Diversified Security goes public

SADDLE BROOK, N.J.-Systems integration company and manufacturer Diversified Security Solutions became a publicly-traded company in November, a move company officials hope will raise funds for future expansions. "It will allow us to go after larger systems integration jobs," said Irvin Witcosky, a co-founder of the company. "We'll be able to finance larger jobs and we'll be able to add more employee resources to be able to support them either in a single location or if they're geographically spread out." Company employees have earmarked funds raised for adding offices, making acquisitions, hiring employees and repaying $1 million in debt. As of press time in mid-December, the company's stock price remained steady at around $8 per share, outperforming some security companies that have been publicly traded for years. At its initial public offering, Diversified made available1.5 million shares of common stock at $7 per share. Witcosky and partner James Henry maintain a 63 percent stake in the company. The performance of Diversified's stock so far, and the fact that the company received the backing needed to make an IPO, is unusual, according to an industry analyst. "What's unique is that a company of that size in this (financial) environment was able to successfully launch an IPO," said Jack Mallon, a security industry analyst. "The fact that they were able to achieve it is an indication of the strength of the security industry in the market place." Diversified is better known in the New Jersey and New York area under the name Henry Bros. Electronics. The company also operates a branch in Dallas. The manufacturing arm, makers of CCTV equipment used in buses and other mass transit applications, is known as Viscom. Together, the company reported revenues of $14 million for the year 2000. "This is tiny by normal IPO standards," said Mallon. "They were successful in getting it off the ground and more importantly in the aftermarket the stock is holding firm." The first time Diversified attempted an IPO the backing was not there, said Witcosky. "We didn't get the IPO the first time around," he said. "We started this two years ago then the market crashed and we didn't make it. However, we had the attention of the banks." What grabbed financiers' attention recently was the fact that Diversified doubled its sales in 2000, a milestone only anticipated after an IPO, not without one. Today, the company has contracts with the New York City Transit Authority and New York's three airports. Following the attacks of Sept. 11, the company is being kept busy with airport security upgrades and researching new technology. "We have substantial contracts there," said Witcosky. "They've added onto them since 9/11. We're now trying to evaluate new technology, biometrics and new access control systems."