VISTA, Calif., Nov. 14, 2013 (GLOBE NEWSWIRE) -- Omnitek Engineering Corporation (OTCQB:OMTK) today reported results for its third quarter and nine months ended September 30, 2013, reflecting the impact of lower foreign sales due, in part, to the appreciation of the U.S. dollar, as well as inventory build up to support the anticipated ramp up of domestic diesel engine conversion-to-natural gas kit sales in the current fourth quarter.
Net revenues for the third quarter were $280,921 compared with $562,367 a year earlier. For the same period, the company reported a net loss of $467,895, or $0.02 per share, compared with a net loss of $142,150, or $0.01 per share, a year earlier.
Net revenues for the nine-month period were $827,460 compared with $1.25 million a year ago, reflecting the impact of the company's relocation to a larger facility in the second quarter. For the same period, the company reported a net loss of $1.09 million, or $0.06 per share, compared with a net loss of $1.32 million, or $0.07 per share, a year earlier.
Gross margin for the quarter ended September 30, 2013 was sharply impacted due particularly to lower foreign sales, fixed overhead and labor costs that could not be absorbed due to volume and product mix, as well as high freight costs associated with a planned inventory build to support the anticipated ramp up of domestic engine conversion business. Gross margin for the nine months was also impacted, due to the factors noted above. The company anticipates gross margin as a percentage of sales will return to more a normalized range of 40 to 50 percent as domestic sales commence and foreign sales regain momentum.
"Notwithstanding the impact of the aforementioned items impacting the quarter and nine-month period, sales in the current fourth quarter are expected to begin to reflect long-awaited domestic contributions. Our optimism is supported by expressed strong interest from large domestic trucking fleet operators and a commitment to convert from diesel fuel to natural gas engines," said Werner Funk, president and chief executive officer of Omnitek Engineering Corporation.
The company's recently announced strategic alliance with Minneapolis, Minnesota-based diesel engine remanufacturer Reviva to produce a "drop-in" natural gas engine for the widely utilized Navister DT 466E and DT 530E heavy-duty truck engines, with plans to offer additional engine models, is expected to accelerate the conversion process for large fleet operators, Funk noted. "We look forward to expanding our EPA-approved engine lineup and leveraging this drop-in strategic model to achieve significant growth moving forward," Funk said.
Funk noted the government shut-down and resulting furloughs, particularly at the Environmental Protection Agency, impacted the company's testing process during the quarter and management's ability to clarify certain technical matters.
At September 30, 2013, current liabilities totaled $505,794 and current assets totaled $4.8 million, resulting in positive working capital of approximately $4.3 million and a current ratio of 9.4 to 1. The company's total assets at September 30, 2013 were $4.9 million. Funk noted management intentionally increased the company's inventory levels more than two-fold to support the anticipated ramp up of domestic sales activities, with a target of commencing in the current fourth quarter and sharply increasing volume in 2014.
The company is working diligently to obtain EPA and CARB approval for additional diesel engine models to address the anticipated increasing demand from trucking fleets that operate with other diesel engine models to complement its EPA-certification of the heavy-duty Navistar DT466E and DT530E engines – including plans for the recently announced 12.7 L Detroit Diesel Series 60 and the Caterpillar C15 engine models as part of the second phase for the Puget Sound Clean Air Agency pilot project.
Funk added that the company's expansion of its international business continues, with a particular focus on markets in South America, Europe, Mexico and China. "Despite softness in foreign markets that impacted the quarter and reduced revenues derived from OE customers due to model-year changeovers, we anticipate significant new near-term sales opportunities in certain regions of Europe and China for large fleet customers," Funk said.
He emphasized that the cost for a diesel truck engine conversion can be recouped within a one-to-two year period, and even earlier if performed during a regularly scheduled engine overhaul.
About Omnitek Engineering Corporation
Omnitek Engineering Corp. develops and sells new natural gas engines, as well as proprietary diesel-to-natural gas conversion systems -- providing global customers with innovative alternative energy and emissions control solutions that are sustainable and affordable.
Some of the statements contained in this news release discuss future expectations, contain projections of results of operations or financial condition or state other ``forward-looking'' information. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. Important factors that may cause actual results to differ from projections include, among many others, the ability of the Company to raise sufficient capital to meet operating requirements, completion of R&D and successful commercialization of products/services, patent completion, prosecution and defense against well-capitalized competitors. These are serious risks and there is no assurance that our forward-looking statements will occur or prove to be accurate. Words such as ``anticipates,'' ``expects,'' ``intends,'' ``plans,'' ``believes,'' ``seeks,'' ``estimates,'' and variations of such words and similar expressions are intended to identify such forward-looking statements. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
(Financial Tables Follow)
|OMNITEK ENGINEERING CORP.|
|Condensed Statements of Operations (unaudited)|
|For the Three||For the Three||For the Nine||For the Nine|
|Months Ended||Months Ended||Months Ended||Months Ended|
|September 30||September 30||September 30||September 30|
|REVENUES||$ 280,921||$ 562,367||$ 827,460||$ 1,249,267|
|COST OF GOODS SOLD||180,103||281,633||528,035||631,694|
|General and administrative||470,258||353,438||1,193,132||1,789,028|
|Research and development expense||104,991||88,922||207,127||166,070|
|Depreciation and amortization expense||14,503||1,606||41,839||4,596|
|Total Operating Expenses||589,752||443,966||1,442,098||1,959,694|
|LOSS FROM OPERATIONS||(488,934)||(163,232)||(1,142,673)||(1,342,121)|
|OTHER INCOME (EXPENSE)|
|Total Other Income (Expense)||21,039||21,082||55,764||21,766|
|LOSS BEFORE INCOME TAXES||(467,895)||(142,150)||(1,086,909)||(1,320,355)|
|INCOME TAX EXPENSE||--||--||800||800|
|NET LOSS||$ (467,895)||$ (142,150)||$ (1,087,709)||$ (1,321,155)|
|BASIC AND DILUTED LOSS PER SHARE||$ (0.02)||$ (0.01)||$ (0.06)||$ (0.07)|
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED||19,749,582||19,749,582||19,749,582||18,872,509|
|OMNITEK ENGINEERING CORP.|
|Condensed Balance Sheet|
|September 30,||December 31,|
|Cash||$ 1,373,841||$ 3,192,761|
|Accounts receivable, net||43,180||120,547|
|Accounts receivable - related parties||12,594||26,455|
|Short-term investments, net||1,024,130||--|
|Total Current Assets||4,769,142||4,812,558|
|FIXED ASSETS, net||113,756||14,560|
|Long-term investments, net||--||1,201,671|
|Intellectual property, net||3,403||5,218|
|Total Other Assets||3,403||1,206,889|
|TOTAL ASSETS||$ 4,886,301||$ 6,034,007|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and accrued expenses||$ 105,070||$ 317,106|
|Accrued management compensation||215,447||264,717|
|Total Current Liabilities||505,794||765,932|
|Common stock, 125,000,000 shares authorized no par value|
|19,749,582 and 19,749,582 shares issued and outstanding, respectively||8,196,061||8,196,061|
|Additional paid-in capital||5,067,310||4,867,169|
|Total Stockholders' Equity||4,380,507||5,268,075|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$ 4,886,301||$ 6,034,007|
CONTACT: Gary S. Maier Maier & Company, Inc. (310) 471-1288Source:Omnitek Engineering Corp.