Mitek Systems Reports Profit in Fiscal Fourth Quarter and Strong Operating Results for Fiscal 2010

SAN DIEGO, Calif., Nov. 16, 2010 /PRNewswire-FirstCall/ -- Mitek Systems, Inc. (OTC Bulletin Board: MITK) (www.miteksystems.com), an innovator of mobile-imaging applications for financial services and other industries, today announced fourth-quarter and full-year financial results for fiscal 2010, which ended Sept. 30, 2010.

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Net sales for the fourth quarter of fiscal 2010 were $1.6 million, compared with $804,000 in the same quarter last year, an increase of 100 percent.  Gross margin for the fourth quarter of fiscal 2010 was 87 percent, compared with 81 percent for the same quarter last year.

Net income for the fourth quarter of fiscal 2010 was $180,000, or $0.01 per basic and diluted share, compared with a net loss of $328,000, or $0.02 per basic and diluted share for the same fiscal quarter last year.

Net sales for fiscal 2010 were $5.1 million, compared with $3.6 million in the same period last year, an increase of 42 percent. Gross margin for fiscal 2010 was 81 percent, compared with 82 percent for fiscal 2009.

Net loss for fiscal 2010 was $682,000, or $0.04 per basic and diluted share, compared with a net loss of $1.3 million, or $0.08 per basic and diluted share, for fiscal 2009.  The fiscal 2010 net loss included non-cash expenses totaling $701,000, comprised of $406,000 of non-cash stock-based compensation expense and $295,000 of non-cash interest expense on convertible debentures.

The company ended fiscal year 2010 with cash and cash equivalents of $1.3 million, compared with $674,000 at the end of fiscal year 2009.  As of Sept. 30, 2010, the company had working capital of approximately $1.4 million and stockholders' equity of $1.0 million, compared with negative working capital of approximately $280,000 and stockholders' equity of $126,000 at the end of fiscal 2009.

Subsequent to the end of the fiscal year, the Company further increased its cash balance by raising $750,000 in a private equity financing that closed on October 1, 2010. The Company has received an unqualified audit opinion from its independent public accounting firm with respect to the Company's financial statements for its 2010 fiscal year.

President and CEO James B. DeBello credited the quarterly and full-year results largely to broad financial industry acceptance of Mitek's flagship Mobile Deposit® application in mobile remote deposit capture (RDC).

Patented in the fourth quarter, Mobile Deposit gives smartphone users an accurate, secure and easy-to-use way to deposit checks simply by snapping photos of their checks with the cameras on their mobile devices.  Mitek's Mobile Deposit patent, entitled "Systems for Mobile Image Capture and Processing of Checks," was issued on August 17, 2010.  Among other elements, the patent contains claims that cover capturing an image of a financial document such as a check using a camera in a Smartphone or other mobile device, and transmitting the image to a bank server for processing and deposit into a customer's account.

Mobile Deposit has been widely embraced by leading technology solutions integrators and application services providers for the financial services industry, including Fiserv, NCR, FIS, Jack Henry & Associates, WAUSAU Financial Systems, BankServ, J&B Software, Bluepoint, Cachet Financial and RDM, among others. In addition, the Company has partnered with leading mobile-banking-application providers, including mFoundry, Clairmail, Kony Solutions and Monetise Americas.

More and more banks, credit unions and payment-management organizations, including PayPal, with the Mobile Check Capture feature of its PayPal Mobile app for iPhones, are deploying Mitek's mobile check deposit solution to their customers, which the Company expects  will continue throughout the remainder of 2010 and into 2011. The Company anticipates announcing significantly increased adoption and use in the near future by large financial institutions and payment management organizations.

Early in the current quarter, Mitek introduced Mobile Photo Bill Pay™, its latest innovative application for the financial services industry, which allows people to pay their bills simply by snapping photos of their paper bills or invoices. With Mitek's new Mobile Photo Bill Pay app, users can submit electronic payments from their smartphones without having to write checks, lick stamps, visit a payment location or even use their personal computers.  DeBello said Mitek is now in discussions for the distribution of Mobile Phone Bill Pay with a number of leading banks, integrators of technology solutions and applications services providers for the financial services industry.

"Operationally, we were hitting on all cylinders in fiscal 2010," DeBello said.  "Mitek is enjoying broad acceptance because our products truly bring usefulness and convenience to everyday lives. According to a recent study reported in American Banker, nearly half of the nation's top banks that have deployed a mobile-banking service are extending their applications with mobile remote deposit capture."

"People continue to adopt smartphones and the apps that drive them in huge numbers.  They want safe, secure mobile-banking capabilities that save them a trip to a branch office or ATM, and our Mobile Deposit and Mobile Photo Bill Pay apps are helping to enable that trend," he added.

"Our strategy to apply our deep expertise in image analysis, mobility and payments to create unique applications is working," he said.  "We're already seeing strong interest in our newest app, Mobile Photo Bill Pay.  It's another easy-to-use personal convenience that the financial services industry can offer its customers.

"It's not easy to achieve the degree of security and complexity these apps require, but Mitek has the expertise to make them work seamlessly," DeBello said.

During the quarter, the Company hired Drew Hyatt as Senior Vice President for Sales and Business Development.  A veteran software industry executive, Hyatt has more than 20 years of experience in financial services technology, including payments, risk management, fraud and internet banking.

In October, the Company announced the appointment of Alex W. "Pete" Hart, Chairman of the Board of SVB Financial Group and former CEO of Mastercard International, to its advisory board, joining Mitek Advisory Board members John Major, Chairman of Broadcom Corporation, and Bruce Hansen, Chairman of ID Analytics.

DeBello will discuss the earnings results in a conference call for shareowners, financial analysts and other interested parties at 8 a.m. PST / 11 a.m. EST today.

Callers should dial as follows several minutes in advance of the scheduled start time:

The link to participate online via webcast is http://phx.corporate-ir.net/playerlink.zhtml?c=85785&s=wm&e=3499133

About Mitek Systems

For more than 20 years, Mitek Systems (OTC: MITK.OB) has provided financial institutions with advanced imaging and analytics software to authenticate and extract data from imaged checks and other financial documents.  Mitek's patented technology is currently used by all leading financial organizations in the United States to process more than 10 billion items per year.

Today, Mitek is applying its patented technology and extensive expertise in image correction, optical character recognition and intelligent data extraction to mobile devices.  Using Mitek Mobile Apps, smartphone users can now deposit checks, pay bills, save receipts and fax documents while on the road or sitting at a desk -- eliminating trips to the bank, Post Office and file cabinet.  Simply take a picture of the document and Mitek does the rest -- correcting image distortion, extracting relevant data, routing images to their desired location, and processing transactions through users' financial institutions.

For more information about Mitek Systems, contact the company at 858-503-7810 or visit www.miteksystems.com.

Safe Harbor Statement

This press release contains forward-looking statements. These statements relate to future events or future financial performance, including statements regarding future acceptance and use of our products and technology. Such statements are subject to risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "feel," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to: the general conditions of the domestic and global economy; our ability to continue to develop, produce and introduce innovative new products in a timely manner; our ability to identify and execute successfully cost-control initiatives without adversely impacting sales; the performance of new products and continued acceptance of current products; uncertainties associated with intellectual property protection for our products; and other risks identified from time to time in our filings made with the U.S. Securities and Exchange Commission. Although, we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results. Moreover, we assume no responsibility for the accuracy or completeness of such forward-looking statements and undertake no obligation to update any of these forward-looking statements.

SOURCE Mitek Systems, Inc.