Drexler Technology Gets $7.4 Million U.S. Government Order for Multi-Biometric ID Cards

Business Wire, Sept 25, 2002

Business Editors

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Sept. 25, 2002

Drexler Technology Corporation (Nasdaq:DRXR) yesterday received a $7.4 million U.S. government order for its LaserCard multi-biometric ID cards, through Information Spectrum, Inc. (www.informationspectrum.com), a government prime contractor headquartered in Annandale, Virginia.

The new $7.4 million order is part of a five-year, U.S. government procurement subcontract authorizing up to $81 million for optical memory cards used for U.S. Immigration and Naturalization Service (INS) "Green Card" Permanent Resident Cards and U.S. Department of State (DOS) "Laser Visa" Border Crossing Cards (BCCs). Under the U.S. government subcontract, awarded to the Company in June 2000 for up to 24 million LaserCard(R) optical memory cards, approximately 11,320,000 cards have been ordered thus far under seven purchase orders, including the latest order.

The $7.4 million LaserCard order calls for deliveries beginning next month at a rate slightly above $1 million per month for seven months.

U.S. Department of State Laser Visa cards are used by more than five million frequent visitors from Mexico for crossing the border, allowing travel up to 25 miles into the states of Arizona, California, New Mexico, and Texas for 72-hour visits for shopping and other consumer activities. According to a May 17, 2002 news release by the INS, with the enactment of the Enhanced Border Security and Visa Entry Reform Act, the Laser Visa Border Crossing Cards are also referred to as the "new biometric BCC, Form DST-150" and as the "new biometric, machine-readable cards." The INS news release is headlined, "More Than Five Million New Biometric BCCs Have Been Issued."

Headquartered in Mountain View, Drexler Technology Corporation (www.lasercard.com) develops and manufactures optical data storage products and systems, including LaserCard(R) optical memory cards and chip-ready Smart/Optical(TM) cards (a combination of optical memory card and smart card). Drexler's wholly owned subsidiary, LaserCard Systems Corporation, makes optical card read/write drives, develops optical card system software, and markets card-related data systems and peripherals. The Company is a supplier of optical memory cards for the U.S. Immigration and Naturalization Service, U.S. Department of State, U.S. Department of Defense, Government of Canada, Government of Italy, and a state government of India. The LaserCard optical memory card is capable of recording and storing up to 2,800 kilobytes (2.8 megabytes) of digital data.

Forward-Looking Statements: Except for the historical information contained herein, the matters set forth in this press release contain forward-looking statements -- including statements as to customers, applications, market segments, orders, utilization, and expected delivery schedules for optical memory card products; expectations as to continuation of U.S. government card programs and other governmental card programs; and the Company's plans, objectives, and anticipated economic performance. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to, the impact of governmental or regulatory proceedings; general economic trends; lengthy sales cycles and reliance on government policy-making; the Company's reliance on value-added resellers, licensees, or other third parties; risks, difficulties, and uncertainties associated with development, manufacture, and deployment of optical memory cards, drives, and systems; the impact of technological advances and competitive products; the U.S. government's right to withhold order releases, reduce the quantities released, and extend delivery dates; risks associated with doing business in and with foreign countries; and other risks detailed from time to time in the SEC reports of Drexler Technology Corporation, including its annual report on Form 10-K for the year ended March 31, 2002. These forward-looking statements speak only as of the date hereof. Drexler Technology disclaims any intention or obligation to update or revise any forward-looking statements. There is no assurance that the Company's card products will be selected for implementation of the Enhanced Border Security and Visa Entry Reform Act signed into law on May 14, 2002.