John Cunningham - VP of IR
John Lorenz - Chairman and CEO
Alicia Williams Young - CFO
Grant Sahag - VP, International Development
Todd Smith - COO
Everett Alexander - Director
Thomas Pfister - RedChip Company
Ronald Tracy - American Independent Security Group
GlyEco Inc (OTCQB:GLYE) Q2 2014 Earnings Conference Call August 19, 2014 4:15 PM ET
Good day and welcome to the GlyEco Inc Second Quarter Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to John Cunningham, Vice President of Investor Relations, RedChip Companies. Please go ahead sir.
Thank you, Danny. Good afternoon everyone and welcome to GlyEco’s second quarter 2014 earnings call. With us today are GlyEco’s Chairman and CEO, John Lorenz; Chief Financial Officer, Alicia Williams Young; Vice President International Development, Grant Sahag; Chief Operating Officer, Todd Smith; and Director, Everett Alexander.
Before I hand the call over to John, may I remind our listeners that on this call management’s prepared remarks contain forward looking statements which are subject to risks and uncertainties, and management may make additional forward looking statements in response to your questions. Therefore, the Company claims the protection of the Safe Harbor for forward looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the Company’s filings with the Securities and Exchange Commission.
In addition, any projection as to the Company’s future performance represents management’s estimates as of today August 19, 2014. GlyEco assumes no obligation to update these projections in the future as market conditions change. To supplement these financial results presented in accordance with U.S. GAAP, management may make reference to certain non-GAAP financial measures, which, the Company believes provide a meaningful additional information to understand the Company’s operating performance.
And now it’s my pleasure to turn the call over to GlyEco’s Chairman and CEO, John Lorenz. John, please go ahead.
Thank you, John. And it’s a real pleasure to be here. Before we get started, I want to thank you all of you who are participating in the call today. We are always very pleased at the response we get because it is a good opportunity for us to explain where we are and where we’re going plus it’s a good opportunity for our shareholders to ask questions and to figure out sort of the direction this Company and its culture is taking us.
The second quarter of this year is pretty much on course as to what we had projected and thought about at the end of last year going into this year. We anticipated that we would have an increase of revenue in the second quarter that turned out to be the case. We actually showed a 13% increase year-to-year from 2000 obviously ’13 to today. That increase is $1.6 million. The net equipment assets the Company increased again 43% at the end of the year of 2013. This is the result of continued investment of capital that has been raised through offerings in the equipment purchases and installation of that steady equipment in not only the GlyEco plant in New Jersey but also at our other six locations.
One important fact which I think needs to highlighted is since the 2012 time frame, we have increased our customer base 160%. And we are now on course and/or we’re on course to serve about 5,000 individual waste GlyEco generators by the end of next year and we have reached, we anticipated, getting into the 3,000 customer range by this quarter. We actually, thanks to the efforts of Todd Smith and his crew as well as our subsidiaries, are currently serving over 3,500 waste glycol recyclers.
This year, with the changes we have made in the Company, showed us that as of June 30, 2014, we have a gross margin 1% and that was compared to about a 20% gross margin, a year ago. The decrease in our profit is primarily due to the continuation of our operating expenses, our investment in infrastructure and capacity and low production volumes at the New Jersey processing center due to multiple waste glycols and also to testing and refinement of equipment. We expect that gross profit margin to increase as our production volumes increased at that particular facility.
There is always a negative impact on your gross profit margins when you’re doing installation of equipment in testing, but we’re confident at this time that we’re on the right track to build out the plant and get to the capacity that we have projected and indicated over the last two years. When we talk about capacity at the plant, we’re talking about the difference between 2012 capacity that this company had for processing than what it has today. In 2012, after the conclusion of all our acquisitions and outside purchases, the Company had approximately capacity for 2.3 million gallons. Today, two years later, we have capacity of just over 7 million gallons. This is a real credit to the engineers involved in this company as well as the staff which has worked very hard in sometimes difficult conditions to get our capacity up.
This quarter, we have also done some other things which I think along the same lines that relate to ramping our revenue once our capacity is up. We have renewed our contract with Richard Geib. Richard Geib is the genius behind our technology. He is more and more involved in the Company as we move forward and more of his time is required and we’re looking forward to obviously working with him.
