Viisage (NASDAQ:VISG)
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Viisage (Nasdaq: VISG) today completed the acquisition
of privately-held Iridian Technologies, Inc., the company responsible
for the initial development and commercialization of iris recognition
technology. Viisage first announced the company's intention to acquire
Iridian on July 17, 2006. Under the terms of the definitive agreement
with Iridian, Viisage paid Iridian shareholders $35 million in cash.
Viisage also secured a $6.5 million reduction in potential
contingency payments to the former shareholders of SecuriMetrics under
the terms of Viisage's February 2006 acquisition of SecuriMetrics,
resulting in an effective "net" purchase price for Iridian of $28.5
million. The acquisition of Iridian was funded primarily by proceeds
from the initial $100 million investment into Viisage by L-1
Investment Partners in December 2005.
Iridian has positive net working capital and is debt free. The
company is estimated to generate positive pro forma EBITDA of
approximately $3 million in 2006.
"This acquisition is another important step in our overall
strategy to lead the market as the only U.S.-based manufacturer of a
full range of handheld and multi-modal biometric recognition solutions
encompassing iris, finger and face," said Robert V. LaPenta, Chairman
of the Board of Viisage. "Direct access to Iridian's intellectual
property upon which the iris recognition market is based, together
with synergies from our anticipated merger with Identix later this
month, should help to place us in that premier position. We also
expect that it will do so in such a way that we see operational
benefit with improved margins and cost synergies."
Iridian licenses iris recognition software and related
intellectual property to hardware and software developers for
applications in the government, military and commercial markets, both
domestically and internationally. This intellectual property portfolio
and industry-standard iris recognition algorithm will be combined with
Viisage's wholly-owned subsidiary SecuriMetrics to advance the
development and implementation of SecuriMetrics' advanced hardware,
software and database capabilities.
Iridian's business operation, currently located in Moorestown,
N.J., will be integrated into Identix' Jersey City, N.J. research
facility upon the closing of the pending merger with Identix.
EBITDA
Viisage uses EBITDA as a non-GAAP financial performance
measurement. EBITDA is calculated by adding back to net income (loss)
interest, taxes, depreciation and amortization. EBITDA is provided to
investors to complement results provided in accordance with GAAP, as
management believes the measures help illustrate underlying operating
trends in the Company's business and uses the measures to establish
internal budgets and goals, manage the business, and evaluate
performance. Management also believes that EBITDA provides an
additional tool for investors to use in comparing Viisage's financial
results with other companies in the industry, many of which also use
EBITDA in their communications to investors. By excluding non-cash
charges such as amortization and depreciation as well as non-operating
charges for interest and income taxes, Viisage can evaluate its
operations and can compare its results on a more consistent basis to
the results of other companies in the industry and to its operations
in prior quarters. As noted above, EBITDA excludes the effect of
interest, taxes, depreciation and amortization. Because EBITDA
eliminates these items, Viisage considers this financial measure to be
an important indicator of the Company's operational strength and
performance of its business and a good measure of the Company's
historical operating trend. EBITDA should not be considered in
isolation or as a substitute for comparable measures calculated and
presented in accordance with GAAP. Estimated pro forma EBITDA for 2006
has been calculated by adding estimated pro forma depreciation and
amortization of $1.2 million to pro forma estimated net income of $1.8
million.
About Viisage Technology, Inc.
Viisage delivers advanced technology identity solutions for
governments, law enforcement agencies and businesses concerned with
enhancing security, reducing identity theft, and protecting personal
privacy. Viisage solutions include secure credentials such as
passports and drivers' licenses, biometric technologies for uniquely
linking individuals to those credentials, and credential
authentication technologies to ensure the documents are valid before
individuals are allowed to cross borders, gain access to finances, or
be granted other privileges. With more than 3,000 installations
worldwide, Viisage's identity solutions stand out as a result of the
company's industry-leading technology and unique understanding of
customer needs. Viisage's product suite includes IdentityTOOLS(TM)
SDK, Viisage PROOF(TM), FaceEXPLORER(R), iA-thenticate(R),
ID-GUARD(R), BorderGuard(R), PIER(TM), HIIDE(TM), AutoTest(TM),
FacePASS(TM) and FaceFINDER(R).
