May 16, 2016 - 8:31 AM EDT
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Omnitek Engineering Corp. Reports First Quarter Results

Greenhouse Gas Emissions Policies Expected To Accelerate Large-Scale Diesel-to-Natural Gas Conversions in Quarters Ahead

VISTA, Calif., May 16, 2016 (GLOBE NEWSWIRE) -- Omnitek Engineering Corp.  (OTCQB:OMTK) today reported results for its first quarter ended March 31, 2016 – reflecting a reduced net loss, an order backlog and continued margin strength.

Revenues for the first quarter were $339,582 compared with $450,700 a year earlier, reflecting year-over-year product mix differences and the timing of orders. For the same period, the company reported a reduced net loss of $196,745, or $0.01 per share, compared with a net loss of $237,162, or $0.01 per share, a year ago.  

Gross margin for the three months ended March 31, 2016 was $167,404 compared with $199,055 a year ago.  Gross profit as a percentage of sales for the three-month period was 49 percent compared with 44 percent in the same period a year ago, reflecting product mix.  

“We anticipate accelerating demand and follow-on orders for engine conversion kits and/or converted engines in the quarters ahead, based on the success of several pilot programs and the level of quote requests from fleet customers -- particularly in Mexico, Canada, Europe and Asia. This favorable outlook reflects the company’s strategic ability to capitalize on the continued dramatic shift from domestic to international demand for the company’s products, primarily due to the precipitous drop in oil prices -- though we still expect the domestic market will regain momentum later in the year. At this point, 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, is generating significant business opportunities for Omnitek in these markets -- contributing to a modest order backlog at March 31, 2016 of approximately $260,000, which is expected to greatly accelerate throughout the year based on the factors noted above,” said Werner Funk, president and chief executive officer of Omnitek Engineering Corp.

Funk indicated a previously referenced evaluation program for a large domestic fleet customer is proceeding as planned, with expectations for an expanded conversion program for this particular customer and additional opportunities from other fleets committed to reducing their global carbon footprint. As previously announced, the engine being developed is the Navistar VT365, as used in class 5 and 6 delivery trucks and school buses. 

He noted Omnitek’s EPA-approved technology provides a viable alternative to new engine replacements for fleet operators at a significantly lower cost. Omnitek is well-positioned to capitalize on the abundance of low-cost and clean-burning natural gas and its benefits, particularly as oil prices begin to increase and emissions policies address the 200-nation “Paris Agreement on Climate Change” that was recently signed. “CO2, NOx and black carbon emissions from diesel engines, potent greenhouse gas (GHG) emissions, are abated when using natural gas; and our technology offers countries around the globe a viable and proven solution,” Funk added.

At March 31, 2016, the company’s total current assets were $2,222,309 and total current liabilities were $660,582 -- resulting in positive working capital of $1,561,727 and a current ratio of 3.36 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.
Consolidated Statement of Operations
(Unaudited)
 
         
    For the Three For the Three
    Months Ended Months Ended
    March 31, March 31,
    2016 2015
       
REVENUES $ 339,582  $ 450,700 
COST OF GOODS SOLD   172,178    251,645 
GROSS MARGIN   167,404    199,055 
         
OPERATING EXPENSES      
       
         
 General and administrative   312,795    351,052 
 Research and development    47,407     76,584 
 Depreciation and amortization     7,487      7,790 
         
  Total Operating Expenses   367,689    435,426 
         
LOSS FROM OPERATIONS   (200,285)   (236,371)
         
OTHER INCOME (EXPENSE)
      
  Interest expense   (690)   - 
  Interest income   -    9 
   Other income   4,230    - 
         
  Total Other Income (Expense)   3,540    9 
         
LOSS BEFORE INCOME TAXES   (196,745)   (236,362)
INCOME TAX EXPENSE     -      800 
         
NET LOSS $ (196,745) $ (237,162)
         
BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.01)
         
WEIGHTED AVERAGE NUMBER      
  OF COMMON SHARES OUTSTANDING   19,981,082    19,980,632 
         


 OMNITEK ENGINEERING CORP.
Consolidated Balance Sheet
  
 ASSETS 
         
    March 31, December 31,
    2016 2015
    (unaudited)  
 CURRENT ASSETS      
  Cash$ 38,088  $ 105,846 
  Accounts receivable, net  73,338    30,835 
  Accounts receivable - related parties  22,395    17,257 
  Inventory, net  2,051,526    2,107,463 
  Prepaid expense  18,917    6,050 
  Deposits  18,045    19,745 
         
   Total Current Assets  2,222,309    2,287,196 
             
 FIXED ASSETS, net  51,851    59,151 
         
 OTHER ASSETS      
  Intellectual property, net  94    281 
  Other noncurrent assets  14,280    14,280 
         
   Total Other Assets  14,374    14,561 
         
   TOTAL ASSETS$ 2,288,534  $ 2,360,908 
         
 LIABILITIES AND STOCKHOLDERS' EQUITY  
         
 CURRENT LIABILITIES      
  Accounts payable and accrued expenses$ 206,276  $   145,207 
  Accrued management compensation    219,740      189,163 
  Accounts payable - related parties    7,381    7,591 
  Customer deposits  227,185      230,349 
         
   Total Current Liabilities    660,582      572,310 
         
   Total Liabilities    660,582      572,310 
         
        
  STOCKHOLDERS' EQUITY     
  Common stock, 125,000,000 shares authorized no par value     
    19,981,082 shares issued and outstanding  8,291,411      8,291,411 
  Additional paid-in capital  11,382,698    11,346,599 
  Accumulated deficit   (18,046,157)    (17,849,412)
         
   Total Stockholders' Equity    1,627,952      1,788,598 
         
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$   2,288,534  $   2,360,908 

 

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

Source: GlobeNewswire (May 16, 2016 - 8:31 AM EDT)

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