of industry standards and requirements
Enhanced accuracy of biometric technologies
Convergence of physical and logical security
Source: Frost and Sullivan 2003 ($ millions)
Biometric Revenues
CAGR 50%
CAGR 49%
Backlog of $119 million
Positive operating cash with $11M on balance sheet, no debt
Transitioning financial model to higher margin product portfolio
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Difference on this chart
Difference on this chart
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Gross Profit Improvement to 30%+
Continued EBITDA Improvement
Strong technology portfolio and market knowledge
Long-term contracts with high revenue and earnings visibility
Strong customer base