MedClean technologies second quarter 2010 revenue decreases to $131,758

Aug 23 2010

MedClean Technologies, Inc. (OTC Bulletin Board: MCLN), the leading provider of on-site technology for the treatment and disposal of medical waste and the destruction of confidential documents and related media, today announced financial results for the 2010 second quarter for the period ended June 30, 2010.

Some of the recent highlights include:

• MedClean has addressed its capital requirements for the foreseeable future through previously announced agreements with Southridge LLC and JMJ Financial, which will enable MedClean to execute its differentiated plan, expand the product line, expand distributor partnerships, and penetrate a much larger market opportunity.  The distributor partnerships plus the hauler alliances forged with members of the Independent Medical Waste Transporters Association (IMWTA) will enable MedClean to deliver its technology as a service to address the needs of multi-regional and national health care organizations.  The technology will now be provided in conjunction with local and national partners in a variety of means that will enable health care organizations to conserve capital while generating large savings and protecting the environment.  The Company and its partners are now being considered for large scale national deployment opportunities that have been out of reach in the past.
• The Company has built a virtual infrastructure that will enable it to continue to target its ambitious sales goals while minimizing its fixed cash overhead expenses to less than $450,000 per quarter.  Through the combination of expense management, second-half recurring revenue, and product sales/backlog, the Company is targeting cash self-sustainability and accelerated sales growth by the end of the year.
• The Company added two new distributors, including agreements with Gamma Healthcare, Inc./Danner Medical Waste Management Services ("Gamma"), a premier provider of medical diagnostic services that include laboratory, portable digital radiology, and urodynamics, along with medical waste transportation and disposal services, and Ace Technologies ("Ace"), Inc., (through the formation of MedClean Canada) an industry leader in providing full turn-key network solutions, security, and monitoring services in Canada. The agreement with Gamma will allow MedClean to target more than 3,200 hospitals in seven new states, while the pact with Ace will allow the Company to target over 2,000 hospitals in Canada. The Company previously announced agreements with Barnett and Verde Enterprises LLC.  Post second quarter Distributor agreements signed with new partners brings the total states represented directly by the distributor network to 19.  MedClean's direct sales effort plus the distributor network including our VA partnership with Bear Consulting now positions MedClean to address the market in North America today.  The company will continue its momentum seeking partnerships in Latin / South America as well Europe and Asia / Pacific in the near future to address the global market.

"The paradigm shift undertaken by the Company, infusing readily available capital, ground breaking products, a strong management team, and talents of proven industry partners establishes the basis for the growth that we identified at the beginning of this year," commented David Laky, President and CEO, MedClean Technologies, Inc. "The barometer for the investment community to monitor our success going forward will be growth in backlog, which, at $1.7 million, is up more than 50% compared to one year ago. In addition our progress can be further tracked through incremental partnerships that address new geographies, market segments and international opportunities, new product introductions both through internal development and acquisition, and new business generated through our complementary channels of distribution.  We intend to capitalize on the leverage provided by the distribution/hauler network that has worked with health care customers for many years to increase penetration of a market in need of cost effect alternatives.    

"We are confident that our strategy is optimal for this marketplace and offers great value to the health care community," Mr. Laky continued.  "We are grateful that despite these tough economic times, changing regulatory climate, and lean financial resources in the past, we have secured capital to enable a paradigm shift that provides the Company with a competitive advantage to now rapidly grow our business.  The challenges that have limited the growth of our Company have now been addressed as we look forward to turning the corner to accelerated growth and positive free cash flow from operations."  

Second Quarter Financial Results:

The Company reported revenue of approximately $131,758 for the three months ended June 30, 2010, compared to approximately $400,625 in the same period a year ago.  The year-over-year decrease was due to lower levels of system deliveries during the quarter.  The decrease in service billings was a result of fewer service calls required due to equipment issues.  Service billings will continue to fluctuate period to period based upon equipment issues, whether through operator error or wear and tear, and pre-scheduled service activities such as equipment relocation.  Service revenue attributable to contract revenues is recognized at the time of performance and not at the time of contract execution.

Gross profit for the second quarter of 2010 was $60,084, or a 40.8% profit margin, compared to gross profit of $128,590, or a 35.4% profit margin in the prior-year period. Total operating expenses were $1.1 million compared to operating expenses of $2.3 million in the 2009 second quarter. Net loss for the second quarter was $(1.1) million, or $(0.00) per share, compared to a net loss of $(2.7) million, or $(0.00) per share for the same period in 2009. The net loss included $.5 million of non-cash charges associated with depreciation, amortization and stock-based compensation.  

For the six months ended June 30, 2010, the Company generated revenue of $400,625 compared to revenue of $772,182 in the year-earlier period. Gross profit was $163,498 for the 2010 six months ended, compared to $273,145 in the 2009 six months ended. The net loss for the 2010 six months was $(2.7) million, or $(0.00) per share, compared to a net loss of $(4.6) million or $(0.01) per share in the 2009 six months.

The Company has filed its Form 10-Q for the period ended June 30, 2010 with the Securities and Exchange Commission, and investors are encouraged to visit www.sec.gov to review this document, which includes financial tables and additional detail for the quarter ended June 30, 2010.