- Growth driven by 169% increase in oil & gas sector revenues
HOUSTON, Aug. 08, 2017 (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 2017 financial results.
AETI announced revenue for the quarter of $13.0 million, up 61% from the $8.0 million reported in the first quarter of 2017 and up 13% compared with the second quarter of 2016.
This quarterly revenue increase was primarily driven by growth in the oil & gas sector which saw revenue growth of 169% to $10.5 million. The majority of the oil & gas sector growth came from previously reported backlog in our Technical Products operations, but the Company also saw recovery in its M&I Electric Brazil operation in the quarter as well.
Gross margin for the quarter was up $1.4 million from the first quarter of 2017 but down $410k from the second quarter of 2016 due primarily to market pricing pressures in the US oil and gas markets.
The Company reported quarter ending backlog of $22.7 million, down $3.9 million from the $26.6 million reported at the end of the first quarter of 2017. The Company’s quarter ending backlog did not include the previously announced $4M West Texas pipeline project award received during the first week of July.
Based on the increased revenue and gross margins, the Company saw a $1.5 million improvement in quarterly operating results versus the first quarter of 2017.
EBITDA (a non-U.S. GAAP measure) improved to a loss of $0.7 million, from a loss of $2.1 million in the first quarter of 2017, but down versus a gain of $0.5 million in the second quarter of 2016, while net loss attributable to common shareholders in the quarter was $1.1 million, compared with a loss of $2.6 million in the first quarter of 2017 and net income of $0.1 million in the second quarter of 2016. The second quarter of 2016 EBITDA and net income included $0.4 million of one-time gains from the settlement of a claim and the gain from the sale of assets related to the disposition of the company’s South Coast facility which closed in the second quarter of 2016.
“We were pleased with the growth in revenue and bottom line improvements resulting from our strong backlog growth in the first quarter and our services operations in the US and Brazilian markets,” said Charles Dauber, AETI president and chief executive officer. “Although our markets continue to be very challenging and liquidity remains tight, the company is doing a good job of booking business and executing projects as we head in the second half of 2017.”
Conference Call
AETI will conduct a conference call at 11 a.m. EDT on August 8, 2017 to discuss the results with analysts, investors and other interested parties. Individuals who wish to participate in the conference call should dial 888-632-3384 passcode 817746, in the United States and Canada. International callers should dial +1 785-424-1675 passcode 817746.
American Electric Technologies, Inc. (NASDAQ:AETI) is a leading provider of power delivery solutions to the global energy industry. AETI offers M&I Electric™ power distribution and control products, electrical services, and construction services.
AETI is headquartered in Houston and has global sales, support and manufacturing operations in Beaumont, Texas and Houma, Louisiana; and Rio de Janeiro, Macaé and Belo Horizonte, Brazil. In addition, AETI has minority interests in two joint ventures, which have facilities located in Xian, China and Singapore. AETI's SEC filings, news and product/service information are available at www.aeti.com.
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 30, 2017. 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.
| American Electric Technologies, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands, except share and per share data) | ||||||||
| June 30, 2017 | December 31, | |||||||
| (unaudited) | 2016 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,242 | $ | 1,618 | ||||
| Restricted short-term investments | 507 | 507 | ||||||
| Accounts receivable-trade, net of allowance of $99 and $204 at June 30, 2017 and December 31, 2016 | 6,803 | 6,717 | ||||||
| Inventories, net of allowance of $134 and $60 at June 30, 2017 and December 31, 2016 | 1,106 | 1,181 | ||||||
| Cost and estimated earnings in excess of billings on uncompleted contracts | 6,701 | 5,829 | ||||||
| Prepaid expenses and other current assets | 275 | 349 | ||||||
| Total current assets | 18,634 | 16,201 | ||||||
| Property, plant and equipment, net | 7,016 | 7,298 | ||||||
| Advances to and investments in foreign joint ventures | 10,245 | 10,663 | ||||||
| Retainage receivable | 741 | 649 | ||||||
| Intangibles | 493 | 527 | ||||||
| Other assets | 85 | 46 | ||||||
| Total assets | $ | 37,214 | $ | 35,384 | ||||
| Liabilities, Convertible Preferred Stock and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Revolving line of credit | $ | - | $ | 1,500 | ||||
