<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                   FORM 10-Q


[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the Quarter Ended March 28, 1999.

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the Transition Period from __________ to __________.

Commission File Number 000-21559



                           VIISAGE TECHNOLOGY, INC.
             ____________________________________________________
            (Exact name of registrant as specified in its charter)


Delaware                                                    04-3320515
-------------------------------                             -------------------
(State or other jurisdiction of                             (I.R.S. Employer 
incorporation or organization)                              Identification No.) 
                                                                              
30 Porter Road, Littleton, MA                               01460
----------------------------------------                    -------------------
(Address of principal executive offices)                    (Zip Code)

                                                              
Registrant's telephone number, including area code          (978)-952-2200 
                                                            -------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.        [X]  Yes      [_]  No


Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

          Class                         Outstanding at April 30, 1999
-----------------------------      -------------------------------------------
Common stock, $.001 par value                    8,457,619
 
<PAGE>
 
                           VIISAGE TECHNOLOGY, INC.
                                        
                                     INDEX


<TABLE> 
<CAPTION> 
                                                                                                        Page
                                                                                                        ----
<S>                                                                                                     <C> 
PART I -  FINANCIAL INFORMATION
 
Item 1 -  Financial Statements
 
          Condensed Balance Sheets as of March 28, 1999 and December 31, 1998..........................   1
 
          Condensed Statements of Operations for the three months ended March 28, 1999
          and March 29, 1998...........................................................................   2 
 
          Condensed Statements of Cash Flows for the three months
          ended March 28, 1999 and March 29, 1998......................................................   3
 
          Notes to Condensed Financial Statements......................................................   4
 
Item 2 -  Management's Discussion and Analysis of Financial
          Condition and Results of Operations..........................................................   6
 
PART II - OTHER INFORMATION

 Item 6 - Exhibits and Reports on Form 8-K.............................................................   11

SIGNATURES.............................................................................................   12
</TABLE> 
 

                                       i

 
 
<PAGE>
 
PART 1 - FINANCIAL INFORMATION

Item 1 - Financial Statements



                           VIISAGE TECHNOLOGY, INC.
                           Condensed Balance Sheets
                                (In thousands)


<TABLE>
<CAPTION>  
                                                                  March 28,           December 31,
                                                                    1999                  1998
                                                                --------------      --------------
                                                                  (Unaudited)
<S>                                                            <C>                <C>       
Assets                                                                           
Current Assets:                                                                  
     Cash and cash equivalents                                  $         164       $         166
     Accounts receivable                                                4,305               4,285
     Costs and estimated earnings in excess of billings                22,766              21,723
     Other current assets                                                 765                 683
                                                                --------------      --------------
           Total current assets                                        28,000              26,857
Property and equipment, net                                            17,432              18,513
Other assets                                                              951               1,074
                                                                --------------      --------------
                                                                $      46,383       $      46,444
                                                                ==============      ==============
                                                                                 
Liabilities and Shareholders' Equity                                             
Current Liabilities:                                                             
     Accounts payable and accrued expenses                      $      10,146       $       9,090
     Accrued and deferred income taxes                                     20                  27
     Subordinated debt                                                    800                 800
     Current portion of long-term debt                                  2,347               2,054
     Obligations under capital leases                                   3,787               3,797
                                                                --------------      --------------
           Total current liabilities                                   17,100              15,768
Long-term debt                                                          6,500               6,500
Obligations under capital leases                                       10,749              11,558
                                                                --------------      --------------
                                                                       34,349              33,826
Shareholders' equity                                                   12,034              12,618
                                                                ==============      ==============
                                                                $      46,383       $      46,444
                                                                ==============      ==============

</TABLE> 
  The accompanying notes are an integral part of these financial statements.

