PRINCETON, N.J., March 31, 2020 /PRNewswire/ -- Mikros Systems Corporation (OTCQB: MKRS), a technology company specializing in electronic systems for advanced maintenance in military, industrial and commercial applications, announced today its financial results for 2019.
Revenues for 2019 were $6,366,226 compared to $8,561,346 in 2018, a decrease of $2,195,120, or 26%. The decrease was due principally to delays of follow-on contract awards and no ADEPT units produced in 2019.
Costs of sales were $2,279,823 in 2019 compared to $3,602,555 in 2018, a decrease of $1,322,732, or 37%. The decrease resulted from change in the mix of contracts generating revenues as compared to 2018. In 2019, Mikros did not produce any ADEPT units and all revenue was generated from engineering support services.
Engineering costs were $2,547,007 in 2019 as compared to $2,712,810 in 2018, a decrease of $165,803, or 6%. The decrease in 2019 was due to delays of follow-on contract awards and a shift of engineering personnel from revenue generating contracts resulting in such costs being included in general and administrative expenses. Net income decreased to $30,532 in 2019 as compared to $329,210 in 2018.
"We had a temporary setback last year," commented Mikros' newly appointed President Chuck Bristow. "After a seventeen-year run, the Navy decided to move on to a new generation of shipboard maintenance tools to replace our ADEPT product line. Now that the ADEPT program has ended, we are focused on advancing our ADSSS Condition-Based Maintenance solutions to serve additional ship classes and shipboard systems. These efforts resulted in an important new award to develop condition-based maintenance capabilities for the NATO Seasparrow Missile System, which will allow us to expand the SYM-3 system to two new Navy ship classes."
In September 2019, Mikros was awarded a follow-on Delivery Order for the AN/SYM-3 system, valued at up to $21 million, under its long-term Indefinite Delivery Indefinite Quantity (IDIQ) contract with the Navy's Port Hueneme Division. The SYM-3 is used for remote monitoring of the combat system and data analytics aboard the Littoral Combat Ship (LCS). During 2019, the Company completed installation of SYM-3 on three additional LCS ships, with a fourth ship in process. In 2020, Mikros expects to expand the SYM-3 program to include additional combat systems and accelerate the pace of installation on Navy ships.
"The SYM-3 program has gone from strength to strength," said Lori Ogles, Mikros Vice President of Programs and Business Development. "LCS installations will continue throughout 2020 and we expect to receive additional funding to extend the SYM-3 for other onboard LCS equipment. The new NATO Seasparrow version of the SYM-3 extends the system to aircraft carriers and "big deck" amphibious assault ships, which represents a great potential for follow-on production on these two new platforms."
Mikros' Manufacturing and Depot facility in Largo FL will continue to manufacture "smart sensor" modules for the SYM-3 program and pursue new contract manufacturing opportunities. The Mikros MindR® product line, a low-cost commercial version of the SYM-3, has been deployed in several pilot projects, which may result in significant revenues over the next year.
Mikros Chief Executive Officer Tom Meaney added, "We had a long and successful program with ADEPT on Navy cruisers and destroyers, a testament to our technical strengths and our participation in the Small Business Innovation Research or SBIR program. We expect to more than compensate for the closeout of the ADEPT program by pursuing new opportunities for the SYM-3. Emerging opportunities for condition-based maintenance systems can be found across the entire Navy fleet. We have also renewed our commitment to the SBIR program. We received one new award in 2019 and have already submitted multiple proposals this year, any of which may evolve into new and exciting business segments, particularly in the rapidly expanding field of unmanned vehicles. We are confident that we have in place the best people to execute our business plan and serve our important DoD customers, and we remain very optimistic about the future growth opportunities available to us."
About Mikros Systems
Mikros Systems Corporation is an advanced technology company specializing in the development and production of electronic systems technology for advanced maintenance in military, industrial and commercial 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, command, control, communications, computers and intelligence systems engineering, and communications engineering. For more information on Mikros, please visit: www.mikrossystems.com.
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 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 or implied by such 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, significant delays or reductions in appropriations for our projects, 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, our ability to adequately integrate our software offerings into our business model, our ability to market our solutions to commercial customers, the duration and severity of the current coronavirus COVID-19 pandemic and its effect on our business operations, personnel, and the geographic markets in which we operate, and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature, 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, 2019 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.
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SOURCE Mikros Systems Corporation