EXHIBIT 99.1
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L-1 IDENTITY SOLUTIONS REPORTS FIRST QUARTER 2007 FINANCIAL RESULTS
STAMFORD, CONN. -- MAY 9, 2007 (BUSINESS WIRE)-- L-1 Identity Solutions, Inc.,
(NYSE:ID), a leading supplier of identity solutions and services, today
announced financial results for the first quarter ended March 31, 2007. In the
quarter, the Company was successful in receiving awards from the Department of
Defense (DoD), the Department of Homeland Security (DHS), the Canadian
government, State and local agencies and international customers.
Revenue for the first quarter of 2007 was $70.0 million compared to $23.4
million in the first quarter of 2006, an increase of $46.6 million. Of the
increase, $43.3 million represents businesses acquired after March 31, 2006 and
$3.3 million represents organic growth.
Gross margin on a GAAP basis in the first quarter of 2007 was 25 percent,
compared to 27 percent in the first quarter of 2006, reflecting the increase in
amortization of intangible assets related to acquisitions. Excluding the impact
of acquisitions gross margin in the 2007 first quarter was 32 percent.
Adjusted EBITDA for the first quarter was $5.7 million compared to $2.5 million
in the same period in the prior year, reflecting the impact of acquisitions,
organic sales growth and synergies realized during the year.
Net loss in the first quarter amounted to $8.8 million, or $0.12 per diluted
share compared to a net loss of $2.2 million, or $0.07 per diluted share in the
first quarter of 2006. The results were impacted by increased operating expenses
related to the acquisitions, amortization of intangible assets, as well as
increases in stock-based compensation, income taxes and interest expense.
"The Company performed as expected during our first quarter and we expect
momentum to accelerate as we progress through the year, as evidenced by the
recently announced $71 million HIIDE award. This award is an important milestone
for L-1 that further validates our multi-modal biometric strategy," said Robert
V. LaPenta, Chairman, President and CEO of L-1 Identity Solutions. "We intend to
continue to grow the Company organically and through acquisitions in order to
provide the most advanced and complete solutions available to solve our
customers' identity challenges. This strategy, along with our strong industry
partnerships, also serves to ensure we can effectively compete and win important
federal identity programs, both here and abroad."
First quarter revenue of $70.0 million together with scheduled shipments from
the Company's currently existing backlog of approximately $523.0 million
represents about 80 percent of the Company's 2007 revenue target.
RECENT AWARDS
The Company believes that demand for multi-biometric recognition technology
continues to increase. L-1 had several key wins including the ABIS (Automated
Biometric Identification System) program for the DoD as part of the Northrop
Grumman team. The DoD ABIS system will become the biometric repository for all
identification types that links to the intelligence community and civilian
agencies. The system is initially expected to support up to 2.4 million finger,
face, palm and iris records, and a lesser number of unsolved latent prints. L-1
also was selected to implement MEPCOM (U.S. Military Entrance Processing
Command), a biometric identification system to uniquely identify and track
military applicants throughout the enlistment process. Over time, the program is
expected to build a watch-list of known professional test takers and "ringers"
to help eliminate military enlistment fraud.
In the area of document authentication and credentialing, L-1 received an order
from the Canadian government for $2.8 million in document authentication readers
with Smartchip / RFID (Radio Frequency Identification) capabilities from
Viisage. L-1 also received a DHS Science and Technology (S&T) Division contract
award to develop facial recognition technology for the FAMS Tactical Information
Sharing System (TISS).
At the State level, the Texas Department of Public Safety purchased more than
100 criminal booking systems totaling in excess of $2.5 million to incorporate
high-quality finger-based biometric images with integrated video mug shot
capabilities.
This year, L-1 has received over $2.7 million in orders from the DHS for the
TP-3000 live scan device. The TP-3000's are used at border sites to capture
fingerprints for quick and accurate searches against the FBI IAFIS (Integrated
Automated Fingerprint Identification System) and DHS IDENT (the primary
repository of biometric information held by DHS). Orders from DHS since the
inception of the program exceed $12.0 million.
After the end of the first quarter, L-1's facial and iris recognition algorithms
achieved tier one performance results in both the Facial Recognition Vendor Test
2006 (FRVT 2006) and the Iris Challenge Evaluation (ICE 2006) sponsored by the
National Institute of Standards and Technology (NIST). L-1's facial recognition
technology was the best "all around" performer and its iris recognition
algorithms were two of the top three performers. Additionally, L-1's latest iris
algorithm demonstrated unprecedented and unparalleled matching speed, almost 50
times faster than its nearest competitor, at comparable accuracy.
GROWTH STRATEGY INCLUDES CONTINUED FOCUS ON ACQUISITIONS
Acquisitions form an important element of the L-1 growth strategy with a focus
today on adding high- growth complementary businesses to the existing portfolio.
The acquisition of Canadian-based ComnetiX Inc. was completed on February 21,
2007, for $17.8 million. It creates a strong presence for L-1 in the Canadian
market and adds a complementary base of customers for L-1's fingerprint products
and services portfolio at the State and local level, including New York, Georgia
and California.
The Company's pending acquisition of Advanced Concepts, Inc. (ACI), announced on
May 1, 2007 is expected to add important high-level network, engineering and
security capabilities to L-1, as well as provide important size and synergies in
L-1's human intelligence activities. The acquisition of ACI is expected to close
at the end of the second quarter.
