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Good afternoon, and welcome to the BioHiTech Global Third Quarter 2020 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.
I'd now like to turn the conference over to Scott Gordon, President, CORE IR. Please go ahead.
Thank you, Greg, and thank you all for joining today's conference call. Joining me from BioHiTech Global's leadership team are Anthony Fuller, Chief Executive Officer; and Brian Essman, Chief Financial Officer.
During this call, management will be making forward-looking statements, including statements that address BioHiTech Global's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in BioHiTech's most recently filed periodic reports, Form 10-Q filed with the SEC today and BioHiTech's press release that accompanies this call, particularly the cautionary statement in it. The content of this call contains time-sensitive information that is accurate only as of today, November 19, 2020. Except as required by law, BioHiTech disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.
It is now my pleasure to turn the call over to CEO, Anthony Fuller. Tony, go ahead, please.
Thanks, Scott, and good afternoon to everyone on the call. I'm happy to be joining you for the first time as CEO of BioHiTech Global. When I first joined the company's Board of Directors in 2017, I was attracted by the company's cost-effective technology solutions for sustainable waste management. From experience, I knew that those solutions addressed many of today's environmental problem. Our technology can reduce landfill usage, reduce food waste, lower carbon emissions and other pollutive gases and keep plastics out of our oceans. It can also drive renewable energy fuel production and alternative energy use. We remain deeply committed to this mission. And as I will discuss, we are taking meaningful steps to prioritize corporate actions. These actions will reflect the strategies and initiatives designed to maximize shareholder value and help shareholders stay informed of our progress going forward.
Our financial performance in the third quarter of 2020 suffered from a number of influences that we believe are neither systemic nor recurring. Revenue was down both sequentially and year-over-year, largely due to plant optimization actions at our flagship Martinsburg, West Virginia resource recovery facility that temporarily reduced production at the facility and the negative adjustment in previously estimated take-or-pay contract review at the facility. In addition to the lower-than-expected revenues in the third quarter, our operating expenses increased 53% year-over-year, including nonrecurring impairment expense related to the Martinsburg waste facility.
Expense control is certainly one of the key focuses of our corporate strategy moving forward. We are keenly focused on implementing steps to reduce operating expenses to better align with our revenue profile.
During the third quarter, we enhanced the Martinsburg's facilities management team that subsequently conducted a full analysis of the plant's operation in an effort to optimize production and capacity. During this process, certain mechanical and electrical processes and components were reconfigured to improve processing and capacity and to allow for potential additional revenue streams to be introduced. Thus, plant production was significantly reduced during this reconfiguration process until it was completed in October. Since the facility came online in the second quarter of 2019, we have learned a great deal, and we've adapted along the way.
As we said in the past, our learnings from this initial facility using our proprietary high-efficiency biological treatment process will be critical in future opportunity when we can better optimize the construction and operation of additional waste facility. To this end, in October, we announced a strategic investment in a land venture in Rensselaer, New York. This is a venture where we expect to establish a renewable energy campus on the Hudson River across in the port of Albany. The goal of this renewable energy campus are consistent with the stated sustainability and job creation goals of the government of New York.
We are optimistic that we will be able to move this project and other similar projects forward to the implementation phase in the future. We are also in significant discussions with other entities as they seek to address their environmental problem.
The highlight of the third quarter was the progress with our Revolution Series Digesters. These on-site food waste disposal units convert waste into a liquid, that can be safely discharged through any standard sewer line. They have been used in a number of target markets. They support various levels of customer food waste volumes and have lower processing costs than traditional disposal processes.
In September of 2020, Carnival Corporation began installing our Revolution Series Digesters aboard its Carnival cruise ship in preparation for the eventual resumption of cruising. Encouragingly, Carnival has placed $3.3 million worth of digester orders since July under our $14 million master purchase contract. What's more, the delivery of most of these orders, along with additional expected orders, will happen in future quarters. This provides excellent visibility to future revenue.
We expect significantly more contribution from the sales of our food digester in the coming quarters. We are pleased with our penetration in the cruise industry with Carnival, the world's largest cruise company and Princess Cruises, the second largest cruise company. It is clear that our food waste solutions have real value that are being recognized by the titans of the sea.
Beyond the cruise industry and subsequent to the end of the third quarter, we received an order for 7 new food waste digesters at various Hackensack Meridian Health facilities in New Jersey and New York. This is a material order and provides additional validation that our technology is highly relevant in medical facilities. There are thousands of medical campuses across the country that provide additional opportunities for food digester sales in the health care and food service verticals.
Apart from the cruise and medical verticals, there are additional opportunities for our food digesters in the restaurant, in hotel and hospitality, grocery and food services industry. We remain optimistic regarding our future prospects for market share growth with our food waste, municipal waste and alternative energy solutions.
Moving on to the Altapure-AP4 disinfectant system, for which we have an exclusive license, we shipped our first system to the cruise industry in September for use on the SeaDream yard where it is being used as a part of their disinfecting protocols during its sailing season. Given the recent developments in vaccine trials, we are hopeful that a fundamental change is on the not-too-distant horizon.
