Gatekeeper Systems Inc.
March 17, 2014 Issue
The Most Powerful Name In Corporate News and Information
Safety and Security Systems for Mobile, Aerospace and Military Markets
Doug A. Dyment
focus on improving safety in the fleet environment, coupled with his more
than 20 years of experience leading sales, business development, operations,
and research and development teams, has enabled him to grow Gatekeeper into
the foremost provider of digital video security solutions.
Systems was founded in 1997 on the principles of leveraging technology
platforms to produce quality products and deliver world class service to its
customers in the safety and security markets.
Mobile Video Security
Gatekeeper Systems Inc.
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – March 17, 2014
CEOCFO: Mr. Dyment, what is the concept at Gatekeeper Systems?
Mr. Dyment: Gatekeeper provides total safety and security systems for a multiple of mobile markets, aerospace markets and military markets. It also includes school buses, law enforcement, transit as well as Department of Homeland Security markets. United State Air Force Special Ops, are using our high resolution recorders on the AC-130 Gunships. They are also used on the Canadian Defense Sea King Helicopters and other national defense applications.
CEOCFO: What is special about a Gatekeeper system that you are able to work with such a diverse range of organizations?
Mr. Dyment: We take various data streams, such as video, GPS, voice, vehicle sensory information such as when the brakes were applied, in the school bus application when the “stop arm” was engaged and other vehicle sensors. We fuse that data and we synchronize it and we record it for post mission analysis, whereby managers will be able to review the evidence if there was an issue or an incident and act appropriately. In some situations managers want to be able to stream live video from vehicles anywhere in the world. They detect a problem, analyze what’s happening real time and respond appropriately. In the cast of an AC-130 gunship we are recording the sensor information from their high definition cameras; whether it be video, high resolution video, infrared or weapon sensors. Again, we synchronize that information to time date stamping and also other coordinates, whereby the individuals that are responsible for reviewing that information and acting upon it are able to have a total operating picture at their finger tips.
CEOCFO: What are some of the challenges in synchronizing the data? How do you do it?
Mr. Dyment: We have been doing this for quite some time. Therefore, our engineers understand the environment in which we operate. We usually operate in extreme temperature and extreme shock and vibration. For instance, you can imagine that if you have a fast boat patrol in Coast Guard application or a school bus traveling down the road on a rough road, dusty conditions; those types of environments. Fluctuating power and fluctuating light conditions; all of those things are considered in the design process. We understand the requirements and use of expertise to design quality products. We are able to design a very robust platform for the school bus market and then leverage a lot of the characteristics for the United States Air Force Special Opps. While we are helping to protect our troops overseas with our systems, here domestically we are protecting children with the same platform. Interestingly enough, we have recently launched a new license plate reading system that attaches to the outside of a school bus and we are able to record license plates up to sixty miles an hour. It’s a high speed infrared license plate reading system. You might ask the question, “Why are you putting license plate reading systems on school buses.” The fact is that kids are being killed in and around school buses, because of what is called a “stop arm” violation. A stop arm violation is when a school bus pulls over the side of the road and the stop arm is engaged and children are loading and unloading, it is illegal in all states and provinces for a vehicle to pass that school bus. There is a projected fifteen million of these stop arm violations that are going to occur in 2014. There has been public pressure from PTA groups and parents. Legislators are now passing and have passed laws in various States that allow the authorities to take video from a school bus video system and issue a ticket. The idea is that by issuing these tickets or warning that it will deter the activity from happening and create a safer environment in and around the bus. I have personally been in the industry since 1992. I was one of the first individuals to put video in the inside of school buses. Now of course, it is expanding to the outside of the bus as well. We have seen it coming, because we are very engaged in that marketplace. We went to work designing a unique sensor system. We are getting one hundred percent accuracy of plate reading up to speeds of sixty miles an hour. On top of that, we launched a cloud based software application called “TIM”, which stands for Ticket Infraction Management. What that allows us to do is connect to the vehicle data base and match up the license plate that was recorded by our infrared license plate system, which is called “Student Protector”, which is the trade name of the infrared sensor system that attaches to the bus. It matches with the cloud based software application called TIM that then manages the entire ticketing process. Gatekeeper is a total end to end solution for recording license plates and other meta data including GPS coordinates, date and time and driver characteristic: then issuing and managing the entire ticket process. We see this as a potential new billion dollar market category opening up in a market that we have over thirty five hundred customers in. We have been engaged for many, many years.
CEOCFO: Are there many companies in your space? It seems clear from what you have said so far that there may not be any as comprehensive. What is the marketplace like for the types of services that you offer?
Mr. Dyment: In the general security industry there are a number of competitors. You will see competitors in every segment. In our segment there are a number of competitors that provide video systems inside the bus. There are not very many competitors that are engaged in a total end to end solution for recording license plates and issuing tickets and being, as I say, an end to end solution on school buses. Gatekeeper Systems product line is wide product line and allows us to expand into many extreme applications. If you look at our competitors, we are unique in that fashion. We do not have many competitors that have the capability to provide safety and security systems for school buses, while at the same time putting systems in high end military applications. Therefore, in that fashion Gatekeeper is unique.
CEOCFO: Are you selling the system and then the purchaser is tracking? Are you selling tracking services with this system? What is actually going on in the business end?
