Modified | DDT |>| MON.SEP,980921,10:57-4 | CoSy/Home ; CoSy/Current © Coherent Systems Inc .

Westergaard9809
 
  ============================: THU.SEP,980917 :============================
WESTERGAARD/MALLON WALDORF  SECURITY2001  Conference .

 I got to :
 DigitalDescriptor(OTC-BB:DDSI) 
 Identix(AMEX:IDX) 
 Keynote RichardClarke :  Regan Asst sec terrorism .
 Clinton just appointed National Coordinator for Security , Infrastructure
 Protection and CounterTerrorism
 Kroll-O`Gara(NASD:KROG) 
 AmerSci&Eng(AMEX:ASE) 
 SAC.Tech(NASD:SACM) 

 |10:8| DigitalDescriptor(OTC-BB:DDSI) : RogerLudwig : Contactless
 fingerprint capture . %10 sec image , 10 sec process .
 Nail to nail around finger . repeatable .
 Minutia . No need for specialized Booking officer to roll prints .
 In process of getting FBI approval - have list of stds
 Computerized imaging tied to text . records mngt : Compu-Capture ,
 Compu-Sketch sold thru 5 regional DDSI Sales Offices . 190 reps .
 Mug shot system .
 22 record mngt Busn Partners . ~ Same price as contacting .
 >= 2000 FBI w only take electronic images , no paper
 Biometric ID mkt : | 36E3 x 25E3      |>| 9E8                 |#|
  Public 3yrs .  3E6 % yr | rev now
  SI-3000 ElecFileFolder : ODCB grab legacy text DBs & integrate w
 MugShot 'Electronic File Folders' syss . 30-40k $ |  .5E3 $ in 1st 6 mo .
  Sales thru mkting partners w own products . IBM selling w AS400s Global .
|10:29|
|11:6| Identix(AMEX:IDX)  RandyFowler
 ( Heard from BobFlaherty`s Equities conf : RayDirks pushed  ChicagoTitle )
|11:15| : AMEX:IDX  | Leader Biometrics by std #Units ,
 Biometric Imaging - Live-scan - Evolved into Criminal Justice Info Systems .
  Mng busn of identifying criminals or employees .
  BioSecurity  1 fingerprint personel .  Govt svcs .   AFIS .
  Total vertical soln .
  FBI ImageQualSpec acred. of Dig Biometrics .   ( IDX wins .8 of bids vs )
   in 29 Stahes & DC . 9 state contractors . Sole Fingerprint taker in IL .
   Just won Cook County - larger than NYC .
  NYC Cmnsr : Overrun overtime budget . IDX equip saved .5 time & reduced
  rejections .  UK constabularies finding same . guarentee 2hr chek time .
 Print DBs in NYC , Albany , WVa FBI .
 IL Background checks -- IL foster parent checks backlog .
 DennisCunningham , Prudential Securites asking knowledgable questions .
 Que growing by 50E3 print cards % day .  multiple rolled cards . .3 reject .
 Every Cop wants one .
 All Fed , state , gaming , investment employees are printed .
 Sylvan Learning Ctr supplys service .
 DB : history , images , booking , personnel
 On second generation machines + 24-7 support for .1 cost of machine .
 Invented Fingerprint reading .  now becoming commodity  .
  They biggest Biometric :  Developed pattern Recognition vs FBI minutia sys
 Uses : as Person silicon interactions replace Person-Person :
  Time&Attendenances . Australia eliminate .02 of payroll buddy punching .
  Turkish Parlement voting .
  Credit cards  , perhaps all Wefare systs using any sys use theirs
  DB , eg , Oracle , Computer Assoc - security .
  Physical access , Finc transaction accesss : Bank of Central Asia ( bought
  a lot & paid ) Bk of Cairo , Conavi Bank .
  E-Commerce : Dig
  TWA 800 had Cargo on passenger plane  - FAA pilot prog @ Ohare .
  Testing individual is who says they are : False rejection .01 - .02 . chk ,
   prob failing in 3 | .01 *
   In Law enforcemnt , 10k matchs on large DBs .
   Optical card : 4E6Byte storage .
  ANADC : Govt svcs .  40M$ & good growth since `91 .
  Sylvan/Identix - does Brokers tests & ID . in 10 Cities . All IL .
   , Just won CA dept Social svces . Sell machines - leased Sylvan -
   maintanance contract w Identix .