We have expanded the Maryland facility. It reaches now over 400% which we think is a real standard plus for the Company. We also have thanks to the efforts of Everett Alexander, Janet Lorenz and Hubert Bart expanded this quarter into the Canadian market. We are currently registered in all five provinces as a processor and we’re receiving loads out of the Canadian market and load should be increasing at a relatively rapid rate throughout the third quarter and the fourth quarter.
The Canadian market is a great market for us. It’s highly regulated and we expect that is our first international expansion. And one of the reasons that we purchased certain asset purchases in the Northeast area because of the immediate location with Canada and the ability to transfer material out of Canada as well as service parts of the United States.
Our Minnesota facility this quarter has reached a capacity increase I think that increase in the range of 350% to 400%. We also signed this quarter a multinational textile producer agreement with them to process I believe it’s actually just over 1.15 million gallons of material which will be shift to our facility in New Jersey.
When I was talking earlier about capacity, one of the issues for this company, on a go forward basis, is to create the capacity necessary to service the potentially 700 million gallons of material that is available for recycling in the country on an annual basis. Our goal has always been as historic to the United States and Canada; they have the capacity for 20 million gallons. As I just indicated prior to that, we are now just over 7 million gallons up from about 2.3 million gallons in 2012. When you talk about increasing capacity, our goal as I said is to get to 20 million, we’re well on the way of getting there by 2016 and ’15. But to increase that capacity there are various elements involved and that’s been reflected in our growth and our revenue ramp. There is the physical capacity necessary which is obviously the location of equipment the purchase of that equipment, the installation of that equipment, the testing of that equipment as well as upgrading our layout.
We’re in the process of upgrading the lab and have done some material work there, we also have retained the services of the dynamic chemist Wayne Merrifield, who has now taken over the lab and is running them. So we’re in essence now with two labs. We’re going to need two labs to get to 20 million gallons, one is in place and we’re now upgrading the particular lab over in the New Jersey facility.
The second part of the capacity increase is the infrastructure, which means we have to add additional staff to the company that is new employees that can be integrated into the company’s culture and integrated into the way the company operates. These particular employees are in the areas of engineering, they are basically engineers that are very familiar with chemistry, they are chemists primarily so that we then have the internal infrastructure to support the physical capacity that we’re preparing.
Our goal as I said before is to get to 20 million gallons by 2016; we’re currently at 7 million gallons. This quarter which is the third quarter and the fourth quarter of this year we will start the revenue ramp. We’re now putting in place as I said the chemical the people that can drive that and we anticipate that our earnings and revenue ramp will continue.
The good part about that process is unlike a high technology or a company that has a technology that’s here today can be gone tomorrow. In our case, we actually own and operate assets; those assets provide a revenue stream and that revenue stream we anticipate will keep increasing as we move forward. When we get to the international markets we’ve made great strides in that market this quarter and I am sure that we’ll have some questions Q&A on that as we go into the question-and-answer period.
Overall, I see this quarter as a building quarter, we continue to integrate our employees, new employees into the system and we continue to integrate the equipment, tested and make sure that it is operating and is capable of filling the capacity that we’ve increased in these various facilities. An example of that a very simple one would be our Maryland facility which has gone from 200,000 gallons to 600,000 gallons.
With that I’ll close and Alicia do you have anything to add or I am sure that you do. Go ahead.
Alicia Williams Young
Thank you John and good afternoon to everyone listening on the call. We’re now in a transition phase for our technology enhancements and capacity upgrades. These improvements to our processing infrastructure will allow us to grow our sales. It was not possible to do this conterminously. One had to be done before the other. And we see the impact of this transition when we compare our Q2 numbers for 2014 to those of the first quarter. In general, the numbers for the second quarter of 2014 were relatively the same as those from first quarter. More specifically, when we look at the Q2 numbers we see that the revenues were relatively flat with Q1 of 2014 declining about 3% to our $46,000.
