Juan Costello: Good day from Wall Street. This is Juan Costello, senior analyst with the Wall Street Reporter and joining us today is Thomas Meaney, CEO and CFO for Mikros System Corporation which trades on the OTCQB, Ticker symbol MKRS. Thanks for joining us today, Tom.
Thomas Meaney: Thank you Juan, good to talk to you again.
Juan Costello: Certainly always good to have it with you on, now starting off give us a brief history and overview of Mikros for some of our listeners here they are new to the story.
Thomas Meaney: Sure. We began operations back in the 80s and sold the company in 1996, the defense part of it to another company DRS Technologies. And we restarted Mikros in 2001 called Mikros 2.0 and we’ve been profitable – our revenues have increased and we’ve been profitable ever since we restarted the company. The original company we developed is a very important products for the Navy, a Multi-Frequency Link-11 equipment and that one on most of the engine ship and today we have a product that was developed over a period of about six, seven years is about $8 million in research and development into it and is called the ADEPT equipment which is a maintainability and reliability equipment for Navy ship or radars and another equipments.
We also have a number of different product areas but this one is the main contact where in we’ve booked a $25 million contract for to find these equipments to the fleet on a multi year basis.
Juan Costello: Certainly. And so what are some of the drivers behind the company’s four-year results, which were particularly strong?
Thomas Meaney: Our revenues nearly doubled in our profitability increase significantly which, of course, is very nice because the cash position increased significantly also. It was really the, it’s the Navy adopting the equipment and make near a program of records for the Ez’s, cruisers and destroyers of which there are about 85 of those. These equipments sell for about 100000 a piece then we put Trooper ship though, you know, this just on that group of ship there is a $20 million market that we’re investing now and we’re able to finish the year with a very good bank log after, after, you know, delivering nearly $5 million in sales.
I guess to answer your question in one or two sentence, the Navy is finally adopted this equipment for use of, for all the war combatants, the new look for all combat ship, the LCS is also adopting the equipment. That’s another market of about a 110 system. So, we’re, we’re just really starting to rip the rewards of about six years of development so on.
Juan Costello: Well, good and so talk a little bit more about some of those market trends and how opposition Mikros is to capitalize on them going forward?
Thomas Meaney: We’re the only supplier of this equipment and because of the small business electrical property protection we should remain there for a number of years. We are addressing one ship class after another, we go from the cruises and destroyers to look for combat ship and then we’re picking a hard look at sub marines and zigzag in and also the carrier. Also in addition to the main radar on the, on the cruises and destroyers were addressing large solar radios and emergency equipment so that each ship hopefully could have three to four or even five of this equipments per ship, as I like to say the nominal price for this stuff be $100,000.
So, in addition to the ADEPT program, which is a mainline program we do have a number of research and development programs in the wireless area in, in the three area – we’re teamed up with Ocean Power Technology so that we’re supplying the system engineering to their energy harvesting buoys and there are several large different contractors that were negotiating strategic relationships with today as we speak.
Juan Costello: Great. And anything else you feel makes a company unique from so many other players in the sector?
Thomas Meaney: Well, I think – what really I think differentiate us one is that we, we really are with the customer every week. We’re in Washington, on the West Coast where the naval bases are and so on and we, you know, my senior leadership are head of engineering, business development myself included. We are in Washington every week working with the customers asking what their new requirements are and the different trends. So, there are very few companies that operate this way and I think it really pays off because we’re able to capitalize one problem I have in the fleet as they, as they develop. And there are problems, Navy picks up this compact system on this many, many ships and they require, you now, sophisticated computer driven test equipment which is what we, what we have and across.
Juan Costello: And perhaps you can walk us through your background and experience and talk a little bit about the management team here for once again for some of the listeners are maybe new to the story?
