Mikros Systems Corporation Announces Second Quarter Financial Results; Revenues Increase 26%, Income From Operations Increases 9
Source PRN, PRNOTW
PRINCETON, N.J. , Aug. 14 /PRNewswire-FirstCall/ -- Mikros Systems
Corporation (OTC Bulletin Board: MKRS), announced its financial results for
the three and six months ended June 30, 2008 . Revenues for the second quarter
increased
Year to date, revenues increased
Mikros continues to invest for the future. The decrease in net income was due partially to the cost of additional engineering work on independent research and development projects, including development and testing of a prototype buoy for the Phase I Navy Power Buoy SBIR. The Company also experienced increased personnel costs including professional consulting fees related to higher levels of bid and proposal activities as well as stock option and incentive compensation. These expenses were expected and are in line with the Company's operating budget. Management believes these additional expenses in 2008 will contribute to the growth of the Company in future periods.
Chief Executive Officer Tom Meaney stated, "We are very pleased with our second quarter results. Our marketing and research efforts in the first quarter are starting to pay off as evidenced by the increase in revenue during the second quarter. We remain on budget, our cash position continues to increase, and we expect our business will continue to grow throughout the remainder of 2008. We are fully focused on both developing our existing programs, including ADEPT, RWSE, AIRchitect-EMC, and Autonomous Power Buoys, and targeting new R&D opportunities in the Department of Defense and Homeland Security SBIR programs. Over the years, we have developed many deep customer relationships and built a strong reputation in the defense industry. We believe that we can build off of these relationships to expand into engineering support services. For example, our recent Seaport-e contract gives us the opportunity to partner with other defense contractors to bid for a wide array of engineering service contracts for the entire Naval Enterprise, including Naval Air Systems Command, Space and Naval Warfare Systems Command, Naval Supply Systems Command, Military Sealift Command, Naval Facilities Command, Strategic Systems Programs, the United States Marine Corps, and other Department of Defense agencies."
Adaptive Diagnostic Electronic Portable Testset (ADEPT)
The ADEPT equipment has been tested aboard three US Navy ships and at several Lockheed Martin land-based test sites. Test results have been very positive. Instrumentation embedded into ADEPT has shown close correlation with stand-alone test equipment currently in use. Navy technicians have recognized time savings of more than 50% when using ADEPT to perform routine radar maintenance. ADEPT's unique ability to catalog instrumentation data collected during the maintenance process and facilitate radar troubleshooting from remote locations will be exhibited as part of the distance support demonstration for the Navy's Trident Warrior exercise in 2009.
Mikros recently completed Integrated Logistics Support (ILS) plans and other elements required for fielding ADEPT aboard operating Navy ships. An initial order for up to four units in support of the lead ships undergoing modernization could come by the end of the Government's fiscal year. This order hinges on the approval of submitted test results and plans, the availability of Government funding, and the timeliness of end-of-year Government contracting processes.
At least 84 Aegis ships have been identified that could benefit from ADEPT equipment. At 2 to 3 units per ship, Mikros anticipates additional orders for more than 200 systems over the next 3 years. The Company is engaged in discussions with other Navy program managers to begin development of ADEPT for use on other electronic systems, and extending its applicability to other Navy ships, to include carriers, submarines, amphibious assault craft, and the new Littoral Combat Ship (LCS). Mikros is also investigating the potential of a large international market for ADEPT, as many allied countries have, or are purchasing, Aegis and other Navy ships for use in their own Navies.
Wireless Programs
Mikros continues to execute two ongoing SBIR programs in wireless R&D. With its partner and subcontractor Intell-Check -- Mobilisa, Inc. Mikros is advancing development of the AIRchitect-EMC "interference-aware" wireless network design software. The Company is also working with Naval Air Warfare Center (NAWC) at China Lake to develop a new generation of simulation software that will be used to evaluate jamming effects on missiles and other weapons.
During the second quarter, Mikros was awarded two small study programs to use the AIRchitect-EMC design tool to help develop wireless networks for amphibious ships (LHD class) and aircraft carriers (CVN class). The Company believes these new contracts represent the first of multiple opportunities to use AIRchitect-EMC software to design wireless network installations aboard Navy ships. The Company is exploring an opportunity to establish a long term Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract with the Navy to support future shipboard wireless installations and other wireless networking efforts.
The Company is also exploring several strategies for further expanding the wireless business, including a strategic partnership with a major cell phone manufacturer to develop defense and homeland security applications with the US Army National Guard. To date, two proposals have been submitted to potential customers.
Autonomous Power Buoys
Mikros has also teamed with Ocean Power Technologies, Inc to develop and market autonomous PowerBuoys(R) to the US Navy, Coast Guard, and Department of Homeland Security. PowerBuoys(R) convert wave, wind and solar energy to continuous electric power for use by maritime sensors and communication devices. After successfully completing a Phase I SBIR study on this technology, both companies invested their own funds to develop and test a prototype buoy to use as a marketing tool. PowerBuoys(R) have the advantage of longer life in the water as compared to buoys powered by batteries or diesel generators, as they require less maintenance and do not need to be refueled periodically. The Company is currently seeking Phase II or III funding under the SBIR program to accelerate the development of this technology.
