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Princeton, NJ /PRNewswire-FirstCall/ March 31, 2009 – Mikros Systems Corporation (OTCBB: MKRS) announced its financial results for the year ended December 31, 2008.
Fiscal Year 2008 Highlights
Mikros continued to make good progress during fiscal year 2008, as evidenced by maintaining stable revenues in a tough global market environment. We improved cash flow from operations and increased our cash position. We also increased investments in business development, marketing, employee development and incentive-based compensation. The Company continues to establish new relationships with industry-leading partners. We were also awarded a new contract for Seaport-e and are anticipating significant new contract awards for ADEPT in 2009.
“We expect these relationships and contracts to provide added flexibility allowing us to secure additional development and procurement opportunities with our customers for ADEPT, as well as our wireless and buoy programs. Our engineering and management team is experienced, understands our corporate vision, and we are poised for new growth. We opened an office in Largo, Florida near our ADEPT chassis manufacturer in anticipation of future production orders from the Navy, and our wireless programs have expanded to include customers and partners in the government and commercial markets. Our foray into autonomous power buoys provides us with additional revenue channels in the undersea warfare and homeland security markets,” stated Mikros President, Tom Meaney. “We are excited about the future and look forward to an exciting year for Mikros in 2009.”
The Company has diligently worked on ADEPT development and marketing while also focusing on its long-term projects with other strategic customers. Mikros has made steady advances in a number of ongoing projects, including:
At this time, the Navy plans to install at least 2 ADEPT units on each Aegis Cruiser and Destroyer. As a result, Mikros is anticipating an Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract award in 2009. This will facilitate ADEPT procurement, life-cycle support, and additional development for Aegis ships and other radar and electronic systems. Mikros’ business development team is actively marketing ADEPT capabilities to Navy managers for the Littoral Combat ship, Aegis international programs, and other radars and electronic systems, such as the AN/SPS-49, AN/SPQ-9B, AN/SPS-74, and AN/SLQ-32. Mikros is also beginning to uncover promising markets for ADEPT in support of radar and complex electronic systems found in the U.S. Army and Air Force.
Mikros has also partnered with LM Ericsson to market mobile cellular systems to the government market. The Company is jointly pursuing applications for this technology with the U.S. Marine Corps and National Guard with the objective of generating future contract awards for systems integration and logistics work.
At December 31, 2008, Mikros had cash and cash equivalents amounting to $608,530 and net working capital of $554,352. In 2008, the Company generated $203,973 of cash provided from operating activities compared to $185,873 in 2007.
Total contract revenues in 2008 were $3,098,264 compared to $3,078,492 in 2007, an increase of $19,772 or .6%. Based on current backlog and outstanding bids, the Company expects revenue to increase in future periods.
Costs of sales were $1,628,388 in 2008 compared to $1,828,184 in 2007, a decrease of $199,796 or approximately 10.9%. The decrease is the result of substantially lower subcontract and other direct costs.
Engineering expenses were $578,105 in 2008 compared to $436,104 in 2007, an increase of $142,001 or 32.6%. The rise in engineering costs for 2008 was primarily due to increased investments in employee-related costs.
General and administrative (G&A) expenses were $761,428 in 2008 compared to $651,155 in 2007, an increase of $110,273 or 16.9%. The rise in G&A expenses in 2008 was primarily due to increased investments in independent research and development and employee incentive compensation. Mikros also increased investments in business development and marketing for 2008, which resulted in higher proposal efforts and administrative labor costs. The Company also realized non-cash costs related to stock option compensation.
In 2008, income from operations was $130,343 as compared to $163,049 in 2007. The decrease of $32,706 or 20.1% was primarily attributable to a delay in receiving contracts from the Federal Government and increased operating expenses referred to above
Net income for 2008 was $55,099 as compared to $165,811 in 2007, a decrease of $110,712 or 66.8%. The decrease is primarily due to an increase in income tax expense in 2008 and the changes in income from operations discussed above.
Additional information may be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 filed with the U.S. Securities and Exchange Commission. The Form 10-K may be accessed at www.sec.gov or at the Company’s website at www.mikros.us.
Mikros Systems Corporation is an advanced technology company specializing in the research and development of electronic systems technology primarily for military applications. Classified by the U.S. Department of Defense as a small business, its capabilities include technology management, electronic systems engineering and integration, radar systems engineering, combat/command, control, communications, computers and intelligence systems engineering, and communications engineering. Mikros’ primary business is to pursue and obtain contracts from the Department of Homeland Security, U.S. Navy, and other governmental authorities. For more information on Mikros visit: www.mikros.us
Source: Mikros Systems Corporation
CONTACT: Thomas J. Meaney – (609) 987-1513
Important Information about Forward-Looking Statements: All statements in this news release other than statements of historical facts are forward-looking statements which contain our current expectations about our future results. Forward-looking statements involve numerous risks and uncertainties. We have attempted to identify any forward-looking statements by using words such as “anticipates,” “believes,” “could,” “expects,” “intends,” “may,” “should” and other similar expressions. Although we believe that the expectations reflected in all of our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the Company’s actual results, events or financial positions to differ materially from those included within the forward-looking statements. Such factors include, but are not limited to, changes in business conditions, changes in our sales strategy and product development plans, changes in the marketplace, continued services of our executive management team, our limited marketing experience, competition between us and other companies seeking SBIR grants, competitive pricing pressures, market acceptance of our products under development, delays in the development of products, statements of assumption underlying any of the foregoing, and other factors disclosed in our annual report on Form 10-KSB for the year ended December 31, 2007 and other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date hereof.