- 52% year over year quarterly revenue growth driven by 236% increase in oil & gas revenues
- $1.7M year over year quarterly EBITDA improvement
HOUSTON, Nov. 14, 2017 (GLOBE NEWSWIRE) -- American Electric Technologies, Inc. (NASDAQ:AETI), a leading supplier of power delivery solutions for the global energy industry, today announced its third quarter 2017 financial results.
AETI announced revenue for the quarter of $13.3 million, up 52% from the $8.7 million reported in the third quarter of 2016 and up 2% compared with the second quarter of 2017.
During the quarter, the Company's business operations in Houston and Beaumont Texas were adversely impacted by Hurricane Harvey. Although the company’s facilities did not sustain any damage, operations were temporarily idled, delaying the schedules of customer projects resulting in a $2.5 million negative revenue impact.
The company’s revenue increase even in the face of the Harvey impact in the quarter was driven by strong growth in the oil & gas sector, which saw an increase of 236% versus the third quarter of 2016 and 16% growth from the second quarter of 2017. The majority of the oil & gas sector growth came from previously reported backlog in the company’s Technical Products operations, but the company also saw an increase in its US services business as the services groups assisted Gulf Coast customers with Hurricane Harvey recovery efforts.
Gross margin for the company continues to improve, and in the quarter were $1.1 million, up $1.5 million from the third quarter of 2016 and up 32% versus the second quarter of 2017.
EBITDA (a non-U.S. GAAP measure) improved by $1.7 million to a loss of $0.6 million for the quarter, up from a loss of $2.3 million in the third quarter of 2016 and up $0.1 million from the $0.7 million loss reported in the second quarter of 2017. Net income in the quarter was a loss of $1.1 million, up from $2.7 million loss in the third quarter of 2016 and flat versus the second quarter of 2017. The company noted that reduced profit from lost sales associated with Hurricane Harvey and unabsorbed fixed costs impacted net income and EBITDA in the quarter by $0.6 million.
The company reported quarter ending backlog of $23.5 million, up 3% from the $22.7 reported at the end of the second quarter of 2017.
“Hurricane Harvey significantly impacted our Houston and Beaumont communities, our employees, suppliers and our customers but I am proud of the resiliency shown during this challenging time,” said Charles Dauber, AETI President and CEO. “Our team continues to execute our strategy of successfully delivering the highest quality turnkey power delivery solutions for the global energy industry enabling us to achieve top and bottom line growth.”
The company maintains business interruption insurance and has filed a business interruption claim. It is anticipated that any proceeds resulting from this business interruption claim would be recorded no earlier than the fourth quarter of 2017.
Conference Call
AETI will conduct a conference call at 10 a.m. EST on November 14, 2017 to discuss the results with analysts, investors and other interested parties. Individuals who wish to participate in the conference call should dial 888-378-4398 passcode 843209, in the United States and Canada. International callers should dial +1 323-701-0223 passcode 843209.
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) | |||||||
| September 30, | December 31, | ||||||
| 2017 | 2016 | ||||||
| Assets | (unaudited) | ||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 1,098 | $ | 1,618 | |||
| Restricted short-term investments | 50 | 507 | |||||
| Accounts receivable-trade, net of allowance of $89 and $204 at September 30, 2017 and December 31, 2016 | 7,822 | 6,717 | |||||
| Inventories, net of allowance of $134 and $60 at September 30, 2017 and December 31, 2016 | 1,169 | 1,181 | |||||
| Cost and estimated earnings in excess of billings on uncompleted contracts | 7,477 | 5,829 | |||||
| Prepaid expenses and other current assets | 233 | 349 | |||||
| Total current assets | 17,849 | 16,201 | |||||
| Property, plant and equipment, net | 6,936 | 7,298 | |||||
| Advances to and investments in foreign joint ventures | 10,546 | 10,663 | |||||
| Retainage receivable | 772 | 649 | |||||
| Intangibles | 476 | 527 | |||||
| Other assets | 107 | 46 | |||||
| Total assets | $ | 36,686 | $ | 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 | 238 | - | |||||
