Corporate Overview
September 2008
Safe Harbor Statement
This presentation contains forward-looking statements that involve risks and uncertainties. Forward-looking
statements in this document and those made from time to time by L-1 Identity Solutions, Inc. 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 based on management's beliefs and
assumptions and information currently available. 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 availability of government funding
for L-1's products and solutions, the size and timing of federal contract awards, performance on existing and
future contracts, general economic and political conditions and other factors affecting spending by customers,
and the unpredictable nature of working with government agencies. Additional risks and uncertainties are
described in the Securities and Exchange Commission filings of the Company, including the Company's Form
10-K for year ended December 31, 2007 and Form 10-Q for the quarter ended June 30, 2008. The Company
expressly disclaims any intention or obligation to update any forward-looking statements.
Evolution of Identity Management
Security, Defense and
Intelligence Issues
Industry Players
ID Management
Industry
L-1 Drives the Development of a
New Industry to Better Focus on
Identity Issues
Secure Credentialing
Biometrics
Access Control
Enrollment Services
Government Security
Consulting
L-1 Strategic Vision
Be the premier identity solutions company with customized and
interoperable solutions and services that meet any ID program
requirements, on time and in budget
Remain at the forefront of the latest advances in multi-modal biometric
recognition capabilities as a means to uniquely identify individuals
Use advanced technologies to produce the most secure identification
documents possible that serve as proof of identity
Offer government consulting services that address the most important
areas of security and intelligence in the U.S. today
Our commitment to shareholders is a disciplined fiscal
operating model that delivers strong and predictable results
Achieve organic growth in excess of 20% annually complemented by a
focused acquisition strategy
Profitable, with solid margins and strong cash flow
Deliver exceptional shareholder value
L-1 Identity Solutions
L-1 Identity Solutions Company
Secure Credentialing
Biometrics
Enrollment Services
Government Security Consulting
Human Intelligence
Engineering and Analytical Solutions
Information Technology
Enterprise Access Control
Proven management team and 2,200+ employees globally
Headquartered in Stamford, CT with offices
located throughout the U.S. and Europe
U.S. based technology development
NYSE: ID
Building a Leader in Identity Management
Identix
Iridian
SecuriMetrics
Viisage
Digimarc
Comnetix
IBT
Bioscrypt
McClendon
Advanced Concepts
Spectal
Customer-Driven Divisions
Biometrics
Division
Live scan
ABIS
Iris
Facial Recognition
Fingerprint
Mobile ID
Jail Management
Criminal
Secure
Credentialing
Division
Passports, Visas,
Passport Card, BCC
CAC
Driver’s License
Automated skills
testing
National ID
Voter Registration
Authentication
Access Control
Division
Fingerprint
Facial – 3D
Logical
ID Solutions
Government
Security Consulting
Services
Intelligence Services
Engineering &
Analytical Solutions
Information
Technology Services
Enrollment Services
Division
HAZPRINT
TWIC
Civil
- Day worker
- Healthcare
- Financial
- Insurance
- School employees
- Government employees
Criminal / law
enforcement
ID Services
Customer-Driven Divisions
Secure Credentialing Division
Produced more than 500M secure
credentials to date
High resolution, non-fading image printing
Central issuance, over-the-counter,
hybrid DMV solutions
Key contracts
State driver’s licenses
Passport Card
Border Crossing Card
U.S. Passport
Combined with Digimarc ID Systems,
L-1 supports driver’s licenses
and ID cards in 41 states
International ID cards for 29 countries globally
Biometrics Division
Pier-T
TouchPrint™
Booking Stations
DFR®
Readers
FaceIt®Quality
Assessment
and Capture
Software
TP-4800 Palm,
Slap & Roll
TP-4100
Photo Image
Capture and
Matching
System
Large Scale Multi-Biometric Search Engines
ABIS®with Finger Face and/or Iris Matching
DoD ABIS (finger, face and iris)
State Driver’s Licenses
National ID & Voter Registration
State Department
Visa applications
70 million+ record database,
largest in the world!
Biometrics Division
DoD Biometric
Fusion Center
FBI
CJIS
Other
Governmental
Organizations
DoD
Organizations
Arrestees
Biometrics Division
Detainees, Locally
Employed Personnel, etc.
