AETI Announces Q2 2016 Results
August 15 2016 - 7:00AM
American Electric Technologies, Inc. (NASDAQ:AETI), a leading
supplier of power delivery solutions for the global energy
industry, today announced its second quarter 2016 financial
results.
The Company reported net income attributable to
common shareholders in the second quarter of $0.1 million, up from
the $3.0 million loss from the first quarter of 2016, but down from
the $0.5 million net income reported in the second quarter of 2015.
Second quarter revenues were $11.4 million, up from $8.3 million in
the first quarter of 2016 but down from $12.3 million in the second
quarter of 2015.
Gross margins in the quarter were $1.2 million,
up from $0.1 million in the first quarter of 2016, but were down
from the $2.0 million reported in the second quarter of 2015 due to
competitive pricing pressure and slightly reduced overall lower
revenue levels.
The Company’s international joint ventures
reported a net equity income of $0.2 million for the quarter,
including $0.3 million of equity income from BOMAY in China.
The Company’s reported pre-tax income was
positively impacted by a gain of $0.1 million from the sale of the
fixed assets in Bay St. Louis, Mississippi and $0.3 million from
the settlement of a claim associated with the BP Gulf of Mexico oil
spill.
The Company reported fully diluted income from
operations per share of $0.01 for the quarter, up from a fully
diluted loss of $0.36 per share in the first quarter of 2016 but
down from fully diluted earnings of $0.06 per share reported in the
second quarter of 2015.
The Company reported EBITDA, a non-U.S. GAAP
measure, from operations of $0.5 million for the quarter, up from
$2.7 million EBITDA loss in the first quarter of 2016 but down from
$0.7 million EBITDA in the second quarter of 2015. A reconciliation
of this non-U.S. GAAP measure to our net income is set forth in the
selected financial information below.
The Company reported a decrease in quarter
ending backlog to $11.6 million, down from $19.6 million at the end
of the first quarter of 2016.
“The industry environment in which we operate
remains very challenging,” said Charles Dauber, president and chief
executive officer, AETI. “We continue to take those actions which
we believe are necessary to manage the company during this
period.”
Conference CallAETI will conduct a conference
call at 10 a.m. EDT on August 15, 2016 to discuss the results with
analysts, investors and other interested parties. Individuals who
wish to participate in the conference call should dial 877-612-6725
passcode 868694, in the United States and Canada.
International callers should dial +1 913-312-0945 passcode
868694.
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; Rio
de Janeiro and Macaé, Brazil. In addition, AETI has minority
interests in a joint venture which has facilities located in Xian,
China. 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, 2016. 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 Statements of
Operations |
Unaudited |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
Net sales |
$ |
11,444 |
|
|
$ |
12,302 |
|
|
$ |
19,742 |
|
|
$ |
27,613 |
|
Cost of sales |
|
10,218 |
|
|
|
10,258 |
|
|
|
18,425 |
|
|
|
23,286 |
|
Gross profit |
|
1,226 |
|
|
|
2,044 |
|
|
|
1,317 |
|
|
|
4,327 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research and
development |
|
196 |
|
|
|
90 |
|
|
|
719 |
|
|
|
228 |
|
Selling and
marketing |
|
417 |
|
|
|
493 |
|
|
|
1,293 |
|
|
|
1,096 |
|
General and
administrative |
|
981 |
|
|
|
1,256 |
|
|
|
2,327 |
|
|
|
2,523 |
|
Total operating
expenses |
|
1,594 |
|
|
|
1,839 |
|
|
|
4,339 |
|
|
|
3,847 |
|
Income (loss) from
operations |
|
(368 |
) |
|
|
205 |
|
|
|
(3,022 |
) |
|
|
480 |
|
Net equity income
(loss) from foreign joint ventures’ operations: |
|
|
|
|
|
|
|
Equity income (loss)
from foreign joint ventures’ operations |
|
347 |
|
|
|
284 |
|
|
|
152 |
|
|
|
400 |
|
Foreign joint ventures’
operations related expenses |
|
(98 |
) |
|
|
(109 |
) |
|
|
(149 |
) |
|
|
(207 |
) |
Net equity income
(loss) from foreign joint ventures’ operations |
|
249 |
|
|
|
175 |
|
|
|
3 |
|
|
|
193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations and net equity income from foreign joint ventures’
operations |
|
(119 |
) |
|
|
380 |
|
|
|
(3,019 |
) |
|
|
673 |
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest expense and
other, net |
|
317 |
|
|
|
(45 |
) |
|
|
278 |
|
|
|
(64 |
) |
Foreign transaction
gain |
|
- |
|
|
|
134 |
|
|
|
- |
|
|
|
134 |
|
Income (loss) before
income taxes |
|
198 |
|
|
|
469 |
|
|
|
(2,741 |
) |
|
|
743 |
|
Provision for (benefit
from) income taxes |
|
47 |
|
|
|
(78 |
) |
|
|
(9 |
