Printrak, A Motorola Company

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Printrak, A Motorola Company

1250 North Tustin Avenue
Anaheim, California 92807
U.S.A.
Telephone: (714) 238-2000
Toll Free: (888) 493-3590
Fax: (714) 237-0018
Web site: http://www.printrakinternational.com

Wholly Owned Subsidiary of Motorola, Inc.
Incorporated: 1974
Employees: 561
Sales: $109.91 million (2000)
NAIC: 541512 Computer Systems Design Services; 561611 Investigation Services

Printrak, A Motorola Company makes automated fingerprint/mug shot identification and data management systems that are used by law enforcement and government agencies throughout the world. Clients include the Federal Bureau of Investigation and New Scotland Yard, as well as many other city, state, and national police agencies. The firm’s premier offering is its Digital Justice Solution, an integrated product that can digitize, store, and match fingerprint and photographic images, automate dispatches to officers in the field, and store and organize a wide range of associated data for use throughout the criminal justice system. Originally formed as a division of Rockwell International, in 2000 the company was bought by Motorola, Inc., which intended to integrate its products with those of other subsidiaries that provided wireless communication and information management services to law enforcement agencies.

Early Years

Printrak was formed in 1974 as a division of Rockwell International. The company was created to develop computer programs that could automatically code and match fingerprints for use in law enforcement. Printrak’s first major sale came the next year, when the Federal Bureau of Investigation purchased an automated fingerprint identification system (AFIS) from the company. Over the next several years sales also were made to other crime-fighting agencies in the United States.

By 1981, with a total of 11 employees, Printrak was still a small operation. The company seemed lost at Rockwell, which was involved with many larger projects, including the B-l bomber and the Space Shuttle. At this time the parent corporation decided that Printrak did not fit its overall focus and sold the division to the London-based Thomas De La Rue and Company, Ltd., whose primary business was printing the currency of more than 75 countries. President David Snyder, who had run the firm for Rockwell, was retained, and under its new owners the company (now known as De La Rue Printrak) bloomed. During most of the 1980s growth was strong, with sales made to the New Orleans Police, the State of Florida, the Mexico City Police, and the Royal Canadian Mounted Police, among others. By 1987 the company had grown to employ 250 and was generating annual revenues of $40 million.

Printrak’s AFIS system was built on a Digital Equipment Corp. minicomputer that utilized software of the company’s own design. Fingerprints were copied onto cards that were scanned into the computer, which then compared the distinctive patterns of lines and whorls with thousands of others that were stored in a database. The system identified as many as ten possible matches, at which point a human expert made the final evaluation.

The automated process greatly sped up print identification. Previously, police could compare a print against perhaps a thousand other sets over a few days, but the Printrak system could run through 100,000 sets in 30 minutes. A satisfied New Orleans police captain told the Orange County Register that as many as 90 percent of the perpetrators caught with the Printrak system would not have been found otherwise.

The company’s product was one of several on the market at this time, but it controlled an estimated 60 percent of total sales. There were few serious competitors, primarily the Japanese NEC Corp. and Morpho Systemes, a French start-up aligned with IBM. Printrak’s goal was to get state governments to buy the system, then have their individual cities follow, assuring compatibility between the different agencies. Although it had made sales to some states, including Florida and Minnesota, it had lost others, including California, to NEC. Prices for a system varied depending on size, ranging from $1 million to as much as $10 million.

In 1987 Printrak announced creation of Phototrak, a computerized mug shot storage and matching system. Like AFIS, Phototrak could be used for rapid retrieval of photographs of suspects based on a database search that also used information about previous crimes and physical characteristics. Images were taken with a video camera, which sped up the processing time and eliminated the need for physical storage of photographs. Phototrak could work with between 60,000 and 210,000 images that were stored on optical disks, which were potentially more durable than electronic media.

