ALBANY, N.Y.– Mechanical Technology, Incorporated (MTI or the Company), (OTCQB:MKTY), a company engaged, through its subsidiary MTI Instruments, Inc. (MTI Instruments), in the design, manufacture and sale of precision test and measurement sensors, instruments and systems that provide solutions for linear displacement, vibration measurement and system balancing and tensile measurements in markets that require the exacting measurement and control of products and processes for automated manufacturing, assembly, and consistent operation of complex machinery, announces its 2016 first quarter results and business update.
- Revenue was lower by $411 thousand in the first quarter of 2016 compared to the same period in 2015. The decrease in product revenue is attributable to delays in capital spending by our target clients, continued softness in the economies in Asian markets and the lack of repeated sales from a European distributor and shipments related to application development projects in the U.S. Further contributing to the variability between the periods was a delay in the receipt of an expected order in our turbo-machinery business, which was not received until the final day of the quarter and, therefore, could not be filled and booked as revenue during the quarter.
- Our net loss of $586 thousand for the first quarter, or a $0.11 loss per share, was the result of the reduction in revenue and a one-time charge to write down the value of inventory. In accordance with Company policy, potentially surplus amounts of inventory were written down as a consequence of the recently decreased sales volumes.
- Gross profit, as a percentage of product revenue, decreased to 48.0% in first quarter of 2016 compared to 61.0% in the first quarter of 2015, primarily as a result of the aforementioned one-time charge to write down the value of inventory. Without this one-time charge, gross profit as a percentage of product revenue would have been in a consistent range with recent prior quarters at 59.9%.
- Cash was $336 thousand at March 31, 2016 compared to $462 thousand at December 31, 2015, reflecting the impact of the first quarter operating loss being partially offset by reduced spending in research and development and selling, general and administrative expenses and stricter control of accounts receivables and payables.
Kevin Lynch, Chairman and Chief Executive Officer of MTI commented that, “Following another quarter of soft markets and lower sales, we have, and continue to, control our costs and spending to minimize cash utilization.
At the same time, while the economic conditions in Asia remain uncertain, we are making progress towards commercialization of our new products at key customers in the region. Our SEMtester product has gained acceptance by several universities throughout Asia. As a result, we are starting to realize an improvement in initial orders in the targeted markets and customers we serve. We are also experiencing the beginning of the recovery of our business in the Americas, with the commercialization of new instrument opportunities within the region. The contract efforts with the U.S. Air Force are making headway. We still expect to enter into a new contract with the U.S. Air Force during the second quarter. We anticipate the initial impact of the aforementioned developments starting in the near term.
Our focus remains constant: investing in new products, which will drive our revenue and leverage our lean production capabilities resulting in increases of shareholder value.”
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 that are not historical fact, in particular, our expectation of entering into a contract with the U.S. Air Force during the second quarter of 2016 and expected near-term impact of the various positive developments discussed herein 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: that the U.S. Air Force does not award the expected contract due to procurement determinations within the federal government; that the uncertainty of the global economy may affect demand for our products; variability of customer requirements resulting in cancellations, reductions, or delays; our inability to build and maintain relationships with our customers; and other risks as discussed from time to time in the Company’s reports filed with the Securities and Exchange Commission, including, but not limited to, our annual report on Form 10-K for the year ended December 31, 2015, and our quarterly reports on Form 10-Q.
Mechanical Technology, Incorporated
Lisa Brennan, 518-218-2500
Source: Mechanical Technology, Incorporated
Released May 5, 2016