Omnitek Engineering Corporation Reports Third Quarter Results

SAN MARCOS, Calif., Nov. 5, 2012 (GLOBE NEWSWIRE) -- Omnitek Engineering Corporation (OTCBB:OMTK) today reported results for its third quarter ended September 30, 2012, highlighted by a reduced net loss, an improved balance sheet, growing international sales and expected near-term certification of the company's domestic diesel-to-natural gas conversion kits.

Revenues for the third quarter increased 77.3 percent to $562,367 from $317,160 a year ago. The company reported a reduced net loss of $142,150, or $0.01 per share, compared with a net loss of $179,475, or $0.01 per share, a year ago.

Revenues for the nine-month period were $1.2 million compared with $1.3 million a year ago. The year-ago period benefited from the timing of shipments related to specific customer circumstances that required rescheduling of orders to the first quarter of 2011 from the fourth quarter of 2010. The company reported a net loss of $1.3 million, or $0.07 per share, for the 2012 nine-month period compared with a net loss of $286,172, or $0.02 per share, a year earlier, primarily reflecting the impact of higher general and administrative expenses associated with the company's private placement which closed in the second quarter and increased research and development costs related to its domestic diesel-to-natural gas conversion kits.

The 2012 nine-month period was impacted by a one-time cash expense of $413,306 associated with the company's private placement, as noted above, and non-cash expenses, including the value of options and warrants of $626,915, as well as higher professional fees related to the private placement.

Excluding these one-time cash expenses and non-cash amounts, net loss would have been $259,960, or $0.02 per share, for the nine months ended September 30, 2012 and $39,533, or $0.01 per share, for the nine months ended September 30, 2011.

Gross margin for the third quarter was $280,734 compared with $148,523 a year ago. Gross margin as a percentage of sales for the same period was 50 percent compared with 47 percent in the 2011 third quarter.

Gross margin for the nine months was $617,573 compared with $652,901 a year earlier. Gross margin as a percentage of sales for the same period was 49 percent compared with 50 percent a year ago, reflecting sales volume and product mix.

"Results for the quarter reflect solid international growth -- including component sales to OE customers, high-pressure filter sales to Tata Motors and conversion kit sales to customers in China. In anticipation of receiving Environmental Protection Agency approval for our diesel-to-natural gas engine conversion kits for the domestic market, we are continuing to focus on appointing dealers and authorized installers across the country. These partnerships, such as the appointment of CNG One Source of New York announced in September, are intended to support the anticipated strong demand from fleet operators of heavy-duty trucks interested in the economic benefits of utilizing the significant domestic natural gas resources across the United States," said Werner Funk, president and chief executive officer of Omnitek Engineering Corporation.

"With more than eight million heavy-duty trucks on the road, the U.S. market represents a significant opportunity for our technology, which offers a projected return on investment between one and two years. This is a significant advantage compared with a projected return on investment of five to seven years for a new natural gas truck purchase," Funk said.

At September 30, 2012, current liabilities totaled $604,776 and current assets totaled $4.7 million, resulting in positive working capital of approximately $4.0 million and a current ratio of 8 to 1 for the nine-month period. The company's total assets at September 30, 2012 were $5.9 million.

About Omnitek Engineering Corporation

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)

Condensed Statement of Income
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,
2012 2011 2012 2011
REVENUES $ 562,367 $ 317,160 $ 1,249,267 $ 1,306,906
COST OF GOODS SOLD 281,633 168,637 631,694 654,005
GROSS MARGIN 280,734 148,523 617,573 652,901
General and administrative 353,438 265,999 1,789,028 775,088
Research and development expense 88,922 40,845 166,070 100,791
Depreciation and amortization expense 1,606 21,155 4,596 62,396
Total Operating Expenses 443,966 327,999 1,959,694 938,275
LOSS FROM OPERATIONS (163,232) (179,476) (1,342,121) (285,374)
Interest expense -- -- (490) --
Interest income 21,082 1 22,256 2
TOTAL OTHER INCOME (EXPENSE) 21,082 1 21,766 2
LOSS BEFORE INCOME TAXES (142,150) (179,475) (1,320,355) (285,372)
INCOME TAX EXPENSE -- -- 800 800
NET INCOME (LOSS) $ (142,150) $ (179,475) $ (1,321,155) $ (286,172)
BASIC INCOME (LOSS) PER SHARE $ (0.01) $ (0.01) $ (0.07) $ (0.02)
OF COMMON SHARES OUTSTANDING 19,749,582 17,055,203 18,872,509 16,290,048
Condensed Balance Sheet
September 30, September 30,
2012 2011
Cash $ 3,240,057 $ 31,196
Accounts receivable, net 218,065 13,506
Accounts receivable -related party 30,876 16,715
Inventory 912,384 1,020,117
Prepaid expense 10,628 2,512
Deposits 251,036 41,943
Total Current Assets 4,663,046 1,125,989
FIXED ASSETS, net 15,338 13,249
Long-term investments, net 1,211,845 --
Intellectual property, net 5,979 8,256
Total Other Assets 1,217,824 76,518
TOTAL ASSETS $ 5,896,208 $ 1,147,494
Accounts payable and accrued expenses $ 70,411 $ 57,828
Accrued expenses - related parties 277,343 351,580
Accounts payable - related parties 25 2,568
Customer deposits 256,997 286,608
Total Current Liabilities 604,776 698,584
Total Liabilities 604,776 698,584
Common stock, 125,000,000 shares authorized no par value 19,749,582 and 17,137,812 shares issued and outstanding, respectively 8,196,061 2,659,299
Additional paid-in capital 4,840,228 4,213,313
Accumulated deficit (7,744,857) (6,423,702)
Total Stockholders' Equity 5,291,432 448,910
CONTACT: Gary S. Maier Maier & Company, Inc. (310) 471-1288 gmaier@maierco.comSource:Omnitek Engineering Corp.