Omnitek Engineering Corporation reports results for its first quarter ended March 31, 2014 – reflecting the impact of timing of customer and component orders and investments related to the expected ramp up of diesel-to-natural gas conversion kit sales in the quarters ahead.
Net revenues for the first quarter were $320,374 compared with $349,329 a year earlier. For the same period, the company reported a net loss of $417,805, or $0.02 per share, compared with a net loss of $250,420, or $0.01 per share, a year ago, primarily due to higher operating expenses and research and development outlays related to the development of engine conversion kits for additional engine models.
Gross margin for the three months ended March 31, 2014 was $125,323 compared with $145,244 a year ago. Gross profit for the three-month period as a percentage of sales was 39% compared with 42% in the same period a year ago, reflecting volume and overhead absorption.
“We expect milestone periods for the company in the quarters ahead, as diesel-to-natural gas conversion fleet sales ramp up in both domestic and foreign markets. Our optimism is supported by a significant year-over-year increase in quote requests from fleet managers, as well as a strong response from the company’s participation at the ACT trade show in Long Beach, CA, last week and the anticipated addition of other EPA and state-related engine certifications throughout the year,” says Werner Funk, President and Chief Executive Officer of Omnitek Engineering Corporation.
He notes that kit sales increased in the quarter from the commencement of domestic sales in the preceding fourth quarter. “Fleet managers perform in-field evaluations with a few vehicles in their fleet prior to a broader conversion program commitment, and we look forward to expanding initial sales in the quarters ahead,” Funk says.
“Omnitek’s EPA-approved technology provides a viable alternative to new engine replacement for fleet operators at a significantly lower cost. With more than 8 million heavy-duty trucks on the road in the United States and a payback period of one to two years for conversions, Omnitek is well-positioned to capitalize on the domestic abundance of natural gas and its benefits,” Funk says.
He adds that local fleet operators with trucks that return to the same depot every night are uniquely positioned to build on-site refueling stations and purchase fuel significantly below the cost charged by retail fuel stations. He highlights a recently announced pilot program for the city of Little Rock, AR, intended to demonstrate the economic benefits and environmental effectiveness of Omnitek’s EPA-approved diesel-to natural gas engine conversion technology for the Navistar DT466E heavy-duty truck engines utilized by the city’s municipal truck fleet. “The city of Little Rock is a model for other municipal governments and private organizations, and built a new natural gas refueling station to support its future converted fleet vehicles. This clearly demonstrates the city’s enthusiasm for natural gas and the anticipated benefits of its usage,” Funk says
At March 31, 2014, the company’s total current assets were $4,027,916 and total current liabilities were $541,402 – resulting in positive working capital of $3,486,514 and a current ratio of 7.44.