puraDYN Filter Technologies Inc., Boynton Beach, Fla., announced financial results for the fiscal year ended Dec. 31, 2004. Net sales for the year totaled approximately $2.5 million as compared with approximately $1.91 million in 2003

, an increase of approximately 30%. Net loss was approximately $3.58 million or ($0.21) per share, basic and diluted, as compared with a net loss of approximately $4.05 million or ($0.26) per share, basic and diluted, in the previous year.
This increase in net sales is attributable to the addition of several new domestic and international distributors which expanded the company’s distribution network by 22%. The company also benefited from an increase in sales to one of its largest customers and a marked increase in sales through the OEM customer base.
Efforts to streamline operating costs were evidenced by the decrease in selling, general, administrative and salary expenses by approximately $142,000 in 2004, a decrease of 4%.
Cost of sales increased by approximately $243,000, an increase of 10% primarily due to the 30% increase in net sales. Cost of sales did not increase proportionately to net sales due to the increased utilization of overhead and improvements in raw material sourcing.
Kevin G. Kroger, president and COO, stated, “We remain encouraged by the considerable progress shown in 2004 with regard to the acceptance of bypass oil filtration. As mentioned earlier in the year, recent test results from the U.S. Department of Energy (DOE) show that the puraDYN systems currently in evaluation have produced an estimated annual average savings of 80% during the first two years of its three-year test to evaluate the benefits and potential oil savings provided by the use of bypass oil filtration. While not an official endorsement, the fact that our systems are being used by the DOE as a real-world test subject has focused attention on puraDYN from major companies that are looking for sensible, comprehensive solutions to rising oil costs.
“Additionally, puraDYN systems are now in the third phase of a five-phase process aimed at bringing new commercially available products to the U.S. Military.
“And in 2004, Miami-Dade County (Florida) again specified that puraDYN systems be installed on all new equipment purchases.”
Kroger commented further, “We will stay focused on the obstacles encountered in the acceptance of any new technology. These include the length of time necessary to complete evaluations and the overall acceptance of bypass oil filtration. As acceptance of this technology
continues to build traction, we expect to maximize production at our facilities, which are currently underutilized and continue to negatively impact our gross profits. We know what the challenges are and we look forward to meeting them in 2005 as we continue to aggressively and favorably position our company in a developing marketplace.”
The company is currently working with private investors, including current stockholders, in raising funds in the amount of approximately $2.6 million. As a result of these funds not being secured as of the date of filing and in light of company’s need for additional funds in 2005 and beyond, the audit opinion of Daszkal Bolton LLP, the company’s independent registered public accounting firm, contained a going-concern explanatory paragraph.
The American Stock Exchange rules require AMEX-listed companies to publicly announce whenever a Form 10-KSB includes an audit opinion containing a going concern explanation.
The company’s annual report on Form 10-KSB is available from the SEC website at http://www.sec.gov or the ‘Investor Relations’ section of the company’s website at www.puradyn.com. PuraDYN Filter Technologies Inc. designs, manufactures and markets the puraDYN Bypass Oil Filtration System.