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Omnitek Engineering Reports Third Quarter and Nine-Month Results

Recent Completion of EURO VI 430 hp 13-Liter Engine Development Expected to Drive Growth

VISTA, Calif., Nov. 13, 2018 (GLOBE NEWSWIRE) -- Omnitek Engineering Corp. (OMTK) today announced results for its third quarter and nine months ended September 30, 2018 – reflecting the development of a 430 hp 13-liter heavy-duty EURO VI natural gas engine for truck and bus applications for a European customer, and its finalization subsequent to the end of the quarter.

For the three months ended September 30, 2018, the company reported a net loss of $143,305, or ($0.01) per share, compared with a net loss of $149,849, or ($0.01) per share, a year earlier. Net revenues for the quarter were $280,567 compared with $276,241 from a year earlier.  

Results for the quarter were impacted by non-cash expenses, including the value of options granted in the amount of $5,272, depreciation and amortization of $1,568 and expenses relating to settlement of debt of $32,963. For the three-month period a year earlier, non-cash expenses included the value of options granted of $25,476 and depreciation and amortization of $6,147.

For the nine-month period, the company reported a net loss of $317,938, or ($0.02) per share, compared with a net loss of $550,479, or ($0.03) per share, a year earlier. Net revenues for the nine-months were $1,009,653 compared with $814,210 a year ago.  

Results for the nine-month period were impacted by non-cash expenses, including the value of options granted in the amount of $32,458, depreciation and amortization of $7,294 and expenses relating to settlement of debt of $32,963. For the nine-month period a year earlier, non-cash expenses included the value of options granted of $120,209 and depreciation and amortization of $18,594.  

Gross margin for the quarter ended September 30, 2018 was 39 percent compared with 43 percent a year earlier. Gross margin for the nine months was 43 percent compared with 44 percent a year earlier -- within the company’s normalized target range of 40 to 50 percent on an annual basis.

“Higher oil prices, air pollution regulations and the price disparity between diesel and natural gas in foreign markets remain important catalysts for our business, and we remain focused on ramping up sales volume -- particularly in Turkey, China, India and Europe. The recent finalized development of a 430 hp 13-Liter EURO VI natural gas engine represents a significant competitive advantage, and we anticipate significant sales for this product line to materialize in 2019. In addition, we anticipate meaningful sales to materialize after our exclusive Chinese distributor receives final government approvals to manufacture natural gas engines in its new manufacturing facility currently being built in Shandong Province, China,” said Werner Funk, president and chief executive officer of Omnitek Engineering Corp.

At September 30, 2018, current liabilities totaled $1,229,580 and current assets totaled $1,507,583, resulting in positive working capital of approximately $278,003 and a current ratio of 1.23.

About Omnitek Engineering Corp.
Omnitek Engineering Corp. develops and sells new natural gas engines, as well as proprietary diesel-to-natural gas conversion systems -- providing global customers with innovative alternative energy and emissions control solutions that are sustainable and affordable. Additional information is available at www.omnitekcorp.com.

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 Nine   For the Nine
        Months Ended   Months Ended   Months Ended   Months Ended
        September 30   September 30   September 30   September 30
        2018     2017     2018     2017  
                     
REVENUES   $ 280,567     $ 276,241     $ 1,009,653     $ 814,210  
COST OF GOODS SOLD     170,108       158,358       575,088       456,765  
GROSS MARGIN     110,459       117,883       434,565       357,445  
                             
OPERATING EXPENSES                        
                             
  General and administrative     184,374       240,477       618,680       789,618  
  Research and development expense     29,315       18,978       81,885       92,667  
  Depreciation and amortization expense     1,568       6,147       7,294       18,594  
                             
    Total Operating Expenses     215,257       265,602       707,859       900,879  
                             
LOSS FROM OPERATIONS     (104,798 )     (147,719 )     (273,294 )     (543,434 )
                             
OTHER INCOME (EXPENSE)                        
                         
Other income     -       -       950       -  
Loss on settlement of debt     (32,963 )     -       (32,963 )     -  
Interest expense     (5,544 )     (2,130 )     (11,831 )     (6,245 )
                             
    Total Other Income (Expense)     (38,507 )     (2,130 )     (43,844 )     (6,245 )
                             
LOSS BEFORE INCOME TAXES     (143,305 )     (149,849 )     (317,138 )     (549,679 )
INCOME TAX EXPENSE     -       -       800       800  
                             
NET LOSS   $ (143,305 )   $ (149,849 )   $ (317,938 )   $ (550,479 )
                             
BASIC AND DILUTED LOSS PER SHARE   $ (0.01 )   $ (0.01 )   $ (0.02 )   $ (0.03 )
                             
WEIGHTED AVERAGE NUMBER                        
  OF COMMON SHARES OUTSTANDING BASIC AND DILUTED     20,411,316       20,281,082       20,324,970       20,281,082  
                             


 
OMNITEK ENGINEERING CORP.
Condensed Balance Sheet
ASSETS
 
      September 30,   December 31,
      2018   2017
      (unaudited)    
CURRENT ASSETS          
  Cash $ 5,498     $ 23,279  
  Accounts receivable, net   15,293       7,984  
  Accounts receivable - related parties   6,313       3,440  
  Inventory, net   1,451,896       1,554,656  
  Deposits   28,583       17,385  
               
    Total Current Assets   1,507,583       1,606,744  
               
FIXED ASSETS, net   2,672       7,253  
               
OTHER ASSETS          
  Other noncurrent assets   14,280       14,280  
               
    Total Other Assets   14,280       14,280  
               
    TOTAL ASSETS $ 1,524,535     $ 1,628,277  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES          
  Accounts payable and accrued expenses $ 373,379     $ 358,032  
  Accrued management compensation   512,103       406,841  
  Accounts payable – related parties   142,819       114,321  
  Notes payable – related parties   15,000       15,000  
  Convertible notes payable – related parties   -       15,000  
  Convertible notes payable – current portion   45,000       -  
  Billings in excess of costs and estimated earnings   -       30,000  
  Customer deposits   141,279       212,410  
               
    Total Current Liabilities   1,229,580       1,151,604  
    LONG-TERM LIABILITIES          
    Convertible notes payable, net of current portion   55,000       -  
               
    Total Liabilities   1,284,580       1,151,604  
STOCKHOLDERS' EQUITY          
  Common stock, 125,000,000 shares authorized            
    no par value 20,420,402 and 20,281,082 shares          
    issued and outstanding, respectively   8,427,210       8,411,411  
  Additional paid-in capital   11,917,784       11,852,363  
  Accumulated deficit   (20,105,039 )     (19,787,101 )
               
    Total Stockholders' Equity   239,955       476,673  
               
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,524,535     $ 1,628,277  
                   

 

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