Thomas Meaney: Yeah. I’m an engineer by training one with and having worked in senior positions in several large companies like United Technology. The – my background is mechanical engineering batch was Masters and I have a, a team of really talented engineers and business development people, most advance to the [Indiscernible] [0:06:44] and we’re a small company but we’re growing and we’re having a lot of manufacturing done outside. We do that to keep the overhead to a minimum and we do this by contracting to other companies that are more expert at actually building, building the hardware.
I have a very strong board of directors, we had Wayne E. Meyer, the father of Aegis, who recently passed away but he was our chairman and since then Paul Casner who has advance degrees in engineering and ran one of the large companies, defense companies several years ago. I have Tom Lynch who is the head of the naval academy was a battle troop commander and admiral retired. He is very active and also Tom Schaffnit, who is a director and a consultant. So, I think they are well balanced board of directors and we – they are very supportive of everything we are trying to do and what are the things we like to do, increase the revenues and profitability and get this story out there so that some of the success will be reflected in the stock which is so far, in my opinion as not been to.
Juan Costello: And so what are some of the other goals and milestones timed that you and your team are hoping to accomplish over the course of the next year?
Thomas Meaney: Yeah. We are – we have a number of development programs that we like to convert into another a depth product line like we have, one is in a wireless area and another is this power buoys to expand the different engineering capability there. And there are a couple of other development programs that we’re, we’re trying to expand. I don’t want to over look those – we have a very large untapped market for the ADEPT equipment. I’ve got a varied roles of mine, $84,000 million market for this equipment and, you know, over the next four or five, six years and is just the matter of getting to the customer, let’s see the product and demonstrating it.
So, there is a very I think large potential just in the ADEPT product line we have right now. We do expect the, you know, we did almost five million in revenues in this past year in December 2010. This year we expect to grow [Indiscernible] [0:09:34] and profitably. And whether we double our sales again or not next year, I might – I feel a bit much to do that in one year but we reduce this sustain growth in both revenues and the profit and so on. We also have no debt and it’s, it’s really nice to be growing a company and see the cash, cash level grow gives us much impurity.
Juan Costello: Good and so – you recently listed on the OTCQB and you mentioned wanting to get the message and story out to investors. And so as you continue to speak with the financial community, what do wish that investors better understood about the company?
Thomas Meaney: I think I like them to appreciate that we have a franchise for this equipment in a very critical time in the, in the growth of our fleet. And that we have been very successful in taking development programs and transitioning them into real production programs that are profitable and the experience that we have both with the customer and in the past we expect that this stand is going to continue. So, that I like the investing probably through few state they were going to increase our revenues, increase our profitability and increase our market share both in the markets they were in and then expanding into rather technical areas that, like this wireless and so on. I think we want to make sure we communicate this on a more regular basis is probably going to literally miss in the public relations area just because we’ve been trying to build a company. But we have to keep telling people how good we are doing so. I’m hoping to improve that in the future, Juan.
Juan Costello: Certainly. And so once again joining us today is Tom Meaney, CEO and CFO for Mikros System Corporation which trades on the OTCQB, Ticker symbol is MKRS, currently trading at 13 cents a share and before we conclude Tom, to recap some of your key points here, why do you believe that investors should consider the company as a good long term investment opportunity?
Thomas Meaney: Yeah. Well, I think the market base that we’re in, we have I think recently took control of and I do see the same growth in, in revenues and the profitability and do increase our breadth, our share in the market. And up till now we’ve really done what we’ve said we’re going to do and as we, as we attack the road map of the different, this different ship and the different aircraft and so on, we are not limited to just ship that’s took a lot of discussion for that. So, we’ll be extending into instance in another commercial areas which is as far as FAA radars and so on. But I think, you know, the company should be, should be watch because we’re on a strong growth path.
Juan Costello: Well, we certainly look forward to continue to track the company’s growth and reporting your upcoming progress. And I would like to thank you for taken the time to join us today Tom and update our investors on Mikros, it’s always good to have you on.
Thomas Meaney: Okay. Thank you Juan. I hope to talk to you soon.