  Rev gro .51 last yr . | DonSwan : Unisys ? do some
   are profitable  Op Income  | .14  .04  .05 .02 .06 | 94 - 98
   Covering 50 countries . Divisionalized `97 .
   Challenge to have net grow w rev .
   Gross margind risen from .3 to .4 or better .
   Industry gro .4-5 % yr  | `95 `00 : 100M$  1B$ | expect $100M this yr .
   Last Qs : 16 - 21  on 52 79  M$ rev  | plan  : not public .
   Assets  35.9 , Debt 0  M$

   price  5+1%8  | Range  $12+3%8 - 4.5  |
     26E6 x 5.125 |>| 1.3325E8 | Mkt Cap .
 Operating in all segs ov value chains . |
|12:1| Dif frm comp here : have sales , products , 450 emplyees .
 Digital descriptors contactless -
  .60 - .7 of total ,  .9 of fingerprint
  Future : Eye scanning may go away not because bad , but intrusive . Swiss
  army didn`t line , Cook Cty liked but went Police went for finger prints
  for all .
  2nd gen out 2-3 yrs , | Street expects . .19 .20  $%share .
    .2  26E6 |>| 5200000 | r% 100E6  |>| 0.05  | net on sales .
 Marcos system is OEM working w Lockeed  . |
 Fingerprint record | 2 * 8 10 |>| 256 1024  | bytes
 Germany tried bunch of artifical fingers . |12:13|
|13:0| MarkHayes Sec2001 . JohnMallon intro JohnW : Kjakan Award - was given
 to Greenspan yrs ago . Norwegan WW2 . Given to RandyFowler IDX SanJose CA .
  Vision of company in 3-5 yrs : expect | .08 x 500E6 |>| 4E7
   40 x Earnings | 4E7 % 26E6 |>| 1.54 | % share | r x 40 |>| 61.54 stock
   price . Randy : This is for all those w just the right personality defects
   to be entrepreneurs .
 JohnM : Companies :
  JulesKroll : Legend : J&J blazing path of designating Security as industry .

