Revenues Up 20.7 Percent for Year; Foreign Sales Expected to Drive Growth in 2016

VISTA, Calif., March 30, 2016 (GLOBE NEWSWIRE) -- Omnitek Engineering Corp. (OTCQB:OMTK) today reported results for its fourth quarter and year ended December 31, 2015 – highlighted by year-over-year revenue growth, expanding global demand for the company’s diesel-to-natural gas engine conversion technology and a year-end backlog.

Revenues for the fourth quarter ended December 31, 2015 were $313,493 compared with $413,581 a year earlier, primarily due to the timing of orders.  For the same period, the company reported a net loss of $329,696, or $0.02 per share, compared with $409,156, or $0.02 per share, a year ago.

Gross margin for the quarter was $47,148 compared with $200,811 a year earlier, primarily due to the impact of a one-time, non-cash reclassification of certain items from SG&A to Cost of Goods Sold in an aggregate amount of approximately $56,000.

Revenues for the full year increased 20.7 percent to $1.8 million from $1.5 million in 2014, primarily due to increased diesel-to-natural gas engine conversion kit sales and filter sales to an OEM customer.  The company reported a decreased net loss for the full year of $1.0 million, or $0.05 per share, compared with a net loss of $1.8 million, or $0.09 per share, a year earlier – primarily reflecting a reduction in general and administrative expenses and research and development expenditures.

Gross margin for the full year was $761,144 compared with $633,460 in 2014. Gross margin as a percentage of sales was 42 percent compared with 43 percent in the same period a year ago.

Results for the twelve months ended December 31, 2015 reflect non-cash expenses, including the value of options and warrants granted in the amount of $225,097 and depreciation and amortization of $30,628. For the twelve months ended December 31, 2014, non-cash expenses and income included the value of options and warrants granted for $335,731 and depreciation and amortization of $49,979.

“During the past year, we have seen a dramatic shift from domestic to international demand for engine conversions, 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, is generating significant business opportunities for Omnitek in foreign markets, particularly in Mexico, Europe and Asia -- contributing to an order backlog at December 31, 2015 of approximately $200,000, with expectations for a record year driven by the demand for engine conversion kits and/or converted engines in export markets,” said Werner Funk, president and chief executive officer of Omnitek Engineering Corp.

Funk added that the recently signed 200-nation “Paris Agreement on Climate Change” is expected to further accelerate demand for Omnitek’s technology and generate additional interest for natural gas in both foreign and domestic markets -- especially since the fine-particles (PM2.5) and black carbon emissions from diesel engines and potent greenhouse gas (GHG) emissions are abated when using natural gas.

Funk indicated the company’s evaluation program for a large domestic fleet customer will be completed in the second quarter, 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.

Funk commented further that four Class 8 trucks utilizing Omnitek’s EPA-certified Detroit Diesel Series 60 and Caterpillar C15 natural gas engines are currently being used for heavy-haul freight transportation and port operations in the Seattle area. The fuel-use and maintenance data from the operation of these four vehicles is being collected for a report to demonstrate the economic benefits of diesel-to-natural gas engine conversions of used trucks compared with purchasing new natural gas trucks.

At December 31, 2015, current liabilities totaled $572,310 and current assets totaled $2.3 million, resulting in positive working capital of approximately $1.7 million and a current ratio of 4.0 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)

OMNITEK ENGINEERING CORP.
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
				2015					2014					2015					2014
REVENUES				$		313,493			$		413,581			$		1,793,556			$		1,485,818
COST OF GOODS SOLD						266,345					212,770					1,032,412					852,358
GROSS MARGIN						47,148					200,811					761,144					633,460
OPERATING EXPENSES
	General and administrative					310,852					433,914					1,443,951					1,870,533
	Research and development expense					56,989					168,611					295,190					600,091
	Depreciation and amortization expense					7,578					8,178					30,628					49,976
		Total Operating Expenses				375,419					610,703					1,769,769					2,520,600
LOSS FROM OPERATIONS						(328,271	)				(409,892	)				(1,008,625	)				(1,887,140	)
OTHER INCOME (EXPENSE)
	Other income					275					725					4,209					13,646
	Interest expense					(1,703	)				-					(1,915	)				-
	Interest income					3					11					24					45,467
		Total Other Income (Expense)				(1,425	)				736					2,318					59,113
LOSS BEFORE INCOME TAXES						(329,696	)				(409,156	)				(1,006,307	)				(1,828,027	)
INCOME TAX EXPENSE						-					-					800					800
NET LOSS				$		(329,696	)		$		(409,156	)		$		(1,007,107	)		$		(1,828,827	)
BASIC AND DILUTED LOSS PER SHARE				$		(0.02	)		$		(0.02	)		$		(0.05	)		$		(0.09	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES BASIC AND DILUTED						19,980,971					19,816,240					19,980,971					19,816,240

OMNITEK ENGINEERING CORP. 
Balance Sheet

ASSETS
			December 31,					December 31,
			2015					2014
CURRENT ASSETS
	Cash		$		105,846			$		498,782
	Accounts receivable, net				30,835					56,059
	Accounts receivable - related parties				17,257					15,092
	Inventory, net				2,107,463					2,333,781
	Prepaid expense				6,050					4,200
	Deposits				19,745					92,779
		Total Current Assets			2,287,196					3,000,693
FIXED ASSETS, net					59,151					88,715
OTHER ASSETS
	Intellectual property, net				281					1,345
	Other noncurrent assets				14,280					14,280
		Total Other Assets			14,561					15,625
		TOTAL ASSETS	$		2,360,908			$		3,105,033
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Accounts payable and accrued expenses		$		145,207			$		84,385
	Accrued management compensation				189,163					102,096
	Accounts payable - related parties				7,591					3,600
	Customer deposits				230,349					345,844
		Total Current Liabilities			572,310					535,925
		Total Liabilities			572,310					535,925
STOCKHOLDERS' EQUITY
	Common stock, 125,000,000 shares authorized no par value
	19,981,082  and 19,979,582 shares issued and outstanding,
	respectively				8,291,411					8,289,911
	Additional paid-in capital				11,346,599					11,121,502
	Accumulated deficit				(17,849,412	)				(16,842,305	)
		Total Stockholders' Equity			1,788,598					2,569,108
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$		2,360,908			$		3,105,033

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

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