                                       1
<PAGE>
 
                           VIISAGE TECHNOLOGY, INC.
                      Condensed Statements of Operations
                   (in thousands, except per share amounts)
                                  (Unaudited)

<TABLE> 
<CAPTION> 
                                                                                     Three Months Ended
                                                                          ------------------------------------------
                                                                            March 28,                   March 29,
                                                                               1999                        1998
                                                                          --------------              --------------
<S>                                                                      <C>                          <C> 
Revenues                                                                  $       4,431                $      4,629
Project costs                                                                     3,708                       3,996
                                                                          --------------              --------------
           Project Margin                                                           723                         633
                                                                          --------------              --------------
Operating expenses:
       Sales and marketing                                                          260                         591
       Research and development                                                      98                          17
       General and administrative                                                   510                         498
                                                                          --------------              --------------
           Total operating expenses                                                 868                       1,106
                                                                          --------------              --------------
           Operating loss                                                          (145)                       (473)
Interest expense, net                                                               520                         353
                                                                          --------------              --------------
           Loss before change in accounting principle                              (665)                       (826)
Cumulative effect of change in accounting principle                                   -                      (1,038)
                                                                          ==============              ==============
           Net loss                                                       $        (665)              $      (1,864)
                                                                          ==============              ==============

Basic net loss per share before change in accounting principle            $       (0.08)              $       (0.10)
Basic net loss per share                                                  $       (0.08)              $       (0.23)
                                                                          ==============              ==============
Weighted average common shares                                                    8,421                       8,066
                                                                          ==============              ==============

Diluted net loss per share before change in accounting principle          $       (0.08)              $       (0.10)
Diluted net loss per share                                                $       (0.08)              $       (0.23)
                                                                          ==============              ==============
Weighted average common shares                                                    8,421                       8,066
                                                                          ==============              ==============

</TABLE> 
  The accompanying notes are an integral part of these financial statements.

                                       2
<PAGE>
 
                           VIISAGE TECHNOLOGY, INC.
                      Condensed Statements of Cash Flows
                                (in thousands)
                                  (Unaudited)

<TABLE> 
<CAPTION> 
                                                                                            Three Months Ended
                                                                                -------------------------------------------
                                                                                  March 28,                    March 29,
                                                                                    1999                         1998
                                                                                --------------               --------------
<S>                                                                            <C>                          <C> 
Cash Flows from Operating Activities:
     Net loss                                                                   $        (665)               $      (1,864)
     Adjustments to reconcile net loss to net cash
     (used) provided by operating activities:
         Depreciation and amortization                                                  1,101                          845
         Directors fees paid in common stock                                               36                            -
         Changes in operating assets and liabilities:
            Accounts receivable                                                           (20)                        (230)
            Costs and estimated earnings in excess of billings                         (1,043)                        (298)
            Other current assets                                                            6                         (213)
            Accounts payable and accrued expenses                                       1,056                       (1,428)
            Accrued and deferred taxes                                                     (7)                         (16)
                                                                                --------------               --------------
                   Net cash (used) provided by operating activities                       464                       (3,204)
                                                                                --------------               --------------

Cash Flows from Investing Activities:
     Purchase of contract equipment converted to capital leases                             -                         (850)
     Additions to property and equipment                                                    -                          (15)
     Decrease in other assets                                                              50                           12
                                                                                --------------               --------------
                   Net cash (used) provided by investing activities                        50                         (853)
                                                                                --------------               --------------

Cash Flows from Financing Activities:
     Net revolving credit borrowings                                                      293                        2,521
     Proceeds from sale/leaseback of equipment                                              -                          850
     Principal payments on long-term borrowings                                             -                         (138)
     Principal payments on obligations under capital leases                              (819)                        (787)
     Net proceeds from issuance of common stock                                            10                           11
                                                                                --------------               --------------
                   Net cash (used) provided by financing activities                      (516)                       2,457
                                                                                --------------               --------------

Decrease in cash and cash equivalents                                                      (2)                      (1,600)
Cash and cash equivalents, beginning of period                                            166                        1,611
                                                                                --------------               --------------
Cash and cash equivalents,end of period                                         $         164                $          11
                                                                                ==============               ==============