About Iridian Technologies
Iridian Technologies, Inc. of Moorestown, N.J. is the world leader
in development and commercialization of iris recognition technology --
renowned as one of the most accurate biometric identifiers. The holder
of U.S. and international patents behind iris recognition
technologies, Iridian offers unparalleled security for public-use
applications such as simplified passenger travel, border control,
national IDs, and election verification as well as restricted access
and information access. For more information, visit
www.iridiantech.com.
Forward-Looking Statements
This news release contains forward-looking statements that involve
risks and uncertainties. Forward-looking statements in this document
and those made from time to time by Viisage through its senior
management are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements reflect the Company's current views with
respect to the future events or financial performance discussed in
this release, based on management's beliefs and assumptions and
information currently available. When used, the words "believe,"
"anticipate," "estimate," "project," "should," "expect," "plan,"
"assume" and similar expressions that do not relate solely to
historical matters identify forward-looking statements.
Forward-looking statements concerning future plans or results are
necessarily only estimates and actual results could differ materially
from expectations. Certain factors that could cause or contribute to
such differences include, among other things, the size and timing of
contract awards, performance on contracts, performance of acquired
companies, availability and cost of key components, unanticipated
results from audits of the financial results of the Company and
acquired companies, changing interpretations of generally accepted
accounting principles, outcomes of government reviews, developments
with respect to litigation to which we are a party, potential
fluctuations in quarterly results, dependence on large contracts and a
limited number of customers, lengthy sales and implementation cycles,
market acceptance of new or enhanced products and services,
proprietary technology and changing competitive conditions, system
performance, management of growth, dependence on key personnel,
ability to obtain project financing, general economic and political
conditions and other factors affecting spending by customers, and the
unpredictable nature of working with government agencies. In addition,
such risks and uncertainties include, among others, the following
risks: that the pending merger with Identix will not close, that the
regulatory or shareholder approval will not be obtained, that the
closing will be delayed, that customers and partners will not react
favorably to the merger, integration risks, the risk that the combined
companies may be unable to achieve cost-cutting synergies, and other
risks described in Viisage's and Identix' Securities and Exchange
Commission filings, including the Registration Statement on Form S-4
filed with the SEC in connection with the transaction, Viisage's
Annual Report on Form 10-K for the year ended December 31, 2005 and
its Quarterly Reports on Form 10-Q for the quarters ended March 31,
2006 and June 30, 2006 under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," and Identix' Annual Report on Form 10-K for
the year ended June 30, 2005 and its Quarterly Reports on Form 10-Q
for the quarters ended September 30, 2005, December 31, 2005 and March
31, 2006 under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations." Viisage expressly disclaims any obligation to update any
forward-looking statements
Additional Information and Where to Find It
Investors and security holders of both Viisage and Identix are
advised to read the joint proxy statement/prospectus regarding the
business combination transaction referred to in the material below
because it contains important information. Viisage and Identix have
mailed a joint proxy statement/prospectus about the transaction to
their respective stockholders. This joint proxy statement/prospectus
has been filed with the Securities and Exchange Commission by both
companies. Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus and other documents filed by the
companies at the Securities and Exchange Commission's web site at
http://www.sec.gov. The joint proxy statement/prospectus and such
other documents may also be obtained from Identix or Viisage by
directing such requests to the companies.
Participants In Solicitation
Viisage, Identix and their respective directors and executive
officers and other members of management and employees may be deemed
to be participants in the solicitation of proxies in respect of the
merger. Information concerning Viisage's participants is set forth in
the joint proxy statement/prospectus dated July 27, 2006 for Viisage's
special meeting of shareholders to be held on August 29, 2006 as filed
with the SEC. Information concerning Identix' participants is set
forth in the proxy statement, dated October 6, 2005, for Identix' 2005
annual meeting of shareholders as filed with the SEC on Schedule 14A.
Additional information regarding the interests of participants of
Viisage and Identix in the solicitation of proxies in respect of the
merger is included in the registration statement and joint proxy
statement/prospectus filed with the SEC.