Omnitek Engineering Corporation Reports Second Quarter Results

VISTA, Calif., Aug. 14, 2014 (GLOBE NEWSWIRE) -- Omnitek Engineering Corporation (OTCQB:OMTK) today reported results for its second quarter and six months ended June 30, 2014, reflecting revenue gains and an additional EPA-approved heavy-duty diesel-to natural gas engine conversion kit to support domestic fleet programs.

Net revenues for the second quarter increased 53 percent to $302,385 from $197,210 a year earlier, reflecting higher filter sales and engine conversion kit shipments. Prior-year sales were impacted by activities related to the company's relocation to a larger facility. For the same period in 2014, the company reported a net loss of $459,509, or $0.02 per share, compared with a net loss of $369,393, or $0.02 per share, a year earlier, reflecting higher research and development expenses in 2014 related to EPA approval of the Mack E7 engine in June and other engines in development.

Net revenues for the six-month period were $622,759 compared with $546,539 a year ago. For the same period, the company reported a net loss of $877,314, or $0.04 per share, compared with a net loss of $619,814, or $0.03 per share, a year earlier.

Gross margin for the quarter ended June 30, 2014 was $105,374 compared with $53,364 a year ago. Gross margin for the quarter as a percentage of sales was 35 percent compared with 27 percent in the same period a year ago, primarily reflecting sales volume and product mix.

Gross margin for the six-months ended June 30, 2014 was $230,697 compared with $198,607 a year earlier. Gross margin for the six-month period as a percentage of sales was 37 percent compared with 36 percent in the same period a year ago, primarily reflecting sales volume and product mix.

"Interest from trucking fleet operators in North America to convert to natural gas has been rapidly increasing, and we are encouraged by the level of quote activity during the quarter, supported by the availability of our EPA-approved conversion kits for the widely operated line of heavy-duty Navistar DT466E and DT530E engines and the 12-liter Mack E7 engine," said Werner Funk, president and chief executive officer of Omnitek Engineering Corporation.

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.

Funk noted recent proposed changes that take effect January 1, 2015 to California's AB32 cap and trade regulations. "For the first time, refiners and importers of gasoline and diesel will be required to purchase carbon allowances for the sale of fuels in California, and this will cost a minimum of $2 billion, or 12 cents per gallon, a year -- according to industry observers. This should further accelerate the recoupment of incremental costs associated with diesel-to-natural gas engine conversions, and increase demand for Omnitek's technology," he said.

Funk added that the company's expansion into international markets continues, with a particular focus on markets in South America, Europe, Mexico and China. Orders for a new, previously announced, 6.6 liter engine manufactured by Arizona-based U.R.E. to power Master Road buses in Mexico are ramping up following the resolution of certain regulatory approvals in that country.

Funk noted that the company's pilot project for the Puget Sound Clean Air Agency is proceeding. The project has a goal of meeting 2007 EPA emission standards for particulate emissions by 2017 for all drayage trucks serving the Port's marine container terminals, estimated at more than 2,000 vehicles.

About Omnitek Engineering Corporation

Omnitek Engineering Corp. develops and sells proprietary diesel-to-natural gas engine conversion systems and complementary products, including new natural gas engines that utilize the company's technology -- 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)

Consolidated Statement of Operations
For the Three For the Three For the Six For the Six
Months Ended Months Ended Months Ended Months Ended
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
REVENUES $ 302,385 $ 197,210 $ 622,759 $ 546,539
COST OF GOODS SOLD 197,011 143,846 392,062 347,932
GROSS MARGIN 105,374 53,364 230,697 198,607
General and administrative 433,083 370,582 877,604 722,874
Research and development expense 135,399 51,777 239,159 102,136
Depreciation and amortization expense 14,834 14,066 29,902 27,336
Total Operating Expenses 583,316 436,425 1,146,665 852,346
LOSS FROM OPERATIONS (477,942) (383,061) (915,968) (653,739)
Investment income, net 12,921 -- 12,921 --
Interest expense -- -- -- (13)
Interest income 5,512 13,668 26,533 34,738
Total Other Income (Expense) 18,433 13,668 39,454 34,725
LOSS BEFORE INCOME TAXES (459,509) (369,393) (876,514) (619,014)
INCOME TAX EXPENSE -- -- 800 800
NET LOSS $ (459,509) $ (369,393) $ (877,314) $ (619,814)
BASIC AND DILUTED INCOME (LOSS) PER SHARE $ (0.02) $ (0.02) $ (0.04) $ (0.03)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 19,762,897 19,749,582 19,762,897 19,749,582
Consolidated Balance Sheet
June 30, December 31,
2014 2013
(unaudited) (audited)
Cash $ 265,660 $ 1,057,836
Accounts receivable, net 68,166 38,261
Accounts receivable - related parties 16,780 33,369
Inventory 2,419,886 2,225,868
Prepaid expense 6,746 21,474
Deposits 155,434 62,973
Short-term investments, net 803,715 917, 248
Total Current Assets 3,736,387 4,357,029
FIXED ASSETS, net 104,329 118,460
Intellectual property, net 2,092 2,872
Total Other Assets 2,092 2,872
TOTAL ASSETS $ 3,842,808 $ 4,478,361
Accounts payable and accrued expenses $ 214,774 $ 91,744
Accrued management compensation 141,216 189,466
Accounts payable - related parties 4,013 1,475
Customer deposits 281,774 222,072
Total Current Liabilities 641,777 504,757
Total Liabilities 641,777 504,757
Common stock, 125,000,000 shares authorized no par value 19,779,582 and 19,759,582 shares issued and outstanding, respectively 8,214,911 8,201,311
Additional paid-in capital 5,272,777 5,181,636
Accumulated deficit (10,286,657) (9,409,343)
Total Stockholders' Equity 3,201,031 3,973,604

CONTACT: Gary S. Maier Maier & Company, Inc. (310) 471-1288Source:Omnitek Engineering Corp.