ALBANY, N.Y., Aug. 14 --
Mechanical Technology Inc. (Nasdaq: MKTY) reported financial results for the
fiscal 2001 third quarter and nine months ended June 30, 2001, and summarized
recent advancements in its micro fuel cell and precision instrumentation
operations.
The Company will have a live conference call and web cast at 10:30 AM
(EDT) today. George C. McNamee, chairman of the Company's board of directors,
and Dr. William P. Acker, president, will host the call. The dial-in phone
number for the conference call is (913) 981-4902. There will be a
simultaneous live web cast that can be heard on Mechanical Technology's web
site at http://www.mechtech.com. A replay of the call will be available
within 24 hours on the web site and via telephone by calling (719) 457-0820
and, when prompted, entering pin code number 618507.
McNamee outlined Company progress. "We are successfully implementing the
financial strategy we put in place to strengthen our operations. We took some
major steps forward in our drive to commercialize micro fuel cells
-- developing a strategic partnership with DuPont and receiving a key federal
grant. And we increased sales in our precision instrumentation subsidiary
despite difficult conditions in the semiconductor field," said McNamee.
For the third quarter of fiscal 2001, revenue for Mechanical Technology
doubled to $2.3 million up from $1.1 million for the same quarter of fiscal
2000. Revenue for both periods was from sales generated by MTI Instruments,
the Company's precision instruments subsidiary. The Company's operating loss
was $1.1 million for the fiscal 2001 third quarter versus $1.2 million for the
third quarter in fiscal 2000.
Mechanical Technology's net income for the fiscal 2001 third quarter was
$10.1 million, or $0.27 per diluted share, compared with a net loss of
$5.0 million or $0.14 per diluted share for the same period a year ago. The
fiscal 2001 third quarter net income included a $3.8 million after-tax loss
related to the Company's proportionate share of losses from holdings in two
new energy companies: $2.9 million in fuel cell company
Plug Power Inc. (Nasdaq: PLUG) and $0.9 million in
SatCon Technology Corporation (Nasdaq: SATC), which manufactures power and
energy management devices. This is compared to a $3.9 million after-tax loss
in the same quarter of fiscal 2000, which included $3.4 million for Plug Power
and $0.5 million for SatCon.
The fiscal 2001 third quarter net income figure also included a
$25.5 million gain on the sale of some of the Company's holdings.
For the first nine months of fiscal 2001, Mechanical Technology reported
revenue of $5.6 million - from sales generated by MTI Instruments -- compared
with $4.2 million in the fiscal 2000 period, which combined MTI Instruments'
sales of $4.1 with $0.1 generated by the Company's Ling Electronics
subsidiary, which was sold on October 21, 1999.
Mechanical Technology's net income for the first nine months of fiscal
2001 was $7.0 million, or $0.19 per diluted share, versus a net loss of
$10.9 million, or $0.31 per diluted share in the same period a year-ago.
The fiscal 2001 nine-month net income figure included a $31.0 million gain
on the sale of holdings. This gain related to the Company's previously
announced plan to raise additional capital through equity offerings and the
strategic sale of assets in order to pay down debt, strengthen its balance
sheet and support the development of its micro fuel cell operation. As of
June 30, 2001, the Company had sold 1.7 million of its approximately
13.7 million shares of Plug Power common stock, with proceeds totaling
$35.7 million and gains totaling $31.0 million, and had reduced its debt to
approximately $15.2 million from a high of $29.1 million at December 31, 2000.
During August 2001, the Company amended and restated its credit agreement
with KeyBank N.A., reducing its line of credit to $10.0 million, eliminating
the Put requirement and making principal payments of $7.7 million to reduce
its debt to $7.5 million.
The first nine months of fiscal 2001 also included an after tax loss of
$12.9 million from the recognition of the Company's proportionate share of
losses from holdings in Plug Power and SatCon, up from $9.7 million in the
same nine month period of fiscal 2000, and it included a $6.1 million
after-tax gain from the adoption of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities."
Acker summarized recent achievements in the Company's micro fuel cell
operation. "We formed an important strategic alliance to develop micro fuel
cell technology with DuPont. We received a $4.6 million award from the
Advanced Technology Program of the National Institute of Standards and
Technology to develop our micro fuel cell systems. We moved our micro fuel
cell operation into a new 15,000 square foot facility, filed our fifteenth
patent application, and, at the June U.S. Congressional Fuel Cell Expo, we
demonstrated a proof-of-concept micro fuel cell powering a digital device.
These are significant milestones in a commercialization effort we announced
just eight months ago," said Acker.
Mechanical Technology (Nasdaq: MKTY) is primarily engaged in the
development of direct methanol micro fuel cells through its subsidiary MTI
MicroFuel Cells, and in the design and manufacturing of precision
instrumentation through its subsidiary MTI Instruments. Mechanical Technology
also co-founded and retains a significant interest in
Plug Power Inc. (Nasdaq: PLUG), a leading manufacturer of fuel cells.
Mechanical Technology also has an interest in
SatCon Technology Corporation (Nasdaq: SATC), which develops power electronics
and energy management products, and Beacon Power Corporation (Nasdaq: BCON),
which develops flywheel energy storage systems
This document contains statements that are not historical fact and are
considered "forward-looking statements" under the Private Securities
Litigation Act of 1995. You should not rely on any forward-looking statements
in making investment decisions. Such statements are only predictions. Our
actual circumstances, events and results may differ materially from the
information contained in any forward-looking statements based on a number of
factors, including but not limited to: 1) the availability and cost of
capital, 2) the success of our development and commercialization efforts with
micro fuel cells, 3) the performance of technologies and companies with which
Mechanical Technology is involved and 4) the successful introduction of
products by MTI Instruments. Additional information concerning factors that
may cause actual results to differ from those in forward-looking statements is
contained, from time to time, in our SEC filings including, but not limited
to, our Annual Report on form 10-K and our Quarterly Reports on form 10-Q.
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three Months Ended Nine Months Ended
6/30/2001 6/30/2000 6/30/2001 6/30//2000
Revenue $2,260 $1,146 $5,555 $4,242
Operating loss (1,072) (1,168) (4,050) (2,423)
Interest expense (463) (521) (1,778) (1,336)
Loss on derivatives (27) -- (807) --
Gain on sales of
holdings 25,458 -- 31,009 --
Gain on sales of
subsidiary -- -- -- 1,262
Income (loss) before
income taxes, equity
in investee losses
and cumulative effect
of change in
accounting
principle 23,418 (2,155) 23,224 (2,865)
Income tax (expense)
benefit (9,511) 982 (9,460) 1,656
Equity in investee
losses, net of tax (3,826) (3,868) (12,860) (9,666)
Income (loss) before
cumulative effect of
change in accounting
principle 10,081 (5,041) 904 (10,875)
Cumulative effect of
accounting change for
derivative financial
instruments, net of
tax -- -- 6,110 --
Net Income (loss) $10,081 $ (5,041) $7,014 $ (10,875)
Earnings (loss)
per share (Basic):
Income (loss) before
cumulative effect of
change in accounting
principle $.28 $(.14) $.03 $(.31)
Cumulative effect of
accounting change for
derivative financial
instruments -- -- .17 --
Net earnings (loss)
per share $.28 $(.14) $.20 $(.31)
Earnings (loss) per
share (Diluted):
Income (loss) before
cumulative effect of
change in accounting
principle $.27 $(.14) $.02 $(.31)
Cumulative effect of
accounting change for
derivative financial
instruments -- -- .17 --
Net earnings (loss)
per share $.27 $(.14) $.19 $(.31)
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