) |
|
|
(78 |
) |
Net income (loss)
before dividends on redeemable convertible preferred stock |
|
151 |
|
|
|
547 |
|
|
|
(2,732 |
) |
|
|
821 |
|
Dividends on redeemable
convertible preferred stock |
|
(88 |
) |
|
|
(87 |
) |
|
|
(176 |
) |
|
|
(174 |
) |
Net income (loss)
attributable to common stockholders |
$ |
63 |
|
|
$ |
460 |
|
|
$ |
(2,908 |
) |
|
$ |
647 |
|
Earnings (loss) per
common share: |
|
|
|
|
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
0.06 |
|
|
$ |
(0.35 |
) |
|
$ |
0.08 |
|
Diluted |
$ |
0.01 |
|
|
$ |
0.06 |
|
|
$ |
(0.35 |
) |
|
$ |
0.08 |
|
Weighted
- average number of common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
8,292,751 |
|
|
|
8,250,833 |
|
|
|
8,277,897 |
|
|
|
8,235,901 |
|
Diluted |
|
8,292,751 |
|
|
|
8,293,947 |
|
|
|
8,277,897 |
|
|
|
8,279,015 |
|
|
|
|
|
|
|
|
|
American Electric Technologies, Inc. and
Subsidiaries |
|
Condensed Consolidated Balance
Sheets |
|
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
June 30, 2016 |
|
December 31, |
|
|
(unaudited) |
|
|
2015 |
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
3,961 |
|
|
$ |
7,989 |
|
|
Restricted short-term
investments |
|
507 |
|
|
|
507 |
|
|
Accounts receivable-trade, net of
allowance of $257 and $225 at June 30, 2016 and
December 31, 2015 |
|
7,444 |
|
|
|
6,853 |
|
|
Inventories, net of allowance of
$73 and $60 at June 30, 2016 and December 31, 2015 |
|
1,093 |
|
|
|
1,325 |
|
|
Cost and estimated earnings in
excess of billings on uncompleted contracts |
|
5,374 |
|
|
|
2,302 |
|
|
Prepaid expenses and other current
assets |
|
298 |
|
|
|
324 |
|
|
Total current assets |
|
18,677 |
|
|
|
19,300 |
|
|
Property, plant and
equipment, net |
|
7,591 |
|
|
|
7,915 |
|
|
Advances to and
investments in foreign joint ventures |
|
10,650 |
|
|
|
11,104 |
|
|
Intangibles |
|
409 |
|
|
|
218 |
|
|
Other assets |
|
64 |
|
|
|
49 |
|
|
Total assets |
$ |
37,391 |
|
|
$ |
38,586 |
|
|
Liabilities, Convertible Preferred Stock and Stockholders’
Equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Revolving line of credit |
$ |
900 |
|
|
$ |
1,043 |
|
|
Current portion of long-term note
payable |
|
300 |
|
|
|
300 |
|
|
Accounts payable and other accrued
expenses |
|
7,463 |
|
|
|
4,031 |
|
|
Accrued payroll and benefits |
|
631 |
|
|
|
476 |
|
|
Billings in excess of costs and
estimated earnings on uncompleted contracts |
|
906 |
|
|
|
1,629 |
|
|
Total current liabilities |
|
10,200 |
|
|
|
8,355 |
|
|
Long-term note
payable |
|
4,050 |
|
|
|
4,200 |
|
|
Deferred
compensation |
|
283 |
|
|
|
305 |
|
|
Deferred income
taxes |
|
2,901 |
|
|
|
3,064 |
|
|
Total liabilities |
|
17,434 |
|
|
|
15,924 |
|
|
Convertible preferred
stock: |
|
|
|
|
Redeemable convertible preferred
stock, Series A, net of discount of $645 at June 30, 2016 and
$671 at December 31, 2015; $0.001 par value, 1,000,000 shares
authorized, issued and outstanding at June 30, 2016 and
December 31, 2015 |
|
4,355 |
|
|
|
4,329 |
|
|
Stockholders’
equity: |
|
|
|
|
Common stock; $0.001 par value,
50,000,000 shares authorized, 8,438,630 and 8,385,929 shares issued
and 8,292,753 and 8,254,001 shares outstanding at June 30,
2016 and December 31, 2015 |
|
8 |
|
|
|
8 |
|
|
Treasury stock, at cost 145,877
shares at June 30, 2016 and 131,928 shares at
December 31, 2015 |
|
(827 |
) |
|
|
(792 |
) |
|
Additional paid-in capital |
|
12,309 |
|
|
|
12,032 |
|
|
Accumulated other comprehensive
income |
|
245 |
|
|
|
310 |
|
|
Retained earnings; including
accumulated statutory reserves in equity method investments of
$2722 at June 30, 2016 and December 31, 2015 |
|
3,867 |
|
|
|
6,775 |
|
|
Total stockholders’ equity |
|
15,602 |
|
|
|
18,333 |
|
|
Total liabilities, convertible
preferred stock and stockholders’ equity |
$ |
37,391 |
|
|
$ |
38,586 |
|
|
|
|
|
|
|
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, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Net income
(loss) attributable to common stockholders |
$ |
63 |
|
|
$ |
460 |
|
|
$ |
(2,908 |
) |
|
$ |
647 |
|
Add: Depreciation and
amortization |
|
223 |
|
|
|
222 |
|
|
|
444 |
|
|
|
459 |
|
Interest expense |
|
64 |
|
|
|
45 |
|
|
|
103 |
|
|
|
64 |
|
Provision for (benefit from) income
taxes |
|
47 |
|
|
|
(78 |
) |
|
|
(9 |
) |
|
|
(78 |
) |
Dividend on redeemable preferred
stock |
|
88 |
|
|
|
87 |
|
|
|
176 |
|
|
|
174 |
|
EBITDA |
$ |
485 |
|
|
$ |
736 |
|
|
$ |
(2,194 |
) |
|
$ |
1,266 |
|
|
|
|
|
|
|
|
|
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 2015 10-K which was
filed on March 30, 2016. |
|
|
|
|
|
|
|
|
Investor Contact:
American Electric Technologies, Inc.
Bill Brod
713-644-8182
investorrelations@aeti.com
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