More today from Westergaard:
August 4, 1998
WBN Looks At the Whys and Wherefores of Identix' (IDX 7 3/4
AMEX) Fourth Quarter
IDX reported 4QJun98 last week. Total revenues up 31%, product revenues
(which is what's really important) up 21%, gross profit on product revenues up
fractionally to 51%, and SG&A down from 24% to 20.4%. The decline in SG&A --
almost 4 points taken out -- is an astonishing achievement and says everything
about how far IDX's internal restructuring has advanced!!!
CEO Fowler and CFO Scullion conducted a conference call on the 28th. Lots of
valuable inputs. Our rough notes:
Legal expenses down sharply for FY99 as patent case is out of the way.
Sylvan joint venture operating now in 10 U.S. cities.
Strategic relationships expanded during year with biggies: Computer
Associates, NEC Technologies, Sagem Morpho.
ANADAC's services business primarily to government agencies, up 68% to
$44mm, is now 15% commercial. Focus on low gross margins for this
business loses sight of co's strategy to bid accepting 3% pass through on
direct labor to gain market share, margins will come later. They'd rather take
3% on a growing $44mm business than 8% on a static $15mm.
Alliances: very active in various negotiations right now, Oracle still in pilot, co
surprised to learn how many of its customers already use Oracle software.
Commercial biometric: Indicator has rushed in with $99 product, not secure,
no encryption, software for analysis of fingerprint resides on p.c. which is no
better than a password. When Compaq is ready to be serious about this
market, IDX will be there.
Co has 40-45 salespeople worldwide.
INS (Immigration and Naturalization Service): Co has delivered what's been
ordered and has been paid. Awaiting RFP (Request for Proposal) for balance
of the order which WBN estimates at circa $20mm based on last year's INS
news conference in Baltimore (see WBN-IDX "News Analysis").
Re debate over pattern recognition vs minutia alogrithm, IDX believes the
former provides greater security and will prevail. Esoteric stuff, over our head.
More to come.
Chicago O'Hare Pilot Project: Very encouraging. Can now know everything
that goes on a plane and who put it there. FAA and Air Force pleased. Large
opportunity for Oracle and IDX to do business together -- not explained.
Smart Cards: Coming. Note American Express, Visa announcement last
week to develop a worldwide, open standard. The venture -- Proton World
International -- will incorporate technology spun off from Banskaya of
Belgium. Will include fingerprint recognition? WBN thinks so.
Questions??? Blah blah blah blah blah!!! The IDX beat goes on in nooks and
crannies throughout the world. Every day in every way. It's the ubiquitous
little train that could. I think I can. I think I can. I know I can. I know I can.
Choo choo choo choo choo choo!!! Amazing, amazing. |