Our revenues for the first quarter were $1.6 million which was an increase of 13% from the second quarter of 2013. And for the first half of 2014, our revenues were $3.2 million, an increase of over 23% from the first half of 2013. We’ve been able to continue to increase our revenues over the same period in the prior year and the improvements that we have made to our infrastructure will only allow us to expand these sales even further. Our gross profit margin decreased year-over-year for the three months ending in June from 33% in Q2 of 2013 to a negative 1% in Q2 of 2014. For the six months period, the decrease was from 21% to a negative 1%. The gross profit margins remained flat from the second quarter 2014 from the first quarter of the same year.
The negative gross profit margins are primarily due to investments that we have made to upgrade our facilities as John has mentioned. We have expanded our facilities with growth in mind. The expansion activities will provide the infrastructure and trained operations staff necessary for the company to reach a projected throughput of 7 million gallon, as John discussed.
Our current operating results and margins have been negatively impacted in this three and six month period ending in June by the costs associated with, increases in staffing, fixed product cost, operations testing, quality control procedure development and technology implementation. All of that being necessary to support our future expected production level. These costs increased the average cost of producing recycled glycol without the associated increase in sales that we anticipate once we achieve planned production levels of our T1 product.
As forecasted production levels and sales are reached, the average cost per unit produced will decline as fixed costs are spread over a larger number of units produced. This is the transition that we are now going through, the transition from increased capacity to increased sales. We expect that our gross profit margins will be higher in the future likely ranging in the 30% to 35%. And for further information on our facility upgrade, please refer to the detailed information that can be found in the 10-Q.
As I mentioned in our last conference call, we had a facility that had not performed and had lost money. The general manager of this facility had at that time been put on notice. That general manager is no longer with the company and we are looking forward to moving this facility towards its true potential.
Our net loss also increased year-over-year for the 3 months ending in June by approximately $900,000 and for the six months ending in June, the increase was about $1.6 million. These increases were largely due to a non-cash expenditure for stock-based compensation of almost $700,000. The remainder of the increase was due to increased professional fees for things such as the filing of the S-1, the hiring of additional staff to support the four acquisitions made in 2013 as well as some increase in general and administrative expenses also related to our acquisitions. Quarter-over-quarter, we saw a decrease in our net loss of 7% or approximately $82,000.
Now turning towards the balance sheet, we reported the decrease in our cash of approximately $2.4 million, compared to $4.4 million at the end of 2013. The decline was mainly attributable to the investment in equipment and construction at our New Jersey facility. Our equipment value including construction in process has increased 43% from $5.8 million at the end of 2013 to $8.3 million at the end of this quarter. Overall, we had seen a slight decrease in our liabilities and one additional item to note, we have seen an increase in our inventories of 89%, which is part of our preparations for the transition from increased capacity to increased sales.
Thank you for your time and I will now turn the call back over to the John.
Thank you, Alicia. I think one of the things that we also should mention is that the company currently carries no debt, so I think that’s an important issue. We never talk about it because we don’t do it, but that’s one of our issues here. Okay, let’s open it up for some questions.
(Operator Instructions) Our first question comes from Thomas Pfister with RedChip Company. Please go ahead sir.
Thomas Pfister - RedChip Company
I just have a few questions for both of you today. My first question, I think it questions a little bit your prepared remarks but can you go over some of the relationships you have in place to obtain feedstock supply for each of your facilities?
Sure. Feedstock supply for our facilities comes in two varieties; the first is feedstock that is supplied to the plant in New Jersey that as I indicated earlier we signed a contract with one international producer in the textile area for about 1.15 million gallons over the year. The other feedstock producer sent us material on a regular basis generally by train car. We normally don’t enter into agreements or contracts with them because it’s a hazardous material and for most them they’re supplying us feedstock that they otherwise have to dispose another landfill which is expansion to say the least. So that’s one source of feedstock.
For the operating end units, that is the individual facilities that we have, they collect and reprocess glycol. They’re collecting glycol from [indiscernible], Monroe Shocks so on and so forth and so doing they bring that material back but they want to route pretty much like a solid waste or garbage route or they collect the material, we bring it and process. Todd do you have anything to add to that in terms of feedstock in the subsidiary?