Supplemental cash flow information:
     Cash paid during the period for interest                                   $         462                $         310
                                                                                ==============               ==============

     Cash paid during the period for income taxes                               $           -                $          39
                                                                                ==============               ==============

Non cash activities:
     Issuance of stock options                                                  $          35                $           -
                                                                                ==============               ==============

</TABLE> 
  The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
 
                           VIISAGE TECHNOLOGY, INC.
                    Notes To Condensed Financial Statements
                                  (Unaudited)
                                        
Note 1.  Basis of Presentation

      The financial information included herein is unaudited, however, the
information reflects all adjustments (consisting solely of normal recurring
adjustments) that are, in the opinion of management, necessary for a fair
presentation of the financial position, results of operations and cash flows for
the interim periods presented. These financial statements should be read in
conjunction with the financial statements and notes thereto and management's
discussion and analysis of financial condition and results of operations
included in the Company's 1998 Form 10-K.

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

      The results of operations for the period ended March 28, 1999 are not
necessarily indicative of the operating results to be expected for the full
year.

      The condensed balance sheet as of December 31, 1998 has been derived from
the audited financial statements for that date.

 
Note 2.  Income Taxes

      Due to the uncertainty surrounding the realization of the Company's net
deferred tax asset the Company has provided a full valuation allowance against
this amount.

Note 3.  Related Party Transactions 

      During the quarter, the Company issued Lau options to purchase 60,000
shares of the Company's common stock in exchange for Lau's guarantee of an
indemnification obligation of the Company.  The options are exercisable through
February 2002 at $1.90 per share.  The fair value of the options have been
credited to shareholders' equity and charged to costs and estimated earnings in 
excess of billings.

      In May 1999, the Company issued a $2,000,000, 4% convertible subordinated
note to Lau in connection with Lau's commitment to provide up to $2,000,000 of
additional funding which can be drawn, under certain conditions defined in the
commitment, at various times through February 2000.  Amounts drawn under the
note and related accrued interest are convertible into shares of the Company's
common stock at any time prior to December 31, 2000 at $1.26 per share.  In May
1999, the Company borrowed $1,000,000 under the note.

Note 4.  Net Loss per Share

      Basic and dilutive net loss per share are computed based on the weighted
average number of common shares outstanding during the period.  The diluted per
share amounts do not reflect the impact of options outstanding for 2,999,594 and
1,596,975 shares, respectively, because their effect is antidilutive. Except for
convertible debt and options referred to above, the Company does not have any
other potential common stock.

                                       4
<PAGE>
 
                           VIISAGE TECHNOLOGY, INC.
              Notes To Condensed Financial Statements (Continued)
                                  (Unaudited)
                                        
Note 5.  Business Segments

     The Company is engaged in one business, the development and implementation
of digital identification systems and solutions.  Effective June 1, 1998, the
Company reorganized its operations to create two separate divisions, a
biometrics division and a systems integration and identification card division.
Since June 1, 1998, the Company has operated in two segments.  Amounts for the
biometrics division prior to the reorganization are not material.  The costs of
shared facilities and certain administrative services have been allocated to
each business based on actual usage or other methods that approximate actual
usage.  All other costs and expenses have been allocated to each business based
on actual usage.  Management evaluates segment performance based on operating
income.

     Substantially all of the Company's revenues are currently derived by its
systems integration and identification card division from public sector
customers and contractors to such customers.  The Company believes for the
foreseeable future that it will continue to derive a significant portion of its
revenues from a limited number of large public sector contracts.  For the three
months ended March 28, 1999, three customers each accounted for more than 10% of
the Company's revenues and an aggregate of 50% of revenues for the period.
 
