Exhibit 99.2
FOR IMMEDIATE RELEASE
CONTACT:
- --------
Doni Fordyce
L-1 Identity Solutions
203-504-1109
dfordyce@L1ID.com
L-1 IDENTITY SOLUTIONS AWARDED CONTRACT FOR $71 MILLION IN HIIDE BIOMETRIC
RECOGNITION DEVICES WITH THE U.S. ARMY
Company Adjusts Financial Expectations for First Quarter and
First Half of 2007 and EPS for the year
STAMFORD, CT. - APRIL 12, 2007 - L-1 Identity Solutions, Inc. (NYSE: ID)
announced that its wholly-owned subsidiary, SecuriMetrics, Inc., has been
awarded a requirements contract that may receive awards totaling a maximum of
$71 million from the U.S. Department of Defense (DoD) for the sale of HIIDE
(Handheld Interagency Identity Detection Equipment) biometric recognition device
and other related software. The contract is with the U.S. Army's Space Program
Office (ASPO) which supports the Tactical Exploitation of National Capabilities
Program (TENCAP). The period of performance under the contract is 24 months and
the first task order under the contract, valued at $23.7 million, has been
received by SecuriMetrics. Shipments under the first task order will begin
during the Company's second quarter ending June 30, 2007.
"This contract further validates our belief that multi-modal (finger, face and
iris) recognition capabilities are the new standard for identity solutions and
that the federal government is leading the way in this fundamental shift and
adoption," said Robert V. LaPenta, L-1 Identity Solutions Chairman, President
and Chief Executive Officer.
Mr. LaPenta also explained, "Although we had forecast this contract to be
awarded during our first quarter ending March 31, 2007, the first task order is
larger than we expected. This provides us with increased confidence in achieving
our sales and profit objectives for the year. We anticipated sales of
approximately $5 million of HIIDE shipments in the first quarter that will now
be recognized in our second quarter, and the additional shipments will improve
results for the first half of the year."
The Company previously provided financial expectations for the second quarter
and first half of the year ending June 30, 2007 on its annual earnings call, a
transcript of which was filed with the Securities and Exchange Commission on
February 13, 2007. The Company is now raising revenue expectations for the first
half of the year ending June 30, 2007 to $158 to $162 million compared to
previous expectations of $153 to $155 million. Adjusted EBITDA (as defined
below) for the first half of 2007 is expected to be between $21 to $25 million,
compared to previously expected Adjusted EBITDA of $20 to 24 million. Earnings
Per Share (EPS) for the first half of 2007 is now expected to be in the range of
a loss of ($0.01) to ($0.05) per share compared to original expectations of a
loss of ($0.03) to ($0.07) per share.
The Company had previously forecasted revenue for the first quarter ending March
31, 2007 to be $73.0 to $75.0 million with Adjusted EBITDA of $9.0 to $11.0
million with a loss per share in the range of ($0.04) to ($0.06). Due to the
delay in the award of the contract, the Company's revenue for the first quarter
is now expected to be $68 to $70 million with Adjusted EBITDA of $4 to $6
million with a loss per share in the range of ($0.08) to ($0.12). As previously
announced, the Company will report its first quarter financial results on May 9,
2007.
The Company expects revenue for the second quarter ending June 30, 2007 of
between $90 and $92 million with Adjusted EBITDA of $17 to $19 million and EPS
in the range of $0.07 to $0.09. The aforementioned expectations include revenues
from ComnetiX, Inc. (which was acquired by the Company in February 2007) of $1
million for the first quarter ending March 31, 2007 and $4 million for the six
month period ending June 30, 2007. These estimates were not included in the
Company's previous financial expectations.
The Company continues to expect revenue for the year ending December 31, 2007 to
be $340 to $350 million. The Company expects gross margin to be slightly higher
than the 35 percent previously forecast and therefore expects Adjusted EBITDA to
improve from the previous estimate of $58 to $62 million to $60 to $64 million
and EPS to approximate $0.10 to $.14 for the year versus the previously forecast
$0.08 to $0.12.
MULTI-MODAL MOBILE BIOMETRIC RECOGNITION DEVICE
HIIDE is the world's first hand-held biometric identification device that can
enroll, identify or verify subjects using any of the three primary biometrics:
iris, finger, face.
The device can operate in extreme and rugged mobile environments, as well as on
a desktop connected to a host personal computer or network. This makes it ideal
for mobile identification of individuals on the battlefield, at border
checkpoints, in airports, in detention centers, and for checking individuals
against known watch lists in addition to naval and coast guard applications.
ADJUSTED EBITDA
Adjusted EBITDA is provided to investors to supplement the results of operations
reported in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). 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, taxes, depreciation, amortization,
and stock-based compensation expense. Management believes Adjusted EBITDA is
useful to help investors analyze the operating trends of the business before and
after the adoption of FAS 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 trend. 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 expected net income to expected Adjusted EBITDA referred to
in this press release follows:
Three Months Ending Three Months Ending Six Months Ending Year ending
March 31, 2007 June 30, 2007 June 30, 2007 December 31, 2007
Net Income $(9.0) to $(7.0) $4.0 to $6.0 $(5.0) to $(1.0) $6.0 to $10.0
Interest Expenses 1.0 2.0 3.0 5.0
Income Tax Expense 1.0 1.0 2.0 4.0
Depreciation and Amortization 9.0 8.0 17.0 36.0
Stock Compensation Expense 2.0 2.0 4.0 9.0
---------------- ---------------- ---------------- ----------------
Adjusted EBITDA $4.0 to $6.0 $17.0 to $19.0 $21.0 to $25.0 $60.0 to $64.0
---------------- ---------------- ---------------- ----------------
ABOUT L-1 IDENTITY SOLUTIONS
L-1 Identity Solutions, Inc. (NYSE: ID), together with its portfolio of
companies, offers a comprehensive set of products and solutions for protecting
and securing personal identities and assets. Leveraging what are believed to be
the industry's most advanced multi-modal biometric platform for finger, face and
iris recognition, our solutions provide a circle of trust around all aspects of
an identity and the credentials assigned to it -- including proofing,
enrollment, issuance and usage. With the trust and confidence in individual
identities provided by L-1 Identity Solutions, government entities, law
enforcement and border management agencies, and commercial enterprises can
better guard the public against global terrorism, crime and identity theft
fostered by fraudulent identity. L-1 Identity Solutions is headquartered in
Stamford, CT. For more information, visit www.L1ID.com.
####
FORWARD LOOKING STATEMENTS
This news release contains forward-looking statements that involve risks and
uncertainties. Forward-looking statements in this press release and those made
from time to time by L-1 Identity Solutions 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 DoD's willingness and ability
to purchase the estimated procurement of HIIDE devices under the ASPO HIIDE
contract, which has no guaranteed minimum value, 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 L-1 Identity Solutions, including the Company's Annual Report on
Form 10-K for the year ended December 31, 2006. L-1 Identity Solutions expressly
disclaims any intention or obligation to update any forward-looking statements.