May 16, 2016 - 8:00 AM EDT
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MagneGas Reports 22% Increase in Revenue in the First Quarter of 2016

Revenue for Industrial Gas Segment up 27%

TAMPA, Fla., May 16, 2016 /PRNewswire/ -- MagneGas Corporation ("MagneGas" or the "Company") (NASDAQ: MNGA), a technology company that counts among its inventions a patented process that converts renewable and liquid waste into MagneGas® fuels, today announced financial results and provided a business update for the first quarter ending March 31, 2016.

First Quarter 2016 Financial Highlights

  • Revenue for the first quarter of 2016 increased 22% to $665,663 compared to $545,648 for the same period last year;
  • Revenue for the Company Industrial Gas Segment up 27% to $665,663 compared to $522,315 for the same period last year;
  • Operational expenses for the first quarter of 2016 were flat when compared to the fourth quarter of 2015 at $2,868,151 versus $2,882,819 for the fourth quarter last year;
  • Gross margin for the first quarter of 2016 remained flat at 45% compared to the first quarter of 2015.

Ermanno Santilli, Chief Executive Officer of MagneGas stated, "We continue to execute on our strategy to expand MagneGas2® sales and geographical footprint while increasing our revenue base. Revenue for the first quarter industrial gas segment increased 27% to $665,663 versus the same period last year. We believe that MagneGas2 is one of the few differentiated products in the industrial gas business due to its fast cutting speed, renewable source and its safety and eco-friendly attributes.  We believe this differentiation, together with our 2014 acquisition of ESSI, has led to a significant increase in new customers and distributors. We are also focusing on expanding geographically and recently opened a third retail location in Central Florida to expand our gas distribution footprint. Through this new location, we will be able to directly distribute MagneGas2® in areas not previously serviced and we expect this will create expanded revenue opportunities from industrial gas and welding supplies. In addition, we expect to be in a much better position to service our project with the sub-contractors working at NASA at the Kennedy Space Center in Florida."

"In the beginning of the first quarter, we announced that two significant industrial gas users expanded the use of MagneGas® into multiple facilities. We also announced that an international bridge builder, Condotte America, Inc., selected MagneGas2® fuel as its fuel of choice for metal cutting.  Condotte conducted extensive testing of MagneGas2® under various conditions.  To accommodate the growing demand for MagnaeGas2®, we purchased 2,000 additional fuel cylinders. In addition, ESSI, the Company's wholly owned gas distribution company, has put numerous new cylinders into service to help accommodate ancillary gas demand. We look forward to seeing the impact of these new cylinders on revenue in the coming months as we seek to expand nationwide."

"Recently, we announced that a major Southeast distributor has placed its first order for MagneGas2® to supply four of its locations in Alabama. Through these locations, the distributor will also supply an existing waste to energy utility customer of MagneGas®, and will be the Company's preferred distributor for MagneGas2® for metal cutting in their territory.  We now have distribution coverage in many of the major hubs in the eastern half of the United States. As we seek to execute on our plan to expand rapidly, adding customers in new states, we eventually intend to expand through either new plant installation or joint ventures. MagneGas2® has continued to receive positive feedback from distributors and customers, which is allowing us to execute on our expansion strategy."

"At the end of last year, we announced that we have advanced the testing of our fuel for co-combustion. We have also filed provisional patents related to proprietary characteristics of the new MagneGas® fuel, as part of our on-going development of a co-combustion technology to substantially reduce coal emissions and improve coal burning efficiency. Recent updates include improved analytics and equipment to better control flue gas in addition to a re-designed co-combustion chamber. We are currently evaluating these improvements, quantifying the emissions obtained and discussing next steps with our partners. We are working towards obtaining independent verification of these results from a leading coal technology research center that is associated with one of the nation's largest utilities. We anticipate this verification will be received in 2016."

"We are also very pleased to have moved into our new headquarters. The new facility is 18,000 square feet and is located within an industrial area outside of Tampa, Florida with closer proximity to existing and potential customers and has easy access to major highways. This new location provides impressive space to demonstrate MagneGas, while allowing room for growth and a sufficient area for research and development. This new facility permits our gas production units to operate over several shifts, which allows us to finally meet existing demand and can accommodate our planned business expansion. We expect to have all three gas production units online in the coming weeks which will double our current capacity."

First Quarter 2016 Financial Results

Revenues for the three months ended March 31, 2016 were $665,663 as compared to $545,648 for the same period last year.  Revenue from the industrial gas segment was $665,663 for the first quarter 2016 as compared to $522,315 for the same period last year.  This was primarily due to an increase in MagneGas® fuel sales and sales through ESSI.

Gross margins remained flat at 45% compared to 45% for the first quarter ending March 31, 2016 versus March 31, 2015.

General operating expenses increased approximately $900,000 for the first quarter ending March 31, 2016 to $2.9 million from $2.0 million for the same period last year.  In the first quarter of 2016, the Company had approximately $1 million of non-recurring operational and capital expenses related to the move to the new headquarters and various consulting contracts that expired in March of 2016.

