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Omnitek Engineering Corp. Reports First Quarter Results

VISTA, Calif., May 11, 2018 (GLOBE NEWSWIRE) -- Omnitek Engineering Corp.  (OMTK) today reported results for its first quarter ended March 31, 2018 -- reflecting increased sales, a sharply reduced net loss and a solid pipeline of anticipated orders for the balance of the year.

Revenues for the three months ended March 31, 2018 increased 23 percent to $359,530 compared with $291,654 a year earlier.  For the same period, the company reported a net loss of $98,090, or $0.00 per share, compared with a net loss of $209,041, or ($0.01) per share, a year ago. The net loss for the quarter ended March 31, 2018 includes a non-cash inventory reserve adjustment of $25,000. The inventory reserve adjustment represents a non-cash charge for slow-moving inventory.

Gross margin for the three months ended March 31, 2018, which includes the non-cash inventory adjustment referred to above, was $155,038 compared with $139,041 a year ago.  Adjusted gross margin as a percentage of sales for the three months ended March 31, 2018 was 50 percent compared with 48 percent a year earlier, excluding the previously noted non-cash inventory reserve adjustment.

Results for the three months ended March 31, 2018 reflect the impact of non-cash expenses, including the value of options and warrants granted in the amount of $21,971, depreciation and amortization of $3,981 and inventory reserve adjustment of $25,000. For the three months ended March 31, 2017, non-cash expenses included options and warrants granted in the amount of $69,533, depreciation and amortization of $6,224 and inventory reserve adjustment of $-0-.

“The dramatic shift from domestic to international demand for engine conversions continued to gain momentum in the first quarter-- primarily due to increasing oil prices, air pollution regulations and the price disparity between diesel and natural gas in foreign markets, which has been further boosted by higher taxes on diesel fuel.  Results for the quarter reflect various stages in development programs, particularly in Europe, India and Asia, and we expect a transformative year for the company as sales begin ramping up in these markets,” said Werner Funk, president and chief executive officer of Omnitek Engineering Corp.

Funk noted the 200-nation “Paris Agreement on Climate Change” remains an important catalyst for alternative solutions to diesel fuel overseas, with natural gas being particularly appealing -- especially since the fine-particles (PM2.5) and black carbon emissions from diesel engines and potent greenhouse gas (GHG) emissions are abated when using natural gas.

At March 31, 2018, the company’s total current assets were $1,601,431 and total current liabilities were $1,218,429 -- resulting in positive working capital of $383,002 and a current ratio of 1.31 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,
        2018    2017 
             
REVENUES   $ 359,530     $ 291,654  
COST OF GOODS SOLD     204,492       152,613  
GROSS MARGIN     155,038       139,041  
                 
OPERATING EXPENSES            
             
                 
  General and administrative     220,530       300,122  
  Research and development      26,802        39,884  
  Depreciation and amortization       3,981         6,224  
                 
    Total Operating Expenses     251,313       346,230  
                 
LOSS FROM OPERATIONS     (96,275 )     (207,189 )
                 
OTHER INCOME (EXPENSE)

 
           
 

 
   

Interest expense
    (2,765 )     (1,852 )
    Other income     950       -  
                 
    Total Other Income (Expense)     (1,815 )     (1,852
                 
LOSS BEFORE INCOME TAXES     (98,090 )     (209,041 )
INCOME TAX EXPENSE       -         -  
                 
NET LOSS   $ (98,090 )   $ (209,041 )
                 
BASIC AND DILUTED LOSS PER SHARE   $ (0.00 )   $ (0.01 )
                 
WEIGHTED AVERAGE NUMBER            
  OF COMMON SHARES OUTSTANDING     20,281,082       20,281,082  
                 


  OMNITEK ENGINEERING CORP.
Consolidated Balance Sheet
 
     
  ASSETS  
                 
      March 31,   December 31,  
      2018   2017  
      (unaudited)      
  CURRENT ASSETS                
  Cash $ 11,522   $ 23,279  
  Accounts receivable, net   27,116     7,984  
  Accounts receivable - related parties   7,752     3,440  
  Inventory, net   1,512,779     1,554,656  
  Prepaid expense   20,250     -  
  Deposits   22,012     17,385  
                 
  Total Current Assets   1,601,431     1,606,744  
                                                 
 

FIXED ASSETS, net             3,272                  7,253     
                                                 
  OTHER ASSETS                                              
  Other noncurrent assets   14,280     14,280  
                 
   Total Other Assets   14,280     14,280  
                 
   TOTAL ASSETS $ 1,618,983   $ 1,628,277  
                 
  LIABILITIES AND STOCKHOLDERS' EQUITY  
                 
  CURRENT LIABILITIES                
  Accounts payable and accrued expenses $ 361,728   $   358,032  
  Accrued management compensation     432,084       406,841  
  Accounts payable - related parties     125,836     114,321  
  Notes payable – related parties   15,000     15,000  
  Convertible notes payable – related parties   15,000     15,000  
  Contract liabilities   30,000     30,000  
  Customer deposits   238,781       212,410  
                 
   Total Current Liabilities     1,218,429       1,151,604  
                 
   Total Liabilities     1,218,429       1,151,604  
                 
                   
  STOCKHOLDERS' EQUITY            
  Common stock, 125,000,000 shares authorized no par value            
    20,281,082 shares issued and outstanding   8,411,411       8,411,411  
  Additional paid-in capital   11,874,334     11,852,363  
  Accumulated deficit        (19,885,191)                    (19,787,101)    
                                       
   Total Stockholders' Equity     400,554       476,673  
                 
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $   1,618,983   $   1,628,277  
                 


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