Identix Streamlines Operations with Reduction in Force: Expects More Than $3.5 Million in Annual Operating Expense Savings

MINNETONKA, Minn.--(BUSINESS WIRE)--Feb. 26, 2004--Identix Incorporated (Nasdaq:IDNX), the world's leading multi-biometrics technology company, announced today that it has streamlined its operations with a reduction in force of more than 30 full time equivalent job positions, or approximately six percent of its total workforce. As a result of this improved efficiency, Identix expects to realize annual operational expense savings of more than $3.5 million starting in its fiscal 2005 year, which begins July 1, 2004.

According to Identix President & CEO Dr. Joseph J. Atick, the expense savings the Company expects to realize are primarily the result of Identix being able to take advantage of a go to market strategy that better reflects where the biometric market is today. "This is a strategy that we began to execute on as far back as at the time of the merger with Visionics," Atick said. "Prior to that time, the immaturity of the market required us to act as biometric evangelists and we had to build every application and device ourselves before being able to participate in most market opportunities. As the market continued to mature and adoption accelerated, we saw many OEMs and systems integrators begin to invest in market development by committing their own resources towards creating end user solutions and applications that were enabled by biometrics. These companies had the tools to develop and deliver the solutions and applications, but they lacked the critical enabling biometrics technology and components.

“The success of this strategy over the past year, combined with the recent sale of our project management services subsidiary IPS, created redundancies among a number of functional positions - primarily in administration, end user application development, and hardware engineering”

"Today," Atick continued, "Identix is participating in an ever increasing number of market opportunities by providing the Systems Integrators and OEMs the critical biometric components and enabling technologies that they need to deliver customized large scale Identification and Identity management solutions. This allows us to focus on what we do best; bringing forth the leading, multiple biometric technologies encapsulated in high-level standards based modules that can be easily integrated to form solutions and systems that fit the requirements of the end users. The cost reductions we implemented are the logical and positive outcome of knowing when to be the full solutions provider and when to partner to deliver solutions.

"The success of this strategy over the past year, combined with the recent sale of our project management services subsidiary IPS, created redundancies among a number of functional positions - primarily in administration, end user application development, and hardware engineering," he said. "This overlap enabled us to streamline our operations while focusing in on our core strategies and strengths and potentially further expanding the reach of our biometric technology and product offerings.

"Today's announcement is another step forward in the execution of our strategic plan intended to ensure that Identix is focused on biometric products and product related services where we see the opportunity to accelerate our growth, deepen our competitive offering and enhance our progress to profitability," Atick said. "Based on our ongoing work over the past year and a half, we have made several aggressive and necessary strategic moves over the past five weeks intended to ensure that Identix is the best positioned company in the biometrics market. We have strengthened our Board leadership with the appointment of Milt Cooper as Chairman. We have sharpened our focus on biometrics with the sale of our project management business, while adding an expected net total of more than $10 million in cash to our balance sheet. And earlier this week, we acquired 100% ownership of a strategic piece of biometric business - Identix Identity Services (IIS) - that we expect will add nicely to our revenue base and contribute to our strategic and profitability objectives in the near term."

Atick concluded, "Today's reductions, as well as the strategic steps we have taken over the past five weeks, reflect natural and necessary maturations of our business to ensure that we are approaching each and every opportunity and market in the most efficient and impactful manner, with an eye towards achieving sustainable profitability."

Identix said that it expects the net financial impact of this reduction in force to be modestly beneficial to net income for the remainder of its fiscal 2004 year ending June 30, 2004, when the anticipated operational expense savings are offset by the costs of severance payments.

About Identix Incorporated

Identix Incorporated (Nasdaq:IDNX) is the world's leading multi-biometric technology company. Identix provides fingerprint and facial technologies, systems and critical system components that empower the identification of individuals in large-scale ID and ID management programs. The Company's offerings include live scan systems and services for biometric data capture, mobile systems for on-the-spot ID, and backend standards-based modules and software components for biometric matching and data mining. Identix products are used to conduct background checks, speed travel and commerce via secure identification documents, prevent identity fraud in large scale government and civil ID programs, and control access to secure areas and networks. With a global network of partners, such as leading system integrators, defense prime contractors and OEMs, Identix serves a broad range of markets such as government, law enforcement, gaming, finance, travel, transportation, corporate enterprise and healthcare.

Statements in this release that relate to future plans, events or performance are forward-looking statements reflecting management's current expectations, assumptions and estimates of future performance and economic conditions. All forward-looking statements are made in reliance on the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Identix cautions investors that forward looking statements involve risks and uncertainties that may cause actual results to differ materially from those expressed or implied in such statements. Risks and uncertainties include, without limitation, those related to: the ability of the Company to prevail in the DHS BPA protest, maintain the DHS BPA award, and achieve or exceed targeted proceed levels from the DHS BPA; the availability of funding from government and commercial customers; the development of the marketplace for biometrics solutions; the ability of the Company to successfully compete for and be awarded certain major domestic and/or international government contracts that are or will be the subject of targeted RFP's and RFQ's; demand for Identix' products and services; the ability of Identix to complete product development on a successful and timely basis; increasing levels of competition; and other risks identified in the Company's SEC filings. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.