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With a strong management
team in place, GVI Security Solutions is positioned for growth in the video surveillance
portion of the fast growing security industry
Video Surveillance Security
GVI Security Solutions Inc.
2801 Trade Center Drive, Suite 120
Carrollton, TX 75007
Steven E. Walin
Director and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
Published - February 1, 2007
Steven E. Walin
Director and CEO
Steven Walin joined GVI from GE Security Enterprise Solutions, where he has been president
since April 2003. Under Walin's leadership, GE Security Enterprise Solutions integrated
several acquisitions and expanded product and service offerings while increasing revenues
by 20 percent and operating margin by 33 percent.
From 2001 to 2003, Walin was a senior vice president with the security systems division of
Siemens Building Technologies, Inc. where he was responsible for field sales and
installation and service operations. From 1997 until 2001, Walin was president and chief
operating officer for Security Technologies Group (STG), the largest independent security
system integrator in North America, a company that he grew both organically and through
acquisitions from $10 million in revenues to more than $115 million. STG was acquired by
Siemens in 2001. He began his career in the security industry with CASI-RUSCO, Inc. a
developer, manufacturer and marketer of electronic security products, now owned by GE.
Walin is a 23-year veteran of the security industry.
Walin received a bachelor of science in business administration from Northeastern University
GVI Security Solutions Inc. is a leading provider of video surveillance security solutions
to the homeland security, institutional and commercial market segments. The company offers
a full suite of video surveillance and integrated security solutions which enable
intelligent video surveillance. GVI offers its products and services through local,
regional, and national system integrators and distributors in the North and South America
and operates sales and distribution centers in Dallas, Texas; Mexico City, Mexico; Sao
Paulo, Brazil; and Bogota, Colombia. GVI Security Solutions was founded in 2000 and is
based in Carrollton, Texas.
CEOCFO: Mr. Walin, what was your vision when you
became CEO of GVI Security Solutions and where are you today?
Mr. Walin: My vision was to join a
medium-sized public company in the security space, particularly in the video surveillance
space. I believed that would be an excellent platform for growth. The company had some
past challenges due to management issues that I was confident with my 24 years in the
security industry and experience in turnarounds that I could correct. Ten months later, we
seemed to accomplish most of that. The company is turned around now, we are growing sales
at a double-digit rate, the expense structure is adequate and in the right spot now for a
company our size. In addition, we continue to get a lot of interest not only from the
investment community but also the customers and other stake holders in the industry.
What major solutions are you providing, and who is using them?
Mr. Walin: We provide video
surveillance solutions, which are widely known as closed-circuit television. These are a
line of products primarily from Samsung Electronics (LSE: SMSN). We provide those to most
industry verticals. We do a great deal of work in the retail industry where we have
customers that have multiple retail stores. They deploy video cameras and recording
devices to not only protect their facilities from shoplifting and other security breaches,
but also to give them some indication of what is going on in their store from a marketing
standpoint. This would include what displays people are most frequently walking towards
when they walk in the door, how their store personnel are dressed and how are they
greeting customers. It is a multi-purpose type application, for both security, as well as
marketing and productivity uses.
Is that marketing productivity a growing trend?
Mr. Walin: I believe it is. The idea
is that if you are a manager or own several retail stores and you want to see your
employees and store in action , it is much easier to do that online from your
office, rather than going out and visiting each one.
Is there resistance from employees to type of surveillance?
Mr. Walin: Not that I am aware of. My
experience is that employees are used to it and they view it as a positive for their own
protection as well as well as for productivity for the company.
When a company comes to you, are you designing the system for them or is it off the shelf?
Mr. Walin: We play the role of a
manufacturer of products representing Samsung as their master distributor. Our customers
are the distributors and security dealers who work closely with the end-user customer and
their consultant or specifying engineer, to design and configure the system. They also
install and maintain the systems and do all the appropriate training.
Why is the advantage of Samsung equipment and why is GVI the provider of choice?
Mr. Walin: Samsung is a fantastic
consumer and commercial brand. If you travel anywhere in the country or around the world,
you will find Samsung products everywhere and they are very high quality. Samsung is
widely known for their LCD (liquid crystal display) and Plasma displays. When you are
doing video surveillance, there is a great importance in how images are displayed and
Samsung does a great job having the background in all of their display equipment. Samsung
is also very well known for their video recording for video recorders and now have
leveraged that into surveillance cameras for the security marketplace. They are also well
known for their recording devices and they now have a line of digital video recording
devices that also capitalizes on their background. Our customers like Samsung because
Samsung represents quality and stability and is priced competitively in the market from a
feature and function providing excellent value. They come to GVI primarily because we
represent Samsung in North America and Latin America. We work closely with our customer
partners to make sure they have the products they need to provide solutions to their
customers. We provide strong technical support, both prior to the sale and after the sale.
