Business development and financial results
ALBANY, N.Y.– Mechanical Technology, Incorporated (“MTI”) (OTC: MKTY), a company primarily engaged in the development and commercialization of Mobion(R) off-the-grid portable power solutions through its subsidiary MTI MicroFuel Cells Inc. (“MTI Micro”) and in the design, manufacture and sale of test and measurement instruments and systems through its subsidiary MTI Instruments, Inc. (“MTI Instruments”), today announced its financial results for the quarter ended March 31, 2009.
“Both MTI Micro and MTI Instruments have had successful achievements in both technical improvements and business development. We believe MTI Micro has reached a stage where the Mobion(R) platform can accommodate the commercialization of the micro fuel cell system in various applications in diverse industries. MTI Instruments has made strides in the solar industry, especially in Europe,” said Peng Lim, Chief Executive Officer of MTI. “At MTI Instruments, we plan to further expand our product offerings to different continents and at MTI Micro we continue to develop and partner with additional OEMs to achieve our goal of making Mobion(R) a standard power source for portable electronic devices.”
Recently, MTI Micro received an additional $0.8 million bridge loan commitment from an existing and a new investor bringing the total bridge loan amount to $3.5 million, of which $3.08 million has been drawn to date. In addition, the U.S. Department of Energy (DOE) awarded MTI Micro a $2.4 million grant to help accelerate micro fuel cell deployment in portable electronics.
Financial Highlights: First Quarter 2009
-- Net loss was $1.2 million, a reduction of $2 million in losses from Q1 of 2008. -- Cash used in operations decreased 53% to $1.4 million
-- May 05, 2009 - MTI Micro announced a developers program aimed at engineers and product designers at qualified OEMs. The developer program includes access to MTI Micro's expert engineering support team and a developers' kit which contains a Mobion(R) Fuel Cell system, a monitoring software CD, a compact methanol cartridge, a user's operation manual and a design guideline booklet. This developer program allows the OEMs to explore the opportunities to develop a greener and longer run-time power source alternative to batteries. -- April 21, 2009 - MTI Micro announced a collaboration agreement with a top-tier power tool manufacturer in the industrial market segment. This collaboration agreement opens the door to further expand the Mobion(R) technology for various applications as an independent power source. -- April 16, 2009 - MTI Micro was awarded a $2.4 million grant by the U.S. Department of Energy (DOE) with the intent of developing and deploying fuel cells technology while laying the foundation for a green energy economy. MTI Micro was the only micro fuel cells manufacturer to receive an award in this program. This program will help MTI Micro to further develop manufacturing processes for Mobion(R) fuel cell systems, reduce overall costs and help accelerate fuel cell use to power portable electronic devices in the consumer market. -- March 27, 2009 -- MTI Micro announced a collaboration agreement with a leading U.S. based OEM of portable chargers. With the U.S. based OEM global market channels and impressive reputation in the portable charger business, it brings MTI Micro closer to its planned commercialization process. This agreement is in addition to our current OEM partners with Samsung, NeoSolar and with a global Japanese camera manufacturer, as well as a letter of intent from Duracell.
First Quarter Financial Results
Revenue for the three months ended March 31, 2009 decreased 31.8 percent to $1.5 million compared to revenue of $2.2 million for the same period in 2008. First quarter revenue in 2009 was solely from MTI Instruments, as compared to $2.0 million in product revenue from MTI Instruments and $173,000 in funded Research and Development (“R&D”) revenue from MTI Micro in the first quarter of 2008. The revenue decrease in MTI Instruments was primarily the result of a $503,000 decrease in general dimensional gauging sales due to significantly lower sales to a Japanese and a domestic OEM. Otherwise, semiconductor / solar sales increased $123,000 and aviation sales remained comparable to that of the first three months of last year. Funded R&D revenue of $173,000 in the 2008 period represented reimbursement from the DOE. MTI Micro’s final billing occurred in December 2008.
Net loss for the three months ended March 31, 2009 of $1.2 million, or $0.26 per diluted share, was significantly lower than a loss of $3.2 million, or $0.67 per share for the three months ended March 31, 2008. The decrease in net loss for the first quarter of 2009 compared to 2008 includes the effects of positive and negative revenue and expense changes. These changes include decreases in funded R&D revenue, cost savings in R&D spending, decreases in Selling, General and Administrative expenses, and a decrease in gain on derivatives. Gross margin percentages on product sales for the three months ended March 31, 2009 remained consistent with the comparable period in 2008.