<TABLE>
<S>                                                 <C>          <C>    
                                                    1999      1998
                                                    ----      ----
Business Segment Information
Revenues:
  Systems integration division                     $ 4,431   $ 4,629
  Biometrics division                                    -         -
                                                  ------------------
                                                   $ 4,431   $ 4,629
                                                  ==================
Operating Income (Loss):                                     
  Systems integration division                     $   387   $  (473)
  Biometrics division                                 (532)        -
                                                  ------------------
                                                   $  (145)  $  (473)
                                                  ==================

</TABLE>

                                       5
<PAGE>
 
                           VIISAGE TECHNOLOGY, INC.
                                        

Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations

      The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto contained in the Company's 1998 Form
10-K.

      The following discussion and analysis contains forward-looking statements
that involve risks and uncertainties.  The Company's actual results could differ
materially from those discussed herein.  Factors that could cause or contribute
to such differences include, but are not limited to, those discussed in the
section below entitled "Certain Factors That May Affect Future Results."  The
cautionary statements made herein should be read as being applicable to all
related forward-looking statements in this Form 10-Q.

Overview
--------

      Viisage is a leader in the emerging field of biometrics technology and in
providing digital identification systems and solutions.  The Company focuses on
identification solutions that improve personal convenience and security, deter
fraud and reduce identification program costs.  Viisage combines its systems
integration and software design capabilities with its proprietary software and
hardware products and other industry standard products to create complete
customized solutions.  These turnkey solutions integrate image and data capture,
create relational databases, incorporate multiple biometrics and improve
customers' ability to move and manage information.  Applications can include
driver's licenses, voter registration, national ID's, law enforcement, social
services, access control and PC network and internet access security.  To date,
Viisage's primary customers have been government agencies with particular
emphasis on U.S. drivers licensing agencies.  Since its inception in 1993, the
Company has captured approximately 30% of the domestic driver's license market.
Viisage products annually produce more than 20 million identification documents
at more than 1,000 locations in 11 states.  The Company has also provided
services under subcontracts for projects in Jamaica, the Philippines and for the
U.S. Immigration and Naturalization Service.

      During 1998 and 1999, the Company's revenue growth slowed significantly
due primarily to lengthening procurement delays in its principal markets and a
strong competitive market place.  The Company believes that the acceptance of
digital identification technology in recent years, its commitment to providing
customized solutions for its customers needs, its expertise in facial imaging
and biometric solutions and its proprietary software and hardware products will
continue to contribute to its growth.

      Effective June 1, 1998, the Company reorganized its operations to create a
separate biometrics division to respond to the growing market interest in
biometric solutions.  The biometrics division is focused on product, market and
channel development activities in three principal areas: facility access
control; PC network and internet access security; and real-time large database
identification and verification of individuals.  The systems integration and
identification card division (SI division) focuses on Viisage's public sector
markets and serves as a channel to existing customers and the public sector for
the Company's biometric technologies.

      The Company is engaged in one business, the development and implementation
of digital identification systems and solutions.  As discussed above, since June
1, 1998, the Company has operated in two segments.  Amounts for the biometrics
division prior to the reorganization are not material or meaningful.

                                       6
<PAGE>
 
      The SI division provides systems and services principally under contracts
that have five-year terms and provide for several annual renewals after the
initial contract term.  Contracts generally provide for a fixed price for the
system and/or for each card produced.  Contract prices vary depending on, among
other things, design and integration complexities, the nature and number of
workstations and sites, the projected number of cards to be produced, the size
of the database, the level of post-installation support and the competitive
environment.  Substantially all of the Company's revenues are currently derived
by its systems integration and identification card division from public sector
customers and contractors to such customers.  The Company believes for the
foreseeable future that it will continue to derive a significant portion of its
revenues from a limited number of large public sector contracts.  For the three
months ended March 28, 1999, three customers each accounted for more than 10% of
the Company's revenues and an aggregate of 50% of revenues for the period.

