Mechanical Technology Incorporated Announces First Quarter 2017 Results
Revenue growth, cost reductions and improved operations contribute to better quarterly results
ALBANY, NY -- (Marketwired) -- 05/04/17 -- Mechanical Technology, Incorporated (MTI or the Company), (OTCQB: MKTY), a company engaged, through its wholly-owned subsidiary MTI Instruments, Inc. (MTI Instruments), is a supplier of precision linear displacement sensors, instruments and system solutions, vibration measurement and system balancing solutions, precision tensile measurement systems and wafer inspection tools, serving markets that require 1) the precise measurements and control of products and processes in automated manufacturing, assembly, and consistent operation of complex machinery, 2) engine balancing and vibration analysis systems for both military and commercial aircraft, 3) metrology tools for semiconductor and solar wafer characterization, and 4) tensile stage systems for materials testing and precision linear displacement gauges all for use in academic and industrial research and development settings, announces its 2017 first quarter results and business update.
- Revenue increased by $72 thousand in the first quarter of 2017 compared to the same period in 2016. This increase was primarily a result of activity under the U.S. Air Force contract we entered into in July 2016 combined with an increase in capacitance products sales to a European subsidiary of a U.S. company. These increases were partially offset by a decline in commercial engine balancing system shipments.
- Gross profit, as a percentage of product revenue, increased to 61.1% in the first quarter of 2017 compared to 48.0% in the first quarter of 2016, as a result of lower material costs, a change in the product mix, and reduced charges for excess inventory stemming from improved procurement management.
- Operating loss improved to $409 thousand in the first quarter of 2017 compared to $580 thousand during the same period in 2016 as a result of the increased sales, improvement in the gross margin and decreased research and development expenses. The first quarter operating loss in 2017 was negatively impacted by $205 thousand of non-recurring severance costs.
- Cash decreased to $3.2 million at March 31, 2017 from $3.4 million at December 31, 2016.
"As expected, our first quarter was a challenge with regard to new customer business, yet we still managed to grow revenue by 6% during the first quarter of 2017," noted Rick Jones, Chief Executive Officer of MTI. "This growth, when combined with cost reductions and improvements in inventory management, allowed us to cut our net loss for the period by 30% compared to last year."
"MTI enters the second quarter of 2017 on a healthier financial foundation compared to this time last year, with $2.9 million more in cash, a multi-year contract with the U.S. Air Force in effect at MTI Instruments and a reduced organizational cost basis. As such, we expect to continue to grow revenue and improve our bottom-line throughout 2017."
"Meanwhile, with assistance from our new investors at Brookstone Partners, we also continue to explore new strategic initiatives -- including potential acquisitions -- that would allow us to further increase revenue and, eventually, utilize previously-generated Federal net operating loss carryforwards to offset future taxable income. These measures, along with the previously mentioned organic growth, will allow us to achieve our overall goal of increasing value for our shareholder base."
MTI is engaged in the design, manufacture, and sale of test and measurement instruments and systems through its wholly-owned 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, "we expect to continue to grow revenue and improve our bottom-line throughout 2017" and "with assistance from our new investors at Brookstone Partners, we also continue to explore new strategic initiatives -- including potential acquisitions -- that would allow us to further increase revenue and, eventually, utilize previously-generated Federal net operating loss carryforwards to offset future taxable income. These measures, along with the previously mentioned organic growth, will allow us to achieve our overall goal of increasing value for our shareholder base" constitute forward-looking statements within the meaning of federal securities laws. Such forward-looking statements are made as of today, and MTI disclaims any duty to update such statement. 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 failure of the U.S. Air Force to exercise its option to purchase products under its contract; the failure of the Company to locate viable strategic opportunities including potential acquisitions that are beneficial to the Company; our inability to build and maintain relationships with our customers; and changes in national and global economic or other conditions that impact demand for our products and/or accelerated purchases of our products by our customers due to changes in their business needs.
Source: Mechanical Technology, Incorporated
Released May 4, 2017