Realignment aims to better position Identix

Thursday, April 1, 2004

MINNETONKA, Minn. - Biometric technology company Identix has made yet another move to streamline operations and focus solely on the biometrics market.

In late February, the company eliminated 30 full-time positions, a reduction that is expected to save the company more than $3.5 million beginning in 2005. The move followed the recent sale of its project management services subsidiary to Alion Science and Technology Corp. for $11.25 million and its acquisition of Sylvan Identix Fingerprint Centers, a joint venture between Identix and Sylvan Learning Centers.

The changes are part of the company’s new go-to-market strategy, according to Frances Zelazny, spokesperson for Identix. She said the eliminated positions came from a variety of departments and several positions had become duplicated as a result of Identix’s acquisition of Sylvan Identix Fingerprint Centers. The eliminated positions accounted for about six percent of the company’s workforce, which now numbers less than 500 people.

According to a report by Brian Ruttenbur, an analyst with Morgan Keegan & Co., Identix’s acquisition of the Sylvan Identix Fingerprint Centers was a “continuation of the company’s strategic plan to focus on biometric products and products related services that provide the strongest growth opportunities.”

Identix paid $875,000 to buyout Sylvan Learning Centers stake in the joint venture, but it is expected to generate $6 million in additional annual revenues. The business has been renamed Identix Identification Services and offers corporations and government agencies fingerprint background checks through the FBI using its 10-print biometric capture and transmission service.

The sale of Identix’s project management services subsidiary, Identix Public Sector, to Alion Science and Technology Corp., immediately helped to strengthen Identix’s balance sheet, according to company officials. Alion paid $8.85 million and expects to receive another $1.1 million in equal installments from Alion over the next four months.

Additional funds have also been retained in escrow and on Identix’s balance sheet, as part of arrangements.

Zelazny said as a result of these changes, company officials expect to hit between $50 and $60 million in revenue by the end of the year.