After the fact, if there are any issues with system in terms of warranty support or
technical support, it is all handled by GVI.
What have you changed at GVI to bring about a turnaround and what might still need to be
Mr. Walin: For GVI, when I joined, was
really a company trying to do many things without adequate resources and proper focus. The
first thing we did was focus the company in on its core business, which was representing
Samsung and the video surveillance market place for Latin America and North America. We
discontinued several ancillary projects and alliances the company had embarked upon that
were not successful. The second thing that we did was to begin to run the company with
profit as a goal in addition to increased sales volume. We now run the business with the
right cost structure, the proper financial controls, strong rigor regarding sourcing,
inventory management and other working capital metrics such as receivables and overall
cash management. Now that we are focused on the core business, it is operating
efficiently, and growing. What is left is to weigh our strategic opportunities. That would
include expanding our offering with new products and services that are complimentary to
our core video surveillance business.
Would that be done by acquisition?
Mr. Walin: It could be done by
acquisition, strategic partnerships or joint ventures; even as simply as just filling out
the product line organically along with Samsung. For example, we have a team in Korea
right now that is working closely with the Samsung product managers and marketers on
future products that are needed in our marketplace. I will go there next week to follow up
on those meetings.
Is there much turnover in your inventory?
Mr. Walin: There are some new
products; the industry is constantly changing. Everything is relative in terms of the size
of the industry and marketplace, but we do have anywhere from 5 to 15 new product
introductions every year. Currently they mostly evolve around the fact that the
marketplace is moving from an analogue environment to a digital environment and quickly
heading in the next few years to an IP environment. As that trend takes place with
technology, new products follow and we spend a good deal of time following those trends by
talking with customers, end-user and specifying consultants. We want to be certain
that we are following the trend properly and we are on top of it so that we can have the
right products when they are needed.
Will you tell us about the competitive landscape and some of your recent major project
Mr. Walin: As far as the competitive
landscape, the industry is fragmented. There are players that are significant in size and
very well known such as General Electric (NYSE:GE) Honeywell (NYSE: HON), Tyco Electronics
Corp. and United Technologies Corporation (UTC) (NYSE: UTX) that all have video
surveillance product companies as part of their security businesses. There are several
medium sized companies that are privately owned. Then there are scores of companies in the
10 to $20 million range that make a limited range of security products that sell either
over the web or just through small dealers. It runs the gamut from small to large. In
terms of major projects, we recently announced a $12 million win from a very large and
well-known international retail chain. We have been providing products and servicing that
customer for several years and they just renewed their relationship with us for two-years.
On the international front, we have won the largest casino in Puerto Rico, and are
providing security products for the Sao Paulo, Brazil Train Network, which is government
run, as well as several other public transportation projects.
How big a component is the international area for you and do you see that growing?
Mr. Walin: It is about a third of our
business today and I do see it growing. I spent most of the month of December (2006) with
our Latin America business. The opportunities there are very significant. In Latin America,
we are the number-two brand in terms of share. That gives us a strong foothold. The
competition is also strong in Latin America, but the market is growing nicely.
What is the financial picture of the company?
Mr. Walin: We will publish our fourth
quarter results in February or March. The company financially is well positioned for 2007.
Last year was a difficult year, but in the fourth quarter of 2006, we were successful in
recapitalizing the company. In October, we raised $5 million in equity.
Why should potential investors be looking at GVI and what might surprise them about the
company that does not jump of the page?
Mr. Walin: Investors should be
enthusiastic about the industry in general. If you look at the security industry, it is
growing at a double-digit rate. The video surveillance portion of that, which is our core,
is the fastest growing component of the security industry. It is extremely uncommon for
you to turn on a TV at night or use the internet without seeing a video clip of something
happening somewhere in the world. That is going to continue to increase as technology
moves toward an IP internet type of surveillance model. Unfortunately, when bad things
happen in the world, it fuels our marketplace and we are at the center of the industry
action. In terms of what would surprise everyone about GVI, is how talented and committed
are employees are. The company is very well positioned to perform effectively.
Final thoughts about GVI?
Mr. Walin: The company is a fantastic
business. When you look at a business that is about a $50 million revenue company that is
in the security space it is a great opportunity for myself as the CEO, our employees,
customers and anybody else who is interested in becoming a stakeholder in our
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