Omnitek Engineering Corp. has reported results for its first quarter ended March 31, 2016 -- reflecting a reduced net loss, an order backlog and continued margin strength.
Revenues for the first quarter were $339,582 compared with $450,700 a year earlier, reflecting year-over-year product mix differences and the timing of orders. For the same period, the company reported a reduced net loss of $196,745, or $0.01 per share, compared with a net loss of $237,162, or $0.01 per share, a year ago.
Gross margin for the three months ended March 31, 2016 was $167,404 compared with $199,055 a year ago. Gross profit as a percentage of sales for the three-month period was 49% compared with 44% in the same period a year ago, reflecting product mix.
“We anticipate accelerating demand and follow-on orders for engine conversion kits and/or converted engines in the quarters ahead, based on the success of several pilot programs and the level of quote requests from fleet customers -- particularly in Mexico, Canada, Europe and Asia. This favorable outlook reflects the company’s strategic ability to capitalize on the continued dramatic shift from domestic to international demand for the company’s products, primarily due to the precipitous drop in oil prices -- though we still expect the domestic market will regain momentum later in the year. At this point, air pollution regulations and the price disparity between diesel and natural gas, mostly as a result of higher taxes on diesel fuel in foreign markets, is generating significant business opportunities for Omnitek in these markets -- contributing to a modest order backlog at March 31, 2016 of approximately $260,000, which is expected to greatly accelerate throughout the year based on the factors noted above,” says Werner Funk, President and Chief Executive Officer of Omnitek Engineering Corp.
Funk indicates a previously referenced evaluation program for a large domestic fleet customer is proceeding as planned, with expectations for an expanded conversion program for this particular customer and additional opportunities from other fleets committed to reducing their global carbon footprint. As previously announced, the engine being developed is the Navistar VT365, as used in Class 5 and 6 delivery trucks and school buses.
He notes Omnitek’s EPA-approved technology provides a viable alternative to new engine replacements for fleet operators at a significantly lower cost. Omnitek is well-positioned to capitalize on the abundance of low-cost and clean-burning natural gas and its benefits, particularly as oil prices begin to increase and emissions policies address the 200-nation “Paris Agreement on Climate Change” that was recently signed. “CO2, NOx and black carbon emissions from diesel engines, potent greenhouse gas (GHG) emissions, are abated when using natural gas; and our technology offers countries around the globe a viable and proven solution,” Funk adds.
At March 31, 2016, the company’s total current assets were $2,222,309 and total current liabilities were $660,582 -- resulting in positive working capital of $1,561,727 and a current ratio of 3.36 to 1.