Omnitek Engineering Corporation reports results for its second quarter and six months ended June 30, 2014, reflecting revenue gains and an additional EPA-approved heavy-duty diesel-to natural gas engine conversion kit to support domestic fleet programs.
Net revenues for the second quarter increased 53% to $302,385 from $197,210 a year earlier, reflecting higher filter sales and engine conversion kit shipments. Prior-year sales were impacted by activities related to the company’s relocation to a larger facility. For the same period in 2014, the company reported a net loss of $459,509, or $0.02 per share, compared with a net loss of $369,393, or $0.02 per share, a year earlier, reflecting higher research and development expenses in 2014 related to EPA approval of the Mack E7 engine in June and other engines in development.
Net revenues for the six-month period were $622,759 compared with $546,539 a year ago. For the same period, the company reported a net loss of $877,314, or $0.04 per share, compared with a net loss of $619,814, or $0.03 per share, a year earlier.
Gross margin for the quarter ended June 30, 2014 was $105,374 compared with $53,364 a year ago. Gross margin for the quarter as a percentage of sales was 35% compared with 27% in the same period a year ago, primarily reflecting sales volume and product mix.
Gross margin for the six-months ended June 30, 2014 was $230,697 compared with $198,607 a year earlier. Gross margin for the six-month period as a percentage of sales was 37% compared with 36% in the same period a year ago, primarily reflecting sales volume and product mix.
“Interest from trucking fleet operators in North America to convert to natural gas has been rapidly increasing, and we are encouraged by the level of quote activity during the quarter, supported by the availability of our EPA-approved conversion kits for the widely operated line of heavy-duty Navistar DT466E and DT530E engines and the 12-liter Mack E7 engine,” says Werner Funk, President and Chief Executive Officer of Omnitek Engineering Corp.
He emphasizes that the cost for a diesel truck engine conversion can be recouped within a one-to-two year period, and even earlier if performed during a regularly scheduled engine overhaul.
Funk notes recent proposed changes that take effect January 1, 2015 to California’s AB32 cap and trade regulations. “For the first time, refiners and importers of gasoline and diesel will be required to purchase carbon allowances for the sale of fuels in California, and this will cost a minimum of $2 billion, or 12 cents per gallon, a year -- according to industry observers. This should further accelerate the recoupment of incremental costs associated with diesel-to-natural gas engine conversions, and increase demand for Omnitek’s technology,” he says.
Funk adds that the company’s expansion into international markets continues, with a particular focus on markets in South America, Europe, Mexico and China. Orders for a new, previously announced, 6.6 liter engine manufactured by Arizona-based U.R.E. to power Master Road buses in Mexico are ramping up following the resolution of certain regulatory approvals in that country.
Funk notes that the company’s pilot project for the Puget Sound Clean Air Agency is proceeding. The project has a goal of meeting 2007 EPA emission standards for particulate emissions by 2017 for all drayage trucks serving the port’s marine container terminals, estimated at more than 2,000 vehicles.
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