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. 

MTI Logo (PRNewsfoto/Mechanical Technology, Incorpor)

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
jolszowy@mtiinstruments.com

Investor Relations:
Kirin Smith, President
PCG Advisory, Inc.
646.823.8656
Ksmith@pcgadvisory.com

 

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


 

 

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SOURCE Mechanical Technology, Incorporated

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