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MFIC Posts Greater Than 23% Increase for Both Third Quarter & Nine Month Revenues
Wednesday November 8, 4:55 pm ET

NEWTON, Mass.--(BUSINESS WIRE)--MFIC Corporation (OTCBB: MFIC - News) today reported revenues for the quarter ended September 30, 2006 of $3.55 million, representing an increase of approximately $670,000, or 23.3%, compared with revenues of $2.88 million for the quarter ended September 30, 2005.

For the quarter ended September 30, 2006, the Company posted net income of approximately $85,000, or $.01 per diluted share, as compared with a net loss of approximately $297,000, or $0.03 per diluted share, for the quarter ended September 30, 2005. The third quarter 2006 included an income tax provision of $57,000 while the third quarter of 2005 had no income tax benefit or provision.

For the nine month period ended September 30, 2006, revenues increased $2,033,000, or 23.7%, to approximately $10.6 million, and the Company reported a net profit of $0.02 per diluted share, as compared with approximately $8.6 million in revenues, and a net loss of $0.05 per diluted share, for the first nine months of 2005.

The Company's order backlog at September 30, 2006, was $4.94 million as compared with a $3.43 million backlog at June 30, 2006. The current backlog represents an increase of approximately $1.42 million from approximately $3.52 million as of September 30, 2005.

Robert P. Bruno, President & COO stated, "I am very pleased to announce that our third quarter machine orders increased by 124% versus the same period last year. In the year to date, machine orders have increased by 61% versus the same period last year.

One of the many highlights of the past quarter and for the year is the continuing strong sales for our M110EH laboratory machine. The number of M110EH machines shipped during the third quarter increased by 200% compared to the same period last year and shipments of this product, year to date, have nearly doubled compared to the same period last year.

Also, the number of M700 series pilot and production machines shipped during the quarter increased by 50% compared to the number of machines shipped during the same period last year and increased by 27%, year to date, compared to the same period last year."

Irwin Gruverman, Chairman & CEO commented, "We continued to experience a strong demand for our Microfluidizer® materials processing equipment during the third quarter. We believe that the current quarter's performance and the nine months revenue and profitability, combined with the backlog, are testimony to the effectiveness of our R&D reinvestment program in 2004 and 2005. Based on the backlog and expected shipments, we anticipate continued revenue growth in the fourth quarter versus the prior year's fourth quarter. We are committed to retaining our leadership in high pressure, high shear fluid processing and will continue the high level of investment in R&D and our efforts to ensure our future position in the industry."

Third Quarter 2006 Company Highlights

During the quarter, MFIC:

Shipped a high level of laboratory systems, including M110EH-30 lab machines
Booked more that $2.2 million in orders for large production equipment and production equipment interaction chambers.

Notice to Investors/Stockholders

MFIC will hold a conference call at 1:30 PM Eastern Time on Thursday, November 9, 2006 to discuss third quarter and nine months financial results. The domestic call in number is [phone] and the Conference I.D. number is 8087245. Management's discussion will be followed by a question and answer period. For those who cannot listen to the live event, a replay of the call will be available on the Company's website: www.mficcorp.com.

MFIC CORPORATION

MFIC Corporation, through its Microfluidics subsidiary, provides patented and proprietary high performance Microfluidizer® materials processing equipment to the biotechnology, pharmaceutical, chemical, cosmetics/personal care, and food industries. MFIC applies its 20 years of high pressure processing experience to produce the most uniform and smallest liquid and suspended solid structures available, and has provided manufacturing systems for nanoparticle products for more than 15 years.

The Company is a leader in advanced materials processing equipment for laboratory, pilot scale and manufacturing applications, offering innovative technology and comprehensive solutions for nanoparticles and other materials processing and production. More than 3,000 systems are in use and afford significant competitive and economic advantages to MFIC equipment customers.

MFIC CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited - in thousands, except per share amounts)

For The Three For The Nine
Months Ended Months Ended
September 30, September 30,
----------------- ----------------
2006 2005 2006 2005
-------- ------- -------- -------

Revenues $ 3,553 $2,881 $10,614 $8,581
Cost of sales 1,558 1,527 4,806 4,283
-------- ------- -------- -------
Gross profit 1,995 1,354 5,808 4,298
-------- ------- -------- -------
Operating expenses:
Research and development 424 414 1,274 1,220
Selling 723 599 2,081 1,871
General and administrative 707 632 2,030 1,706
-------- ------- -------- -------
1,854 1,645 5,385 4,797
-------- ------- -------- -------
Income (loss) from operations 141 (291) 423 (499)
Interest expense (9) (13) (29) (45)
Interest income 10 7 31 18
-------- ------- -------- -------
Income (loss) before income tax
provision (benefit) 142 (297) 425 (526)
Income tax provision (benefit) 57 - 170 (77)
-------- ------- -------- -------
Net income (loss) $ 85 $ (297) $ 255 $ (449)
======== ======= ======== =======
Net income (loss) per common share:
Basic $ 0.01 $(0.03) $ 0.03 $(0.05)
Diluted $ 0.01 $(0.03) $ 0.02 $(0.05)
Weighted average number of common
and common equivalent shares
outstanding:
Basic 10,045 9,784 9,990 9,724
Diluted 10,561 9,784 10,517 9,724

Summary Consolidated Unaudited Balance Sheet Information
(Unaudited - in thousands, except per share data)

September 30, December 31,
2006 2005
--------------------------------------- --------------- --------------
Current Assets $7,004 $5,734
--------------------------------------- --------------- --------------
Current Liabilities $2,387 $1,461
--------------------------------------- --------------- --------------
Total Stockholders' Equity $4,880 $4,426
--------------------------------------- --------------- --------------
Equity Per Share $0.46 $0.45
--------------------------------------- --------------- --------------

Forward Looking Statement:

Management believes that this release contains forward-looking statements that are subject to certain risks and uncertainties including statements relating to the Company's plan to attain and/or increase operating profitability and/or to achieve net profitability. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results achieved by the Company to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that the actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including but not limited to the following risks and uncertainties: (i) whether the performance advantages of the Company's Microfluidizer® materials processing equipment or that a commercial market for the equipment will continue to develop, (ii) whether the performance advantages of the Company's MMR nanoparticle production systems will be realized commercially, (iii) whether the Company will be able to increase its market penetration and market share, (iv) whether the timing of orders will significantly affect revenues and resulting net income for particular quarters in a manner that could cause increased volatility in the Company's stock price, and (v) whether the Company will have access to sufficient working capital through continued and improving cash flow from sales and ongoing borrowing availability, the latter being subject to the Company's ability to comply with the covenants and terms of its loan agreement with its senior lender.



Contact:
MFIC Corporation
Irwin Gruverman, CEO & Chairman
Robert P. Bruno, President & COO
Jack M. Swig, Investor Relations
617-969-5452
[e-mail]