Mechanical Technology Announces Fiscal 2000 Results and First Quarter Activities
ALBANY, N.Y., Dec. 28 /PRNewswire/ -- Mechanical Technology Inc. (Nasdaq: MKTY) today reported financial results for the fourth quarter and fiscal year ended September 30, 2000, and steps taken to amend its credit agreement as the Company moves forward with its core business strategy of developing new energy companies.
For fiscal 2000, Mechanical Technology reported a net loss of $18.6 million, or $0.53 per share, on a fully diluted basis. Approximately $15.9 million of this loss is the result of an after-tax loss related to the Company's equity investments in the fuel cell company Plug Power Inc. (Nasdaq: PLUG) and in SatCon Technology Corporation (Nasdaq: SATC), which develops energy management products. The loss also includes $2.0 million of research and product development costs. For fiscal 1999, Mechanical Technology reported a net loss of $10.7 million, or $0.31 per share on a fully diluted basis, which included a $9.4 million after-tax loss related to its equity investment in Plug Power and $1.1 million in research and product development costs.
The Company's annual net revenue was $5.5 million in 2000, a decrease from $12.9 million in 1999. This decrease is primarily due to the October 21, 1999 sale of Ling Electronics, which had revenue of $8.4 million in 1999 and $140 thousand in 2000 prior to the sale. The annual net revenue of MTI Instruments, now a separate, majority-owned subsidiary but formerly Mechanical Technology's Advanced Products Division, was $5.4 million, an increase of $0.9 million over fiscal 1999 due primarily to marketing efforts for a new wafer thickness gauge product line, and increased sales of capacitance products in the Pacific Rim and Japan.
Mechanical Technology's revenue for the fiscal 2000 fourth quarter was $1.3 million compared to $4.3 million in the same quarter of fiscal 1999. The reduction in revenue was caused primarily by the October 21, 1999 sale of Ling Electronics, which had accounted for $2.5 million of revenue in the fiscal 1999 fourth quarter. And while MTI Instrument's annual 2000 revenue was up, its fiscal 2000 fourth quarter revenue decreased by $0.5 million to $1.3 million due to a shift in the timing of engine balancing system shipments.
Mechanical Technology's operating loss for the fiscal 2000 fourth quarter was $1.5 million versus $78 thousand for the same quarter in fiscal 1999. The net loss for the fourth quarter of fiscal 2000 was $7.7 million or $0.22 per diluted share, compared with a net loss of $2.4 million, or $0.07 per diluted share, for the same period a year ago. The fiscal 2000 quarterly net loss included a $6.2 million after-tax loss related to the Company's equity losses in portfolio companies, as compared to a $2.5 million after-tax loss for the same quarter in 1999.
Mechanical Technology also reported that in December 2000, it restructured its loan agreement with KeyBank N.A., reducing its credit line from $50 million to $30 million and making a $3 million principal repayment. The Company also entered into contractual arrangements with First Albany Companies Inc., (Nasdaq: FACT) to enhance its collateral for the KeyBank loan, including the right to Put 6,300,000 shares of Plug Power to First Albany. In addition, the Company borrowed approximately $6 million from First Albany to fund repayment of the loan, cover fees related to the contractual arrangements, and provide working capital. Details of the arrangement are covered fully under the Liquidity and Capital Resources Section of Item 7 in the Company's Form 10-K being filed today.
"The demand for energy and the market for energy technologies are both projected to grow dramatically over the next decade," said Dr. William Acker, president of Mechanical Technology. "So, despite the recognized challenges of commercializing cutting-edge technology and the expected net losses in the early stages of product development, we are more committed than ever to moving forward with our strategy of helping develop new energy companies."
As part of its strategic involvement in the new energy sector, Mechanical Technology has holdings in Plug Power, which manufactures fuel cells; SatCon, which develops a wide range of power and energy management products; and Beacon Power Corporation, which designs and develops flywheel energy storage systems. Mechanical Technology is also the majority shareholder of MTI Instruments, a manufacturer of non-contact, precision diagnostic and sensing instruments.
Statements made in this document that are not historical fact are considered "forward-looking" statements within the meaning of the Private Securities Litigation Act of 1995. The Company wishes to caution you that such statements are only predictions, and that its actual circumstances, events or results may differ materially from the information contained in any forward looking statements. Investors should not rely on forward-looking statements in making investment decisions. Mechanical Technology's actual circumstances, events or results may differ from those contained in forward looking statements because of a number of factors, including but not limited to, 1) the availability and cost of capital, 2) the availability of opportunities at prices and on terms favorable to Mechanical Technology, and 3) the performance of technologies or companies with which Mechanical Technology is involved. Additional information concerning factors that may cause actual results to differ from those contained in the forward-looking statements may be found, from time to time, in the Company's SEC filings, including but not limited to, our 10-K and 10-Q. Copies of those filings are available from the Company and from the SEC.
CONDENSED STATEMENTS OF INCOME (Dollars in thousands, except per share) Three Months Ended Twelve Months Ended 09/30/2000 09/30/1999 09/30/2000 09/30/1999 Revenue $1,314 $4,276 $5,547 $12,885 Selling, general and administrative expenses 1,465 1,432 4,864 4,949 Product development and research costs 825 305 2,034 1,105 Operating loss (1,504) (78) (3,927) (1,408) Gain on sale of Ling -- -- 1,262 -- (Loss) income from continuing operations before income taxes and equity in investee losses (2,052) 69 (4,917) (1,329) Income tax (benefit) expense (271) -- (1,927) 37 Equity in investee losses, net of tax (6,183) (2,504) (15,849) (9,363) Loss from continuing operations (1,781) (2,435) (18,839) (10,729) Income from discontinued operations 243 -- 243 41 Net loss $(7,721) $(2,435) $(18,596) $(10,688) Earnings per Share -- assuming dilution: Loss from continuing operations $(.23) $(.07) $(.54) $(.31) Income from discontinued operations .01 -- .01 -- Net loss $(.22) $(.07) $(.53) $(.31)
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