JH Harland John H

SAN DIEGO, Feb. 14 /PRNewswire-FirstCall/ -- Mitek Systems, Inc. (OTC:MITK) (http://www.miteksystems.com/), a leading provider of Image Analytics and intelligent character recognition software, today announced financial results for the first quarter of fiscal 2006 ended December 31, 2005. (Logo: http://www.newscom.com/cgi-bin/prnh/20041117/LAW022LOGO ) Net sales for the first quarter of fiscal 2006 were $1.5 million, compared with $1.3 million in the same quarter last year. Gross margin for the first quarter of fiscal 2006 was 73 percent, compared with 86 percent for the same quarter last year. The reduction in gross margin is due to increased revenue from software development services which has a higher cost of sales component. Operating loss for the first quarter of fiscal 2006 was $168,000 compared with a loss of $800,000 for the same quarter last year. Net loss for the first quarter of fiscal 2006 was $472,000 or $0.03 per basic and diluted share, compared with a net loss of $918,000, or $0.08 per basic and diluted share, for the same quarter last year. A significant portion of the net loss for the first quarter of fiscal 2006 is attributed to non-cash charges totaling $288,000 arising from the expensing of unamortized beneficial conversion charges associated with the conversion of $850,000 of the Company's convertible note into equity. The Company incurred beneficial conversion charges of $87,000 for the same quarter last year. The Company ended the first quarter of fiscal year 2006 with cash and cash equivalents of $1.8 million, compared with $1.4 million at the end of the same quarter last year. As of December 31, 2005, the Company had working capital of approximately $1.2 million and stockholders' equity of $1.4 million compared with ($123,000) and ($1.3) million, respectively, at the end of the first quarter of fiscal 2005. The principal balance under its convertible debt at the end of the first quarter of fiscal 2006 was $659,000, net of unamortized financing costs of $130,000, a reduction of $1.4 million from the same quarter last year, also net of unamortized financing cost. Total liabilities reported at the end of the first quarter of fiscal year 2006 decreased by $2.4 million compared to the same quarter last year, primarily as a result of the conversion of the convertible debt. "We are executing our long term strategy and continue to invest in perfecting our innovative identity validation products," said James DeBello, President and CEO. "During this quarter, we significantly improved our balance sheet and financial performance. Revenue improved 17% and total operating costs decreased 20%. We also materially reduced our long term debt, strengthened our working capital and added to stockholder's equity. As a result, we believe we are well-positioned for future growth." "During the quarter we announced several milestone achievements including the delivery of our software that powers John H. Harland Company's (NYSE:JH) newly released Validify(TM) solution to combat identity theft and check fraud," added DeBello. "Harland has mobilized its sales force and will deliver the solution to financial institutions, for which Mitek will receive recurring royalties based on Harland's sale of Validify printed checks. In addition, Mitek retains the exclusive rights to license the validation software to vendors of ATM machines, Point of Sale systems, kiosks, scanners, and other Check 21 compliant devices used to process check payments." "We believe that our unique capability to detect signature forgeries and counterfeits is also valuable in other markets," said DeBello. "We are actively pursuing opportunities in the healthcare and pharmaceutical industries and with government agencies where our technology could benefit compliance and protect against fraud. In addition, we will continue to explore opportunities to acquire complementary technologies or businesses to build shareholder value." The Company will host a conference call tomorrow at 11:00 a.m. Eastern Time (10:00 a.m. Central Time/8:00 a.m. Pacific Time) to discuss its first quarter fiscal 2006 results. The call can be accessed live on the Investor Relations section of the company's Web site at http://www.miteksystems.com/, and a replay will be available approximately two hours after the completion of the call through March 15, 2006. Analysis of the Company's financial statements is available within the Management's Discussion and Analysis section of the Form 10-QSB filed with the SEC and available on the SEC's website at http://www.sec.gov/. A printed copy of the financial report will be posted on the Company's website at http://www.miteksystems.com/. About Mitek Systems Mitek Systems (OTC:MITK) (http://www.miteksystems.com/) is a global leader in Image Analytics and intelligent character recognition products used by financial institutions to detect fraud and improve customer service. The Company also develops and markets the most comprehensive suite of intelligent character recognition software used to test, clean, read and authenticate imaged documents. Sold to partners and directly to end users, the Company's software is used in the processing of over 8 billion transactions per year. For more information about Mitek Systems, contact the company at 8911 Balboa Avenue, Suite B, San Diego, CA 92123; 858-503-7810 or visit http://www.miteksystems.com/. Forward-Looking Statement Disclosure With the exception of historical matters, the matters discussed in this news release are forward-looking statements that involve risks and uncertainty. Forward-looking statements include, but are not limited to, statements relating to the launch of new products entry into licensing agreements and future prospects of Mitek's recurring royalties growth and sales volume. Actual results could differ from such forward-looking statements. There can be no assurance that Mitek will achieve results set forth herein. Mitek and Mitek Systems are registered trademarks of Mitek Systems, Inc. Contacts: Tesfaye Hailemichael Chief Financial Officer 858.503.7810 Mitek Systems, Inc. Condensed Balance Sheet (Unaudited) December 31, December 31, 2005 2004 ASSETS Current assets $2,787,000 $2,572,000 Property and equipment - net 109,000 109,000 Other assets 138,000 21,000 TOTAL ASSETS $3,034,000 $2,702,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $1,602,000 $2,696,000 Long term liabilities 2,000 1,318,000 TOTAL LIABILITIES 1,604,000 4,014,000 Stockholders' equity: Common stock 16,000 11,000 Additional paid-in capital 13,527,000 10,207,000 (Accumulated deficit) (12,113,000) (11,530,000) Total stockholder's equity 1,430,000 (1,312,000) TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,034,000 2,702,000 Mitek Systems, Inc. Statements of Operations Three Months Ended (Unaudited) December 31, 2005 2004 NET SALES $1,521,000 $1,300,000 OPERATING COSTS AND EXPENSES: Cost of sales 410,000 183,000 Operations 21,000 41,000 Selling and marketing 399,000 580,000 Research and development 327,000 370,000 General and administrative 532,000 927,000 Total costs and expenses 1,689,000 2,101,000 OPERATING LOSS (168,000) (801,000) Other income (expense) net (304,000) (117,000) LOSS BEFORE INCOME TAXES (472,000) (918,000) PROVISION FOR INCOME TAXES -- -- NET LOSS $(472,000) $(918,000) NET LOSS PER SHARE - BASIC & DILUTED ($0.03) ($0.08) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED 15,018,703 11,389,481 http://www.newscom.com/cgi-bin/prnh/20041117/LAW022LOGO http://photoarchive.ap.org/ DATASOURCE: Mitek Systems, Inc. CONTACT: Tesfaye Hailemichael, Chief Financial Officer of Mitek Systems, Inc., +1-858-503-7810, Web site: http://www.miteksystems.com/

Copyright