HANDWRITING ON THE WALL: FINGERPRINT TECHNOLOGY BUYING SURGES IN 1995

ANAHEIM, Calif., May 30, 1995 -- In one small corner of Richard Giles'
Anaheim office, taped to the wall, there is a hand-written scoreboard of
current bid opportunities and contract awards for automated fingerprint
identification systems (AFIS).

As you scan closer to the bottom of the 18-by-36 inch sheet, the writing
gets smaller and there is less space between the lines. The year's
calendar is filling fast, indicating an unusual level of purchasing
activity among the world's law enforcement agencies.

As president and chief executive officer of Printrak International, Inc.,
the world's leading supplier of large-scale fingerprint processing
equipment, Giles is familiar with the cyclical nature of his business. But
the 1995 activity is approaching extraordinary proportions, even for an
up-cycle year. The general industry consensus is that the administrative
requirements of recent anti-crime legislation in the U.S. are a
behind-the-scenes influence. And more Eastern European nations are turning
to the U.S. for technology. But Giles has another opinion.

"For the first time in 20 years, there is something new to buy," he says,
"something that advances the state-of-the-art, something that enables
agencies to think of more efficient and more effective ways to run their
operations."

It's easy for Giles to take such a position, since Printrak is the company
that has developed the technology that is forcing a paradigm shift on the
industry. The shift is not only in how law enforcement records are
processed and managed, it also incorporates the open systems philosophy
that has fueled the growth of commercial information processing over the
past decade.

"It's a one-two punch that has really shaken up this business," he said.
"For the first time, agencies have the tools to perform fingerprint
matches in real time, while integrating different types of information.
The second punch is the ability to do these tasks with what is essentially
off-the-shelf products."

The effects of Printrak's achievements are seen on Giles' scorecard. Other
vendors are, in some cases, being disqualified because they cannot meet
the emerging model of performance specifications. Those that can meet the
criteria must charge for hundreds of hours of custom engineering, which
gives Printrak an unmistakable bidding advantage.

The company holds the longest winning streak in the industry, with most
recent contract awards from the Czech Republic, Guam, Montreal, Tennessee,
Nebraska, Louisiana and the U.S. Secret Service.

Revenues for the company's fiscal 1995 year, which ended March 31, were in
the $32 million range with a $4 million profit, a dramatic improvement
from the low point of $14.5 million in 1991, the year Printrak executives
assumed the money-losing operation from London-based De La Rue Group.
Revenues from many of the items on Giles' scorecard are expected to yield
up to 20 percent higher revenues in fiscal 1996.

Turning Point

The financial turnaround, which took place during the three years preceding
the AFIS technology revolution, earned Giles and Printrak Orange County's
1994 Entrepreneur of the Year Award in the turnaround category. Most of
the decisions in those years were financial, he recalls. When he acquired
control of Printrak in 1991 from De La Rue Group, it had $90 million in
losses on the books, and an outlook of losing another $2 million every
month it stayed in business.

"There were a lot of problems," Giles says, "but the list was headed by
trying to fix technical problems that wouldn't have been there had we not
agreed to unreasonable requests. Worse yet, the problem seemed to be
different for every customer, which required more technical specialists
than we could afford."

Giles learned an important point from that experience. "Most of the
technical problems were the result of promising customers some special
product feature that stretched our resources to the breaking point. We
don't do that anymore."

Learning to say "no" launched the company on its financial turnaround and
enabled it to invest its limited R&D funds in a direction that has
elevated the company to world leadership in automated fingerprint
identification technology.

As a result, Printrak has become an evangelist for industry standard
equipment and procedures. Prior to 1995, all fingerprint systems were
designed with custom hardware and software. "They were essentially
centralized batch processing systems, and a 24-hour turnaround was an
acceptable standard," according to Giles. "Some agencies sent prints by
mail to the computer center and got the results back the same way."

Indeed, Printrak stuck to its resolve and developed a more advanced
general-purpose system that is expected to capture from 50 percent to 70
percent of 1995 contract awards. "We're committed to designing-out
complexities that inhibit widespread use of fingerprint technology, and in
the process we're cutting the cost by as much as 50 percent," Giles said.

The Next Generation

The new generation of equipment developed by Printrak promises a turnaround
of five minutes or less for a process that requires four billion computer
operations at the workstation alone. In addition to advanced workstation
microprocessors, the company's 1995 innovations include a parallel
processing architecture capable of supporting a ten-fold increase in
search and match operations, and mass storage subsystems that retrieve
records up to 1,000 times faster than the previously-used optical disk
drives.

The entire architecture is scalable, which allows small agencies to buy
into the concept at a very low cost and expand capacity in increments. The
UNIX operating system and commercial database management system facilitate
programming enhancements that were prohibitively expensive before. Among
those enhancements is the ability to network with other criminal records
systems to gain access to photos, text, DNA analyses, voiceprints and
other types of information -- all from one workstation.

Giles admits to having been worried about competition when he assumed
control of the company. "Very substantial firms were entering the market
during our weakest period, and I shudder to think how easily we could have
been squashed."

However, he now offers the opinion that those companies were lured by an
overestimate of market size and the prospect of selling thousands of hours
of custom engineering time, rather than investing in new technologies.

With a positive financial position and a return to technology leadership,
Giles no longer has to rely solely on luck. "We have a very strong cash
position and can now get the credit we need to post performance bonds of
any size needed," he said. "Our new products are capturing more than 50
percent of the market, and we have the confidence of our customers."

A Cultural Revolution

Yet there is another Printrak turnaround story to be told. The most
significant thing to happen at Printrak in the past five years is a
culture change, according to Giles. "The company used to be driven by
getting contracts, at any cost," he said. "These days, we will walk away
from a deal rather than commit to something that puts us at financial or
technical risk."

The new culture focuses on selling standard products. While the new
Printrak Series 2000 family of products still involves a certain amount of
customized services and programming, it's a lot easier and far less
expensive.

One new product -- called live-scan -- is truly in line with the direction
envisioned by Giles. Live-scan is an inkless intelligent terminal that
records prints by optically scanning a person's fingers and hands. This
type of product is considered fundamental to Printrak's distributed
processing philosophy, which extends advanced technology from a
centralized computer room to any number of remote facilities that can use
fingerprints as an identification mark.

Firmly situated in the law enforcement community, the AFIS concept is
becoming increasingly appealing to other markets, including public welfare
agencies, social service programs, healthcare administration, immigration
processing and gun control. "I can see a potential for live-scan to become
an assembly line product," Giles said, "and that is a totally foreign
concept to our competitors."

Printrak International Inc
1250 North Tustin Ave
Anaheim, CA 92807
714-666-2700,  fax 714-666-1055

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