The one thing I would say John is that in our regular delivery of product to our customers we collect 60% to 70% of the feedstock that we need and then the remainder is collected through supplemental agreements we have with local waste collectors.
Okay. Todd one thing that we didn’t highlight in the discussion that which Grant brought up is we’ve invested quite a bit of money in our subsidiaries both in equipment and upgrading equipment and accounting systems and uniform so on and so forth. Well, that’s been a result there in sales what we have we done in sales I mean this has been attractive in your mind or not.
Well I’m glad that question asked, actually it has been very effective as we know we spent a lot of money with infrastructure and capital expenditures increasing capacity flow rates, pumping abilities, storage ability and so forth in our processing centers and when I talk about processing centers I’m talking about the six that are not New Jersey at this particular point but I think Q2 of 2014 started to pay some dividends. Our Q2 2014 versus Q2 2013 would [indiscernible] meaning shops that were open the previous year, we actually had an increase in top line sales of just over 64% and then if we add anything forward (Ph) which was not open last year at this time. We’ve got an increase of 141.5% over Q2 of 2013.
But when you talk about the revenue ramping and where we are going, utilizing the investments that we’ve made and really driving the company I think Q2 is an excellent example of the exact direction that we can expect the company to continue to go.
Thanks Todd. As I try to indicate what we have been doing really since 2012 is finishing off our asset purchases, doing the integration and creating the capacity necessary for a revenue ramp. It doesn’t happen automatically and it doesn’t happen without careful timing and careful testing and that is essentially what we’re doing now.
So from the feedstock point of view there is available feedstock, the key to the feedstock situation you got to have the capacity to process it and we have and we’ll continue to make that investment. Our goal as I said earlier is to get to 20 million gallons or 7 million gallons now. The additional upgrades were planning for the balance of this year should get at least 15 million to 18 million gallons. So that’s really the ramp we’re looking at to increase the capacity.
As we increase capacity right behind it follows the revenue ramp.
Thomas Pfister - RedChip Company
Great, thank you for that. My next question is, can you go over the progress in your international expansion plans?
That’s a great question and a very timely one. Most of the world’s glycol is not consumed in North America, of the 6 billion gallons produced annually about 700 million maybe 900 million it’s consumed in North America, the balance is consumed internationally. We’ve been very blessed in the company that we have export those markets in great detail over the last three to four years. Actually Grant Sahag, who has been with us for four years, who is charged with that responsibility and he also works at the facility in New Jersey.
Additionally to that, we are a very happy that we have retain the services of Everett Alexander, who is not only a Director but has been very helpful to us in the international area and those two guys have basically been shepherding that wholesale (Ph). And I’d ask them to address that Grant, could you address the international expansion area questions and also Everett, would you mind addressing a Canada and some other stuff we’re looking at overseas including the relationships we’re establishing internationally with the chemical engineering firm. Grant, why don’t you go first.
Sure, thanks John. Outside of North America, our targets continue to be similar as we described in the past. First and foremost being Europe with regulations very similar to ours and a good collection system for glycols which lend itself to a good model for our operation. The second region is Asia specifically China, some other portions of South East Asia and the third being the Middle East. The key to our expansion into those regions is having the right partners, the right customers, customer partners being waste collection company that have glycols and our strategic partners that have waste glycol such as in the polyester industry that have difficulty dealing with the material.
So over the next 12 to 18 months, we’re putting together a plan to rollout into the regions. Currently, we still plan to move into Europe first into the Middle East second and into China third. That may change as the strategic partnerships develop and as we ramp up in some of the personnel end of the structure that John had described. So there is an opportunities to really expand and export this technology internationally and we continue to get calls on a consistent basis, both on the feedstock and on fixed side there are lot of glycol that people can deal with, don’t want to deal with or deal with in an improper way. And there are lot of customers that are looking for a 100% recycled material that they can sell at a premium specifically in some of these regions such as Europe.
So, we continue down the course but really the key is an application and technology with the right people and that’s fits right with what John and Alicia said, the key is - chemical engineers to roll this out along with the business opportunities. Everett, do you have anything else to add.
