SiliconBeat

One of Robert DeVincenzi’s first acts as chief executive of LaserCard was to buy 8,000 of the company’s shares with his own money. At $6.89 a share, the bill came to $55,115. Since then the company’s stock price has fallen nearly 19 percent. After hitting a more than three-year low Monday of $5.50, they closed at $5.58.

The shares he bought were in addition to 20,000 he received provisionally in a restricted stock grant as part of his hiring package. He’s paid a $330,000 salary and has a target bonus placed at $198,000. He was also granted options on a total of 550,000, one tranche of which will only vest if certain stock price targets are met, according to the company.

LaserCard would seem to be in a growth business. Its optical memory cards are used for
identification systems used in “demanding applications” such as border security, government
service and facility access. It supplies foreign residence ID cards to customers including the
U.S. and Canada; national ID cards for Saudi Arabia and Angola; and vehicle registration ID
for some states in India.

A company that lives off of government contracts, however, can easily suffer when those
governments change plans. LaserCard shares shot up 24 percent in August 2005 after the Italian
government placed an order for secure ID cards that was valued at $15 million. Orders from
Italy accounted for $12.5 million of revenue that year, $2.5 million the next, but amounted to
only $660,000 last year.

Shares of LaserCard rocketed nearly 300 percent from the end of June 2005, before the Italian
order came in, to to $22.50 by the end of its fiscal year 2006. So far this year, LaserCard
shares have lost nearly half their value.

In May, LaserCard received a follow-on order to supply more than $1 million worth of cards to the Italian government to be used as Foreign Resident ID Cards. And days before DeVincenzi purchased his shares, LaserCard announced an agreement with an Italian company to produce memory card encoders and read-write drives in that country.