posted
Security systems company looking beyond government clients David Hendricks 4/20/2005
San Antonio Express-News
Approach government property, and chances are good you are on MDI Security Systems surveillance cameras.
Smile if you want. You either belong there or you don't.
The San Antonio-based public company's security cameras/access controls/alarm systems hardware and software operate at everything from the White House to military bases worldwide.
Its federal clients the ones that are not secret include the FBI, CIA, Secret Service, Bureau of Engraving and Printing, U.S. Departments of State, Justice, Treasury and Agriculture, NASA, Internal Revenue Service, Transportation Security Agency, Los Alamos National Laboratory and the Smithsonian.
Security at some government sites is so sensitive that MDI employees are not allowed there. So government officials come to San Antonio to train on upgraded systems.
Private-sector companies with MDI equipment include MBNA, General Dynamics, Raytheon, American Red Cross, General Motors, Disney, Boeing, Caterpillar, Microsoft, SBC Communications, Disney, Fidelity Investments and even Six Flags Fiesta Texas. Not to mention numerous school systems and universities.
MDI assembles components of its products at its 36,000-square-foot offices at 9725 Datapoint Drive, a building that initially belonged to now-departed Datapoint Corp.
MDI sells its products to integrated security brokers, who incorporate them as part of larger security systems to the users. MDI does not monitor video cameras and access controls. Its products instead are designed for users who want to do their own monitoring through systems that can tie together video cameras, motion sensors and card-swipe readers.
That includes monitoring employee locations, since MDI systems include radio frequency tracking through employee badges.
The technology has become so efficient that one private-sector customer, heavy-equipment maker John Deere, needs only four employees in one location to monitor 86 sites.
Founded as Monitor Dynamics Inc. in Rancho Cucamonga, Calif., in 1979, the company has been in San Antonio only one year but it's a year in which the company believes it has reinvented itself for another quarter century.
As a company, MDI had a rough patch of history, starting when Ultrak Inc. in Lewisville acquired it in 1997. Ultrak sold a large part of itself to Honeywell in 2002 and changed its name to American Building Control. Eventually, MDI re-emerged on its own again as MDI Security Systems, trading on the Nasdaq with a current market capitalization of about $5.85 million under the symbol MDII.
Under the ownership of Ultrak/American Building Control, though, MDI had lost its focus. It had 150 employees in offices ranging from Texas and California to Louisville, Ky., Fairfax, Va., Switzerland and Poland. Last year, the company actually paused product sales to fix itself and upgrade its products. It closed all of its non-Texas offices and moved its engineers to Ontario, Calif., where they could concentrate on research and development instead of technical support.
MDI then needed a new headquarters. Dallas, Austin and San Antonio were the finalists, said Tim Rohrbach, MDI technology vice president. San Antonio was selected primarily because of its low cost of doing business. It didn't hurt that Rohrbach a former executive at San Antonio's Southern Steel, a prison equipment and technology company is a San Antonio native.
It also helped that San Antonio had capable potential employees with military and security backgrounds. MDI now is lean with 65 employees, 42 of them in San Antonio. Although the federal government is only 10 percent of the security surveillance market, it accounts for 80 percent of MDI's clients.
MDI's strategy now is to add government clients, but concentrate on the larger and lucrative private sector, especially organizations that need to guard two to 20 doors with video monitoring and access controls, said Michael Garcia, MDI's vice president for worldwide marketing.
It will approach the private sector by offering the same technology that protects the highest levels of government. At the White House, MDI equipment monitors the gates, exterior doors and the property perimeter.
"The same technology used to protect the White House is offered to protect your store or home," Rohrbach said. MDI stock traded Tuesday at only 53 cents per share, but company officials were upbeat last week after having shown its latest products at a Las Vegas industry showcase convention.
"We've turned the corner," Rohrbach said, acknowledging that MDI stock will not go up until the company can report new contracts and revenues.
Many times that can be frustrating, because some clients are too secretive to allow MDI to announce contracts. But MDI did make an announcement Tuesday. It will sell products to Volvo worldwide, including its Mack truck and Renault divisions, in a $10 million project with Diebold Inc. as a partner.
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