Force Protection
Initiatives (FPI, MNFI)
Criminal Master Files
Enemy Prisoner of
War Records
Submission Sources
Terrorist/Crime
Scenes (Latent Prints)
Biometric Identification
System for Access
U.S. Government Agencies
Ingests Information from Any
Source and Searches Against Any
Biometric or Multiple Biometric
ABIS®
Biometrics Division
HIIDE™ - Finger Face and Iris
Integrated Biometric
Identity System
(IBIS) – Credential
and Fingerprint
Matching System
Identity Verification: Mobile ID
HIIDE™ Expansion Module
(EM) Jumpkits
HIIDE device
HIIDE Expansion Module
L-1 TouchPrint ™ 4100 Live Scan device for
slap and roll fingerprint capture
Battery
All in a highly compact and ruggedized case
NO LAPTOP REQUIRED
Access Control Solutions Division
Biometric physical and logical access control
Finger, face and/or iris physical access control linked to
logical access control security
ID enrollment software and mobile solutions
Strong presence in the commercial enterprise market with
over 400 global customers and an install base of over
260,000 access control units
Significant partners including Kronos, Honeywell, ADI,
Lenel and HP, among others
HSPD-12 PIV
Access System
Walkthrough
Facial Access
System
Wall Mounted Iris Access
Logical Access Credential
Manager
Enrollment Services Division
Total business & technology infrastructure for
outsourcing biometric capture
500+ locations across the USA and Canada
Presence in 46 states
4M people printed
to date
Service >1.2M
customers annually
Key contracts
HAZPRINT
HSPD-12
TWIC
State pre-employment
programs
Gov’t Security Consulting Services Divisions
Counterterrorism
Information sharing and analysis
Counterintelligence
Behavioral science
Vulnerability assessments
Surveillance and surveillance
detection
Computer forensics
Operational support
Training
Intelligence Services
formerly SpecTal
Imagery analysis
Spectral science, hyperspectral / multi-
spectral systems
Geospatial systems
Model making and prototype fabrication
Engineering & Analytical Solutions
formerly McClendon
Information assurance
Systems engineering
Telecommunications R&D
Public safety consulting
Information Technology Solutions
formerly Advanced Concepts
2008 Highlights
CONTRACT WINS
U.S. Passport Card ($215M,
5 years)
U.S. Border Crossing Card
($24.8M, 5 years)
HIIDEs, PIERs, HIIDE EMs,
Jumpkits (approx. $16.4M)
Driver’s license extensions
(>$16M)
Project Management Office
Defense Travel System (PMO-
DTS) ($50M, 5 year BPA)
RT program expanded at new
airports and terminals
Support kiosks in 17 U.S. airports
MILESTONES
Digimarc ID Systems and
Bioscrypt acquisitions
completed
Released latest iris
algorithm, Daugman '08
Enrollment services
processing increased 36%
Introduced 3D face reader
for physical access control
Launched next generation
TenPrint and palm reader
International voter and
national ID systems
Partners
Robust open architecture technologies encourage
many prime contractors look to partner on large
contracts:
Competitive Landscape
Strong Presence
Limited Presence
No Presence
Minimal Presence
Mobile
ID
Full
Hand
Biometric
Data-Mining
AFIS
Facial
Recognition
Intel
Svcs
Live
Scan
Iris
Credentialing
(Pay-by-Click)
ABIS
Quarterly Financial Review
$0.04
$0.03 – $0.05
($0.02)
($0.06)
EPS
$22.5m
$20m - $22m
$14.1m
$3.8m
Adj. EBITDA
$145m
$135m - $145m
$90.1m
$24.9m
Revenues
Q2’08(A)
Q2’08(E)
Q2’07(A)
Q2’06(A)
Q3’08 Forecast
$0.04 – $0.06
$0.02
($0.66)
EPS
$20m - $23m
$19.1m
($1.0)m
Adj. EBITDA
$140m - $150m
$115.5m
$39.8m
Revenues
Q3’08(E)*
Q3’07(A)
Q3’06(A)
*Excludes Digimarc ID Systems business
FY’05/’06/’07 Review and FY’08 Expectations
Free Cash Flow
EPS
Adj. EBITDA
Revenue
($0.2)
($0.37)
$6.6m
$66.2m
FY’05 (A)
$9.0m
($0.71)
$23.6m
$164.4m
FY’06 (A)
$39.7m
$0.24
$60.1m
$389.5
FY’07 (A)
$63m
$0.12
$83m
$565m
FY’08 (E)
$70m
N/A
$101m
$608m
Pro Forma
LTM 6/30/08
(a) After adding back non-recurring charges of $3.3 million
(b) Using mid-point of expected range
(c) Includes ID Systems business of Digimarc, Bioscrypt, ACI & McClendon as if they had been acquired on
7/1/07 and excludes the impact of non-recurring items
(a)
(a)
(c)
(b)
Total Revenues
(**)
Organic Growth
($ in millions)
(*) Only includes nine months of Bioscrypt.
