ALBANY, N.Y.– Mechanical Technology, Incorporated (MTI or the Company), (Trading Symbol:MKTY), a company engaged, through its subsidiary MTI Instruments, Inc. (MTI Instruments), in the design, manufacture and sale of test and measurement instruments and systems that provide solutions for precision linear displacement, vibration measurement and balancing, and wafer inspection tools 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 full year 2013 results.
Product revenue in MTI Instruments for the year ended December 31, 2013 increased by $2.5 million, or 41.6%, to $8.4 million from $5.9 million in 2012. This increase was primarily attributable to a 57.2% increase in shipments of military and commercial aviation balancing systems and accessory kits. Also contributing to the overall increase was a 37.3% rise in general instrumentation revenue, which was driven by higher capacitance, tensile stage and laser system sales.
As a result of the increased sales, reduced production overhead, lower product material costs and improved inventory management, the gross profit, as a percentage of product revenue, increased to 61.0% during 2013 compared to 49.7% during 2012.
On December 31, 2013, following a MTI Micro stock warrant exercise, the Company transferred management of MTI Micro to Dr. Walter L. Robb (a member of the Company’s and MTI Micro’s board of directors and Managing Director of Counter Point Ventures Fund II, LP). Consequently, MTI is no longer reporting MTI Micro as a variable interest entity (VIE). As a result of this deconsolidation, the equity of other MTI Micro shareholders and the net book value of MTI Micro were eliminated from the Company’s consolidated balance sheet and, as such, we realized a one-time, non-cash income gain from the VIE deconsolidation of $3.6 million. As of December 31, 2013, the Company owned an aggregate of approximately 47.5% of MTI Micro’s outstanding common stock.
Net income for the year ended December 31, 2013 was $3.7 million ($0.69 per share on a fully diluted basis) compared to a net loss of $2.1 million ($0.40 per share on a fully diluted basis) for the same period in 2012. The $5.7 million increase in net income is primarily attributable to the $3.6 million gain on VIE deconsolidation and an improvement in MTI Instruments net income in 2013 of $2.3 million.
Kevin Lynch, our Chairman and Chief Executive Officer, commented “In 2013 we achieved very positive results for MTI. Our focus to improve the Company came through a defined market focused strategy, increasing sales and margins, clear direction and implementation of material and operational controls, along with administrative cost reductions. We achieved $361 thousand in operating income during 2013, a $2.6 million improvement over the prior year, and succeeded in establishing a stronger balance sheet with $1.2 million in cash available, reduced liabilities, and a net worth increase of $394 thousand to $3.4 million.
At the same time, our recently defined market strategy to grow in the markets of precision automated manufacturing, complex machinery measurement and analysis, and the developments to support these markets with our core instruments business continues. One of our new product initiatives, targeting precision measurement in industrial and electronics development and manufacturing, has advanced from the Beta stage to product launch. Performance and costs of the new product are in line with our expectations. Overall, we have seen significant new sales opportunities open in Asia, and we are committed to achieving International Organization for Standardization (ISO) 9000 registration early in the second quarter of 2014 in support of our customer needs.
The start of 2014 has opened slowly, but as the year progresses; we expect to build on our momentum of 2013 to realize ongoing growth in sales and earnings, in particular, in our targeted markets with our core instrumentation product lines.”
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 “significant new sales opportunities in Asia,” ”we are committed to achieving … ISO 9000 registration early in the second quarter of 2014,” “the start of 2014 has opened slowly, but as they year progresses; we expect to build on our momentum of 2013 to realize ongoing growth in sales and earnings,” and statements regarding our strategy and the significance of any 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 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 March 6, 2014