MagneGas Reports Financial Results For The Third Quarter And First Nine Months Of 2012

13 Nov, 2012, 17:00 ET from MagneGas Corporation

TAMPA, Fla., Nov. 13, 2012 /PRNewswire/ -- MagneGas Corporation ("MagneGas" or the "Company") (NASDAQ: MNGA), the developer of a technology that converts liquid waste into a hydrogen-based metal working fuel, today announced its financial results for the third quarter and nine months ended September 30, 2012.

Third Quarter 2012 Financial Highlights:

  • Total revenues of $201,096 for the third quarter of 2012 increased 147% as compared to $81,253 for the prior year's third quarter;
  • Metal cutting revenues increased 207% to $177,763 as compared to $57,920 in the third quarter of 2011; and
  • Quarterly cash balance of $4.3 million as compared to $147,000 for the same period ending September 30, 2011

"We made good progress during the third quarter of 2012 as we continued to ramp up production, win new customers and demonstrate the superior metal cutting properties of our MagneGas fuel," stated Ermanno Santilli, Chief Executive Officer of MagneGas. "We are committed to staying focused on our business plan as we expand our footprint through out the metal cutting industry."

Santilli concluded, "We also believe that demand for MagneGas refineries, which provide an excellent value proposition for customers looking to produce MagneGas fuel in-house and on-site, will continue to increase over the next several quarters. In August, we shipped a 160 kW refinery to RJ Torching, one of the largest scrap yards in Michigan. We also purchased a 3.5 acre facility adjacent to our headquarters that will allow us to manufacture up to 30 refineries at one time. We are now well positioned to meet the steadily increasing demand for our products."   

Third Quarter 2012 Financial Results

For the third quarter of 2012, total revenues were $201,096, an increase of $119,843 or 147%, from revenues of $81,253 for the third quarter of 2011. 

Metal cutting revenues were $177,763 for the third quarter of 2012, a 207% increase over metal cutting revenues of $57,920 for the prior year's third quarter. Metal cutting revenues as a percentage of total revenues for the third quarter of 2011 were 88% as compared to 71% in the prior year's third quarter.  Licensing fees were $23,333 for the third quarter of 2012, the same as for the prior year's third quarter. 

Operating expenses were $2,166,514 for the third quarter of 2012, increasing 254% from operating expenses of $612,773 for the prior year's third quarter, primarily due to the opening of new facilities, the addition of executives and staff to manage sales and production efforts, and investments in research & development. The Company had an operating loss in the third quarter of 2012 of $2,099,034, compared to an operating loss of $587,011 for the prior year's third quarter.

The Company recorded a net loss of $2,098,385, or $0.11 per basic and diluted share, for the third quarter of 2012, as compared to a net loss of $366,041, or $0.02 per basic and diluted share, for the third quarter of 2011.

The Company has focused on selling fuel to scrap yards and demolition companies for much of 2012.  But a decrease in scrap steel prices during the 3rd quarter, with a corresponding decrease in cutting and fuel use in this market, resulted in lower than anticipated sales of MagneGas fuel in the 3rd quarter. The Company is now also focusing on selling fuel to those industries that benefit from lower steel prices such as fabricators and ship builders.  The intention is to diversify sales channels in order to hedge against the volatility of the scrap steel industry.

Nine Month Results

For the nine months ended September 30, 2012, total revenues were $522,052, an increase of $295,949 or 131%, from revenues of $226,103 for the first nine months of 2011. 

Metal cutting revenues were $452,053 for the nine months ended September 30, 2012, a 326% increase over metal cutting revenues of $106,104 for the same period in 2011. Metal cutting revenues as a percentage of total revenues for the nine months ended September 30, 2011 were 87% as compared to 47% for the same period in 2011.  Licensing fees were $69,999 for the first nine months of 2012, a 42% decrease over licensing fees of $119,999 for the same period last year. 

Operating expenses were $4,958,621 for the first nine months of 2012, increasing 187% from operating expenses of $1,725,620 for the same period in 2012, primarily due to the opening of new facilities, a rise in headcount to support sales and production efforts and investments in research & development. The Company had an operating loss for the nine months ended September 30, 2012 of $4,958,621, compared to an operating loss of $1,725,620 for the same period in 2011.