Yes, I think just to add to the point that you made in terms of the international expansion and the requirement for chemical engineers we’ve been in advanced discussions and in the process of signing the confidentiality agreement with the large chemical company that self-catalyst with the petrochemical industry. This company generates about $1 billion in sales and has over 2,000 chemical engineers and really what we’re looking to do with leverage those engineers as well as the company’s customer relationships to grow our technology internationally.
In addition to that we’re in preliminary discussions with the private equity sponsor who owns a very large polyester fiber manufacturer that have global capabilities and we’re talking about utilizing our technology to reprocess their internal waste streams to really help them save money on the purchase of diversion glycol and thereby jointly sharing the value proposition of those savings. And then in addition to that I’d say on the Canada side just to touch on that. So, Canada has a very elaborate I would say probably pretty organized collection system. The way that they fund their collection system is really by levying tax on retail sales of ethylene glycol anti-freeze that’s sold and so they use those proceeds to fund the collection system in Canada. And so as John mentioned earlier we would have registered and all of the provinces that have that program and are looking to leverage our existing fixed capacity which borders Canada and you really process those volumes?
Great. Everett is that it?
That’s all I have for now.
Okay, and I would simply add to what Grant and Everett have said is that I think it’s important that shareholders and investors to realize that once you get out of the United States and Canada and the EU the rest of the world is not as sensitive to environmental issues as can the U.S. and the EU are. For the most part, ethylene glycol material is disposed off by putting it into the water table meaning the rivers or the ground water. And it is not, shall we say handled maybe in a manner that is to the benefit of just the human species.
Our focus internationally has been in two areas; one is that we are a U.S. technology born and bred in this country that is profitable and that has environmental consequences that are helpful. And by that I mean wherever you go in the world people wear cloths and most of the clothing in this world is made in textile companies that make thread from ethylene glycol and to convert it into polyester whether its [indiscernible] that buys a lot of polyester worldwide, polyester materials or any other company. And so our focus internationally has been going to people or having people and generally people calling us who run polyester plants that know that we are probably the only company in the United States certainly in the world we think that can reprocess polyester material waste material from that plant back into a T1 product that they can reuse.
That is a substantial savings to that plant. And as a result their motivation internationally is a financial motivation for most case, not really an environmental one. But an environmental company culturally, we try to stress that not only is the ethylene glycol important to dispose off properly but also the anti-freeze wing de-icers so on and so forth; so that our focus internationally will probably be more in the textile area. And as a result we are not building a plant there that would process all five types.
We most likely will build the plant that would process only textile material. That plant would cost us less money to build and be as profitable, if not more profitable. So international is a very good place for us to be and in terms of my staff allocation I’ve allocated two people at this point which is essentially a Grant Sahag and Everett Alexander into that zone together with an engineer, an engineer, chemical engineer and Everett and his team are putting together the agreement with this internationally whom very well-known chemical and engineering company which I think will certainly help us not only in building plants but also help us in introducing us to their range of customers which are, shall we say, extremely large.
Thomas Pfister - RedChip Company
Thanks for all the detail there. My next question here is can you give us an idea of your current capacity utilization and maybe on a facility basis if possible? And how do you expect this to translate in the sales volume in the coming quarters.
I think in the sales and in the volume of the sales I think Todd has touched a little bit on that. We generally, we do not like to give out specific information with regard to individual facilities and the capacity at those facilities primarily because we do have competitors in the market people that do compete with the company on a limited basis not in a very large basis. And we’re not really like to release what the capacity is for each individual plant. I don’t think it hurts to get the general numbers as I indicated earlier that when we started this venture in 2012, we were at about 2.3 million gallons of capacity and all of our facilities were now over 7 million gallons headed to 20 million gallons. The most difficult part is getting the equipment and to get to about $7 million to $8 million gallons because that equipment with the additional other equipment is still cost of lot of money, but overall getting to 20 million gallons is not as hard as getting to the first six or seven.
So I think Todd if you wouldn’t mind, pick one of your plants and talk a little bit about pre and post capacity and maybe some of the things that we’ve done there given example. Maybe pick whatever plant you want.
