Electronic Control Security (EKCS)

[flemsnopes]

Gross Margins.

Gross margins for the Fiscal 2012 Period were 9% of revenue as compared to 50% of revenue for the Fiscal 2011 Period. The decrease in gross margins is primarily attributable to the reduction in the revenues in the Fiscal 2012 Period and to a change in the order mix of equipment sales and support services. We incurred an increase in material cost as a percentage of revenues due to the change in the mix of sales and support services. We experienced an increase in proposal, design and engineering support service costs as a percentage of revenues due primarily to the lower revenues in the Fiscal 2012 Period.