TAMPA, Florida, August 18, 2017 /PRNewswire/ --
Metal cutting fuel revenue
increases 50.1%
Investor Call to be held
on Friday, August 18th
at 11:30 a.m. Eastern
Time
MagneGas Corporation ("MagneGas" or the "Company")
(NASDAQ: MNGA), a leading clean technology company in the renewable
resources and environmental solutions industries, today announced
preliminary financial results for the second quarter ending
June 30, 2017.
Ermanno Santilli, Chief Executive
Officer of MagneGas, stated, "We experienced a 50.1% increase in
metal cutting fuel revenue in the second quarter of 2017 versus the
same period last year. This compares favorably the industry growth
rate of just 2-3%. Our growth in this segment is primarily due to
the successful expansion into two new markets, which have begun to
deliver consistent and scaled revenues for the Company in 2017. We
have implemented additional sales and marketing initiatives, which
we expect will help further drive our growth going forward. In
addition, we are utilizing MagneGas2® as a key introductory product
to penetrate large industrial clients. We then look to aggressively
expand these relationships where we can profitably cross sell
non-proprietary products. As an example of our success, our
Sarasota, Florida location, opened
in January of this year, is on pace to generate over $1 million in annualized revenue within the
coming quarters. We look to replicate this success as we grow our
Huntington, Indiana location,
followed by additional locations planned in Florida in the coming quarters."
"We have also initiated an aggressive cost reduction program.
Excluding $1.6 million of non-cash
stock compensation expenses, our SG&A decreased 35% quarter
over quarter, and 57% compared to Q4 2016. As a result, we see a
clear path to profitability through continued organic growth,
accretive acquisitions, reduction in our production costs, and
careful management of our expenses," added Mr. Santilli.
"Through the introduction of butanol as a feedstock and further
procedural and equipment improvements, our production rates have
increased over 150% with a 50% reduction in production costs. We
believe these enhancements, along with changes to improve the ease
of use, should make our equipment more attractive for small and
medium sized distributors looking to produce their own acetylene
substitute. In addition, the lower fuel cost has the potential to
further enhance our gross margins by reducing our feedstock costs.
Preliminary gross margins increased 128 basis points to 45% for the
second quarter of 2017 from 44% in the second quarter of 2016. We
believe our margins will continue to improve over the coming
quarters as we scale the production of our gas and reap the
benefits of the lower production costs."
"In June, we were awarded a grant from the United States
Department of Agriculture (USDA) to accelerate commercialization of
the Company's plasma arc Venturi® sterilization system for the
treatment of pathogens and nutrients found in animal biosolid
wastes. We are now advancing a number of additional sterilization
projects we have been developing in the U.S., Europe, Latin
America and Asia. We are
also making strides in the waste water industry. Last month, we
announced that we received our first order for wastewater
treatment, as part of a licensing agreement to produce units in
Italy for waste water
sterilization. This unit will be installed into a customized
facility that will generate revenue through the treatment of
landfill wastewater, which represents a large and underserved
market due to stringent regulations. Following completion of this
first project, we look forward to expanding our presence across
Europe."
"In July, we were awarded an important patent by the US Patent
and Trademark Office related to use of our technology to increase
the energy density of fuels or as an additive to current fuels. We
believe there are numerous applications in the energy,
transportation and space industries. We will continue to explore
low cost proof of concept development and licensing opportunities.
We also announced that we have filed a provisional patent
application on our next-generation gasification system. The
provisional patent application entails the use of a plasma arc in
conjunction with certain fluids and powdered materials such as
coal, plastics, and potentially the Company's primary feedstock,
butanol. We see broad market potential for this technology
including 'clean coal' applications, where we are exploring various
grant opportunities."
Scott Mahoney, Chief Financial
Officer of MagneGas, commented, "Our executive team set forth
a series of internal goals at the end of 2016. These goals centered
on revenue growth, cost control, profitability, and productivity.
We are now two full quarters into the execution of our plan, and we
are pleased to have clear data that supports our plan is now being
successfully executed. We are well into the third quarter now, and
we are excited to continue to focus on accelerated revenue growth,
improved profitability, and the opportunity to deliver further
value to our shareholders. We have a number of near term catalysts
that we look to execute on, and we believe this will continue to
drive the value proposition of our technology in the coming
quarters."
Preliminary Second Quarter 2017 Financial
Results
Preliminary revenues for the three months ended June 30, 2017 were $966,204 as compared to $837,257 for the same period last year. This
increase was primarily due to additional customers and
distributors. Preliminary gross profit for the second quarter
ending June 30, 2017 increased to
$433,547 from $364,982 for the same period last year.
Preliminary operating expenses for the second quarter ending
June 30, 2017 were $3.1 million, compared to $2.8 million for the same period last year.
Preliminary operating expenses for the three months ended
June 30, 2017 included a non-cash
charge of $1.6 million in stock based
compensation.
Conference Call
MagneGas' executive management team will host a conference call
on Friday, August 18th at
11:30 a.m. Eastern Time to give a
business update for the second quarter ended June 30, 2017.
Interested parties can access the conference call by dialing
877-407-8031 for U.S. callers or +1-201-689-8031 for international
callers.
A teleconference replay of the conference call will be available
approximately one hour following the call, through midnight
September 18, 2017, and can be
accessed by dialing 877-481-4010 for U.S. callers or
+1-919-882-2331 for international callers and entering conference
ID: 19973.
About MagneGas Corporation
MagneGas® Corporation (MNGA) owns a patented process that
converts various renewables and liquid wastes into MagneGas fuels.
These fuels can be used as an alternative to natural gas or for
metal cutting. The Company's testing has shown that its metal
cutting fuel "MagneGas2®" is faster, cleaner and more productive
than other alternatives on the market. It is also cost effective
and safe to use with little changeover costs. The Company currently
sells MagneGas2® into the metal working market as a replacement to
acetylene.
The Company also sells 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. For more information on MagneGas®, please
visit the Company's website at http://www.MagneGas.com.
The Company distributes MagneGas2® through Independent
Distributors in the U.S and through its wholly owned distributor,
ESSI (Equipment Sales and Services, Inc). ESSI has four locations
in Florida and distributes
MagneGas2®, industrial gases and welding supplies. For more
information on ESSI, please visit the company's website at
http://www.weldingsupplytampa.com.
The MagneGas IR App is now available for free in Apple's
App Store for the iPhone or iPad
http://bit.ly/AfLYww and at Google Play http://bit.ly/Km2iyk for
Android mobile devices.
To be added to the MagneGas investor email list, please email
pcarlson@kcsa.com with MNGA in the subject line.
FORWARD-LOOKING STATEMENTS
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 .
Investor Contacts:
Crescendo Communications
T: +1-844-589-8760
mnga@crescendo-ir.com
SOURCE MagneGas Corporation