The Company recently began an aggressive cost cutting campaign aimed at focusing operational expenses on major business opportunities as an initiative for 2016.

Conference Call

MagneGas' executive management team will host a conference call today, Monday, May 16th at 10:00 a.m. Eastern Time to discuss the company's financial results for the first quarter ending March 31, 2016, 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, June 16, 2016, and can be accessed by dialing (877) 660-6853 for U.S. callers or (201) 612-7415 for international callers and entering conference ID: 13637515.

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 [email protected] with MNGA in the subject line.

About MagneGas Corporation 

MagneGas® Corporation (MNGA). The Company owns a patented process that converts various liquids and liquid wastes into hydrogen based fuels. These fuels can be used as a replacement to natural gas or for metal cutting. The Company's testing has shown the fuels are faster, cleaner and more productive than other alternatives on the market. We believe they are also cost effective and safe to use with little changeover costs.  The Company currently sells MagneGas® into the metal working market as a replacement to acetylene.

The MagneGas fuel production systems can be set-up locally using various types of feedstock. The Company believes this flexibility can give them an advantage in the Government/Military marketplace as fuels can be manufactured on site from raw materials found locally worldwide and eliminates the time and expense of shipping to the specific military theater. The Company is planning to establish joint ventures with third parties to construct these supply facilities worldwide.

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.

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 future financial performance, our planned business development and cost cutting strategies and our intended customer acquisition, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, strategies 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.

                                                                 (tables follow)

 

 

MagneGas Corporation

Balance Sheets




March 31,



December 31,



2016



2015



(Unaudited)



(Restated)

Assets








Current Assets








Cash and cash equivalents


$

2,217,442



$

5,319,869

Accounts receivable, net of allowance for doubtful accounts of $124,568 and $109,568, respectively



328,291




373,006

Inventory



2,337,019




2,362,014

Prepaid and other current assets



390,093




320,431

Total Current Assets



5,272,845




8,375,320









Property and equipment, net of accumulated depreciation of $1,582,589 and $1,467,123, respectively



6,522,797




6,004,990









Intangible assets, net of accumulated amortization of $359,366 and $345,382, respectively



479,043




493,016

Investment in joint ventures



767,965




754,601

Security deposits



28,524




24,113

Goodwill



2,108,781




2,108,781

Total Assets


$

15,179,955



$

17,760,821









Liabilities and Stockholders' Equity








Current Liabilities








Accounts payable


$

437,759



$

425,294

Accrued expenses



280,835




504,855

Deferred revenue and Customer Deposits



412,500




412,500

Notes Payable (equipment)-Short Term



9,329




7,891

Change in Derivative Liability



285,044




1,241,841









Total Current Liabilities



1,425,467




2,592,381









Long Term Liabilities








Note payable on headquarters building & equipment



552,313




552,177

Total Liabilities


$

1,977,780



$

3,144,558









Stockholders' Equity








Preferred stock: $0.001 par; 10,000,000 authorized; 1,000,000 issued and outstanding



1,000




1,000

Common stock: $0.001 par; 90,000,000 authorized; 45,749,534 and 45,599,535 issued and outstanding, respectively



45,749




45,599

Additional paid-in capital



50,865,373




50,658,216

Accumulated deficit



(37,709,947)




(36,088,552

Total Stockholders' Equity



13,202,175




14,616,263









Total Liabilities and Stockholders' Equity


$

15,179,955



$

17,760,821

 

 

 




 

MagneGas Corporation


Statements of Operations


(Unaudited)






Three Months Ended
March 31,




2016



2015









Revenue:


$

665,663



$

545,648











Direct costs



365,763




299,325





299,900




246,323


Operating Expenses:









Selling, General and Administration



2,552,904




1,758,948











Research and development



161,294




62,426


Depreciation and amortization



153,953




136,923


Total Operating Expenses



2,868,151




1,958,297











Operating Loss



(2,568,251)




(1,711,974)











Other Income and (Expense):









 Net Interest



(10,806)




(4,770)


Loss on Sale of Unused Property



-




(483,630)


Other Income



865




2,822


Change in Derivative Liability



956,797




-


Total Other Income (Expense)



946,856




(485,578)











Net Income Loss before tax benefit



(1,621,395)




(2,197,552)


Provision for Income Taxes









Net Loss


$

(1,621,395)



$

(2,197,552)











Net Loss per share:









Basic and diluted


$

(0.04)



$

(0.06)


Weighted average common shares:









Basic and diluted



45,685,248




37,142,551


 

Investor Contacts:
KCSA Strategic Communications
Philip Carlson
+1 212.896.1233 / +1 212.896.1217
[email protected]

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/magnegas-reports-22-increase-in-revenue-in-the-first-quarter-of-2016-300268873.html

SOURCE MagneGas Corporation


Source: PR Newswire (May 16, 2016 - 8:00 AM EDT)

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