Mitek Systems Signs Agreement With Chase for Mobile Deposit®, Reports Fiscal 2011 1st Quarter Earnings

February 14, 2011

SAN DIEGO, Feb. 14, 2011 /PRNewswire/ — Mitek Systems, Inc. (OTC Bulletin Board: MITK; www.miteksystems.com), the leader in mobile-imaging applications using smart phone cameras for check deposits and bill payments, today announced financial results for the first quarter of its fiscal 2011, which ended Dec, 31, 2010.

(Logo: http://photos.prnewswire.com/prnh/20100224/MITEKLOGO)

Net sales for the first quarter of fiscal 2011 were $1,404,000, compared with $1,159,000 in the same quarter last year, an increase of $245,000 or 21 percent. Gross margin for the first quarter of fiscal 2011 was 85 percent, compared with 70 percent for the same quarter last year.

Net loss for the first quarter of fiscal 2011 was $801,000, or $0.04 per basic and diluted share, compared with a net loss of $223,000, or $0.01 per basic and diluted share, for the same fiscal quarter last year. The fiscal 2011 first quarter’s net loss resulted primarily from non-cash expenses totaling $712,000 that included $384,000 of a one-time, non-cash interest expense resulting from the conversion of the Company’s long term debt into equity, $234,000 of non-cash, stock-based compensation expense related to annual performance stock option grants to all employees, and $94,000 of depreciation and amortization.

The Company ended the first fiscal quarter of 2011 with cash and cash equivalents of $2,141,000, compared with $1,090,000 in the year-ago period. The Company had working capital of approximately $2,120,000 and stockholders’ equity of $2,338,000 at the end of the first quarter of fiscal 2011, compared with working capital of approximately $555,000 and stockholders’ equity of $556,000 at the end of the first quarter of fiscal 2010.

President and CEO James B. DeBello said the leading highlight of the quarter is an agreement with J. P. Morgan Chase, one of the nation’s top retail banks, under which it will deploy Mitek’s flagship Mobile Deposit® solution in the next version of its widely advertised mobile check-deposit application.

“Chase has told us they see our patented solution as a way to provide an all-around better retail customer experience in depositing checks via smart phone cameras,” DeBello said. “We’ve made Mobile Deposit the ‘Gold Standard’ for accurate and secure mobile check deposit by applying all of our intellectual property and expertise in image analysis and mobile capture, so it’s really gratifying that Chase has chosen our technology and capabilities.”

In January, Mitek announced that 10 banks, including three of the nation’s top 10 retail banks, have signed agreements to deploy Mobile Deposit. Since that announcement, DeBello said, at least 10 additional banks, credit unions and other financial institutions are now in the process of integrating and launching Mobile Deposit as part of their arrays of mobile-banking choices for their customers.

During the fiscal first quarter, Mitek introduced Mobile Photo Bill Pay(TM), the industry’s first mobile payments app that enables users to pay bills simply by snapping a photo of a paper bill or invoice with their smart phone camera without writing a check or setting up a template. This product addresses a growing market for mobile payments globally. DeBello added that the Company is currently engaged in discussions with major financial institutions and bill payment providers to pilot Mobile Photo Bill Pay.

Mobile Deposit and Mobile Photo Bill Pay support all major smart phone operating systems, including the iPhone, Blackberry, Android and Windows Mobile handsets.

“We also took major steps to strengthen Mitek’s balance sheet by eliminating debt through conversion to equity to position the Company for future profits,” said DeBello. “Our higher cash balance and higher net equity reflect the strengthening of our business as we see broader demand for our products. We’re continuing to invest in developing new mobile imaging products that give financial institutions the industry’s best technology solutions at exactly the time they’re looking to expand their mobile banking offerings to their customers.”

DeBello will discuss the first-quarter financial results in a conference call for shareholders, financial analysts and other interested parties at 5 p.m. EST / 2 p.m. PST today.

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

    Domestic:      866-804-6921
    International: 857-350-1667
    Passcode:                   73078283

The link to participate online via webcast is http://phx.corporate-ir.net/playerlink.zhtml?c=85785&s=wm&e=3686407.

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.

    Bud Leedom, Finance Director
    858.503.7810, x-309

                                               December 31,   December 31,
                                                        2010           2009
                                                        ----           ----


      Current assets                              $3,908,000     $1,928,000
      Property and equipment - net                    32,000         51,000
      Software development costs - net               194,000        332,000
      Other long-term assets                          29,000         72,000

    TOTAL ASSETS                                  $4,163,000     $2,383,000
                                                  ==========     ==========


      Current liabilities                         $1,788,000     $1,373,000
      Long-term debt                                       0        406,000
      Other long-term liabilities                     37,000         48,000
    TOTAL LIABILITIES                              1,825,000      1,827,000
                                                   ---------      ---------

    Stockholders' equity:
      Common stock                                    20,000         17,000
      Additional paid-in capital                  18,613,000     15,574,000
      (Accumulated deficit)                      (16,295,000)   (15,035,000)
    Total stockholder's equity                     2,338,000        556,000
                                                   ---------        -------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $4,163,000     $2,383,000
                                                  ==========     ==========

                                               THREE MONTHS ENDED
                                             December 31, December 31,
                                                      2010         2009
                                                      ----         ----

    NET SALES                                   $1,404,000   $1,159,000

        Cost of sales                              208,000      353,000
        Selling and marketing                      399,000      165,000
        Research and development                   590,000      506,000
        General and administrative                 623,000      333,000

         Total costs and expenses                1,820,000    1,357,000

    OPERATING LOSS                                (416,000)    (198,000)

        Other (expense) income - net              (383,000)     (23,000)

    LOSS BEFORE INCOME TAXES                      (799,000)    (221,000)

    PROVISION FOR INCOME TAXES                      (2,000)      (2,000)
                                                    ------       ------

    NET LOSS                                      (801,000)    (223,000)
                                                  ========     ========

    NET LOSS PER SHARE - BASIC AND DILUTED           (0.04)       (0.01)
                                                     =====        =====

     OUTSTANDING -BASIC AND DILUTED             18,845,990   16,751,137
                                                ==========   ==========

SOURCE Mitek Systems, Inc.

Source: newswire

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