| Current portion of long-term note payable | - | 300 | ||||||
| Short-term note payable | 299 | - | ||||||
| Accounts payable and other accrued expenses | 10,060 | 9,798 | ||||||
| Accrued payroll and benefits | 1,039 | 1,093 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 4,387 | 208 | ||||||
| Total current liabilities | 15,785 | 12,899 | ||||||
| Long-term note payable, net | 6,104 | 3,900 | ||||||
| Deferred compensation | 237 | 260 | ||||||
| Deferred income taxes | 2,726 | 2,824 | ||||||
| Total liabilities | 24,852 | 19,883 | ||||||
| Convertible preferred stock: | ||||||||
| Redeemable convertible preferred stock, Series A, net of discount of $590 at June 30, 2017 and $617 at December 31, 2016; $0.001 par value, 1,000,000 shares authorized, issued and outstanding at June 30, 2017 and December 31, 2016 | 4,410 | 4,383 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock; $0.001 par value, 50,000,000 shares authorized, 8,710,677 and 8,499,508 shares issued and 8,529,795 and 8,335,968 shares outstanding at June 30, 2017 and December 31, 2016 | 9 | 8 | ||||||
| Treasury stock, at cost 180,882 and 163,540 shares at June 30, 2017 and December 31, 2016 | (893 | ) | (863 | ) | ||||
| Additional paid-in capital | 13,106 | 12,613 | ||||||
| Accumulated other comprehensive income | 100 | (2 | ) | |||||
| Retained Deficit; including accumulated statutory reserves in equity method investments of $2,887 at June 30, 2017 and December 31, 2016 | (4,370 | ) | (638 | ) | ||||
| Total stockholders’ equity | 7,952 | 11,118 | ||||||
| Total liabilities, convertible preferred stock and stockholders’ equity | $ | 37,214 | $ | 35,384 | ||||
| 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, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Net sales | $ | 12,960 | $ | 11,444 | $ | 20,990 | $ | 19,742 | |||||||
| Cost of sales | 12,144 | 10,218 | 20,730 | 18,425 | |||||||||||
| Gross margin | 816 | 1,226 | 260 | 1,317 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 78 | 196 | 182 | 719 | |||||||||||
| Selling and marketing | 695 | 417 | 1,306 | 1,293 | |||||||||||
| General and administrative | 897 | 981 | 1,991 | 2,327 | |||||||||||
| Total operating expenses | 1,670 | 1,594 | 3,479 | 4,339 | |||||||||||
| Loss from operations | (854 | ) | (368 | ) | (3,219 | ) | (3,022 | ) | |||||||
| Net equity income from foreign joint ventures’ operations: | |||||||||||||||
| Equity income from foreign joint ventures’ operations | 134 | 347 | 186 | 152 | |||||||||||
| Foreign joint ventures’ operations related expenses | (64 | ) | (98 | ) | (128 | ) | (149 | ) | |||||||
| Net equity income from foreign joint ventures’ operations | 70 | 249 | 58 | 3 | |||||||||||
| Loss from operations and net equity income from foreign joint ventures’ operations | (784 | ) | (119 | ) | (3,161 | ) | (3,019 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Interest expense and other, net | (365 | ) | 317 | (465 | ) | 278 | |||||||||
| Income (loss) before income taxes | (1,149 | ) | 198 | (3,626 | ) | (2,741 | ) | ||||||||
| Provision for (benefit from) income taxes | (90 | ) | 47 | (72 | ) | (9 | ) | ||||||||
| Net income (loss) before dividends on redeemable convertible preferred stock | (1,059 | ) | 151 | (3,554 | ) | (2,732 | ) | ||||||||
| Dividends on redeemable convertible preferred stock | (89 | ) | (88 | ) | (178 | ) | (176 | ) | |||||||
| Net income (loss) attributable to common stockholders | $ | (1,148 | ) | $ | 63 | $ | (3,732 | ) | $ | (2,908 | ) | ||||
| Earnings (loss) per common share: | |||||||||||||||
| Basic | $ | (0.13 | ) | $ | 0.01 | $ | (0.44 | ) | $ | (0.35 | ) | ||||
| Diluted | $ | (0.13 | ) | $ | 0.01 | $ | (0.44 | ) | $ | (0.35 | ) | ||||
| Weighted - average number of common shares outstanding: | |||||||||||||||
| Basic | 8,504,240 | 8,292,751 | 8,420,680 | 8,277,897 | |||||||||||
| Diluted | 8,504,240 | 8,292,751 | 8,420,680 | 8,277,897 | |||||||||||
| 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, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||
| Net income (loss) attributable to common stockholders | $ | (1,148 | ) | $ | 63 | $ | (3,732 | ) | $ | (2,908 | ) | |||
| Add: Depreciation and amortization | 218 | 223 | 436 | 444 | ||||||||||
| Interest expense | 238 | 64 | 338 | 103 | ||||||||||
| Provision for (benefit from) income taxes | (90 | ) | 47 | (72 | ) | (9 | ) | |||||||
| Dividend on redeemable preferred stock | 89 | 88 | 178 | 176 | ||||||||||
| EBITDA | $ | (693 | ) | $ | 485 | $ | (2,852 | ) | $ | (2,194 | ) | |||
| The Company is disclosing EBITDA, which is a non-GAAP measure, because it is used by management and provided to investors to provide comparability of underlying operational results. For more discussion of the use and limitations of EBITDA, see the 2016 10-K which was filed on March 30, 2017. | ||||||||||||||