Market strategy implementation leads to a 78% increase in earnings on 9.3% sales improvement compared to same three-month period in 2013
ALBANY, N.Y.– Mechanical Technology, Incorporated (MTI or the Company), Trading Symbol: (MKTY), a company engaged, through its subsidiary MTI Instruments, Inc. (MTI Instruments), primarily in the design, manufacture and sale of test and measurement instruments and systems that provide solutions for precision linear displacement, vibration measurement and balancing developed for markets that require the exacting measurement and control of products and processes in the development and implementation of automated manufacturing, assembly, and consistent operation of complex machinery, announces its 2014 second quarter results and business update.
Sales for the three months ended June 30, 2014 increased by $211 thousand to $2.5 million from $2.3 million during the three months ended June 30, 2013. This increase was attributable to increases in laser sales and additional shipments of aviation balancing systems.
Net income for the three months ended June 30, 2014 was $178 thousand ($0.03 per share on a fully diluted basis) compared to net income of $100 thousand ($0.02 per share on a fully diluted basis) during the comparable 2013 period.
Kevin Lynch, our Chairman and Chief Executive Officer, remarked “the implementation of our strategy is now taking hold with the recent orders from a major manufacturer of consumer electronics in China. Our actions of obtaining ISO 9001:2008 certification and the initial implementation of lean manufacturing practices supported the commercialization of this business and our sales improvements.”
“The release of new orders received from the U.S. Air Force helped to improve our sales mix as we continue to pursue additional military funding to support and replace our existing contracts.”
“We anticipated a decline in gross margin percentages during this quarter as we implemented our market penetration strategy with major automated manufacturing and assembly companies in China. However, we are pleased to report that, due to a favorable product mix and improved operating performance, we were able to achieve gross margins of nearly 60%.”
“At the same time, we increased our investment in product development and engineering as compared to the prior year. To ensure our strategy continues to be successful, we have committed to develop products that support the markets of precision automated manufacturing, complex machinery and measurement. We have also reached an agreement to license technology from a European developer of precision measurement systems that we believe will speed our introduction of additional new products during the coming 12 months. The new Accumeasure D series of products, which was launched during the second quarter of 2014, has received favorable feedback, strong interest and initial demonstration orders.”
“Future levels of capital spending among our existing and potential customers for manufacturing automation projects are presently unclear. Despite this, we remain committed to our growth strategy with continuing investment in sales resources, engineering and product development for market penetration and business growth.”
MTI is engaged in the design, manufacture, and sale of test and measurement instruments and systems through its subsidiary MTI Instruments, Inc. MTI Instrument’s products use a comprehensive array of technologies to solve complex, real world applications in numerous industries including manufacturing, electronics, semiconductor, solar, commercial and military aviation, automotive and data storage. For more information about the Company, please visit www.mechtech.com.
Statements in this press release which are not historical fact, including “To ensure our strategy continues to be successful, we have committed to develop products that support the markets of precision automated manufacturing, complex machinery and measurement,” that our new licensing agreement “will speed our introduction of additional new products during the coming 12 months,” “Future levels of capital spending among our existing and potential customers for manufacturing automation projects are presently unclear. Despite this, we remain committed to our growth strategy with continuing investment in sales resources, engineering and product development for market penetration and business growth,” and statements regarding, anticipated improvement in sales volume, our strategy and new product development constitute forward-looking statements within the meaning of federal securities laws. All forward-looking statements are made as of today, and MTI disclaims any duty to update such statements. It is important to note that the Company’s actual results could differ materially from those projected in forward-looking statements. Factors that could cause the anticipated results not to occur include: revenue growth of our test and measurement instrumentation business may not be achieved; a reduction in defense department spending; our market penetration in China may not gain strength and thus our sales volumes will not improve; our inability to build and maintain relationships with our customers; significant periodic and seasonal quarterly fluctuations in our results of operations and the other risk factors listed from time to time in the Company’s SEC reports, including, but not limited to, our annual report on Form 10-K for the year ended December 31, 2013, and our quarterly reports on Form 10-Q.
Mechanical Technology, Incorporated
Lisa Brennan, 518-218-2500
Source: Mechanical Technology, Incorporated
Released August 7, 2014