Sure. I’ll pick the Minneapolis plant, the twin cities have between 7 million and 8 million people within reach of our plant there. When we bought the Minneapolis plant and it was already at around 80% to 90% of capacity. In Q4 of 2013 and into Q1 of 2014, we moved that plant to a new facility that was approximately 5 times the size square footage wise. We installed equipment on the heat exchanger, a lot of tanks and additional ancillary equipment necessary. We barely got off the ground there with the move and everything else and in Q2, we already realized a 40% increase in sales over the previous year. I mean that’s one illustration of what we are doing and the results that we are getting and like we talked about honestly is the ramping up of the revenue is now that we’re focused on I think it’s starting to pay dividends our [indiscernible].
Todd what do you see as the main impediment to ramping the revenue, let’s take Minneapolis, what’s the main issue there? Is there feedstock available? What you see is the issue? Because like shareholders ask me, from where you’re going to get the revenue up, how is the revenue, how fast can you get it done? Explain a little bit about how that culture works and the education and how we go about doing things?
Sure. We first have to start with staff and that’s what we did in Minneapolis. So we are starting to realize rewards there, we have to increase obviously with the size of the plant, we will continue to increase the staff, we bought additional people on from a sales perspective and we will continue to push forward and grow that facility in incremental steps that make sense to us. We don’t want the growth to get ahead of us, we don’t want to not be able to service our customers. So if there is an impediment there, I think it’s controlling the growth and maintaining the company image, the quality of our product and making sure we keep pace with it as we go along. And the last thing I want to see is sales going out the back door as come in the front door because we didn’t manage them. So if there is an impediment there, I would say it is controlling the growth as we start to go through realizing this ramp up and really taking advantage of it to solidify ourselves and position ourselves and qualify (Ph) and welcome marketplace.
And let’s take an example of that. An example of that is one of the very large lube chains as the concentration in our market area of over I think its 60, 70, 80 stores. And those are stores that can use our services. So if we were to jump on that immediately, and expand into those areas we probably wouldn’t be able to provide the level of service we currently provide to our customer base. And remember as I indicated earlier we have customer base of about 3,500 people and 3,500 waste recyclers. So I think what Todd is really saying is that he ascribes to the principle this whole company subscribes to which is [indiscernible], we make haste here but we make it slowly and we are on very firm ground where we operate. So that if we are going to expand we’re not going to retract, we’re going to continue expanding at a very controlled rate that allows us to make additional funds continually and expand the business logically without spiking it.
Thomas Pfister - RedChip Company
And then just my final question here then I will jump back in the queue. Going forward as you implement your type one processing in some of your other facilities how should we expect your gross margins to react also considering that you gained some experience with the implementation at the New Jersey facility?
Alicia do you mind handling that one?
Alicia Williams Young
I am sorry, can you restate the question for me.
Thomas Pfister - RedChip Company
Sure, so just going forward here, as you implement that your type 1 processing in some of your other facilities, how should we expect your gross margins to react, if also considering that you’ve gained some experienced with implementation at your New Jersey facility?
Alicia Williams Young
Okay, thank you. That’s a great question. One of the things that will happen is of course our gross margin should increase. As we sell more products that we’ll able to spread the cost of producing that product across a greater number of units and in doing so we’ll decrease the cost per unit which will then increase our gross margin. So we know that as we’re doing this revenue ramp or as we increase our sales that we’re going to see tremendous benefit and change to our gross margin.
But I would add to what Alicia says that it’s important to recall that for us to implement T1 facility we have to be assured that the feedstock supply coming into the particular facility is around 800 to 1 million gallons, which makes it a cost benefit ratio realistic. Currently, we have one facility that is approaching that particular number in terms of its capacity. As we ramp revenue there then we will begin to convert that plant to T1 plant. The plant in New Jersey obviously is able to do that. So obviously it’s well into that number with its capacity. So it’s a function of the capacity but also the throughput so as we ramp that particular facility it’s actually in the Northeast. As it ramps and it starts to hit full capacity, the next step for that plant would be to convert it over to T1 facility and obviously the margins go up because there is a price delta between a T2 and T1 product. We make both products right now
Alicia Williams Young
And John just to quickly add to that when we look at a facility especially and with the size of New Jersey it’s large and it has a lot of operating expenses that attributed to it. And most of these operating expenses go into the cost of its fold because those are expenses that are related to producing the product. So that type of facility requires that we sell a greater number of gallons in order to offset those costs and that’s how we’ve been doing we’ve been preparing that facility to be able to view that and it’s just a matter of walking past the gate and getting it done. So we’re right there and that’s going to happen for that New Jersey facility and it’s exciting to see that.