Mr. Dyment: On the business side we have a number of models. Gatekeeper can act as the prime contractor and provide everything from the sale and installation of the equipment to after sales service. We also partner with dealers, system integrators and third party vendors to provide total solutions customized by our customers. With respect to license plate reading, we have a number of models. We will sell the equipment to school districts, license the equipment or provide the equipment free of charge and share in the revenue created from tickets issued. We create a safer environment around school buses by deterring stop arm violations. We provide revenue sharing programs with law enforcement, school districts and Gatekeeper. Everybody wins with our business model. But most importantly we deter the activity from happening thus creating a safer environment for our children.
CEOCFO: Are you working with your customers whatever way possible?
Mr. Dyment: Yes. We have a flexible business model. Depending on what is attractive to them and what works for them, we fit a model to meet with their requirements.
CEOCFO: You mentioned the potential in the school bus situation. Are you able to rev up and gear up if ten percent of the districts wake up tomorrow and say, “We want Gatekeeper?”
Mr. Dyment: That is a great question. The answer is yes. While Gatekeeper is a small company today, we have a strong management team that understands how to expand quickly. Our current facility can handle up to $70 million in revenue with some expansion efforts. Prior to going public I eliminated all debt, expanded our product line and positioned the company to leverage our currency in order meet market demand. Our sales funnel is growing rapidly as we add more salespeople. We are in a hiring mode here. We are looking for great people that want to build a career. Ninety eight percent of our sales are currently in the US market. We are starting to expand into other countries as well with our technology and our products. We are very excited about that. Therefore, we are in a position to definitely meet the demands as we move forward.
CEOCFO: Are there new technologies on the horizon? Are there things you would like to measure that you are not quite doing yet?
Mr. Dyment: Gatekeeper Systems is transitioning from a hardware company to a software and analytics company. What I mean by that is; we will always be selling cameras and recorders that record information and we have the capability to streamline video. However, as we move forward, once you start moving into reading license plates you actually start to get into the analytics side of the technology. My vision is to take Gatekeeper into that space. We want to be a full, total end to end solutions provider. One of the core markets that we are very strong in is education. I see in the future one of the technologies that we are looking very closely at is detecting weapons and items that are carried that have the potential for mass destruction; being able to detect those on bodies. With the recent attacks in schools on the domestic side, the threat of terrorism; we at Gatekeeper see ourselves heading and expanding our capabilities on the video analytics side of the business.
CEOCFO: What is the key as CEO to staying focused when you have so much opportunity? Sometimes, it is easy to go in too many directions. What is your management philosophy?
Mr. Dyment: I think that is a great question. I have certainly had my experiences in the past, particularly when the Homeland Security marketplace started to evolve, shortly after the attack on the Twin Towers and the attack on the US. It was really an attack on all of civilization, because everyone felt vulnerable to that attack. Therefore, when that market started to evolve, companies such as ourselves looked to position ourselves in a way to take advantage of supporting the safety and security and well being of our children and our citizens, by looking at those missed markets and developing technologies to fit. Sometimes what can happen is you can get off focus. We experienced that and found negative results. We have since, in the last few years, really focused our attention into staying laser focused on our core markets. We focused on the mobile space. We focused our product development. The strategy there was to create a flexible technology platform that is capable of giving birth to many new products. The other thing that we do is we have a vision for education. Our product line is now being picked up by system integrators that do business in markets we can’t possibly reach on our own. Protecting children will always be in our DNA and with 120,000 schools and 550,000 school buses in the United States, it’s not a market that is depreciating. Staying focused is critical to success. We will stay focused on our core niche markets but also build partnerships with companies that have greater reach on a global scale.
CEOCFO: Would you tell us a little bit more about the military side and the foreign side of the business?
Mr. Dyment: We have been engaged in the military side when we were building a new division called Deep Development Corp. The brand in Deep Development Corp is called Viperfish®. A viperfish is a fish that lives at five thousand feet below the water and comes up to twenty five hundred feet to feed. It is a tough, very rugged looking animal that is a good representation of our recorders that operate in the tough maritime environment. We were presenting our products at an ocean show and were introduced to the United States Air Force. They liked our technology. We demoed it for them and they went ahead and started to test it on their aircrafts. Before long we were doing business with the United States Air Force and Boeing Aerospace. We are a Tier I supplier for Boeing Aerospace and Lockheed Martin has purchased product from us for their simulators. Our digital recorders are used to synchronize time and date, positioning coordinates, meta data and high resolution video. All of this information is recorder to a rugged designed military spec digital recorder. Our post mission analysis software is used to review incidents and share with the appropriate security or military personnel. We are looking at expanding that capability as well in our company.
CEOCFO: Why pay attention to Gatekeeper Systems today?
Systems, in my opinion, is currently a great investment. We are a small
company. We are around five million dollars in revenue. We have no debt, an
efficient operator and have a vision to build a large company. We have a
significant customer base. We have a core product line that is selling into
numerous niche markets that we are completely focused on. Then we have some
potential, what I call “Blue Sky”, where you have got a potential billion
dollar market category that is just starting to open. That is because
legislation is being passed that allow Counties to use video recorded from a
school bus video system as evidence to issue a ticket. The average ticket is
two hundred and fifty dollars. There are fourteen million incidents. At two
hundred and fifty dollars, that is a potentially big marketplace. Gatekeeper
technology is very well positioned. We have the total end to end solution
and most of the larger school districts in North America do business with
us. Therefore, we have a number of projects that are in our funnel now that
we feel are close to landing. We are in a position to potentially have
significant scalable revenue. From an investment standpoint, I feel we are
in the right space at the right time. We are debt free. We just went public.
We have got access to public funds to grow and we have got expertise in this
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