      The Company's results of operations are significantly affected by, among
other things, the timing of award and performance on contracts.  As a result,
the Company's revenues and income may fluctuate from quarter to quarter, and
comparisons over longer periods of time may be more meaningful.  The Company's
results of operations are not seasonal since contracts are awarded and performed
throughout the year.  However, the Company believes its SI division business
is subject to cyclical procurement delays that may be related to state-wide
election cycles. Biometrics division revenues have not been material to date and
operations are not expected to be seasonal.

Results of Operations
---------------------

Revenues. SI division revenues are derived principally from systems
implementation, card production and related services under multi-year contracts.
Revenues were $4.4 million for the quarter ended March 28, 1999 compared to $4.6
million for the same period in 1998.  Revenues for 1999 relate solely to the SI
division and reflect the impact of new business awards in the second half of
1998.

Project Costs and Margin. SI division project costs consist primarily of
hardware, consumables (printer ribbons, cards, holographic overlays, etc.),
system design, software development and implementation labor, maintenance and
overhead.  As a percentage of revenues, project costs decreased to 84% for the
quarter ended March 28, 1999 from 86% for the comparable period in 1998. Project
costs for 1999 reflect the impact of lowering project margin estimates in the
third and fourth quarters of 1998, as well as the impact of new business on the
overall revenue mix. Project costs for 1998 include approximately $283,000 of
start up costs and $50,000 of restructuring costs, respectively. Project costs
for 1998 do not reflect the impact of margin adjustments made at the end of
1998. Project margin increased 14% to $723,000 (16% of revenues) for the quarter
ended March 28, 1999 from $633,000 (14% of revenues) for the comparable period
in 1998. This improvement reflects the changes in project costs discussed above.
Biometrics division project costs for the periods were not material.

Sales and Marketing. Sales and marketing expenses consist primarily of
compensation and professional service fees for marketing, bid and proposal and
customer support activities. SI division sales and marketing expenses for the
quarter ended March 28, 1999 decreased 83% to $100,000 from $591,000 for the
comparable period in 1998.  Sales and marketing expenses for 1998 include
restructuring costs of approximately $170,000.  The decrease in SI division
sales and marketing expenses for 1999 reflects the restructuring and related
headcount reductions, the allocation of certain marketing resources to the
biometrics division beginning in June 1998, more focused marketing efforts and
the Company's on-going cost reduction efforts.  As a percentage of revenues, SI
division sales and marketing expenses were 2% for the quarter ended March 28,
1999 compared to 13% in 1998 due to the factors discussed above. Biometrics
division sales and marketing expenses for the quarter ended March 28, 1999 were
$160,000.

                                       7
<PAGE>
 
Research and Development. Research and development expenses consist principally
of compensation, outside services and materials utilized for product and
software development activities that are not related to specific projects.
There were no SI division research and development expenses for the quarter in
either period. Biometrics division research and development expenses were
$98,000 for the quarter ended March 28, 1999 compared to $17,000 in total
research and development expenses for the same period in 1998.  Such amounts do
not include amounts for specific projects that are allocated to project costs
and do not reflect the benefits to the Company under license arrangements from
the research and development efforts of Lau Technologies and the Massachusetts
Institute of Technology for projects that are not directly related to the
Company.

General and Administrative. General and administrative expenses consist
principally of compensation for executive management, finance and administrative
personnel and outside professional fees and are shared by the Company's two
divisions.  General and administrative expenses were $510,000 for the quarter
ended March 28, 1999 compared to $498,000 for the comparable period in 1998. As
a percentage of revenues, general and administrative expenses were 12% for the
quarter ended March 28, 1999, compared to 11% for the same period in 1998.

Interest Expense. The increase in net interest expense to $520,000 for the
quarter ended March 28, 1999 from $353,000 for the comparable period in 1998
reflects increased borrowings and rates during 1999.

Income Taxes. The Company did not record any tax benefit for the 1999 and 1998
losses due to the uncertainty of when such benefit will be realized.

