AETI announces Q2 results
HOUSTON, Aug. 14, 2018 (GLOBE NEWSWIRE) -- American Electric Technologies, Inc. (NASDAQ:AETI), a leading supplier of power delivery solutions for the global energy industry, today announced its second quarter 2018 financial results.
As a result of the Company’s previously-announced agreement to sell the U.S. based assets of its M&I subsidiary, the assets and liabilities of that business are classified as “held for sale” in the Condensed Consolidated Balance Sheets and the current and historical operating results related to those assets are reported as income or loss from discontinued operations in the Condensed Consolidated Statements of Operations.
For the 2018 quarter, the Company reported revenue, which related to its Brazilian subsidiary, of $2.1 million, up 56% compared with the $1.3M in the 2nd quarter of 2017 and up from $1.9M in Q1 2018. This increase was primarily due to increased service revenue for the Brazilian oil and gas market as well as a product project executed in Brazil for a South American customer.
The Company’s China joint venture, BOMAY, saw Q2 2018 revenue grow 76% to $12.2M from $6.8M in the same 2017 quarter and up from $8.1M in Q1 of this year. AETI owns 40% of BOMAY and does not consolidate revenue but reports BOMAY’s income as Equity Income from Foreign Joint Ventures. The Chinese oil and gas market is expected to see strong growth over the next several years as CNPC (BOMAY Joint Venture partner BOMCO’s parent company) has announced plans to invest more than $22B in the Xinjiang Autonomous Region, offsetting declining production in the Daqing oil region and increasing production of domestic natural gas to wean China away from coal-based power generation.
The Company reported Q2 EBITDA on continued operations (a non-U.S. GAAP measure) of $.2 million for the quarter, compared with an EBITDA loss of $.2 million in Q1 of 2017 and an EBITDA breakeven in Q1 2018.
“Our results highlight the growth and profit potential represented by our Brazilian and Chinese interests. The growth in the global oil and gas markets drove strong topline growth in both Brazil and our Chinese joint venture in the quarter” said Charles Dauber, AETI president and chief executive officer.
American Electric Technologies, Inc. (NASDAQ:AETI) is a leading provider of power delivery solutions to the global energy industry. AETI is headquartered in Houston and has global sales, support and manufacturing operations in Rio de Janeiro, Macaé and Belo Horizonte, Brazil. In addition, AETI has minority interest in a joint venture in Xian, China. AETI's SEC filings, news and product/service information are available at .
Forward Looking Statements
This press release contains forward-looking statements, as defined in Section 27A of the Securities Exchange Act of 1934, concerning anticipated future domestic and international demand for our products, and other future plans and objectives. While the Company believes that such forward-looking statements are based on reasonable assumptions, there can be no assurance that such future revenues, profits, plans and objectives will be achieved on the schedule or in the amounts indicated. Investors are cautioned that these forward-looking statements are not guarantees of future performance. Actual events or results may differ from the Company’s expectations, and are subject to various risks and uncertainties, including those listed in Item 1A of the Form 10-K filed with the Securities and Exchange Commission on March 29, 2018. The Company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future events make it clear that any of the projected results expressed or implied herein will not be realized.
Investor Contact:
American Electric Technologies, Inc.
Bill Brod
713-644-8182
| American Electric Technologies, Inc. and Subsidiaries | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (in thousands, except share and per share data) | |||||||
| June 30, | December 31, | ||||||
| 2018 | 2017 | ||||||
| Assets | (unaudited) | ||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 477 | $ | 243 | |||
| Restricted short-term investments | - | - | |||||
| Accounts receivable-trade, net | 516 | 794 | |||||
| Inventories, net | 201 | 2 | |||||
| Cost and estimated earnings in excess of billings on uncompleted contracts | 1,419 | 592 | |||||
| Prepaid expenses and other current assets | 280 | 151 | |||||
| Current portion of assets held for sale | 11,871 | 14,912 | |||||
| Total current assets | 14,764 | 16,694 | |||||
| Property, plant and equipment, net | 578 | 598 | |||||
| Advances to and investments in foreign joint ventures | 9,869 | 10,947 | |||||
| Deferred tax benefit | 40 | - | |||||
| Other assets | 246 | 116 | |||||
| Assets held for sale, less current portion | 6,506 | 7,566 | |||||
| Total assets | $ | 32,003 | $ | 35,921 | |||
| Liabilities, Convertible Preferred Stock and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Current portion of long-term note payable | $ | 360 | $ | 270 | |||
| Short-term note payable | 5,629 | 203 | |||||
| Accounts payable and other accrued expenses | 2,023 | 1,058 | |||||
| Accrued payroll and benefits | 613 | 574 | |||||
| Current portion of liabilities held for sale | 13,710 | 13,558 | |||||