The Company recorded a net loss of $4,959,000, or $0.28 per basic and diluted share, for the nine months ended September 30, 2012 as compared to a net loss of $1,080,508 or $0.08 per basic and diluted share, for the same period in 2011.

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.

About MagneGas Corporation

Founded in 2007, Tampa-based MagneGas Corporation (NASDAQ: MNGA) is the producer of MagneGasTM, a natural gas alternative and metal working fuel that can be made from certain industrial, municipal, agricultural and military liquid wastes following the receipt of appropriate governmental permits.

The Company's patented Plasma Arc FlowTM process gasifies liquid waste, creating a clean burning hydrogen based fuel that is essentially interchangeable with natural gas. MagneGasTM can be used for metal working, cooking, heating, powering bi fuel automobiles and more. For more information on MagneGas, please visit the Company's website at 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 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. The Company is currently using new ethylene glycol to produce fuel until proper permits to process used liquid waste have been obtained.

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

(Unaudited)

 

September 30,

December 31,

2012

2011

(Unaudited)

(Audited)

 Assets

Current Assets

Cash and cash equivalents

$

4,314,751

$

1,429,412

Accounts receivable, net of allowance for doubtful accounts of $25,000 and $0,

respectively

104,825

19,050

Inventory, at cost

1,715,285

656,992

Prepaid and other current assets

-

2,500

     Total Current Assets

6,134,861

2,107,954

Property and equipment, net of accumulated depreciation of $286,267 and $44,538,

respectively

5,159,346

2,561,384

Deferred tax asset

456,500

456,500

Intangible assets, net of accumulated amortization of $187,861 and $151,511,

respectively

539,139

575,489

Investment in joint ventures

490,410

490,410

Security deposits

2,153

-

Total Assets

$

12,782,409

$

6,191,737

 Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

$

668,844

$

291,249

Accrued expenses

277,766

125,011

Deferred revenue and customer deposits

256,663

326,662

Due to stockholder

-

210,500

Due to related parties

-

13,400

Total Current Liabilities

1,203,273

966,822

Total Liabilities

1,203,273

966,822

Stockholders' Equity

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

1,000

2

Common stock: $0.001 par;  900,000,000 authorized; 20,042,616 and 15,438,929

issued and outstanding, respectively

20,043

15,439

Additional paid-in capital

21,627,523

10,334,904

Issued and unearned stock compensation

(13,333)

(28,333)

Accumulated deficit

(10,056,097)

(5,097,097)

Total Stockholders' Equity

11,579,136

5,224,915

Total Liabilities and Stockholders' Equity

$

12,782,409

$

6,191,737

 

Statements of Operations

(Unaudited)

 

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

Revenue:

201,096

81,253

522,052

226,103

Direct costs, metal cutting

133,616

55,491

316,824

91,087

67,480

25,762

205,228

135,016

Operating Expenses:

Selling and related expenses

293,660

68,992

615,495

288,089

General and administration

1,020,058

377,131

2,384,905

932,211

Stock-based compensation

672,099

95,850

1,699,622

456,490

Research and development

71,875

53,031

185,748

130,535

Depreciation and amortization

108,822

17,769

278,079

53,311

Total Operating Expenses

2,166,514

612,773

5,163,849

1,860,636

Operating Income (Loss)

(2,099,034)

(587,011)

(4,958,621)

(1,725,620)

Other Income and (Expense):

Interest

649

(30)

(379)

12

Total Other Income (Expense)

649

(30)

(379)

12

Net Income (Loss) before tax benefit

(2,098,385)

(587,041)

(4,959,000)

(1,725,608)

Provision for Income Taxes

-

(221,000)

-

(645,100)

Net Income (Loss)

$

(2,098,385)

$

(366,041)

$

(4,959,000)

$

(1,080,508)

Net Loss per share:

    Basic and diluted

$

(0.11)

$

(0.02)

$

(0.28)

$

(0.08)

Weighted average common shares:

    Basic and diluted

19,124,100

15,366,332

17,410,423

13,397,682

On June 26, 2012, we affected a 1-10 reverse stock split for our common stock.  All share and per share information has been retroactively adjusted to reflect the reverse stock split.

 

 

SOURCE MagneGas Corporation



RELATED LINKS

http://www.magnegas.com