Liquidity and Capital Resources
-------------------------------

      At March 28, 1999, working capital was $10.9 million compared to $11.1
million at December 31, 1998.

      For the quarter ended March 28, 1999, operations and investing activities
provided cash of approximately $464,000 and $50,000, respectively, which was
used to repay capital lease obligations.

      The Company has a revolving credit facility with a commercial bank that
provides for borrowings of up to $10 million through September 30, 1999, $9
million through December 31, 1999, and $6.5 million through June 30, 2000 at the
prime rate plus 1%.  The revolving credit facility is secured by substantially
all of the Company's assets and requires the Company to maintain certain
financial ratios and minimum levels of earnings and tangible capital funds, as
defined.  The revolving credit facility also requires the Company to raise
funds, as needed, from other sources to cover biometrics division expenses.
These sources are expected to include a combination of biometrics division
revenues, subordinated debt and equity capital.

      The Company also has a system project lease financing arrangement with a
commercial leasing organization.  Pursuant to this arrangement, the lessor
purchases certain of the Company's digital identification systems and leases
them back to Viisage for deployment with identified and contracted customers
approved by the lessor.  The lessor retains title to systems and has an
assignment of Viisage's rights under the related customer contracts, including
rights to use the software and technology underlying the related systems.  Under
this arrangement, the lessor bears the credit risk associated with payments by
Viisage's customers, but Viisage bears performance and appropriation risk and is
generally required to repurchase a system in the event of a termination by a
customer for any reason except credit default.  The Company is also required to
maintain certain financial ratios and minimum levels of tangible capital funds,
as defined.  These project lease arrangements are accounted for as capital
leases. 

                                       8
<PAGE>
 
The current arrangement provides for project financing of up to $15.0 million.
At March 28, 1999, the Company had approximately $14.2 million outstanding under
the lease financing arrangement. The Company has a similar project lease
financing arrangement with Lau that provides for up to $3.1 million of capital
lease financing in 1999.

     The Company believes that it will meet its debt covenants.  However, this
expectation is dependent in part on achieving business forecasts and raising
funds to cover biometrics division expenses.  If the Company does not meet such
covenants, the bank and the lessor could require immediate repayment of amounts
outstanding.

     In May 1999, the Company issued a $2,000,000, 4% convertible subordinated
note to Lau in connection with Lau's commitment to provide up to $2,000,000 of
additional funding which can be drawn, under certain conditions defined in the
commitment, at various times through February 2000.  Amounts drawn under the
note and related accrued interest are convertible into shares of the Company's
common stock at any time prior to December 31, 2000 at $1.26 per share.  In May
1999, the Company borrowed $1,000,000 under the note.  The Company plans to
raise additional funding, as needed, from other sources.

     The Company has historically not made substantial capital expenditures for
facilities, office and computer equipment and has satisfied its needs in these
areas principally through leasing.

     The Company believes that if it meets its business forecast for 1999, cash
flows from available borrowings, project leasing, operations and capital raising
will be sufficient to meet the Company's working capital and capital expenditure
needs for the foreseeable future.  There can be no assurance, however, that
additional capital will be available on favorable terms or at all.  If the
Company is unable to obtain additional capital, as needed, on acceptable terms
the Company may be unable to take full advantage of future opportunities or
respond to competitive pressures, which could adversely affect the Company's
business, financial condition and results of operations.  Failure to obtain
additional capital could also result in violation of debt and project lease
financing covenants.

Market Risk
-----------

     Except for the Company's revolving credit facility, which has a variable
interest rate, the Company has no material exposure to market risk that could
affect its future results of operations and financial condition.

Impact of Year 2000 Issue
-------------------------

     The Company continues to assess the potential impact of the year 2000 on
the Company's internal business systems, products, and operations.  The
Company's year 2000 initiatives include (i) testing and upgrading internal
business systems and facilities; (ii) testing and developing necessary upgrades
for the Company's current products and certain discontinued products; (iii)
contacting key suppliers, vendors, and customers to determine their year 2000
compliance status; and (iv) developing contingency plans.

