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Revenue Increases 46% and net income increases 70% from the nine months ended September 30, 2006
Princeton, NJ /PRNewswire-FirstCall/ November 16, 2007 – Mikros Systems Corporation (OTCBB: MKRS – News), announced today significant increases in revenues, gross margin and net income for the nine months ended September 30, 2007. Year to date, revenue from contracts increased from $1,576,283 to $ 2,303,142, a gain of 46%, gross margin increased from $636,418 to $934,429, a gain of 47%, and net income increased from $96,799 to $164,408, a gain of 70%. For the three months ended September 30, 2007, revenue from contracts increased from $626,290 to $663,256, a gain of 6%, gross margin increased from $260,354 to $301,024, a gain of 16%, and net income was $13,796 compared to $78,689 in 2006. The reduction in profitability for the third quarter resulted primarily from increased current expenses which are expected to provide material benefits in future periods and position the Company well for future growth. These expenses included investments related to the retention of new engineering employees and consultants and costs related to proposal work and business development. In addition, in order to insure compliance with Section 404 of the Sarbanes-Oxley Act, the Company incurred a number of one time consulting, legal and accounting fees.
Chief Executive Officer Tom Meaney stated, “We are extremely excited about our financial performance so far this year and are even more excited about our prospects for future growth. We have a record contract backlog of nearly $4 million and we continue to execute contracts in a profitable manner. We have nearly doubled the amount of cash and cash equivalents on hand since last year. Our ADEPT(R) program continues to meet or exceed expectations on all fronts; our Radar Wireless Spectral Efficiency (RWSE) is gaining momentum and we continue to land meaningful SBIR awards. We believe these will all be huge drivers of future revenue growth and profits.”
Operational Highlights For the Period Ended September 30, 2007 Include:
Mikros’ flagship ADEPT(R) program continues to be well supported by the Navy customer and members of Congress. The new lightweight unit is ready for production after having passed extensive environmental tests. Results from land-based and shipboard testing aboard the USS San Jacinto have been very encouraging and The San Jacinto has requested that the ADEPT equipment be kept on the ship permanently. Current recommendations from the fleet are for three ADEPT units per ship for Aegis cruisers and two per ship for Aegis destroyers, representing a total potential market of 84 ships in the Aegis fleet.
The Navy has encouraged Mikros to extend ADEPT to other shipboard equipment and other platforms, such as amphibious ships, aircraft carriers, submarines, and the Coast Guard, as well as to Allied fleets with over 100 ships.
The Radar Wireless Spectral Efficiency (RWSE) program with SPAWAR continued to progress. The original $750,000 Small Business Innovative Research (SBIR) Phase 2 contract was recently increased by $900,000 to apply Mikros’ technology to the Secure Wireless Program on Navy amphibious ships supporting the US Marines. Mobilisa, Inc. (Port Townsend, WA) is the Company’s strategic partner in this effort, which leverages many years of their wireless software experience. The Navy has announced plans to continue this effort well into calendar 2009.
Mikros is also applying its innovative and proprietary wireless software technology to the analysis of weapon data links, under a $750,000 US Navy Phase 2 SBIR contract.
Recent SBIR awards have been equally exciting and are also expected to contribute to Mikros’ continued growth. The Radiation Hazard program, with Mobilisa as the prime contractor, is developing software tools to analyze radiation hazards to personnel. Mikros recently submitted a Phase 2 proposal to the Air Force which if successful, may also have commercial applications. The Company’s most recent new contract, a Navy Phase 1 SBIR program to design an innovative new communications buoy platform, also has potential applications in the Department of Homeland Security (DHS) and the US Coast Guard. The buoy is designed to allow submarines to communicate with external forces while continuing its mission at speed and depth. This award is the result of combining Mikros communications and systems capabilities and subcontractor Ocean Power Technologies (OPT, Pennington, NJ) expertise with energy-harvesting “Power Buoys”. OPT has been developing and delivering PowerBuoy(R) technology for the US Navy for many years.
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.
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.