Mechanical Technology, Incorporated Reports Record 2020 Revenue and Full Year Results

Reports Highest Revenue in 9 Years and 500% Annual Increase in Net Income

News provided by

Mechanical Technology, Incorporated

Mar 31, 2021, 08:55 ET

ALBANY, N.Y., March 31, 2021 /PRNewswire/ -- Mechanical Technology, Incorporated ("MTI" or the "Company"), (NASDAQ: MKTY), the parent company of MTI Instruments, Inc. ("MTI Instruments"), a test and measurement instruments and systems business and EcoChain, Inc. ("EcoChain"), a cryptocurrency mining business powered by renewable energy, announced today its fiscal year end 2020 financial results. 

Highlights:

For the fiscal year ended 2020, net income was $1.9 million, which represents a year over year increase of approximately 500% over 2019. Product revenue for the year ended 2020 was $9.0 million, an increase of 37% over 2019, with corresponding product margins increasing by $2.0 million.

A key reason for the increase in our financial performance was the successful delivery, by our MTI Instrument subsidiary, of 52 new PBS-4100+ engine vibration balancing systems and associated accessories, pursuant to a contract with the United States Airforce. This increase in revenue combined with an improvement in product margin of 589 basis points contributed to our increase in operating income. The improvement in basis points was primarily driven by cost savings in materials purchases due to volume and leveraging the existing cost structure.

Revenues generated by our EcoChain subsidiary, with the addition of our cryptocurrency mining business in 2020, contributed favorably to our healthier financial performance for the year ended 2020. During the fourth quarter of 2020, EcoChain generated revenues of $369 thousand, which represented an increase of 109% over revenues generated in the third quarter of 2020 and totaled $595 thousand for the year ended December 31, 2020. Our TNT site generated margins of $190 thousand on those revenues for the year ended December 31, 2020. During 2021, we expect to generate positive margins from our TNT mining operation.

Michael Toporek, CEO of MTI stated, "We are extremely pleased with our record results, especially the approximate 500% increase in profitability. With our growth strategy clearly gaining momentum, we are particularly pleased with our recent uplisting to The Nasdaq Capital Market. The power cost of EcoChain's new data center in the Southeastern United States is exciting as it provides for maximum flexibility to potentially optimize the Company's return on invested capital."

MTI's Chief Financial Officer, Jessica Thomas commented, "The year ending 2020 was a historic year for the Company, highlighted by a product revenue increase of 37% over the prior year and margin improvements that allowed the Company to realize greater profitability. In addition, the TNT mine's fourth quarter operating results led to the mine being profitable for 2020. Our financial results for 2020 set a record performance for about the past decade for both revenue and net income. Our cash position remains strong at $2.6 million, in addition to untapped credit facilities in 2020. Further, we were able to leverage existing general and administrative functions to support the EcoChain line of business."

Moshe Binyamin, President of MTI Instruments stated, "COVID-19 certainly presented a number of business and operational challenges for us. While we did see an 11% decline in our non-PBS product lines compared to 2019, we were able to offset that from increases in revenues generated from our military and freight aviation PBS customers. I am certainly pleased with our overall revenue results and particularly proud of our production and fulfilments teams' performance. They did an extraordinary job adapting quickly to the new operating environment, working tirelessly in multiple shifts to meet customer expectations, while following social distancing guidelines and keeping each other safe. It is a testament to our hard work and agility that helped us achieve these record results. Notwithstanding the challenges presented by the COIVD-19 pandemic, we were still able to rapidly improve our on-line content and outreach. As a result, we now have a richer on-line presence and ability to engage with customers and prospects in any manner they see fit."

A presentation and corresponding video is available on the Company's website at https://www.mechtech.com/mti-announces-year-end-2020-results.

About MTI

MTI is the parent company of MTI Instruments, Inc. and EcoChain, Inc. Through MTI Instruments, MTI is engaged in the design, manufacture and sale of test and measurement instruments and systems that 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. Through EcoChain, MTI is developing cryptocurrency mining facilities powered by renewable energy that integrate with the blockchain network. For more information about MTI, please visit https://www.mechtech.com.

Forward Looking Statement

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current expectations, as of the date of this communication, and involve certain risks and uncertainties. Forward-looking statements include statements herein with respect to the successful execution of the Company's business strategy. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Such risks and uncertainties include, among other things, our ability to establish and maintain the proprietary nature of our technology through the patent process, as well as our ability to possibly license from others patents and patent applications necessary to develop products; the availability of financing; the Company's ability to implement its long range business plan for various applications of its technology; the Company's ability to enter into agreements with any necessary partners; the impact of competition, the obtaining and maintenance of any necessary regulatory clearances applicable to applications of the Company's technology; and management of growth and other risks and uncertainties that may be detailed from time to time in the Company's reports filed with the Securities and Exchange Commission.

