L-1 Identity Solutions Reports Second Quarter 2008 Financial Results

STAMFORD, Conn. , July 30 /PRNewswire-FirstCall/ -- L-1 Identity Solutions, Inc., (NYSE: ID), a leading provider of identity solutions and services, today announced financial results for the second quarter and six months ended June 30, 2008...


STAMFORD, Conn. , July 30 /PRNewswire-FirstCall/ -- L-1 Identity Solutions, Inc., (NYSE: ID), a leading provider of identity solutions and services, today announced financial results for the second quarter and six months ended June 30, 2008 .

Revenue for the second quarter of 2008 was $145.0 million compared to $90.1 million in the second quarter of 2007, an increase of $54.9 million or 61 percent. Organic growth in the quarter was 22 percent and reflects strong demand for credentialing solutions, continued growth from intelligence service business and increases from enrollment and background screening services.

Gross margin for the second quarter 2008 was approximately 33 percent compared to 31 percent in the second quarter of 2007. Gross margin improvements reflect higher revenues from biometric solutions and the impact of improved leverage.

Adjusted EBITDA for the second quarter of 2008 improved to $22.5 million from $14.1 million for the same period in the prior year, an increase of $8.4 million, or 60 percent, reflecting the impact of organic sales growth, acquisitions and improved operating leverage. Second quarter 2008 operating expenses as a percentage of revenue decreased to 27 percent compared to 28 percent in the second quarter of 2007.

The Company reported second quarter net income of $3.2 million, or $0.04 per diluted share compared to a net loss of $1.2 million, or ($0.02) per diluted share in the second quarter of 2007 based on weighted average diluted shares outstanding of 74.8 million in the second quarter of 2008 compared to 71.3 million in the prior year period. Included in the Company's second quarter net income are expenses of $13.7 million for non-cash items related to the amortization of intangibles, stock-based compensation and depreciation, compared to $11.9 million in the second quarter of 2007.

"I am pleased with the results for the quarter and applaud the efforts of our divisions in working together to help us achieve our financial targets for the first six months of 2008," said Robert V. LaPenta , Chairman, President and CEO of L-1 Identity Solutions. "Strong momentum from the first half of the year, fueled by an excellent pipeline of biometric division opportunities, intelligence contracts and secure credentialing solutions as evidenced by the recently expanded U.S. Passport Card contract and a new award for the Border Crossing Card, provide positive momentum for the second half of 2008."

Year to Date Results for the Six Months Ended June 30, 2008

Revenue for the first six months of 2008 was $260.9 million compared with $160.1 million for the same period in the prior year, representing an increase of $100.8 million. The Company's organic revenue grew by 21 percent for the first half of 2008 compared to the first half of 2007.

Gross margin for the first six months of 2008 was 30 percent, compared to 28 percent in the same period in 2007 with improvements reflecting higher revenues from biometric solutions and the impact of improved leverage.

Adjusted EBITDA for the first six months of 2008 was $35.2 million compared to $19.8 million for the same period in 2007, representing a 78 percent increase. The increase in Adjusted EBITDA for the first six months of 2008 reflects the impact of higher revenues and improved operating leverage. Operating expenses as a percentage of revenues decreased to 27 percent in the first six months of 2008 from 31 percent in the first six months of 2007.

For the first six months ended June 30, 2008 , the Company reported a net income of $1.3 million, or $0.02 per diluted share compared to a net loss of $10.0 million, or ($0.14) per diluted share in the first six months of 2007. Diluted weighted average shares outstanding increased to 73.8 million from 71.9 million in the prior year. Included in the company's six months net income for 2008 and net loss for 2007 are approximately $26.5 million and $23.7 million, respectively, of expenses for non-cash items related to the amortization of intangibles, stock-based compensation and depreciation.

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