Mikros Systems Announces Fourth Quarter & Full Year Results

Record Revenue in 2011; Company Positioned for Continued Growth

PRINCETON, N.J., March 30, 2012 (GLOBE NEWSWIRE) — Mikros Systems Corporation (OTCBB:MKRS) today announced results for the fourth quarter and twelve months ended December 31, 2011.


  • Achieved record revenue of $5.3 million in 2011, up 11% from $4.8 million in 2010
  • Increased gross profit to $2.1 million from $2.0 million in 2010
  • Ended 2011 with $1.0 million in cash and cash equivalents, an increase of over 50% from 2010
  • Currently pursuing a number of new contracts expected to accelerate growth in 2012 and beyond

"Mikros finished 2011 very well positioned for continued expansion and profitability, with record revenue of $5.3 million and a growing reputation for providing high quality products and services to our customers," said Tom Meaney, Mikros President and CEO. "Our core ADEPT applications are performing well across the U.S. fleet, and we anticipate increasing demand for units under the current contract that runs through 2015 – as we are not even halfway through the total ceiling value of $26 million. We remain very active in the market and are currently bidding on a number of potential opportunities that leverage our unique technical expertise and can assist the Navy in modernizing its shipboard network infrastructure. Overall, we are confident about where we stand and believe that 2012 will be a year of continued growth, higher profitability, and additional program wins."

Fourth Quarter Results
Revenue for the fourth quarter of 2011 increased 56% to $2.3 million, as compared with $1.5 million for the fourth quarter of 2010, reflecting higher revenues related to the Company’s ADEPT products. Mikros realized gross profit of $0.7 million, or 31.4% of revenue, as compared to $0.6 million, or 44.2% of revenue, in the prior-year period. The Company posted net income of $0.2 million, or $0.005 per diluted share, as compared to net income of $0.1 million, or $0.003 per diluted share, in the fourth quarter of 2010. Mikros ended the year with $1.0 million in cash and cash equivalents, as compared to $0.6 million at the end of 2010.

Full Year Results
Revenue for the full year 2011 increased 11% to $5.3 million, as compared with $4.8 million for 2010, reflecting higher revenues related to the Company’s ADEPT products. Mikros reported gross profit of $2.1 million, or 39.9% of revenue, as compared to $2.0 million, or 41.8% of revenue, in the prior year. The Company posted net income of $0.2 million, or $0.005 per diluted share, as compared to net income of $0.3 million, or $0.007 per diluted share, in 2010. The effective income tax rate was 30.2% for 2011 versus 1.4% for 2010; the increase in the tax rate was attributable to an increase in income from operations that are offset by the continued utilization of federal net operating loss carry forwards and the reduction in the valuation allowance for deferred tax assets.
Additional information regarding the Company’s financial data may be found in the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2011 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.mikrossystems.com.

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: www.mikrossystems.com

2011 2010
Current assets
Cash and cash equivalents 963,556 638,106
Certificate of deposit, securing line of credit 50,000
Receivables on government contracts 1,478,103 549,116
Prepaid expenses and other current assets 30,846 45,284
Total current assets 2,472,505 1,282,506
Patents and trademarks 5,383 5,383
Less: accumulated amortization (1,775) (1,437)
3,608 3,946
Property and equipment
Equipment 37,070 34,642
Furniture & fixtures 9,264 9,264
46,334 43,906
Less: accumulated depreciation (35,167) (26,936)
Property and equipment, net 11,167 16,970
Deferred tax assets 21,000 59,000
Total assets $ 2,508,280 $ 1,362,422
Current liabilities
Accrued payroll and payroll taxes $ 364,148 $ 332,823
Accounts payable and accrued expenses 904,217 38,046
Accrued warranty expense 86,400 50,000
Total current liabilities 1,354,765 420,869
Long term portion of rent payable 16,708 2,714
Total liabilities 1,371,473 423,583
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 32,016,753 shares 320,168 317,668
Capital in excess of par value 11,575,436 11,549,587
Accumulated deficit (10,859,721) (11,029,340)
Total shareholders’ equity 1,056,357 858,389
Total liabilities and shareholders’ equity $ 2,508,280 $ 1,362,422
Years Ended December 31,
2011 2010
Contract Revenues $ 5,347,564 $ 4,802,393
Cost of sales 3,213,476 2,796,764
Gross margin 2,134,088 2,005,629
Engineering 757,307 725,706
General and administrative 1,134,667 1,025,928
Total expenses 1,891,974 1,751,634
Income from operations 242,114 253,995
Other income:
Interest 830 1,316
Net income before income taxes 242,944 255,311
Income tax expense 73,325 3,633
Net income $ 169,619 $ 251,678
Basic earnings per share $ 0.01 $ 0.01
Weighted basic average number of shares outstanding 31,847,328 31,766,753
Diluted earnings per share $0.00 $ 0.01
Weighted dilutive average number of shares outstanding 35,409,627 35,329,052

Investor Relations Contact:
Chris Witty, Darrow Associates

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, a decline or redirection of the U.S. Defense budget, the failure of Congress to approve a budget or a continuing resolution, the termination of any contracts with the U.S. Government, 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-K for the year ended December 31, 2011 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.

Mikros Systems Corporation, 220 Commerce Drive Suite 300, Fort Washington, PA 19034 Phone 215.371.3913