Saflink downsizes and refocuses on Registered Traveler program
Following losses, the company will lay off half of its employees and attempt to grab Registered Traveler market share; competition will be stiff, but Saflink is playing to its strengths
The biometric smart card business is growing, there can be little doubt, but not all companies have found the going easy. Earlier this year we reported on Bellevue, Washington-based Saflink (Nasdaq: SFLK), developer of the Saflink SureAccess, an all-weather, smart card, biometric reader aiming to reduce the threat of unauthorized access to critical facilities. At the time, we had high hopes for the company, but it appears these were misplaced. The company has announced a plan to abandon its focus on network authentication systems and focus instead on the U.S. government’s Registered Traveler plan. Half of Safink’s employees will be laid off in the switch.
The company has struggled recently, reporting a 55 percent decline in revenue for the first six months of the year to $1.8 million from $4 million in the same period of 2005. Cash flow is a serious concern. Yet the restructuring plays to the company’s strengths. Saflink is a founding member of the Voluntary Credentialing Industry Coalition, a group formed early this year to advise the government on programs exactly like the Registered Traveler program, and has also played a leading role in putting together the Fast Lane Option Alliance. Nevertheless, Saflink will face tough competition. Other companies involved include Unisys and Verified Identity Pass, which is the first on the scene with a pilot program in Orlando and has deals in the hopper with airports in San Jose, Cincinnati, and New York. Some twenty additional airports will begin involvement as soon as TSA publishes the smart card technology standards. It sounds like a tough row to hoe, but we think a refocused effort may be just the thing to save Saflink.
-read more in this Card Technology report