Mikros and Ocean Power Technologies, Inc. are exhibiting this buoy product at the Office of Naval Research Annual Science and Technology Forum from August 12-14, 2008 in Washington, DC . The response at the show by senior Navy leadership has been very positive.
About Mikros
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: http://www.mikros.us.
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.
MIKROS SYSTEMS CORPORATION CONDENSED BALANCE SHEET (UNAUDITED) June 30, December 31, 2008 2007 ASSETS CURRENT ASSETS Cash and Cash Equivalents $468,873 $404,557 Receivables on Government Contracts 295,079 303,469 Other Current Assets 38,262 17,547 TOTAL CURRENT ASSETS 802,214 725,573 Patents and Trademarks 5,383 5,383 Less: Accumulated Amortization (591) (422) 4,792 4,961 PROPERTY AND EQUIPMENT Equipment 14,625 14,625 Furniture and Fixtures 9,264 9,264 23,889 23,889 Less: Accumulated Depreciation (13,430) (10,786) 10,459 13,103 Deferred Tax Asset 30,757 70,500 TOTAL ASSETS $848,222 $814,137 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accrued Payroll and Payroll Taxes $103,689 $86,757 Accounts Payable and Accrued Expenses 180,883 217,545 Taxes Payable 4,249 14,009 TOTAL CURRENT LIABILITIES 288,821 318,311 Long-term Liabilities 13,103 14,460 TOTAL LIABILITIES 301,924 332,771 REDEEMABLE SERIES C PREFERRED STOCK par value $.01 per share, authorized 150,000 shares, Issued and outstanding 5,000 shares (involuntary liquidation value - $80,450) 80,450 80,450 SHAREHOLDERS' EQUITY Preferred Stock, Series B convertible, par value $.01 per share, authorized 1,200,000 shares, issued and outstanding 1,102,433 shares (involuntary liquidation value - $1,102,433) 11,024 11,024 Preferred Stock, convertible, par value $.01 per share, authorized 2,000,000 shares, issued and outstanding 255,000 shares (involuntary liquidation value - $255,000) 2,550 2,550 Preferred Stock, Series D, par value $.01 per share 690,000 shares authorized, issued and outstanding (involuntary liquidation value - $1,518,000) 6,900 6,900 Common Stock, par value $.01 per share, authorized 60,000,000 shares, issued and outstanding 31,766,753 shares 317,668 317,668 Capital in excess of par value 11,450,482 11,430,668 Accumulated Deficit (11,322,776) (11,367,894) TOTAL SHAREHOLDERS' EQUITY 465,848 400,916 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $848,222 $814,137 MIKROS SYSTEMS CORPORATION CONDENSED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended, Six Months Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Revenues: Contract Revenue $1,062,832 $844,935 $1,714,114 $1,639,885 Cost of Sales 617,672 520,246 924,026 1,006,480 Gross Margin 445,160 324,689 790,088 633,405 Expenses: Engineering 157,055 96,271 285,430 191,704 General & Administrative 210,801 157,540 405,597 310,749 Total Expenses 367,856 253,811 691,027 502,453 Income from Operations 77,304 70,878 99,061 130,952 Other Income: Interest 695 2,419 2,191 2,589 Income Before Income Tax Expense 77,999 73,297 101,252 133,541 Income Tax Expense (Benefit) 43,633 (46,700) 56,133 (17,070) Net Income $34,366 $119,997 $45,119 $150,611 Basic and diluted earnings per share $0.00 $0.00 $0.00 $0.00 Basic weighted average number of Shares outstanding 31,766,753 31,766,753 31,766,753 31,766,753 Diluted Weighted Average number of Shares outstanding 35,231,234 35,449,489 35,237,012 35,453,895 MIKROS SYSTEMS CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, June 30, 2008 2007 Cash Flow From Operating Activities: Net Income $45,119 $150,611 Adjustments to reconcile Net Income to net cash provided by Operating Activities: Depreciation and Amortization 2,813 2,323 Deferred Tax Provision (Benefit) 39,743 (34,100) Recognition of Stock Option Expense 19,813 - Net Changes in Operating Assets and Liabilities (Increase) Decrease in: Receivables on Government Contracts 8,390 (186,995) Other Current Assets (20,715) (19,885) Increase (Decrease) in: Accounts Payable (83,462) 109,711 Accrued Payroll and Payroll Taxes 16,932 10,594 Other Accrued Expenses 35,683 22,137 Net Cash provided by Operating Activities 64,316 54,396 Cash Flow from Investing Activities: Purchase of Furniture and Fixtures - (9,264) Net Cash used in Investing Activities - (9,264) Net Increase in Cash and Cash Equivalents 64,316 45,132 Cash and Cash Equivalents, beginning of the period 404,557 229,459 Cash and Cash Equivalents, end of period $468,873 $274,591SOURCE Mikros Systems Corporation
