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Mitek Systems, Inc.$9.32($.04)(.43%)

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 Mitek Reports Record Fourth Quarter Revenue, Up 63% Year Over Year
   Thursday, November 01, 2018 4:05:00 PM ET

SAN DIEGO, Nov. 01, 2018 (GLOBE NEWSWIRE) -- Mitek (NASDAQ: MITK, ), a global leader in mobile capture and digital identity verification solutions, today announced its financial results for the fourth quarter of fiscal 2018 and the full year ended September 30, 2018.

Fiscal Fourth Quarter 2018 Financial Highlights

  • Fourth quarter revenue increased 63% year over year to a record $21.0 million.
  • Fourth quarter GAAP net loss of $(2.1) million, or $(0.06) per share.
  • Fourth quarter non-GAAP net income of $5.7 million, or $0.14 per diluted share.

Fiscal 2018 Full Year Financial Highlights

  • Full year revenue increased 40% year over year to a record $63.6 million.
  • Full year GAAP net loss of $(11.8) million, or $(0.33) per share.
  • Full year non-GAAP net income of $11.0 million, or $0.29 per diluted share.
  • Full year cash flow from operations was $4.2 million.
  • Total cash and investments of $17.5 million at the end of the fiscal 2018.

Commenting on the results, Bruce Hansen, Chairman of Mitek, said:

“We are pleased to report record revenue for both the fourth quarter and full year as well as our nineteenth consecutive quarter of non-GAAP profitability. Our record revenue was driven in part by continued adoption of our trusted Mobile Verify ID verification solution, as banks, marketplaces and lenders continue to adopt Mitek’s solutions to enable their digital commerce. Thanks to our team’s continued success in penetrating this emerging market, ID achieved its largest quarterly revenue ever, growing 79% year over year in the fourth quarter, and Mobile Verify is being embraced by both new and existing customers as well as industry analysts who are recommending our solution. We also experienced solid growth in Mobile Deposit revenue during the fiscal year, as we continue to dominate the mobile check deposit market with our industry leading solution. We completed two acquisitions in 2018 which contributed to our revenue growth and are integrating successfully into the Company.

“With Mobile Verify, Mitek has a unique opportunity to be a ‘game-changer’ when it comes to enabling digital commerce, in the same way that we have forever changed the world of payments with our Mobile Deposit technology. As our solid revenue results and significant progress this past fiscal year indicate, we remain very focused on building a leadership position in the industry with our digital identity verification platform.”

Fiscal 2019 Financial Guidance

For the fiscal year ending September 30, 2019, the Company expects full year total revenue of $83 million to $86 million, which would represent growth between 31% and 35% year over year, and expects to generate a non-GAAP profit margin of approximately 18% to 20%.

ASG Technologies Proposal

Mitek’s Board of Directors acknowledges that ASG, a portfolio company of Elliot Associates, L.P. and Elliot International, L.P., has made public a non-binding proposal to acquire the Company for $10 per share in cash. The Board will thoroughly consider ASG’s proposal in light of all available opportunities, including the potential for substantial shareholder value creation presented by the Company’s go-forward plan. Mitek’s Board will formally respond to ASG’s proposal after it has carefully reviewed it in consultation with its legal and financial advisors.

Conference Call Information

Mitek management will host a conference call and live webcast for analysts and investors today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the Company’s financial results.

To access the live call, dial 888-204-4368 (US and Canada) or +1 323-994-2082 (International) and give the participant passcode 9374422.

A live and archived webcast of the conference call will be accessible on the “Investor Relations” section of the Company’s website at . In addition, a phone replay will be available approximately two hours following the end of the call and it will remain available for one week. To access the call replay dial-in information, please click here.