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FORWARD LOOKING FINANCIAL EXPECTATIONS
The Company expects revenue for the second quarter ending June 30, 2007 of
between $90.0 and $92.0 million with Adjusted EBITDA of $17.0 to $19.0 million,
gross margin of 36 percent and EPS in the range of $0.07 to $0.09. For the
full-year ending December 31, 2007, revenue is now anticipated to be $365.0 to
$375.0 million, assuming the ACI acquisition is completed by the end of the
second quarter. The Company expects gross margin to be slightly higher than 35
percent and expects Adjusted EBITDA of between $64.0 to $68.0 million and EPS to
be approximately $0.10 to $0.15.
CONFERENCE CALL INFORMATION
The Company will host a conference call with the investment community to discuss
its operating results and outlook beginning at 4:00 p.m. (ET) today. The
conference call will be available live over the Internet at the investor
relations section of the L-1 website at www.L1ID.com. To listen to the
conference call, please dial 866-406-5408 using the passcode 8661520. For
callers outside the U.S., please dial 973-582-2770 with the passcode 8661520. A
recording of the conference call will be available starting one hour after the
completion of the call. To access the replay, please dial 877-519-4471 and use
passcode 8661520. To access the replay from outside the U.S., dial 973-341-3080
and use passcode 8661520.
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 enclosed schedule.
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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 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.
ID-L
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 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 Form10-K for the
year ended December 30, 2006. L-1 Identity Solutions expressly disclaims any
intention or obligation to update any forward-looking statements.
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Reconciliation of Adjusted EBITDA To Net Income
(unaudited)
(in millions)
QUARTERS ENDED
HISTORICAL PERIODS MARCH 31, 2007 MARCH 31, 2006
- -------------------------------------- ------------------ -------------------
Net Loss $ (8.8) $ (2.2)
Add:
Depreciation and Amortization 9.0 4.1
Interest (income) Expense 1.7 (0.7)
Provision for Income Taxes 1.1 0.6
Stock Based Compensation 2.7 0.7
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$ 5.7 $ 2.5
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QUARTER ENDING YEAR ENDING
PROSPECTIVE PERIODS JUNE 30, 2007 DECEMBER 31, 2007
- -------------------------------------- ------------------ -------------------
Net Income $ 4.0 - 6.0 $ 6.5 - 10.5
Add:
Depreciation and Amortization 8.0 37.0
Interest (income) Expense 2.0 7.5
Provision for Income Taxes 1.0 4.0
Stock Based Compensation 2.0 9.0
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$ 17 to $19 $ 64 to $68
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CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
(UNAUDITED)
MARCH 31, 2007 DECEMBER 31, 2006
- -------------------------------------- ------------------ -------------------
Current Assets:
Cash and cash equivalents $ 4.1 $ 5.0
Accounts Receivable 54.1 61.5
Other Current Assets 18.2 15.5
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Total Current Assets 76.4 82.0
Property and Equipment, net 20.0 19.9
Goodwill and net Intangible Assets 1,140.5 1,121.5
Other Assets 4.7 3.8
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Total Assets $ 1,241.6 $ 1,227.2
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Liabilities & Shareholders' Equity
Current Liabilities:
Accounts Payable and Accrued
Expenses $ 54.0 $ 54.8
Current Deferred Revenue 11.7 10.3
Other Current Liabilities 4.9 5.2
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Total Current Liabilities 70.6 70.3
Deferred Tax Liability 5.4 4.4
Deferred Revenue 4.0 3.7
Long-Term Debt 98.0 80.0
Other Liabilities 1.0 1.7
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Total Liabilities 179.0 160.1
Shareholders' Equity 1,062.6 1,067.1
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$ 1,241.6 $ 1,227.2
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Condensed Consolidated Statements of Operations
(in millions, except per share amounts)
(unaudited)
THREE THREE
MONTHS ENDED MONTHS ENDED
MARCH 31, 2007 MARCH 31, 2006
- -------------------------------------- ------------------ -------------------
Revenue $ 70.0 $ 23.4
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Cost of Revenues:
Cost Of Revenues 46.2 15.2
Amortization of Purchased Intangible
Assets 6.5 1.8
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Total Cost of Revenues 52.7 17.0
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Gross Profit 17.3 6.4
Operating Expenses:
Sales and Marketing 5.5 2.4
Research and Development 4.6 1.6
General and Administrative 12.8 4.6
Amortization of Purchased Intangible
Assets 0.4 0.1
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Total Operating Expenses 23.3 8.7
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Loss from Operations (6.0) (2.3)
Interest Income (expense), net (1.7) 0.7
Loss before Income Taxes (7.7) (1.6)
Provision for Income Taxes (1.1) (0.6)
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Net Loss $ (8.8) $ (2.2)
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Net Loss per Basic and Diluted Share $ (0.12) $ (0.07)
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Weighted Average Basic and Diluted
Shares Outstanding $ 72.5 $ 29.0
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SOURCE: L-1 Identity Solutions, Inc.
L-1 Identity Solutions, Inc.
Doni Fordyce, 203-504-1109
dfordyce@L1ID.com
Copyright Business Wire 2007
News Provided by COMTEX
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