(**) Includes ID Systems business of Digimarc, Bioscrypt, ACI & McClendon as if they had been
acquired on 7/1/07 and excludes the impact of non-recurring items
Strong total and organic revenue growth
Proven Revenue Growth Track
Revenue CAGR 105%
(*)
Revenue Mix by Division
LTM 6/30/08 Pro-Forma Includes ID Systems business of Digimarc, Bioscrypt, ACI & McClendon as if they had been
acquired on 7/1/07 and excludes the impact of non-recurring items
($ in millions)
Solid Adjusted EBITDA
EBITDA CAGR 132%
EBITDA 10% 15% 15% 15% 17%
Margins
(a)
(a) Includes ID Systems business of Digimarc, Bioscrypt, ACI & McClendon as if they had been acquired
on 7/1/07 and excludes the impact of non-recurring items
Management’s focus on high value solution offerings, working capital and the
growing backlog has led to significant increases in Cash Flow
($ in millions)
(a) Includes ID Systems business of Digimarc, Bioscrypt, ACI & McClendon as if they had been acquired
on 7/1/07 and excludes the impact of non-recurring items
Strong Cash Generation
EBITDA
Unlevered Free Cash Flow
(a)
($ in millions)
Growing Backlog Provides Significant
Visibility and Stability
Ending Backlog
Pro Forma 12/31/07 backlog of $900M represents approximately 90% of
Pro Forma 2008 sales including growth on existing contracts
Backlog is Diversified and Growing
Summary
Multi-modal strategy validated by strong
customer momentum
Continue to build expertise with talented,
experienced professionals
Capabilities to address most viable potential
biometric markets
Address ID management challenges with
customized solutions
Strong organic revenue, significant decrease of
operating expenses and profit growth of 20%
Increase growth margin with emphasis on
software and Intellectual Property
Defined Financial Terms
Adjusted EBITDA
L-1 Identity Solutions uses Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adding
back to net income (loss) interest, income taxes, depreciation, amortization, and stock-based compensation expense. Adjusted EBITDA is
provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes Adjusted EBITDA is
useful to help investors analyze the operating trends of the business before and after the adoption of SFAS 123(R) and to assess the
relative underlying performance of businesses with different capital and tax structures. Management believes that Adjusted EBITDA
provides an additional tool for investors to use in comparing L-1 Identity Solutions financial results with other companies in the industry,
many of which also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as amortization,
depreciation and stock-based compensation, as well as non-operating charges for interest and income taxes, L-1 Identity Solutions can
evaluate its operations and can compare its results on a more consistent basis to the results of other companies in the industry.
Management also uses Adjusted EBITDA to evaluate potential acquisitions, establish internal budgets and goals, and evaluate
performance.
L-1 Identity Solutions considers Adjusted EBITDA to be an important indicator of the Company's operational strength and performance of
its business and a useful measure of the Company's historical operating trends. However, there are significant limitations to the use of
Adjusted EBITDA since it excludes interest income and expense and income taxes, all of which impact the Company's profitability, as well
as depreciation and amortization related to the use of long term assets which benefit multiple periods. L-1 Identity Solutions believes that
these limitations are compensated by providing Adjusted EBITDA only with GAAP net income (loss) and clearly identifying the difference
between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss)
presented in accordance with GAAP. Adjusted EBITDA as defined by the Company may not be comparable with similarly named measures
provided by other entities. A reconciliation of GAAP net income (loss) to Adjusted EBITDA is included in the press release for first Quarter
2008 Financial results. A reconciliation of Adjusted EBITDA to net income for the historical periods has been included in the press
releases for the respective periods. No reconciliation has been presented for Pro Forma LTM 6/30/08 since the net income for such period
is not available.
Defined Financial Terms
Unlevered Free Cash Flow
Unlevered Free Cash Flow represents cash flow from operating activities, plus interest expense less capital expenditures L-1 believes
unlevered free cash flow is a useful measure for assessing the company's liquidity, meeting its debt service requirements and making
acquisitions. Unlevered free cash flow is not necessarily comparable to similar measures used by other entities and is not a substitute for
GAAP measures of liquidity such as cash flows from operating activities
Backlog
Backlog represents sales value of rm orders for products and services not yet delivered and, for long term executed contractual
arrangements (contracts, subcontracts, and customer commitments), the estimated future sales value of estimated product shipments,
transactions processed and services to be provided over the term of the contractual arrangements, including renewal options expected to
be exercised. For contracts with indenite quantities backlog reects estimated quantities based on current activity levels. Backlog will not
necessarily result in future revenue because rm orders may be cancelled, rm orders from governmental agencies may remain subject to
funding options, renewals may not be exercised by the customers, and the quantities ordered, the volume of transaction processed or
services to be provided may be less than estimated. Backlog includes deferred revenues. Contractual arrangements could be cancelled by
our customers without penalty for lack of performance. Contracts terminated by our customers for convenience generally would result in
recovery of actual costs incurred and prot, if any, on work performed through the date of cancellation