| Total current liabilities | 22,335 | 15,663 | |||||
| Long-term note payable, net | - | 5,524 | |||||
| Deferred compensation | 188 | 213 | |||||
| Liabilities held for sale, less current portion | - | - | |||||
| Total liabilities | 22,523 | 21,400 | |||||
| Convertible preferred stock: | |||||||
| Redeemable convertible preferred stock, Series A, net of discount of $532 at June 30, 2018 and $562 at December 31, 2017; $0.001 par value, 1,000,000 shares authorized, issued and outstanding at June 30, 2018 and December 31, 2017 | 4,468 | 4,438 | |||||
| Stockholders’ equity: | |||||||
| Common stock; $0.001 par value, 50,000,000 shares authorized, 9,078,837 and 8,850,532 shares issued and 8,884,862 and 8,669,650 shares outstanding at June 30, 2018 and December 31, 2017 | 9 | 9 | |||||
| Treasury stock, at cost 193,975 and 180,882 shares at June 30, 2018 and December 31, 2017 | (934 | ) | (916 | ) | |||
| Additional paid-in capital | 14,331 | 13,811 | |||||
| Accumulated other comprehensive income | (90 | ) | 401 | ||||
| Accumulated Deficit; including accumulated statutory reserves in equity method investments of $2,809 at June 30, 2018 and December 31, 2017 | (8,304 | ) | (3,222 | ) | |||
| Total stockholders’ equity | 5,012 | 10,083 | |||||
| Total liabilities, convertible preferred stock and stockholders’ equity | $ | 32,003 | $ | 35,921 | |||
| American Electric Technologies, Inc. and Subsidiaries | |||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||
| Unaudited | |||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net sales | $ | 2,075 | $ | 1,331 | $ | 3,951 | $ | 2,546 | |||||||
| Cost of sales | 1,566 | 972 | 3,114 | 2,042 | |||||||||||
| Gross margin | 509 | 359 | 837 | 504 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | - | - | - | - | |||||||||||
| Selling and marketing | 98 | 127 | 190 | 264 | |||||||||||
| General and administrative | 469 | 499 | 936 | 1,016 | |||||||||||
| Total operating expenses | 567 | 626 | 1,126 | 1,280 | |||||||||||
| Loss from continuing operations | (58 | ) | (267 | ) | (289 | ) | (776 | ) | |||||||
| Net equity income from foreign joint ventures’ operations: | |||||||||||||||
| Equity income from foreign joint ventures’ operations | 284 | 134 | 455 | 186 | |||||||||||
| Foreign joint ventures’ operations related expenses | (50 | ) | (64 | ) | (110 | ) | (128 | ) | |||||||
| Net equity income from foreign joint ventures’ operations | 234 | 70 | 345 | 58 | |||||||||||
| Income (loss) from continuing operations and net equity income from foreign joint ventures’ operations | 176 | (197 | ) | 56 | (718 | ) | |||||||||
| Other income (expense): | |||||||||||||||
| Interest expense and other, net | (6 | ) | (8 | ) | 68 | 40 | |||||||||
| Income (loss) from continuing operations before income taxes | 170 | (205 | ) | 124 | (678 | ) | |||||||||
| Provision for (benefit from) income taxes on continuing operations | 129 | (90 | ) | 189 | (73 | ) | |||||||||
| Net income (loss) from continuing operations | 41 | (115 | ) | (65 | ) | (605 | ) | ||||||||
| Loss from discontinued operations | (1,979 | ) | (944 | ) | (4,838 | ) | (2,949 | ) | |||||||
| Provision for (benefit from) income taxes on discontinued operations | - | - | - | - | |||||||||||
| Net loss from discontinued operations | (1,979 | ) | (944 | ) | (4,838 | ) | (2,949 | ) | |||||||
| Net loss before dividends on redeemable convertible preferred stock | (1,938 | ) | (1,059 | ) | (4,903 | ) | (3,554 | ) | |||||||
| Dividends on redeemable convertible preferred stock | (90 | ) | (89 | ) | (179 | ) | (178 | ) | |||||||
| Net loss attributable to common stockholders | $ | (2,028 | ) | $ | (1,148 | ) | $ | (5,082 | ) | $ | (3,732 | ) | |||
| Loss per common share - basic: | |||||||||||||||
| Continuing operations | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.09 | ) | |||
| Discontinued operations | $ | (0.22 | ) | $ | (0.11 | ) | $ | (0.55 | ) | $ | (0.35 | ) | |||
| Consolidated operations | $ | (0.23 | ) | $ | (0.13 | ) | $ | (0.58 | ) | $ | (0.44 | ) | |||
| Loss per common share - diluted: | |||||||||||||||
| Continuing operations | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.09 | ) | |||
| Discontinued operations | $ | (0.22 | ) | $ | (0.11 | ) | $ | (0.55 | ) | $ | (0.35 | ) | |||
| Consolidated operations | $ | (0.23 | ) | $ | (0.13 | ) | $ | (0.58 | ) | $ | (0.44 | ) | |||
| American Electric Technologies, Inc. and Subsidiaries | |||||||||||||||
| Non-GAAP Financial Measures and Reconciliations | |||||||||||||||
| Computation of Earnings on Continuing Operations , Including Net Equity Income from Foreign Joint Ventures, Before Interest, | |||||||||||||||
| Dividends, Taxes, Depreciation and Amortization ("EBITDA") | |||||||||||||||
| Unaudited | |||||||||||||||
| (in thousands) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net loss on continuing operations attributable to common stockholders | $ | (49 | ) | $ | (203 | ) | $ | (244 | ) | $ | (783 | ) | |||
| Add: Depreciation and amortization | 11 | 27 | 24 | 55 | |||||||||||
| Interest expense | 4 | 5 | 11 | 6 | |||||||||||
| Provision for (benefit from) income taxes | 129 | (90 | ) | 189 | (73 | ) | |||||||||
| Dividend on redeemable preferred stock | 89 | 89 | 179 | 178 | |||||||||||
| EBITDA | $ | 184 | $ | (172 | ) | $ | 159 | $ | (617 | ) | |||||