 Keynote RichardClarke : Regan Asst sec terrorism .
 Clinton just appointed National Coordinator for Security , Infrastructure
 Protection and CounterTerrorism
 |13:13| CyberSecurity & CounterTerrorism :
  Near Future senario : US threated
  in Pursan gulf . as start to move , find logistic systems have been
  penetrated . Or systems controling Powergrids or Telecom , or Sabre .
  or Pager Satilites spinning out of control -- all have happend .
  Fragility of computer controled infrastructure : May decision to focus on
  Homeland defense . We only SuperPower . Noone W repeat Sadam style attack .
  Achilles heel : Manhattan , WDC . Vulnerable to multiple modes of attack .
 Create Homeland defense against : Chem & Bio weapons : Is there a theat ?
  Seren in Tokyo w tek learned off WWW . Chem Weapons worked , 1st resquers
  died . NYC is prepared . Cert State Terrorism Sponsers & weapon developers
  virtually same list .  May shifted 300E6 on 1st of 5yrs on home security
  . Congress agrees .
  Will : equip & train largest 125 Metro areas for detect & analyze for
   ChemBio attacks.  Civilian stockpile of specialized antidotes .
   Research in Recomb DNA etc to create antidotes for CW & BW agents .
  Powergrids , banking , etc if can access nets on public switch nets .
  Authorized small band of Hackers . achieve command of 4 comps in 3 days .
  National Command & control in Pentagon by EoWeek .
  Accused of trying to wasting tax money .
 Before WW2 , looking to improve WW1 aircraft power .
 Tek available WW . Bangalore or Ireland .
 Even Terrorists or Criminal Cartels : Demand Stop backing Israel , Stop
  fighting Cocaine .
 It is private systems which are main targets . How Feds build walls around
  them ? Work w Owners : red team attack - Vulnerablity assesment .
 SolarSunrise Attack - took ~ 3 days for most to recognize attack . AirForce
  caught . Navy & Army had to be pointed to evidence of breach ~ selfdetected
 Need R&D reading M lines of code finding trapdoors .
 NYTimes Monday - two yrs ago had hired security analyst - gave clean BoH .
 Established : info ctr w/in FBI . Joint Task Force w DoD .
 Asking for supliment 1.4 - 1.8 B rebuilding & Hardening embasies .
 Not waiting for PearlHarbor , ` think ahead of power curve .
 Have Idendified Threats . Believe are Real . Next war w not just be overseas
 Loose utilities as effectively as if bombed .  |13:43|
JW : 1M6 hits on Y2000.com . Blessing in disguise in forcing cleanout of old
 systems ? Share - Do both . Y2k is known threat . forced problem up past CIO
 to CEO & Board .
 Defense vs Offense . Are excersizing Offensive attacks on terrorist grps .
  Defense needs public awareness . Offense c
 Trapdoors put in during off-shore re-codeing ? may not be off-shore .
  Can only be found Line By Line . Are doing for selves .
 JamesMeyer JanneyMontgommery : TWA800 , Gore commission recomenditions ?
  Gov grps ordered to be done to extent resources available . abt 1.5 yrs
  behind .
JM : of 5y Plan how much private : most to state & local govts , suits ,
 detectors , etc . Orange Jello shut down FAA ctr in midwest . Also Medicines
 RandyFowler : other than trapdoors . password failures ? no . can run a
 dicitonary attack in no time at all . His on computer requires change every
 quarter . | Principal weakness ? far too much which should be on isolated
 LANs is on webs .
 Do we have enough spys ? Scores of times when Tek intell has saved amer
  lives . need both . |13:59|
|14:12| Kroll-O`Gara(NASD:KROG) : Risk Mitigation Company | Rev
 190E6 % 1400  |>| 135714.3  | rev % employ
 Armored Limos . Kroll - Asset searches
  not in Guard svc . Investigative : Wall St : was .1 of total Busn .
   400E6 % 17E6 |>| 23.53 | Mkt Cap % shr | , 3.2 M share new in May
 Violent crime |  400B$ losses from fraud . 6500 kidnapings in `96 .
  2900 casualties from terrorism .
 Tot WW Securitiy busn : 55E9$ | 3%4 guard svcs . | 55 x .25 |>| 13.75
 Fastest growth developing countries . PacRim , EastEurope .
  Armor HumVees .
  3 seg :  Investgations & inteligence - forensic audit - due Dili .
   Court ordered Monitoring of settlements . eg Gambino , LI Carters Assoc .
    Teamsters election .  Dade Cty Airport .  | Acqd Canadian investig acntin
     120 investigative acnts | 20M rev . see tremendous growth potential .
    Competitors ? Kahn Consulting NYC , LewFreedmon Miami , Big 5 Acntants .
   `97 , 3000 assignments up from 1200 in `92 .
   MCI telecom fraud - hourly consulting .
   BellAtlanic WW due dil . project fee .
   EducTestSvc : Assesment , monitor & Hotline .
   Teamsters , Court approved fees .
   .75 of revs from repeat clients .
   Deal w Boards & Sr mngt .
  Security prods & svcs :  commercial Vehicles ( O`Gara ) modified Suburbans
   Cost loward by standardization & production . 45K to 1E6 $ .
   Level 4 Kevlar encased . Demand increasing dramatically .
   Sole provoder UpArmord  HMMotorizedWheeledVehicle . $70 - $100k .
   US contract : 60E6  % 738 |>| 81300.81     | 360 % yr
    have armore 1000 out of 130k HumVee production ., Sell Kits
 Voice & Data Security : Computer Forensics .
  May get out of Voice .  all in MidEast  | 22M$  |
 Tot Rev breakdown | +/ D 100 135 20 |>| 255 | PROPOFTOT P |>| 0.39 0.53 0.08
 Growth : International local assembly . Bought Armoring & Glass co .
 Cohelesce Fragmented industry .  Acqs on mix of Cash & stock .
  Except for  Kroll - O`Gara pooling
  To armor HMMWV 235 down from 465 hours . sice `94 . components 540 from 800
   Suburban 1200 to 290 , 350 - 172 .
  Found 2.5E6$ admin savings in pooling .
