BEARS
4. Viisage Technology Inc.

By Ronald Rosenberg, Globe Staff, 05/18/99

est known as the provider of Massachusetts' digital-photo identification drivers' licenses (beating out arch-rival Polaroid Corp.), Viisage Technology has endured a rocky road that has included a corporate restructuring, a change in top management, and a downwardly spiraling stock price.

Formed in 1996 as a spinoff of defense contractor Lau Technologies Inc. of Littleton, Viisage has watched its shares plummet from 20 in the summer of 1997 to 53/8 in March 1998, sliding further to an all-time low of 5/8 during the year before creeping up to 1 1/16 by March 31, 1999.

The company's problems stem largely from its size: a small company competing in a business in which the customers are big bureaucracies - US states and foreign countries.

Individual states want drivers' license programs, but the process of winning the contract is arduous. It usually requires significant upfront investment, which bigger rivals such as Polaroid and NBS Imaging can handle during the long procurement process.

Similarly, foreign governments looking to create identification and authorization cards are often slow to act and are sometimes unpredictable.

Viisage recently restructured the company into three divisions under Thomas J. Colatosti, who recently succeeded Robert Hughes as president and chief executive.

Last year Viisage reported annual revenues of $16.3 million and a $3.3 million loss, or 41 cents per diluted share, before one-time charges and accounting changes, compared with 1997 revenues of $29.4 million and profit of $1.9 million, or 22 cents per diluted share.

The road has brightened slightly for Viisage. The company recently won an extension to its five-year Massachusetts drivers' license program. Viisage receives 77.5 cents for each digital-photo license.

This story ran on page D23 of the Boston Globe on 05/18/99.
© Copyright 1999 Globe Newspaper Company.