SOURCE: Puradyn Filter Technologies Incorporated

November 14, 2007 16:09 ET

Puradyn Announces 3rd Quarter Financial Results

28% Increase in 3rd Qtr 2007 Net Sales Over Comparable Period in 2006

BOYNTON BEACH, FL--(Marketwire - November 14, 2007) - Puradyn Filter Technologies Incorporated (OTCBB: PFTI), manufacturer of the puraDYN® bypass oil filtration system, today reported results of operations for the third fiscal quarter ended September 30, 2007.

Net sales for the third quarter 2007 increased by 28%, to $819,000 from $641,000 for the third quarter 2006. Net sales year-to-date (YTD) increased by approximately $53,000, or 2%, from approximately $2.32 million in 2006 to approximately $2.37 million for the same period in 2007.

For the quarter ending September 30th, the Company reported a net loss of approximately $526,000 or ($0.02) per share, basic and diluted, compared to a net loss of approximately $639,000 or ($0.03) per share, basic and diluted, for the same period in 2006. Year-to-date, the Company reported a net loss of approximately $1.7 million or ($0.06) per share basic and diluted, compared to a net loss of approximately $1.8 million or ($0.07) per share basic and diluted, for the same period in 2006. Basic and diluted weighted average shares used in the calculation for the three months ended 2007 and 2006 were 29,981,383 and 25,355,915, respectively.

Cost of products sold increased by $168,000 or 31%, from $545,000 in the 3rd qtr. 2006 to $713,000 in 3rd qtr. 2007. Cost of products sold YTD increased by $273,000 or 15%, from $1.8 million in 2006 to $2.1 million in 2007. While the majority of this increase is attributable to increases in raw materials, a portion is attributable to an overall increase in reserves and disposal of slow moving and obsolete inventory as well as higher costs of labor. Due to these factors, a price increase for Puradyn products will go into effect on Jan. 1, 2008. The Company continues to research ways to reduce our cost of materials.

Selling and administrative expenses decreased by approximately $125,000 or 13%, from $943,000 in 2006 YTD to $818,000 for the same time period in 2007. The decrease is due primarily to a reduction in stock-based compensation expense.

Kevin G. Kroger, President and COO, stated, "Net sales year-to-date in North America decreased slightly relative to 2006, due in part to one of our larger customers over purchasing equipment in 2006, which in turn reduced their requirements for 2007. In addition, other customers followed this same pattern but also postponed planned equipment purchases due to new emission regulations put in place for 2007.

"On a more positive note, the company continues making strides, albeit slowly, with the U.S. DOE including orders in early 2007 for additional systems. We continue to work with other federal agencies to reduce their fleet's consumption of oil given the proven savings and the President's Executive Order No. 13423, which mandates that government agencies reduce their fleet's total consumption of petroleum products by 2% annually through the end of fiscal year 2015. We also continue providing systems to Freightliner for foreign military sales."

Kroger continued, "The international market is openly pursuing green initiatives and views Puradyn as a means to achieve these objectives. Year-to-date, our international sales account for 53% of consolidated net sales. The concerns and efforts with regard to oil consumption and energy conservation are more prevalent internationally as they often don't have the abundance of resources that, until recently, we in the U.S. have taken for granted. The progress made in Latin America and Southeast Asia is extremely encouraging, so much so that we have received several requests to expand our product line for these emerging markets, especially for diesel engines. We have also recently released news of the opportunity for Puradyn applications on bus transmissions in Latin America, expanding our family of products into another industry segment.

"We've spent the past few years laying domestic and international groundwork and, as evidenced by recent releases, it's apparent that doors are now being opened as more companies begin to realize how the substantial increase in the cost of lubricating oil is impacting their bottom line. We are now being contacted by large and small potential customers searching for means to reduce their escalating oil costs and to demonstrate their desire to exhibit a greater attention to the environment."

Kroger concluded, "Environmental regulations are only going to get more stringent and we maintain that the puraDYN® system is a very valuable element in a total equipment maintenance package geared to meet these regulations and reduce expenses and oil consumption.

