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CST: 04/06/2020 15:43:53   

Omnitek Engineering Corp. Reports 2018 Results

430 Days ago

Foreign Sales Gaining Momentum As Development Programs Are Completed

VISTA, Calif., April 01, 2019 (GLOBE NEWSWIRE) -- Omnitek Engineering Corp.  (OTCQB: OMTK) today reported results for its fourth quarter and year ended December 31, 2018 – reflecting the completion of certain multi-year natural gas engine development programs overseas and the initial ramp up of related orders.

Revenues for the fourth quarter ended December 31, 2018 were $276,034 compared with $260,004 a year earlier.  For the same period, the company reported a sharply reduced net loss of $150,467, or ($0.01) per share, compared with $485,818, or ($0.02) per share, a year ago. The decreased loss is due primarily to a reduction in the non-cash inventory reserve adjustment between 2017 and 2018. The inventory reserve adjustment represents a non-cash charge for slow-moving inventory and is recorded as a separate line item component of total cost of goods sold.

Gross margin for the quarter included the non-cash inventory reserve adjustment noted above, resulting in a positive gross margin of $66,229 for the fourth quarter ended December 31, 2018 compared with negative gross margin of $188,379 a year earlier.

Revenues for the full year increased to $1.3 million compared with $1.1 million a year earlier, primarily due to higher diesel-to-natural gas engine conversion kit sales in foreign markets and the completion of engine development projects.  For the full year, the company reported a sharply reduced net loss of $468,406 or ($0.02) per share, compared with a net loss of $1 million, or $0.05 per share, a year earlier – primarily attributable to the increased sales noted above combined with a reduction in the non-cash charge for the inventory reserve adjustment and general and administrative expenses.

Gross margin for the full year includes the non-cash inventory reserve adjustment noted above, resulting in a gross margin of $500,793 compared with gross margin of $169,062 a year earlier.  Adjusted gross margin as percentage of sales was 47 percent compared with 44 percent a year earlier, excluding the previously noted non-cash inventory reserve adjustment.

Results for the twelve months ended December 31, 2018 reflect non-cash expenses, including the value of options and warrants granted in the amount of $37,730, depreciation and amortization of $7,590 and inventory reserve adjustment of $97,436. For the twelve months ended December 31, 2017, non-cash expenses and income included the value of options and warrants granted for $131,522, depreciation and amortization of $24,586 and inventory reserve adjustment of $305,458.

“The past year was a transformative year for the company as several multi-year development programs, particularly in Asia and Europe, were completed.  We are now finally gaining traction and have begun to generate initial orders for engine conversion projects to support the utilization of CNG and LPG fuels,” said Werner Funk, president and chief executive officer of Omnitek Engineering Corp.

He noted the shift from domestic to international demand for engine conversions continues to be an important strategic growth driver for the company, particularly given stringent air pollution regulations overseas and the price disparity between diesel and natural gas in foreign markets, mostly as a result of higher taxes on diesel fuel.

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

At December 31, 2018, current liabilities totaled $1.3 million and current assets totaled $1.4 million, resulting in positive working capital of approximately $62,000 and a current ratio of 1.05 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)

Statement of Operations

    For the Three   For the Three   For the Year   For the Year
    Months Ended   Months Ended   Ended   Ended
    December 31   December 31   December 31   December 31
    2018   2017   2018   2017
REVENUES   $ 276,034     $ 260,004     $ 1,285,686     $ 1,074,213  
COST OF GOODS SOLD     162,369       142,925       687,457       599,693  
INVENTORY RESERVE ADJUSTMENT     47,436       305,458       97,436       305,458  
Total Cost of Goods Sold     209,805       448,383       784,893       905,151  
GROSS MARGIN     66,229       (188,379 )     500,793       169,062  
OPERATING EXPENSES                        
General and administrative     192,779       262,730       811,459       1,052,344  
Research and development expense     25,012       26,273       106,896       118,940  
Depreciation and amortization expense     296       5,992       7,590       24,586  
Total Operating Expenses     218,087       294,995       925,945       1,195,870  
LOSS FROM OPERATIONS     (151,858 )     (483,374 )     (425,152 )     (1,026,808 )
OTHER INCOME (EXPENSE)                        
Loss on settlement of debt     -       -       (32,963 )     -  
Interest expense     (6,050 )     (2,444 )     (17,882 )     (8,689 )
Other income     7,441       -       8,391       -  
Total Other Income (Expense)     1,391       (2,444 )     (42,454 )     (8,689 )
LOSS BEFORE INCOME TAXES     (150,467 )     (485,818 )     (467,606 )     (1,035,497 )
INCOME TAX EXPENSE     -       -       800       800  
NET LOSS   $ (150,467 )   $ (485,818 )   $ (468,406 )   $ (1,036,297 )
BASIC AND DILUTED LOSS PER SHARE   $ (0.01 )   $ (0.02 )   $ (0.02 )   $ (0.05 )
WEIGHTED AVERAGE NUMBER OF COMMON SHARES BASIC AND DILUTED     20,420,402       20,281,082       20,349,024       20,281,082  

Balance Sheet

  December 31,   December 31,
  2018     2017  
Cash $    17,060     $    23,279  
Accounts receivable, net   13,442         7,984  
Accounts receivable - related parties   6,666          3,440  
Inventory, net     1,359,678         1,554,656  
Contract assets   12,772          -  
Deposits      5,811         17,385  
Total Current Assets     1,415,429         1,606,744  
PROPERTY & EQUIPMENT, net      2,376          7,253  
OTHER ASSETS          
Other noncurrent assets   30,425          14,280  
Total Other Assets     30,425         14,280  
TOTAL ASSETS $   1,448,230     $    1,628,277  
Accounts payable and accrued expenses $   362,363     $   358,032  
Accrued management compensation     506,103         406,841  
Accounts payable – related parties     145,171         114,321  
Notes payable – related parties   15,000       15,000  
Convertible notes payable – related parties   -       15,000  
Convertible notes payable   100,000       -  
Contract liabilities   84,496       30,000  
Customer deposits   140,338          212,410  
Total Current Liabilities   1,353,471         1,151,604  
Total Liabilities   1,353,471          1,151,604  
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   11,923,056         11,852,363  
Accumulated deficit   (20,255,507 )       (19,787,101 )
Total Stockholders' Equity     94,759          476,673  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $   1,448,230     $    1,628,277  


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

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