Maintaining the confidence and safety of passengers is paramount for cruise lines and the Altapure-AP4 automated and touchless aerosol system provides a safe process to eliminate bacteria and viruses, including the coronavirus. In late September, we also introduced the Altapure-AP4 disinfectant system to the Hazleton Area School District in Pennsylvania. This was the first school district in the country to incorporate the Altapure-AP4 as a part of its protocol to help protect its students, staff and schools from the spread COVID-19 and other viruses and bacteria. Nothing is more valuable than the safety and health of our children, and we're extremely gratified to give them the chance to contribute to the health and safety of our country's greatest resource.
Our corporate initiatives are founded upon a core set of chance. We envision driving sustainable growth, operating leverage, market share capture and expansive business opportunities. Upon becoming CEO, I sat down with our team, and we began to map out what we believe are the keys to success for BioHiTech. This company has a long history, and we've never been more optimistic about its future. Before us is a measurable path by which we can track success, and I believe it falls into 5 categories. First, we must increase revenue appreciably. We're off to a great start. The partnerships we afford with the cruise industry are historical. We've shown with our contract with Hackensack Meridian Health that there are substantial untapped markets that our digester business can broach. This is just the beginning of a sustainable growth trajectory, which, we believe, will create lasting shareholder value.
Second, we must make these revenues all the more meaningful by reducing our SG&A. Efficient expense control and prudent budget managements are critical means by which our company will demonstrate our commitment to shareholders. We've already begun this process. And we look forward to discussing more of these initiatives in our future communications.
Next, we must measurably improve the operations of our facility in Martinsburg, West Virginia. This facility and our ability to leverage what we have learned there is a cornerstone of our development as a company. We've had some challenges, but we've learned from them. And I believe that the ability to take solid municipal waste and convert it into a significant revenue stream as a renewable fuel is a strong solution to multiple problems. It reduces landfill waste significantly, which is a pressing environmental solution, and it helps to pay for itself by converting that waste into revenue.
To this end, I'd like to share a quick success story regarding our Martinsburg processing plant. From April 1 through November 12 of this year, our plant provided 4,400 metric tons of fuel to the nearby Argos cement production facility. At the minimum fuel design of 6,500 BTUs per pound, this fuel -- this waste is the equivalent of at least 2,290 tons of coal in the Argos plant. As a result of using our produced alternative fuels in that Argos plant, coal use at Argos dropped significantly. This also reduced in -- also resulted in a reduction of the amount of ammonia needed to control the plant's Title V pollutive emission.
As I mentioned earlier, the learnings that came from our experience in Martinsburg can now be applied to our upcoming renewable energy campus, which we intend to build upon the newly acquired land parcel in Upstate New York as well as other opportunities that we are pursuing. As these plans solidify, they will help position us as leaders in the world of converting waste into alternative fuel. We are very excited to both make and prove our case to our shareholders and to the world.
Fourth, we must absolutely tell our story better. We must communicate more clearly, we must communicate with our shareholders. We must communicate with our customers and we must communicate with our suppliers. It's one thing for us to do the job we set out to do, but we must also ensure that the mission is understood. We realize that we will be measured along the way, and we welcome that measurement.
Finally, and this cannot be underemphasized. The BioHiTech organization is working together as a single team with a singular vision to achieve our mission. We stand at multiple inflection points. We have great products. We have proven technology, and we have proprietary processes. We are learning and adapting while aligning together to provide solutions which attack and solve some of the planet's most pressing environmental problems.
I've had the privilege working in 1 of the most complex organizations in the world in Walmart. And I know that the key to our success there was providing solutions that matter and aligning around that singular purpose. I am excited to see what the future holds for us at BioHiTech as we continue on this mission. And with that, I will now turn the call over to Brian, our CFO, who will review our financial results for the third quarter. Brian?
Thanks, Tony, and hello to everyone. Total revenue in the third quarter of 2020 was $740,000, a decrease of 48% compared to revenue of $1.4 million in the third quarter of 2019. The revenue decline was due primarily to an optimization and reconfiguration process undertaken as previously described in the Martinsburg waste facility that caused its revenue to decline 59% year-over-year to $249,000 prior to a $248,000 negative adjustment in previously estimated take-or-pay contract revenue.
Rental, service and maintenance revenue also declined 13% year-over-year to $424,000 in the third quarter of 2020. Equipment sales represented primarily by the sale of our food waste digesters partially offset some of the revenue declines in other areas and rose 370% year-over-year to $294,000. Management advisory fees from Gold Medal, our related entity, also declined from $265,000 in the third quarter of 2019 to $24,000 in the third quarter of 2020. This reduction in advisory fees revenue is due to a concerted effort by the company to focus more on its core efforts as demands continue to grow for its products.