Losses Leading to Management, Ownership Changes in the Late 1980s and Early 1990s

By the end of the decade Printrak was experiencing financial difficulties, due in large part to its over-commitment to too many large contracts, some of which were not fulfilled. In May of 1989 the company reshuffled its leadership, with De La Rue officer Richard M. Giles taking the presidency and David Snyder leaving the company. In the late spring of 1990 more changes took place when company management, led by Giles, Chief Operating Officer Chuck Smith, and Vice-President of Engineering John Hardy, bought the company from De La Rue, which previously had been on the verge of selling to Unisys. De La Rue took a write-off of ¥55 million in the deal, apparently happy just to divest itself of the money-losing Printrak. The company’s annual revenues reportedly had dropped to $20 million, half the figure of just three years earlier. Losses were estimated at $2 million a month, for a total of $90 million since 1987. Once the transfer of ownership was complete, Giles took drastic action and cut the workforce to 150 from 425. Many of the discharged staffers had been hired to work out problems for specific contracts and were not considered essential to the company’s overall direction. Following the sale, the company became known simply as Printrak, Inc.

Late 1991 saw the firm reach an agreement with Digital Biometrics, Inc. to use the latter’s inkless electronic fingerprinting device as part of its equipment. Printrak also launched a smaller version of its original “Orion” fingerprint matching system, called “Hunter.” The latter was priced at between $350,000 and $500,000, less than half the cost of a low-end Orion setup.

During the early 1990s the company made sales to the Czech Republic, the state of Louisiana, and other major clients, and began to recover its financial footing. More competitors were emerging, however, and Printrak lost bids to sell new systems to the FBI and the state of Ohio. In 1995 Live-Scan 2000 was introduced, the first real-time digital fingerprint and imaging system. The system could communicate with a central computer from a remote location to compare a suspect’s photograph or fingerprints in seconds, rather than requiring a paper copy to be scanned in. Each “booking station” unit was priced at about $60,000, with a total system costing considerably more.

Also in 1995, the company began making its component products available for use by outside firms, rather than strictly as part of its own systems. The Los Angeles County Department of Social Services was one of the first to buy such a hybrid, with Printrak’s technology used as part of an identification system created by Electronic Data Systems for the agency. The new equipment took the place of an inefficient system that relied on driver’s licenses and mothers’ maiden names to weed out fraudulent claimants. Within six months of installation, the county was able to catch 8,000 fraudulent welfare recipients, good for annual savings of $12 million. Printrak subsequently began to actively seek sales to this type of end-user.

Initial Public Offering in 1996

In the summer of 1996, Printrak made 2.5 million shares of common stock available on the NASDAQ exchange for about $9 each. The proceeds were earmarked for debt retirement and acquisitions. Chairman, President, and CEO Richard Giles sold 190,000 of his own shares, but remained in control of the firm, retaining 60 percent of its stock. Later in the year the company addressed an issue that had been on the horizon for quite some time, that of compatibility between competing AFIS systems. The firm offered to make its technology available to competitors who wanted to make their equipment compatible with Printrak’s. By this time half of the company’s clients were overseas, with recent large contracts coming from the Swiss Central Police Bureau, the Amsterdam Police Department, and the Mexican Office of the Attorney General. Research into new technology was ongoing, with nearly 20 percent of revenue plowed back into this area. In addition to earnings from sales of systems, the company also provided a maintenance service, which itself accounted for nearly a fifth of revenues.

In late 1996 Printrak formed a new division, Printrak IDS Solutions, which targeted the growing market for biometrics, or computerized identification of images, fingerprints, and voices. The company also introduced its smallest portable fingerprinting unit, the Single Finger Station 2000, which weighed 2.5 pounds and was powered by batteries. Shortly afterward the firm added its first PC-based AFIS software. Revenues, which had been steadily climbing during the 1990s, reached $52 million for the year.

Company Perspectives:

Printrak empowers today’s law enforcement and public safety agencies by providing the right tools for delivering the right information to the right person at the right time. Printrak has always been the pioneer in public safety and law enforcement, beginning with the introduction of the Automated Fingerprint Identification System (AFIS) to the FBI in 1975. Over a quarter century later, Printrak remains the global leader in positive identification technology with the most sophisticated solutions available to criminal justice, public safety and, civil agencies.

