Tampa, Fla. -- MagneGas Corporation ('MagneGas' or the 'Company') (NASDAQ: MNGA), a technology company that counts among its inventions a patented process that converts liquid waste into MagneGas® fuel, today announced financial results for the second quarter ending June 30, 2015.
Second Quarter 2015 Financial Highlights
- Revenues for the three month period ended June 30, 2015 increased 228% over the same period in 2014 and were $584,445 and $178,330, respectively;
- Revenues for three month period ended June 30, 2015 increased 7% over March 31, 2015 and were $584,445 and $545,648, respectively;
- Gross margins increased 623 basis points to 36% from 30% for the three month period ending June 30, 2015 versus June 30, 2014;
- Operating expenses (excluding non-cash items) decreased 6% for the three month period ended June 30, 2015 versus March 31, 2015 to $1,720,441 from $1,822,961;
- The Company had an ending cash balance of $4,038,190 on June 30, 2015.
Ermanno Santilli, Chief Executive Officer of MagneGas stated, 'MagneGas 2 ® is the most successful product in the history of MagneGas Corp and, we believe, the hands down best cutting fuel on the market. The successful introduction of MagneGas 2® has resulted in multiple repeat customers sales, gasification unit sales, pull through distribution wins and generally increasing demand from small users to the US Navy, NYFD and major utilities. We continue to make progress and remain on target to increase revenues, reduce expenses and improve margins for the second half of the year. Revenue for the three months ending in June 30, 2015 more than tripled to $584,445 in the second quarter versus the same period last year primarily due to our ESSI acquisition and MagneGas 2® product line. We have launched an aggressive sales campaign for our new MagneGas 2® fuel and have added marquee customers to our existing and growing customer base. In May, we were pleased to announce that after months of testing, the US Navy placed their first order of MagneGas 2® fuel. In various customer and independent tests, MagneGas 2® has repeatedly been commended for its ability to cut faster than acetylene as well as for its overall safety advantages due to its lighter than air characteristics, reduced slag and reduced oxygen consumption. At the end of July, we announced a major waste-to-energy company has placed multiple fuel orders of MagneGas 2® for metal cutting where it will be used as a replacement to acetylene for repairs and demolition. MagneGas 2® is an excellent example of successful customer-driven research and development coupled with consistent execution on our strategy to attract marquee customers that can have a significant impact on revenue as our product rolls out to multiple locations.'
'We continue to add to our growing customer base and in the past month we have announced that several other prominent companies made the switch from acetylene to MagneGas 2® such as AB&I Foundry, LB Construction and others. MagneGas 2® is also, we believe, the only cutting fuel on the planet which is produced from renewable liquid wastes.'
'During a successful demonstration at a large utility customer Green Gas Supply LLC witnessed first hand that MagneGas 2® would provide the driver for growth to help execute their own aggressive expansion strategy. As a result, we signed a Memorandum of Understanding with Green Gas Supply, LLC to expand into Louisiana and Texas with a $550,000 Plasma-Arc Gasification system sale that includes future royalty payments, profit sharing rights and an initial 300 cylinder gas order to seed the territory. Under the MOU, we formed a new joint venture that will be established in Louisiana to own and operate MagneGas® gasification systems to produce and sell MagneGas 2® into the metal cutting market. We also established another joint venture company, Kickin Gas Partners, Inc., to expand distribution and service capability into North Florida. The 50/50 joint venture company was established through a signed agreement with Suwannee Ironworks, an existing client. Through Kickin Gas Partners, we will now be able to directly distribute MagneGas® in areas not currently serviced and will expand revenue opportunities from gas and welding supplies. This new joint venture will launch MagneGas® into North Florida, from Tallahassee to Jacksonville, as well as from southern Georgia to Gainesville. Both of these joint ventures allow us to reach new customers and expand our fuel sales rapidly across the United States while keeping joint control of MagneGas 2® production and quality.'
'We continue to move forward aggressively with our plans to commercialize MagneGas® for the co-combustion of hydro-carbon fuels and are now continuing the pilot testing of our co-combustion technology to reduce coal emissions. Currently, we are working closely with our joint venture partners in the U.S. and Australia to complete the verification phase and we anticipate the conclusion of our testing by year's end. Initial internal testing demonstrated a significant reduction in greenhouse gas emissions and a greater efficiency in burning coal. Testing and validation is now in the final stages with oversight from a leading coal technology research center that is associated with one of the nation's largest utility companies. We fully expect the results to continue to be significant in terms of coal burning efficiency, reduction of greenhouse gases and overall business potential for MagneGas. We believe our system cost-effectively reduces emissions, which also improves the overall energy output of the plant by re-burning the smoke from coal fired power plants.'
Second Quarter 2015 Financial Results
Revenues for the six months ended June 30, 2015 were $1,130,093 as compared to $369,931 for the same period last year. Revenue from the industrial gas segment was $1,083,427 for the second quarter of 2015 as compared to $268,924 for the same period last year. This was primarily due to an increase in MagneGas® fuel sales and revenue received from the acquisition of ESSI, Inc. Revenue for three month period ended June 30, 2015 increased 7% over March 31, 2015 to $584,445 versus $545,648. This was primarily due to the addition of new industrial gas customers acquired through the introduction of MagneGas 2®.
Gross margins increased to 36% from 30% for the three month period ending June 30, 2015 versus June 30, 2014. This was primarily due to reduced product costs associated with the volume related vendor agreements through ESSI, Inc.
Overall operating expenses decreased 5% for the three month period ended June 30, 2015 versus March 31, 2015 to $2,325,774 from $2,441,927. Operating expenses (excluding stock payments and our one-time loss on property sale), increased to $3,336,391 for the period ending June 30, 2015 versus $2,070,779 for the same period 2014. The additional expenses were primarily due to the operating expenses associated with the ESSI, Inc. acquisition as well as additional regulatory and other expenses related to the incident on April 16th.
MagneGas' executive management team will host a conference call today, Monday, August 10th at 4:00 p.m. Eastern Time to discuss the company's financial results for the second quarter ending June 30, 2015, as well as the Company's corporate progress and other meaningful developments.
Interested parties can access the conference call by dialing (877) 407-8033 for U.S. callers or (201) 689-8033 for international callers.
A teleconference replay of the conference call will be available approximately one hour following the call, through midnight Thursday, September 10, 2015, and can be accessed by dialing (877) 660-6853 for U.S. callers or (201) 612-7415 for international callers and entering conference ID: 13616084.
About MagneGas Corporation
Founded in 2007, Tampa-based MagneGas Corporation (NASDAQ: MNGA) is a technology company that counts among its inventions, a patented process that converts liquid waste into hydrogen based fuels. The Company currently sells MagneGas 2® into the metal working market as a replacement to acetylene. It is also selling equipment for the sterilization of bio-contaminated liquid waste for various industrial and agricultural markets. In addition, the Company is developing a variety of ancillary uses for MagneGas® fuels utilizing its high flame temperature for co-combustion of hydrocarbon fuels and other advanced applications.
This press release contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events, including our ability to raise capital, or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
For a discussion of these risks and uncertainties, please see our filings with the Securities and Exchange Commission. Our public filings with the SEC are available from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov.