Mitek Systems Reports Operating Results for Third Quarter of Fiscal 2010

SAN DIEGO, Aug. 16 /PRNewswire-FirstCall/ -- Mitek Systems, Inc. (OTC Bulletin Board: MITK; www.miteksystems.com), the innovator of mobile-check-deposit and mobile-document-capture applications for smartphones, today announced financial results for the third quarter of fiscal 2010 ended June 30, 2010.

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Net sales for the third quarter of fiscal 2010 were approximately $822,000, compared to $915,000 in the same quarter last year, a decrease of approximately $93,000 or 10 percent.  Gross margin for the third quarter of fiscal 2010 was 75 percent, compared with 79 percent for the same quarter last year. Gross margin is impacted by the product mix combining bookings of the Company's higher-yielding mobile applications and its lower-margin character-recognition toolkits for office automation. Total costs and expenses, including cost of goods sold, were approximately $1,378,000 in the third quarter of fiscal 2010, up from $1,000,000 in the third quarter in fiscal 2009.  

Operating loss for the third quarter of fiscal 2010 was approximately $556,000, compared to approximately $85,000 for the same quarter last year. Net loss for the third quarter of fiscal 2010 was approximately $647,000, or $0.4 per basic and diluted share, compared with a net loss of approximately $86,000, or $0.01 per basic and diluted share, for the same quarter last year.

Net income for this period was decreased by non-cash expenses totaling $166,000, which included stock-based compensation expense of approximately $75,000 and accretion of the discount on the convertible debt of approximately $91,000.

Cash and cash equivalents at the end of fiscal third quarter totaled approximately $1,495,000, compared with $537,000 at the end of the same quarter last year. The Company had working capital of approximately $816,000 and a current ratio of 1.57 at June 30, 2010, compared to negative working capital of approximately $17,000 and a current ratio of 0.99 at June 30, 2009.  The Company had stockholders' equity of approximately $538,000 and $430,000 at June 30, 2010 and 2009, respectively.

Management believes that the Company has adequate cash resources to execute its growth strategy while continuing to invest in new mobile-imaging technologies to extend its "Gold Standard" acceptance by the industry.  Highlights for the quarter included:

• Signing five new distribution agreements for its flagship Mobile Deposit® product with Wausau Financial, FIS, Skyline's DirectFed, Secure Payment Systems and Bluepoint Solutions;
• Reaching agreements with two banks -- The Bancorp Bank and Conestoga Bank -- for deployments of Mobile Deposit to their customers that will go live later this year.

"Despite lower bookings this quarter caused by timing of a delayed order, Mitek has established itself as the Gold Standard for Mobile Remote Deposit Capture of checks," said Mitek Systems President and CEO James DeBello. "We are rapidly seeing our technology emerge as the platform of choice.  In addition to the deals won during the quarter, we have now signed partnership agreements for Mobile Deposit with all of the leading providers of technology applications and solutions for the financial services industry, including Fiserv, NCR, NetDeposit, RDM Corporation and J&B Software, in addition to those with the mobile banking vendors Clairmail, mFoundry and Monitise Americas™."

More national and regional banks are using Mitek's technology for their own branded mobile RDC offers to satisfy their customers' growing demands for mobile check deposits via their camera-equipped smartphones, such as iPhone, Android and BlackBerry devices.

"As a result," continued DeBello, "we have experienced expansion of our pipeline for Mobile Deposit as the momentum of market acceptance has grown. Recent announcements by large financial institutions supporting Mobile RDC also indicate the possibility of achieving even broader market penetration by the end of 2011, given the global acceptance of smartphones and consumers' appetite for mobile-banking applications."

Because of its ease of use and accuracy, Mobile Deposit is being deployed by banks and solutions providers to enable remote mobile deposit of checks by consumers and business people. Independent tests show an improvement of up to 300-percent when using Mitek's Mobile Deposit to process mobile check images instead of using traditional check-processing systems not designed for mobile images, resulting in lower processing costs for banks and improved user experience. Mobile Deposit is the only Check 21-compatible mobile-check-deposit solution broadly distributed and patent pending.

During the quarter, the Company published a white paper providing an analysis of best practices for Mobile RDC and has shared it widely throughout the financial services industry. The full text of Mitek's "Gold Standard for Mobile Check Deposit" white paper can be accessed at http://www.miteksystems.com/GoldStandardWhitePaper.asp.

A video demonstrating Mobile Deposit in use is available at http://www.miteksystems.com/MD_video.asp.

In addition to Mobile Deposit, Mitek's family of innovative mobile applications includes Mobile Phax, which allows a user to take a photo of a document or page and send it to a fax machine or as a PDF to an email address, and Mobile Receipt™, which enables professionals on the go to create and submit expense reports with photos of receipts taken with their smartphones. All of these applications make use of Mitek's proprietary mobile-imaging technology platform that converts a three-dimensional color photograph of a check, receipt or document into a perfectly sized image prepared for data processing.

Analysis of the Company's financial statements is available within the Management's Discussion and Analysis section of the Form 10-Q for the quarter ended June 30, 2010, which will be posted on the Company's website at http://www.miteksystems.com.  A printed copy of the 10-Q is also available from the Company upon request.  The Company's Quarterly Report on Form 10-Q will be available, when filed, on the SEC's website at http://www.sec.gov.

Beginning with its fiscal-year-end earnings announcement in November, Mitek will commence holding conference calls conducted by CEO DeBello that will be available to all shareholders.

About Mitek Systems

Mitek Systems (OTC: MITK.OB), the  innovator of Mobile Remote Deposit Capture (RDC) and mobile document capture applications for smartphones, has created the Gold Standard for Mobile Check Deposit. For more than 20 years, the Company has developed a comprehensive suite of intelligent character recognition software used to test, clean, authenticate and extract data from imaged checks, documents and objects, and its software is used to process more than 10 billion items per year.  For more information about Mitek Systems, contact the company at 858-503-7810 or visit 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 and future prospects of Mitek's 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.

SOURCE Mitek Systems, Inc.