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Omnitek Engineering Reports Second Quarter and Six-Month Results

VISTA, Calif., Aug. 15, 2016 (GLOBE NEWSWIRE) -- Omnitek Engineering Corp. (OTCQB:OMTK) today reported results for its second quarter and six months ended June 30, 2016 – primarily reflecting the timing of orders between the completion of current pilot programs and the ramp up of fleet conversions on a larger scale.

Net revenues for the second quarter were $252,316 compared with $591,185 a year earlier. For the same period, the company reported a net loss of $292,939, or $0.01 per share, compared with a net loss of $168,280, or $0.01 per share, a year earlier.

Results for the three months ended June 30, 2016 reflect the impact of non-cash expenses, including the value of options and warrants granted in the amount of $81,969 and depreciation and amortization of $6,976. For the three-month period a year earlier, non-cash expenses for the value of options and warrants granted were $53,486, with depreciation and amortization of $7,734.

Net revenues for the six-month period were $591,899 compared with $1,041,885 a year ago. For the same period, the company reported a net loss of $489,683, or $0.02 per share, compared with a net loss of $405,442, or $0.02 per share, a year earlier.

Results for the six months ended June 30, 2016 reflect the impact of non-cash expenses, including the value of options and warrants granted in the amount of $118,068 and depreciation and amortization of $14,463. For the six-month period a year earlier, non-cash expenses for the value of options and warrants granted were $87,089 and depreciation and amortization of $15,524.

Gross margin as a percentage of revenues for the quarter ended June 30, 2016 was 41 percent compared with 54 percent a year earlier due to sales volume and product mix, but consistent with management’s target range. Gross margin as a percentage of revenues for the six months was 46 percent compared with 50 percent a year earlier, also consistent with management’s target range.

“During the quarter we made significant progress on several ongoing pilot programs, and the level of quote requests from potential fleet customers -- particularly in Mexico, Canada, Europe and China -- continues to gain momentum. Based on current developments and activity, we anticipate accelerating demand and follow-on orders for engine conversion kits and/or converted engines in the second half,” said Werner Funk, president and chief executive officer of Omnitek Engineering Corp.

Air pollution regulations and the price disparity between diesel and natural gas, mostly as a result of higher taxes on diesel fuel in foreign markets, continues to generate significant business opportunities for Omnitek -- contributing to a modest order backlog at June 30, 2016 of approximately $230,000, which is expected to accelerate throughout the balance of this year.

Funk indicated a previously referenced evaluation program for a large domestic fleet customer is proceeding as planned. As previously announced, the engine being developed for this particular program is the Navistar VT365, as used in class 5 and 6 delivery trucks and school buses.

At June 30, 2016, current liabilities totaled $616,989 and current assets totaled $2,174,723, resulting in positive working capital of $1,557,734 million and a current ratio of 3.52 to 1.

About Omnitek Engineering Corp.

Omnitek Engineering Corp. develops and sells proprietary diesel-to-natural gas 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)

OMNITEK ENGINEERING CORP.
Condensed Statements of Operations (unaudited)
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
2016 2015 2016 2015
REVENUES $ 252,316 $ 591,185 $ 591,899 $ 1,041,885
COST OF GOODS SOLD 148,316 269,003 320,493 520,648
GROSS MARGIN 104,000 322,182 271,406 521,237
OPERATING EXPENSES
General and administrative 341,461 396,841 654,257 747,893
Bad debt expense -
Research and development 46,897 89,655 94,303 166,239
Depreciation and amortization 6,976 7,734 14,463 15,524
Total Operating Expenses 395,334 494,230 763,023 929,656
LOSS FROM OPERATIONS (291,334) (172,048) (491,617) (408,419)
OTHER INCOME (EXPENSE)
Other income 1,144 3,934 5,374 3,934
Interest expense (1,949) (172) (2,640) (172)
Interest income - 6 - 15
Total Other Income (Expense) (805) 3,768 2,734 3,777
LOSS BEFORE INCOME TAXES (292,139) (168,280) (488,883) (404,642)
INCOME TAX EXPENSE 800 - 800 800
NET LOSS $ (292,939) $ (168,280) $ (489,683) $ (405,442)
BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.01) $ (0.02) $ (0.02)
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING BASIC AND DILUTED 20,030,533 19,981,082 20,005,807 19,980,858




OMNITEK ENGINEERING CORP.
Condensed Balance Sheet
ASSETS
June 30, December 31,
2016 2015
(unaudited)
CURRENT ASSETS
Cash$ 27,125 $ 105,846
Accounts receivable, net 39,965 30,835
Accounts receivable - related parties 13,057 17,257
Inventory, net 2,070,107 2,107,463
Prepaid expense 5,324 6,050
Deposits 19,145 19,745
Total Current Assets 2,174,723 2,287,196
FIXED ASSETS, net 44,969 59,151
OTHER ASSETS
Intellectual property, net
Other noncurrent assets
-
14,280


281
14,280
Total Other Assets 14,280 14,561
TOTAL ASSETS$ 2,233,972 $ 2,360,908
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses$ 226,239 $ 145,207
Accrued management compensation 155,413 189,163
Accounts payable - related parties 8,152 7,591
Customer deposits 227,185 230,349
Total Current Liabilities 616,989 572,310
Total Liabilities 616,989 572,310
STOCKHOLDERS' EQUITY
Common stock, 125,000,000 shares authorized no par value
20,231,082 and 19,981,082 shares issued and outstanding 8,391,411 8,291,411
Additional paid-in capital 11,564,667 11,346,599
Accumulated deficit (18,339,095) (17,849,412)
Total Stockholders' Equity 1,616,983 1,788,598
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$ 2,233,972 $ 2,360,908

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

Source:Omnitek Engineering Corp.