Contact Information:
Jess Olszowy
[email protected]

Investor Relations:
Kirin Smith, President
PCG Advisory, Inc.
646.823.8656
[email protected]

Mechanical Technology, Incorporated and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2020 and December 31, 2019







(Dollars in thousands, except per share)

December 31,

December
31,


2020

2019

Assets

Current Assets:






   Cash


$

2,630

$

2,510

   Accounts receivable – less allowances of $0 in 2020 and 2019



975

745

   Inventories

828

924

   Prepaid expenses and other current assets

346

56

   Total Current Assets

4,779

4,235

Other assets

309

—

Deferred income taxes, net

759

395

Equity investment

750

—

Property, plant and equipment, net

847

174

Operating lease right-of-use assets

1,203

947

   Total Assets

$

8,647

$

5,751








Liabilities and Stockholders' Equity

Current Liabilities:






   Accounts payable

$

300

$

210

   Accrued liabilities

1,019

761

   Operating lease liability

316

171

   Income taxes payable

2

––

      Total Current Liabilities

1,637

1,142








Other liabilities

203

—

Operating lease liability

891

776

      Total Liabilities

2,731

1,918








Commitments and Contingencies (Note 12)






Stockholders' Equity:






  Common stock, par value $0.01 per share, authorized 75,000,000; 10,750,100 issued in 2020 and 10,586,170 issued in 2019

108

106

  Additional paid-in capital

137,365

137,230

  Accumulated deficit

(117,793)

(119,739)

  Common stock in treasury, at cost, 1,015,493 shares in both 2020 and 2019

(13,764)

(13,764)

   Total Stockholders' Equity

5,916

3,833

   Total Liabilities and Stockholders' Equity


$

8,647

$

5,751

Mechanical Technology, Incorporated and Subsidiaries

Consolidated Statements of Operations

For the Years Ended December 31, 2020 and 2019

(Dollars in thousands, except per share)

Years Ended


December 31,


2020

2019








Product revenue

$

9,004

$

6,571

Cryptocurrency revenue

595

—

     Total revenue

9,599

6,571

Operating costs and expenses:






     Cost of product revenue

2,669

2,205

     Cost of cryptocurrency revenue



405

—

     Research and product development expenses



1,491

1,381

     Selling, general and administrative expenses

3,584

2,726

Operating income

1,450

259

Other income, net

104

36

Income before income taxes

1,554

295

Income tax benefit 



392

28

      Net income

$

1,946

$

323








Net income per share (Basic)

$

.20

$

.03

Net income per share (Diluted)

$

.20

$

.03








Weighted average shares outstanding (Basic)

9,581,886

9,548,460

Weighted average shares outstanding (Diluted)

9,634,503

9,602,548

Mechanical Technology, Incorporated and Subsidiaries

Consolidated Statements of Changes in Equity

For the Years Ended December 31, 2020 and 2019






(Dollars in thousands, except per share)

Common Stock

Treasury Stock

Shares

Amount

Additional
Paid-

in Capital

Accumulated

Deficit

Shares

Amount

Total
Stockholders'
Equity



















January 1, 2019

10,452,670

$

105

$

139,067

$

(118,462)

1,015,493

$

(13,764)

$

6,946


















Net income

–

–

–

323

–

–

323


















Stock based compensation

–

–

31

–

–

–

31


















Issuance of shares – option exercises

133,500

1

73

–

–

–

74


















Cash dividends

–

–

(1,941)

(1,600)

–

–

(3,541)


















December 31, 2019

10,586,170

$

106

$

137,230

$

(119,739)

1,015,493

$

(13,764)

$

3,833


















Net income

–

–

–

1,946

–

–

1,946


















Stock based compensation

–

–

54

–

–

–

54


















Issuance of shares – option exercises

83,000

1

82

–

–

–

83


















Issuance of shares – restricted stock

80,930

1

(1)

–

–

–

–


















December 31, 2020

10,750,100

$

108

$

137,365

$

(117,793)

1,015,493

$

(13,764)

$

5,916




































Mechanical Technology, Incorporated and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2020 and 2019

(Dollars in thousands)

Year Ended December 31,





2020

2019

Operating Activities






Net income

$

1,946

$

323

Adjustments to reconcile net income to net cash provided by operating activities:






   Depreciation

159

87

  Provision for bad debts

––

1

  Deferred income taxes

(364)

—

   Stock based compensation

54

31

   Provision (recovery) for excess and obsolete inventories

(3)

33

   Loss on disposal of equipment

3

3

Changes in operating assets and liabilities:






   Accounts receivable

(230)

125

   Inventories

99

(94)

   Prepaid expenses and other current assets

(290)

1

   Other long-term assets

(309)

––

   Accounts payable

90

9

   Operating lease, net

4

––

   Income taxes and uncertain tax positions

2

––

   Other long-term liabilities



203

––

   Accrued liabilities

258

(230)

Net cash provided by operating activities

1,622

289

Investing Activities






 Purchases of equipment

(835)

(83)

 Purchase of stock in equity investment

(750)

––

Net cash used in investing activities

(1,585)

(83)

Financing Activities






  Cash dividends on common stock

––

(3,541)

  Proceeds from stock option exercises

83

74

Net cash provided by (used in) financing activities

83

(3,467)

Increase (decrease) in cash



120

(3,261)

Cash – beginning of period

2,510

5,771

Cash – end of period

$

2,630

$

2,510

SOURCE Mechanical Technology, Incorporated

Related Links

https://www.mechtech.com/

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