Cash flows: For the three months ended March 31, 2009, cash used in operations decreased by 53.3 percent to $1.4 million compared to $3.0 million in 2008, while no cash was used for capital expenditures in 2009 compared to $102,000 in 2008. Net borrowings on related party loans was $500,000 for the quarter ended March 31, 2009.
See the attached financial highlights for the Company’s first quarter ended March 31, 2009.
MTI is primarily engaged in the development and commercialization of Mobion(R) off-the-grid portable power solutions through its subsidiary MTI MicroFuel Cells Inc. (“MTI Micro”). MTI Micro has a team of entrepreneurial business executives, researchers and scientists; a proprietary direct methanol micro fuel cell power system and a number of system prototypes demonstrating size reductions and performance improvements; and related intellectual property. MTI Micro has received government funding and developed strategic partnerships to facilitate efforts to achieve commercialization. MTI is also engaged in the design, manufacture, and sale of test and measurement instruments and systems through its subsidiary MTI Instruments, Inc. For more information about the Company please visit www.mechtech.com.
(Financial Table Attached)
Statements in this press release which are not historical fact including statements regarding management’s intentions, hopes, goals, beliefs, expectations, projections, plans, anticipation, outlook or predictions of the future are forward looking statements. Such statements include the expectation of our ability to commercialize our Mobion fuel cell system and expand MTI Instruments sales internationally. 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 the lack of liquidity in our common stock; and the 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, 2008 and our quarterly report on Form 10-Q for the quarter ended March 31, 2009.
Balance Sheet Data: December 31, March 31, 2008 2009 (Dollars in Thousands) (Audited) (Unaudited) Assets Current Assets: Cash and cash equivalents $ 1,662 $794 Accounts receivable 540 566 Inventories, net 1,509 1,415 Prepaid expenses and other current assets 272 382 Total Current Assets 3,983 3,157 Long Term Assets: Property, plant and equipment, net 1,528 1,353 Total Assets $ 5,511 $ 4,510 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 508 $ 547 Accrued liabilities 1,648 1,410 Deferred revenue 8 12 Bridge note payable - related party, at fair value 1,544 2,087 Income taxes payable 23 23 Total Current Liabilities 3,731 4,079 Long-Term Liabilities: Uncertain tax position liability 213 __ Derivative liability 41 23 Total Long-Term Liabilities 254 23 Total Liabilities 3,985 4,102 Stockholders' Equity 1,526 408 Total Liabilities and Stockholders' Equity $ 5,511 $ 4,510
Statements of Operations Data: Three Months Ended March 31, March 31, 2008 2009 (Dollars in Thousands, Except per Share Data) (Unaudited) (Unaudited) Revenues: Product revenue $ 1,980 $ 1,549 Funded research and development revenue 173 __ Total revenues 2,153 1,549 Operating costs and expenses: Cost of product revenue 840 665 Research and product development expenses: Funded research and product development 356 __ Unfunded research and product development 2,017 976 Total research and product development expenses 2,373 976 Selling, general and administrative expenses 2,618 1,377 Operating loss (3,678 ) (1,469 ) Interest Expense __ (43 ) Gain on derivatives 333 18 Other income, net 42 21 Loss before income taxes and non-controlling (3,303 ) (1,473 ) interest Income tax (expense) (8 ) 194 Net loss, net of tax (3,311 ) (1,279 ) Net loss attributed to non-controlling interest 124 35 Net loss attributed to MTI $ (3,187 ) $ (1,244 ) Loss per Share (Basic and Diluted): Loss per share $ (0.67 ) $ (0.26 ) Statements of Cash Flows Data: Three Months Ended March 31, March 31, 2008 2009 (Dollars in Thousands) (Unaudited) (Unaudited) Net cash used by operating activities $ (2,988 ) $ (1,368 ) Purchases of property, plant and equipment (102 ) __ Net cash (used) provided by investing activities (102 ) __ Net borrowings on related party debt __ 500 Net cash provided by financing activities __ 500 Decrease in cash and cash equivalents (3,090 ) (868 ) Cash and cash equivalents -- beginning of period 7,650 1,662 Cash and cash equivalents -- end of period $ 4,560 $ 794
Source: Mechanical Technology, Incorporated
Released May 14, 2009