About Mitek

Mitek (NASDAQ: MITK) is a global leader in mobile capture and digital identity verification solutions built on the latest advancements in AI and machine learning. Mitek’s identity verification solutions enable an enterprise to verify a user’s identity during a digital transaction, which assists financial institutions, payments companies and other businesses operating in highly regulated markets in mitigating financial risk and meeting regulatory requirements while increasing revenue from digital channels. Mitek also reduces the friction in the users’ experience with advanced data prefill and automation of the onboarding process. Mitek’s innovative solutions are embedded into the apps of more than 6,100 organizations and used by more than 80 million consumers for mobile check deposit, new account opening and more. Learn more at .  [(MITK-F)]

Notice Regarding Forward-Looking Statements

Statements contained in this news release relating to the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future, including, but not limited to, statements relating to the Company’s long-term prospects and market opportunities are forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, risks related to the Company’s ability to withstand negative conditions in the global economy, a lack of demand for or market acceptance of the Company’s products, the Company’s ability to continue to develop, produce and introduce innovative new products in a timely manner or the outcome of any pending or threatened litigation and the timing of the implementation and launch of the Company’s products by the Company’s signed customers.

Additional risks and uncertainties faced by the Company are contained from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 and its quarterly reports on Form 10-Q and current reports on Form 8-K, which you may obtain for free on the SEC’s website at . Collectively, these risks and uncertainties could cause the Company’s actual results to differ materially from those projected in its forward-looking statements and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company disclaims any intention or obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Note Regarding Use of Non-GAAP Financial Measures

This news release contains non-GAAP financial measures for non-GAAP net income and non-GAAP net income per share that exclude stock compensation expenses, intellectual property litigation costs, acquisition-related costs and expenses, executive transition costs, income tax effect of pre-tax adjustments, impact of tax reform on deferred taxes, and the cash tax difference. These financial measures are not calculated in accordance with generally accepted accounting principles (GAAP) and are not based on any comprehensive set of accounting rules or principles. In evaluating the Company’s performance, management uses certain non-GAAP financial measures to supplement financial statements prepared under GAAP. Management believes these non-GAAP financial measures provide a useful measure of the Company’s operating results, a meaningful comparison with historical results and with the results of other companies, and insight into the Company’s ongoing operating performance. Further, management and the Board of Directors utilize these non-GAAP financial measures to gain a better understanding of the Company’s comparative operating performance from period-to-period and as a basis for planning and forecasting future periods. Management believes these non-GAAP financial measures, when read in conjunction with the Company’s GAAP financial statements, are useful to investors because they provide a basis for meaningful period-to-period comparisons of the Company’s ongoing operating results, including results of operations against investor and analyst financial models, which helps identify trends in the Company’s underlying business and provides a better understanding of how management plans and measures the Company’s underlying business.

(amounts in thousands except share data)
  September 30, 2018 September 30, 2017
Current assets:    
Cash and cash equivalents $9,086  $12,289 
Short-term investments 8,448  30,279 
Accounts receivable, net 17,231  7,099 
Other current assets 3,331  1,209 
Total current assets 38,096  50,876 
Long-term investments   3,780 
Property and equipment, net 4,665  613 
Goodwill and intangible assets 66,992  5,311 
Deferred income tax assets 15,356  11,065 
Other non-current assets 2,017  74 
Total assets $127,126  $71,719 
Current liabilities:    
Accounts payable $3,573  $1,918 
Accrued payroll and related taxes 7,973  3,709 
Deferred revenue, current portion 4,792  3,305 
Acquisition-related contingent consideration 1,849  354 
Other current liabilities 2,196  248 
Total current liabilities 20,383  9,534 
Deferred revenue, non-current portion 485  85 
Deferred income tax liabilities 8,162   
Other non-current liabilities 2,702  692 
Total liabilities 31,732  10,311 
Stockholders’ equity:    
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding    
Common stock, $0.001 par value, 60,000,000 shares authorized, 37,961,224 and 33,724,392 issued and outstanding, as of September 30, 2018 and 2017, respectively 38  34 
Additional paid-in capital 116,944  78,677 
Accumulated other comprehensive income (loss) (586) 147 
Accumulated deficit (21,002) (17,450)
Total stockholders’ equity 95,394  61,408 
Total liabilities and stockholders’ equity $127,126  $71,719 