"The fact that the puraDYN® system saves our customers up to 90% in oil usage and up to 90% in used oil handling makes a very strong argument for using one product that addresses environmental issues, dependence on foreign oil, and contributes to positive profit margins."

For further discussion relevant to the Company's financial status, you can request a copy of the Company's quarterly report on Form 10-QSB, at 561 547 9499, or go to the Investor Relations section of the Company's website at www.puradyn.com. A copy is also available at the SEC website, www.sec.gov.

About Puradyn Technologies Incorporated

Puradyn (OTCBB: PFTI) designs, manufactures and markets the puraDYN® Bypass Oil Filtration System, the most effective filtration product on the market today. It continuously cleans lubricating oil and maintains oil viscosity to safely and significantly extend oil change intervals and engine life. Effective for internal combustion engines, transmissions and hydraulic applications, the Company's patented and proprietary system is a cost-effective and energy-conscious solution targeting an annual $15 billion potential industry. Puradyn equipment has been certified as a 'Pollution Prevention Technology' by the California Environmental Protection Agency and was selected as the manufacturer used by the US Department of Energy in a three-year evaluation to research and analyze performance, benefits and cost analysis of bypass oil filtration technology.

STATEMENTS IN THIS PRESS RELEASE WHICH ARE NOT HISTORICAL DATA ARE FORWARD-LOOKING STATEMENTS WHICH INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES OR OTHER FACTORS NOT UNDER THE COMPANY'S CONTROL, INCLUDING BUT NOT LIMITED TO THE POSSIBLE INABILITY TO RAISE CAPITAL FUNDS, LACK OF PROTECTION FROM INTELLECTUAL PROPERTY, VULNERABILITY BECAUSE OF MANUFACTURING A LIMITED NUMBER OF PRODUCTS, DEPENDENCE ON DISTRIBUTORS, ORDERS PREVIOUSLY STATED IN THIS PRESS RELEASE MAY NOT MATERIALIZE, AND THE POSSIBILITY THAT THE PRODUCTS DO NOT MEET CUSTOMERS' NEEDS, WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM THE RESULTS, PERFORMANCE OR OTHER EXPECTATIONS IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO, THOSE DETAILED IN THE COMPANY'S PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.

             Puradyn Filter Technologies Incorporated
         Condensed Consolidated Statements of Operations
            For the Three Months and Nine Months Ended
                 September 30, 2007 and 2006
                          (Unaudited)


                           Three Months Ended         Nine Months Ended
                              September 30,             September 30,
                            2007         2006         2007         2006
                        -----------  -----------  -----------  -----------

Net sales               $   818,682  $   641,303  $ 2,371,869  $ 2,319,362

Costs and expenses:
  Cost of products sold     713,222      545,105    2,073,082    1,800,109
  Salaries and wages        251,595      351,619      777,168    1,044,010
  Selling and
   administrative           262,899      260,055      818,048      942,753
                        -----------  -----------  -----------  -----------
                          1,227,716    1,156,779    3,668,298    3,786,872
                        -----------  -----------  -----------  -----------
Loss from operations       (409,034)    (515,476)  (1,296,429)  (1,467,510)

Other income (expense):
  Interest income             9,776       13,011       31,694       37,698
  Interest expense         (127,232)    (136,810)    (470,370)    (390,175)
                        -----------  -----------  -----------  -----------
Total other expense,
 net                       (117,456)    (123,799)    (438,676)    (352,477)
                        -----------  -----------  -----------  -----------
Loss before income
 taxes                     (526,490)    (639,275)  (1,735,105)  (1,819,987)
Income tax expense                -            -            -            -
                        -----------  -----------  -----------  -----------
Net loss                   (526,490)    (639,275)  (1,735,105)  (1,819,987)
                        ===========  ===========  ===========  ===========

Basic and diluted loss
 per common share       $     (0.02) $     (0.03) $     (0.06) $     (0.07)
                        ===========  ===========  ===========  ===========

Weighted average common
 shares outstanding      28,981,383   25,355,915   27,959,710   24,833,119
                        ===========  ===========  ===========  ===========

See accompanying notes to condensed consolidated financial statements.

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