Omnitek Engineering Corp. announces results for its third quarter and nine months ended September 30, 2015 --reflecting a sharply reduced net loss for both periods, an order backlog of approximately $392,000 and the commencement of an evaluation program for a large domestic fleet customer subsequent to the quarter end.
Net revenues for the third quarter were $438,178 compared with $447,477 from a year earlier – reflecting the timing of orders. For the same period, the company reported a net loss of $271,970, or $0.01 per share, compared with a net loss of $542,357, or $0.03 per share, a year earlier.
Net revenues for the nine-month period increased 38% to $1.48 million from $1.07 million a year ago, reflecting increased contributions from high-pressure natural gas filter sales and conversion kit shipments to domestic and foreign customers. For the same period, the company reported a net loss of $677,414, or $0.03 per share, compared with a net loss of $1.42 million, or $0.07 per share, a year earlier.
Gross margin for the quarter ended September 30, 2015 was 44% compared with 45% a year earlier due to the volume and timing of orders. Gross margin for the nine months was 48% compared with 40% a year earlier, both within the company’s normalized target range of 40 to 50%.
“We remain confident that the long-awaited domestic conversion market will continue to accelerate as large domestic trucking fleet operators focus on the environment and the availability of our 'as-new' converted EPA-approved natural gas engines and conversions kits. Equally important, our business in Mexico, Europe and Asia is gaining meaningful momentum – supported by a global focus on environmental and economic considerations,” says Werner Funk, President and Chief Executive Officer of Omnitek Engineering Corp.
As noted above, the company recently commenced an evaluation program for a large domestic fleet customer. The engine being developed is the Navistar VT365, as used in Class 5 and 6 delivery trucks. Omnitek Engineering anticipates delivering favorable results during the evaluation period, which it expects to complete early in 2016. “We are optimistic that the program will be enlarged to address an estimated 2,700 vehicles, and we look forward to announcing further details and developments in cooperation and with the approval of our customer,” Funk says.
At September 30, 2015, current liabilities totaled $522,801 and current assets totaled $2.5 million, resulting in positive working capital of approximately $2 million and a current ratio of 4.83 to 1. The company’s total assets at September 30, 2014 were $2.6 million. Funk notes that inventory levels remain high to support the anticipated acceleration of domestic and foreign sales activities.
Funk emphasizes, despite lower oil prices which he expects will begin to increase, the cost for a diesel-to-natural-gas engine conversion can be recouped within a one-to-two year period, particularly in foreign markets where taxes on diesel fuel are particularly higher than in the domestic market. Conversion costs also benefit when the process is performed during a regularly scheduled engine overhaul.