(amounts in thousands except per share data)
 Three Months Ended September 30, Twelve Months Ended September 30,
 2018 2017 2018 2017
Software and hardware$14,261  $8,403  $40,698  $29,647 
SaaS, maintenance, and consulting6,776  4,501  22,861  15,743 
Total revenue21,037  12,904  63,559  45,390 
Operating costs and expenses       
Cost of revenue—software and hardware837  340  3,064  1,112 
Cost of revenue—SaaS, maintenance, and consulting1,837  798  5,622  2,929 
Selling and marketing5,837  3,455  21,700  14,484 
Research and development4,731  2,926  15,673  10,430 
General and administrative6,538  2,962  17,067  11,310 
Acquisition-related costs and expenses2,623  690  8,239  2,356 
Total operating costs and expenses22,403  11,171  71,365  42,621 
Operating income (loss)(1,366) 1,733  (7,806) 2,769 
Other income (expense), net22  121  (935) 402 
Income (loss) before income taxes(1,344) 1,854  (8,741) 3,171 
Income tax benefit (provision)(783) 11,012  (3,066) 10,921 
Net income (loss)$(2,127) $12,866  $(11,807) $14,092 
Net income (loss) per share—basic$(0.06) $0.38  $(0.33) $0.43 
Net income (loss) per share—diluted$(0.06) $0.35  $(0.33) $0.40 
Shares used in calculating net income (loss) per share—basic37,858  33,522  35,811  33,083 
Shares used in calculating net income (loss) per share—diluted37,858  36,251  35,811  35,537 

(amounts in thousands except per share data)
 Three Months Ended September 30, Twelve Months Ended September 30,
  2018   2017   2018   2017 
Net income (loss)$(2,127) $12,866  $(11,807) $14,092 
Non-GAAP adjustments:               
Acquisition-related costs and expenses(1)2,623  690  9,491  2,356 
Litigation costs  51  50  51 
Executive transition costs(2)1,636    1,636  504 
Stock compensation expense3,023  1,533  8,950  5,478 
Income tax effect of pre-tax adjustments(2,184)   (6,038)  
Impact of tax reform on deferred taxes484    4,901   
Cash tax difference(3)2,262    3,819   
Benefit related to the release of deferred tax asset valuation allowance  (11,035)   (11,035)
Non-GAAP net income5,717  4,105  11,002  11,446 
Non-GAAP income per share—basic$0.15  $0.12  $0.31  $0.35 
Non-GAAP income per share—diluted$0.14  $0.11  $0.29  $0.32 
Shares used in calculating non-GAAP net income per share—basic37,858  33,522  35,811  33,083 
Shares used in calculating non-GAAP net income per share—diluted39,693  36,251  37,780  35,537 

(1) Includes a $1.3 million foreign currency exchange remeasurement loss related to euros purchased for the A2iA acquisition during the twelve months ended September 30, 2018.
(2) Comprised of costs associated with the transition of the Company’s executive officers. Our non-GAAP financial measures exclude these transition costs as we believe that such expense is inconsistent with the normally recurring operations of our Company and it makes it difficult to make period-to-period comparisons of our operating performance. Comparable figures have been restated to conform to the current period’s presentation.
(3) The Company’s non-GAAP net income is calculated using the cash tax rate of 3%. The estimated cash tax rate is the estimated tax payable on the Company’s tax returns as a percentage of estimated annual non-GAAP pre-tax net income. The Company uses an estimated cash tax rate to adjust for the historical variation in the effective book tax rate associated with the reversal of valuation allowances, the utilization of research and development tax credits, and the utilization of loss carryforwards which currently have an overall effect of reducing taxes payable. The Company believes that the cash tax rate provides a more transparent view of the Company’s operating results. The Company’s effective tax rate used for the purposes of calculating GAAP net loss for the three and twelve months ended September 30, 2018 was negative 58% and negative 35%, respectively.


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Investor Contact:
Todd Kehrli or Jim Byers
MKR Group, Inc.  



Source: Mitek Systems, Inc.

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