Total operating expenses of $4.7 million increased 53% year-over-year and included $1.3 million in production expenses and a nonrecurring $917,000 impairment expense related to the construction equipment -- equipping and starting up of the Martinsburg facility. The impairment expense and increased cost of production, stock-based compensation, legal and social media expenses, insurance costs at the Martinsburg waste facility, D&O insurance and management transition expenses at Martinsburg primarily drove the increased operating expenses compared to the third quarter.
The loss from operations increased from $1.6 million in the third quarter of 2019 to a loss of $3.9 million in the third quarter of 2020. The combination of lower revenue, and higher operating expenses drove the increased loss from operations.
Loss per share in the third quarter of 2020 was negative $0.16 on 22 million weighted average shares outstanding compared to a net loss of $0.13 per share on 15.6 million weighted average shares outstanding in the third quarter of 2019.
At September 30, 2020, unrestricted cash was approximately $5 million. During the third quarter of 2020, we completed a public offering in which we sold a total of 5.2 million shares, including the underwriter's over-allotment at an offering price of $1.8 million, the company netted $8.4 million in proceeds following closing costs.
That concludes my prepared remarks, and I'd like to turn the call back over to the operator to open the call for questions.
[Operator Instructions] Our first question will come from Tate Sullivan with Maxim Group.
For the West Virginia facility, I mean -- and you didn't -- I noticed you didn't mention COVID much during your comments, but was it a decision to speed up changes that you probably would have done anyways at that facility? Or was it independent of COVID? Can you give just a little background of what you identified that could improve at that facility, please?
Okay. Tate, thank you for the question. No, we didn't mention COVID a lot in the prepared remarks. Clearly, the plant was impacted by COVID as were a lot of facilities around the country. We had time -- we couldn't fully staff and operate. So that was a part of it. The impacts created for us a timing that seems right to take a look at what we were doing and look at what we had accomplished at that point. I referred to the fact that we brought in a new or enhanced management team. We did that for the purpose of recognizing, one, that we could do better, and we were committed to doing that.
So we brought in a new team, and we listened to that team. And as we evaluated the plant, as we evaluated what was working well, and as with any commissioning process, you're going to find that some things are working well and some things are not. It seems an opportune time to make the difficult decision to go in, reconfigure it, address what we knew needed to be addressed and prepare ourselves for better performance in the future. So that's what we did.
Okay. And then what -- the strategic actions that you took in West Virginia and the changes that you put in place, what's -- can you -- does that speed up developing the potential other facility in New York? Or can you just remind me of the timing that it took where you are today in New York in comparison where you were at West Virginia? How long it took to build the facility and and start it running, if you can make that comparison to what you're trying to do in New York, please?
I'm not sure that we can actually make that comparison as an apples-to-apples type of a comparison. I can tell you this that what we learned in West Virginia, what we we're able to go back and reimplement gives us greater confidence in our ability to bring other units online. As far as what's proposed in New York, as we discussed the renewable energy campus, part of the plant would be another facility, like Martinsburg. Although one of the learnings that we realize is that we need probably a larger facility than what we have in Martinsburg and probably create some efficiencies as you do that.
We also learned that it works very well with other renewable type of endeavors. So that's why when we look at the property in Rensselaer and you realize that you have this concept of a campus that allows us to be a part of a campus that goes forward that brings new, but yet proven technologies to bear. So those are some things that we've learned.
As far as the reconfiguration itself in Martinsburg, some of it was to adapt to the waste stream, some of it was to understand that there's a difference in the waste stream in the U.S. and Europe, where the technology has been used for some time. So we adapted and made the tough call to fix what we know needs to be fixed right now. So that's what we did.
Okay. Great. And then last was the -- you mentioned with Martinsburg back up and running, you mentioned additional revenue streams. Were you referring to starting up the SRF production? Or is that something else that you're referring to, please?
Well, I mean, one of the things that we looked at when we talk about additional revenue streams, there's a couple of things that you can look at there. One of them is the fact that we have the ability to adjust the blend of what we bring in to the facility slightly. We think that there is opportunity to do some things, what types of waste, that maybe don't require as intensive processing. So you adjust your capabilities to adapt for that, that specific circumstance. The other thing, I mean, from an additional revenue stream perspective, I think the other thing that we broadly recognize, I think we all have to recognize is, as we look at a campus, we begin to realize that in a campus type of an environment, if you were to locate these plants in that, there are other types of revenue that could be created from other types of ancillary revenue perhaps. We don't know what that looks like just yet in its final stage. We're learning. We're adapting as we go. And there's -- so those are things that we are working hard for.
The demand that is present in the marketplace today for some of this -- some of these waste streams is greater, greater than what we thought. There is -- the environment, it creates different opportunities. So we're simply creating flexibility to maximize our ability to grab some of that opportunity.
This will conclude our question-and-answer session. I'd like to turn the conference back over to Tony Fuller for any closing remarks.
Well, I'd say we want to -- I want to thank all of you for participating in today's call and for your interest in BioHiTech Global. We look forward to sharing our progress with you in future updates. Thank you. Have a great day.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.