Growth Through Acquisitions in the Late 1990s

The company made its first acquisition in April 1997 when it purchased TFP, Inc. of Greenville, South Carolina, in a stock swap worth an estimated $19 million. TFP, founded in 1988, produced digital mug shot systems for law enforcement agencies. The move was in keeping with Printrak’s strategy of becoming a total solution provider for the crime prevention and identity verification markets. Several months later another company was acquired for $9 million, SunRise Imaging of Fremont, California. SunRise had developed a system that scanned microfilm and converted it into electronic images. Its offerings also were expected to be used as part of Printrak’s package of law enforcement products. Most of TFP and SunRise’s operations were later transferred to Printrak’s Anaheim headquarters. During the year the company also purchased the computer dispatch and records management systems unit of SCC Communications Corp. and entered into a joint agreement with Siemens Nixdorf Information Systems AG to develop and market identification systems for use outside the United States. New clients continued to come in, including the governments of Oman, Norway, Sweden, and Denmark, as well as the state of Illinois and the province of Ontario, Canada. Printrak also formed a business unit in Australia to market its products in the far east. Revenues for the year were a record $72 million, though losses totaled $14.5 million due to the acquisitions and subsequent restructuring needed to integrate them.

More large contracts came in during 1998, including a $6 million systems upgrade from the Canadian Mounties and a record $45 million order from the Argentine government to provide an AFIS system for part of that country’s national identification program. In the spring of the year the company also reorganized its sales, marketing, and customer support operations into the new Worldwide Sales and Support Division. These had formerly been associated with each product line’s operating unit.

The following year Printrak expanded once more by adding a 24,000-square-foot facility near Irvine, California to house its research and marketing employees. The company also was making deliveries of its Digital Justice Solution systems, which combined fingerprint and mug shot handling with document management, computer-aided dispatch, vehicle tracking, and jail management components.

In 2000 Printrak formed a new unit, MetaJustice, which was to offer Internet-based subscription access to software applications for public safety and criminal justice agencies. A British company, Emergency Services Group (a unit of BAE Systems), which marketed computer-aided dispatch systems for fire and police agencies, was acquired in March. The firm also selected a new president, Daniel Crawford, with Richard Giles remaining in the roles of chairman and CEO. Other new contracts were signed with TRW, Inc., the Western Australia Police Service, and others. Printrak’s revenues for the fiscal year leapt to $109.9 million, with net earnings of $7.9 million.

In August of 2000 the company was purchased by Motorola, Inc. for $160 million. Motorola was a longtime provider of telecommunications equipment for law enforcement agencies, and the acquisition was intended to enhance its offerings in this area. Motorola had earlier bought Software Corporation of America, which also made wireless communications equipment for public safety agencies.

Starting its second quarter-century in operation, Printrak was offering its most comprehensive product to date, the Digital Justice Solution, which was a total package of identification and record management products for use by law enforcement, social service, and government agencies. The recent acquisition by Motorola brought the company the deep pockets and powerful marketing abilities of one of the world’s leading telecommunications manufacturers. With the world becoming increasingly security conscious, demand for Printrak’s products looked certain to remain strong.

Principal Subsidiaries

Printrak Ltd. (U.K.); TFP, Inc.; SunRise Imaging; Printrak International Pty Ltd. (Australia); Printrak de Argentina S.R.L. (Argentina); MetaJustice.

Principal Competitors

NEC Corp.; Groupe SAGEM; Lockheed Martin Corp.; Identix Inc.; Visage Technology, Inc.; Visionics Corp.

Key Dates:

1974:: Printrak is formed as a division of Rockwell International.
1975:: The company sells first the automated fingerprint identification system to the FBI.
1981:: The company is sold to De La Rue of the United Kingdom; the name is changed to De La Rue Printrak.
1987:: Image processing and recognition software debuts.
1989:: Mounting losses lead to leadership changes.
1990:: De La Rue sells Printrak to management, which cuts staff from 425 to 150.
1996:: Printrak goes public.
1997:: TFP, SunRise, and the dispatch unit of SCC Communications are acquired.
2000:: Emergency Services Group is bought; Printrak is acquired by Motorola.