AETI Announces 61% quarterly revenue growth
08 August 2017 - 9:00PM
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 StatementsThis 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. |
|
Investor Contact:
American Electric Technologies, Inc.
Bill Brod
713-644-8182
investorrelations@aeti.com
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