| Accounts payable and other accrued expenses | 11,528 | 9,798 | |||||
| Accrued payroll and benefits | 1,188 | 1,093 | |||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 3,003 | 208 | |||||
| Total current liabilities | 15,957 | 12,899 | |||||
| Long-term note payable, net | 6,132 | 3,900 | |||||
| Deferred compensation | 225 | 260 | |||||
| Deferred income taxes | 2,805 | 2,824 | |||||
| Total liabilities | 25,119 | 19,883 | |||||
| Convertible preferred stock: | |||||||
| Redeemable convertible preferred stock, Series A, net of discount of $576 at September 30, 2017 and $617 at December 31, 2016; $0.001 par value, 1,000,000 shares authorized, issued and outstanding at September 30, 2017 and December 31, 2016 | 4,424 | 4,383 | |||||
| Stockholders’ equity: | |||||||
| Common stock; $0.001 par value, 50,000,000 shares authorized, 8,799,948 and 8,499,508 shares issued and 8,619,066 and 8,335,968 shares outstanding at September 30, 2017 and December 31, 2016 | 9 | 8 | |||||
| Treasury stock, at cost 180,882 and 163,540 shares at September 30, 2017 and December 31, 2016 | (916 | ) | (863 | ) | |||
| Additional paid-in capital | 13,277 | 12,613 | |||||
| Accumulated other comprehensive income | 272 | (2 | ) | ||||
| Retained Deficit; including accumulated statutory reserves in equity method investments of $2,887 at September 30, 2017 and December 31, 2016 | (5,499 | ) | (638 | ) | |||
| Total stockholders’ equity | 7,143 | 11,118 | |||||
| Total liabilities, convertible preferred stock and stockholders’ equity | $ | 36,686 | $ | 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 September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Net sales | $ | 13,268 | $ | 8,673 | $ | 34,258 | $ | 28,415 | |||||||
| Cost of sales | 12,192 | 9,124 | 32,922 | 27,549 | |||||||||||
| Gross margin | 1,076 | (451 | ) | 1,336 | 866 | ||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 55 | 145 | 237 | 864 | |||||||||||
| Selling and marketing | 646 | 466 | 1,952 | 1,759 | |||||||||||
| General and administrative | 1,125 | 1,587 | 3,116 | 3,914 | |||||||||||
| Total operating expenses | 1,826 | 2,198 | 5,305 | 6,537 | |||||||||||
| Loss from operations | (750 | ) | (2,649 | ) | (3,969 | ) | (5,671 | ) | |||||||
| Net equity income from foreign joint ventures’ operations: | |||||||||||||||
| Equity income from foreign joint ventures’ operations | 98 | 215 | 284 | 367 | |||||||||||
| Foreign joint ventures’ operations related expenses | (67 | ) | (53 | ) | (195 | ) | (202 | ) | |||||||
| Net equity income from foreign joint ventures’ operations | 31 | 162 | 89 | 165 | |||||||||||
| Loss from operations and net equity income from foreign joint ventures’ operations | (719 | ) | (2,487 | ) | (3,880 | ) | (5,506 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Interest expense and other, net | (332 | ) | (78 | ) | (797 | ) | 200 | ||||||||
| Income (loss) before income taxes | (1,051 | ) | (2,565 | ) | (4,677 | ) | (5,306 | ) | |||||||
| Provision for (benefit from) income taxes | (11 | ) | 59 | (83 | ) | 50 | |||||||||
| Net loss before dividends on redeemable convertible preferred stock | (1,040 | ) | (2,624 | ) | (4,594 | ) | (5,356 | ) | |||||||
| Dividends on redeemable convertible preferred stock | (89 | ) | (89 | ) | (267 | ) | (265 | ) | |||||||
| Net loss attributable to common stockholders | $ | (1,129 | ) | $ | (2,713 | ) | $ | (4,861 | ) | $ | (5,621 | ) | |||
| Earnings (loss) per common share: | |||||||||||||||
| Basic | $ | (0.13 | ) | $ | (0.33 | ) | $ | (0.57 | ) | $ | (0.68 | ) | |||
| Diluted | $ | (0.13 | ) | $ | (0.33 | ) | $ | (0.57 | ) | $ | (0.68 | ) | |||
| Weighted - average number of common shares outstanding: | |||||||||||||||
| Basic | 8,598,461 | 8,327,009 | 8,478,848 | 8,294,268 | |||||||||||
| Diluted | 8,598,461 | 8,327,009 | 8,478,848 | 8,294,268 | |||||||||||
| 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 | $ | (1,129 | ) | $ | (2,713 | ) | $ | (4,861 | ) | $ | (5,621 | ) | |||||||
| Add: Depreciation and amortization | 204 | 216 | 640 | 660 | |||||||||||||||
| Interest expense | 282 | 70 | 620 | 173 | |||||||||||||||
| Provision for (benefit from) income taxes | (11 | ) | 59 | (83 | ) | 50 | |||||||||||||
| Dividend on redeemable preferred stock | 89 | 89 | 267 | 265 | |||||||||||||||
| EBITDA | $ | (565 | ) | $ | (2,279 | ) | $ | (3,417 | ) | $ | (4,473 | ) | |||||||
| 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. | |||||||||||||||||||