  `97 tot 190E6$ rev this yr  112M 6mo . Margin up from .09 to .11 .
  .42 % share 1st 6 mo . Issued | 3.5E6 x  20.5 |>| 7.175E7 | bunch invested
  @ .05 , c\have 35E6 Invest Grade debt @  .08+  |
  Done work for CIS , Brazil . comply w State Dept & other agencies .
 O`Gara did all Prez limos except last batch which GM did for more than they
  would have charged . Not in Limos anymore .
|15:19| SAC.Tech(NASD:SACM) : JoeGerard InvRel : reading written Forward
  Stmnt Disclaimer .
 CEO BarryWendt : Biometric  SecureAccessControl technologies :
 Notebook Ide from Print & voice on notebook .  Print ID . VoicePrint .
  SacMan Lookup Verification Browser .
 Print Reader tek small enough to fit in mouse .
  Incorp `93 - MN , Tek Showroom LasVagas , 15 emloyees .
  Alliances w
 Expect 1E9 internet  users by 2005 .  Biometrics used w firewalls .
 Replace PINs .
 Complete network security - flexible layers .
 " The Biometrics Co " . Worlds 1st ICSA Bio ID Prod certification .
 Robust Vector line type algorithm . & "BioKey"
  look @ line types Catalog sweat glands & lines , do 1 way hash . SHA1 algo
  like Digital Signature : Hash document into eg 20Byte signature .
  BioKey like Dig Sig . ~ | 2 * 8 |>| 256 byte sig .
  True real-time id - eliminates "aliases . Want real time ID of individuals
  High Res image capture ,
  SACMan DEvelop tool kit .  SAC_REmotes PC-104 form factor board w input .
  SACcat computer access terminal .
  Desktop security apps . Pinnacle Tek . for multiple user machines .
   HerbSenna : C2 level cert for OS2 .   250k seats in Securities indust .
  Keyware Tek : Layerd Voice Verification .
  Miros : Face recod for securty & time & attendance .
  Baraka Intracom : London  Video conferencing
  Cericom : cryptograph   Eliptic Curve engine .
 Designs turnkey solns .  available for private label .
 `98 : wants to be seen as seen as overall Biometrics Co .
  $500K revs . | focused on low cost . Mass mkt , embeded < $100 , Door
  access $200 | Talking & looking . Door part of net work . look @ cert test
   results .  6000 x more discriminating than some others .  ''
 Ownd .4 Mngt , .10 AIG
 |16:14| AmerSci&Eng(AMEX:ASE) : JeffBernfeld Gen Counsel :
 ( Conversation about how lack of backup batteries on aircraft BlackBoxes is
 typical of how bad an agency FAA is ) not in Air mkt cause can`t deal w FAA .
 AS&E  X-Ray - Duty Evasion . Drugs , explosives .
   4.6E6 % 30E6  |>| 0.15  | net on gross . AMEX:ASE
  Border Control : Drugs , weapons , ,
  Hi risk Govt Buildings.
 also  : Defense force protection , Radioactive .  Prisons .
  Corporate Security ebbs & flows w headlines .
 Niches driven by terrorism : | 311 + 2652 |>| 2963 | death & injury in `96 .
 $30B cocaine comes into US annually .
 Global trade grows . Duty Evasion  as much a .1  . .05 in Europe VAT .
 SouthAfrica estimates  $10M % day loss .
Customers :
 US Govt . Australia VietNam UK | New : SA . AbuDahbi , Egypt
 XRa back Scatter : collimated , chopped , both transmission detector
  BackScatter detects organics .  Raster scan of whole truck . w back scatter
  xmision & backscater from each sied of tru .   Drug around
  %2 foot % sec . | on conveyor . Mobile search .
 Mar 31 fisc yr . good 1st half .
 Conveyr like Car Wash . 6-8 min to do truck .| 8 x 3.3E6 |>| 2.64E7 | US$
  Customs . current monopoly on US borders .
  Customs goal .2 .25 inspection rate - no where near that now .
  Customs mainly looking for drugs .
  Relocatable Contanerized system for SouthAfrica .
  10 Sys to Egypt : Lack of space - small footprint building .
 Patent on Mobil search in adition to BackScatter . Mobile  1.7M$ domestic .
  constant speed drive mechanism .
  Got good press in Busn Wk & Bos Globe in May & June .
 Parcel search systems& Van mounted unit .
 health & safety good because pencil beam . Film , stowaway safe .
 Eg&G & Heiman  Dual power - larger  more expensive .
  Their small units premium .
 Revs   17 28 32 36 Fy 96 97 98 , thru 9806
 R&D
 Backlog | 12.2 15.6 17.3  47.3.  | 96 -- today . Egypt order 35E6$
 Mngt & Sci team in place .  Supplying Financial Engineering to devel Mkt .
 Sell only in $US .
 Service ~ .1 rev .
 BackScatter proprietary . Acq Shurnberg - hi enery physics to increase power
  Just measuring total ratio of back scatter .
  Price went as low as 10 | Equip @ Capital - gunman would not go thru .
  That`s why cop acosted him & got shot .
 Components from vendors , can do 5 mobile @ time
 Show income as delivered .  6-9 mo billing payout .
 Rev | Cargo search  .5 of busn . moving toward Mobile trucks .

|17:54| JW : original of Cyberstation was yrs ago @ Std&Poors commercial paper
 rating . After PennCtrl , COs line up to pay fee to be rated .
 WBN consults company , but gives Co no prior review .  Role to present Co
 Fairly , 5000$ Bounty for purposely misleading Web postings .  36k$ % yr .
 Looking to retain people on contract basis 150-200k$ % yr to handle
 portfolios . ( out in Millwalkee etc , where that reasonable amnt ) Want Sr
 people , keep 2%3 of billing . Plan financing . did one mid `97 . been Cash
 flow positive since June . John replacing AdamKaplan Y2K  1E6 hits % wk .
 JW no longer gets paper NYTimes . Very different experience .
 New " DNA " .  Y2k spending 100s of B$ , producing inventory of systems .
 Moynahan Aide finds Y2K blessing in disguise . Talked to GeorgeWill
 yesterday .  WSJ totally OTL on Y2K .  NYT Cybertimes covering .
 Economist having 9 articles on Y2K next week .  Adam didn`t really want to
 be security analyst . Don`t want to be training ground . |18:9|

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