     The Company's accounting and information systems provider, Lau, has
advised the Company that its internal business systems are year 2000 compliant.
The Company expects that its facilities will be year 2000 compliant by the end
of 1999 and problems encountered, if any, will be remedied by the owners of such
facilities.

                                       9
<PAGE>
 
      The Company believes that all of the material products that it currently
sells are year 2000 compliant or can be made compliant with minor modifications.
However, as many of the Company's products are complex, interact with third-
party products, and operate on computer systems that are not under the Company's
control, there can be no assurance that the Company has identified all of the
year 2000 issues with its current products.  The Company is continuing to test
and evaluate such products and may offer upgrades to alternative products where
reasonably practicable.

      The Company is in the process of identifying and contacting suppliers,
vendors, and customers that are believed to be significant to the Company's
business operations in order to assess their year 2000 readiness.  As part of
this effort, the Company is developing questionnaires relating to year 2000
compliance for distribution to its significant suppliers, vendors, and
customers.  The Company intends to follow-up and monitor the year 2000 compliant
progress of significant suppliers, vendors, and customers that indicate that
they are not year 2000 compliant or that do not respond to the Company's
questionnaires.  The Company intends to develop a contingency plan that will
allow its primary business operations to continue despite disruptions due to
year 2000 issues.  These plans may include identifying and securing other
suppliers, increasing inventories, and modifying production facilities and
schedules.  As the Company continues to evaluate the year 2000 readiness of its
products and significant suppliers, vendors, and customers, it will modify and
adjust its contingency plan as may be required.

      To date, costs incurred in connection with the year 2000 issue have not
been material.  The Company does not expect total year 2000 remediation costs to
be material, but there can be no assurance that the Company will not encounter
unexpected costs or delays in achieving year 2000 compliance.  If any of the
Company's material suppliers, vendors, or customers experience business
disruptions due to year 2000 issues, the Company might also be materially
adversely affected.  While the Company is attempting to minimize any negative
consequences arising from the year 2000 issue, there can be no assurance that
year 2000 issues will not have a material adverse impact on the Company's
business, operations, or financial condition.

Certain Factors That May Affect Future Results
----------------------------------------------

      The Company operates in an environment that involves a number of risks,
some of which are beyond the Company's control.  Forward-looking statements in
this document and those made from time to time by the Company through its senior
management are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.  Forward-looking statements concerning
future plans or results are necessarily only estimates and actual results could
differ materially from expectations.  Certain factors that could cause or
contribute to such differences include, among other things, potential
fluctuations in quarterly results, the size and timing of award and performance
on contracts, dependence on large contracts and a limited number of customers,
lengthy sales and implementation cycles, changes in management estimates
incident to accounting for contracts, availability and cost of key components,
market acceptance of new or enhanced products and services, proprietary
technology and changing technology, competitive conditions, system performance,
management of growth, dependence on key personnel, risks of year 2000 issues,
and general economic and political conditions and other factors affecting
spending by customers.

                                      10
<PAGE>
 
                           VIISAGE TECHNOLOGY, INC.
                                        

                                        
PART II - OTHER INFORMATION


Item 6 - Exhibits and Reports on Form 8-K

          (a) Exhibits
              27  Financial Data Schedule
 
 
          (b) Reports on Form 8-K

              None


 
                                      11
<PAGE>
 
                            VIISAGE TECHNOLOGY, INC.
                                        
                                   SIGNATURES


      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                               VIISAGE TECHNOLOGY, INC.


Date:  May 12, 1999            By:  /s/ Thomas J. Colatosti
                                    -------------------------------------
                                    Thomas J. Colatosti
                                    President and Chief Executive Officer



                               By:  /s/ William A. Marshall
                                    -------------------------------------
                                    William A. Marshall
                                    Chief Financial Officer


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