Right, the other facilities I think enlarge on Alicia’s point have to have the flow through the facility prior to the conversion taking place and this is of course based on the cost that that particular facility or new facility would have that produced the T1 product so.
Thomas Pfister - RedChip Company
Great, thank you so much again for taking all my questions you guys as usual are providing now lots of color commentary and I really appreciate it and you said you have a very exciting year out of you.
Well, thank you. We don’t have a lot of time left. I don’t think so we have to get to another question, if we can.
Our next question comes from Ronald Tracy with American Independent Security Group.
Ronald Tracy - American Independent Security Group
Gentlemen and ladies, I am pretty impressed you have had Grant on and Everett. My early question would have been, did you meet the expectations, I know you had a bad first quarter and you’ve certainly answered that handsome. I am pretty impressed with your story and that brings me back the focusing on stock, I’d really like to see utilized and get the story out because it’s changed a lot since the first quarter and you’ve done a lot, I think you should be pleased with that. As you may know I am a retail institutional broker, I’ve got 35 years of experience in small cap arena and I looked at you as a very young company and what you’re and but I am seeing some great improvements. Also I’d like to see it utilize RedChip, I have a great deal of confidence in them, they have done some great jobs in another positions and maybe getting your story on their TV show and getting it out there I think you’re going to see some good improvements in your stock movement. What you told today that story needs to get out to the public if you want to see some expansion in your stock.
Thank you and thank you for mentioning Grant and Everett. We’re very proud of what they have done. And it’s good that you’re following us. Not everybody understand the story and I think you’re very correct, we need to tell the story a lot more. And one of the problems we’ve had telling our story is that we’re in a very isolated market, there is nobody out there that’s public that producing a T1 product out of ethylene glycol or the glycols that are available. So, not everybody is interested in our story. Most people are interested in reprocessing of oil not reprocessing of ethylene glycol or diethylene or triethylene.
So I think that’s incumbent on us but sometimes it’s hard to get people to listen, they’re more interested in making $0.60 on a gallon of oil versus us making $2 on a gallon of glycol.
Ronald Tracy - American Independent Security Group
I understand that entirely because I am on the oil side too. The team you put together and I did make a trip to Arizona, I did visit you early on, I don’t know if your staff remembered me it was a late day and I got in there. I like to kick tires; I do a lot of my own research work. And then I was very pleased that you brought Rich, and I think now you need to utilize their expertise that today has been very enlightening for me.
This does conclude today’s question-and-answer session. At this time I would like to turn the conference back over to John Lorenz for any closing additional remarks.
Well first of all I’d like to thank everybody for coming and listening to what we have to say today and also like to commend and honor all of the people that work for this company. I think everybody in this second quarter and into this third quarter are doing a tremendous job. And I think that the fruits of the labor that everybody is putting in now will be shown as we move forward. We have positioned ourselves well, we have not listened to a lot of the [indiscernible] and the people out there that don’t get, you have to get this stock and driving us on the market side. We’re following our plan. I think it will start to pay the kinds of dividends that we know it would three or four years ago.
We’re very blessed with a great staff with a genius CTO and with the technology that has not only legs in this country but has international legs. In my mind it’s the true American dream. It’s something that was invented here, works here, is environmental and can be applied internationally.
With that I’ll say thank you very much and as always if any of you have additional questions or questions that were not addressed in this session. Please feel free to call the officer, call me directly and my number is easily available; our main trunk line is 480-477-8677. Thank you very much and thank you RedChip for your help in putting this together.
Thank you John.
This does conclude today’s presentation. We appreciate everyone’s participation.
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