American International Industries, Inc.
(OTCBB:AMIN) (the "Company" or "American") reported net income of
$1,513,018, or $0.15 per share, for the three months ended June 30,
2010, compared to a net loss of $852,248, or $0.10 per share, for
the same period in 2009. We had net income of $408,609, or $0.04
per share, for the six months ended June 30, 2010, compared to a
net loss of $1,045,387, or $0.12 per share, for the same period in
2009. We had net income from continuing operations of $1,513,018,
or $0.15 per share, for the three months ended June 30, 2010,
compared to a net loss of $502,248, or $0.06 per share, for the
same period in 2009. We had net income from continuing
operations of $408,609, or $0.04 per share, for the six months
ended June 30, 2010, compared to a net loss of $695,387, or $0.08
per share, for the same period in 2009. Our net loss for the
three and six months ended June 30, 2009 included a net loss from
discontinued operations of $350,000, or $0.04 per share.
For the three months ended June 30, 2010, revenues were
$6,424,554, compared to $6,232,115 for the three months ended June
30, 2009, representing an increase of $192,439, or
3.1%. Revenues were $11,421,067 for the six months ended June
30, 2010, compared to $12,427,129 for the six months ended June 30,
2008, representing a decrease of $1,006,062, or 8.1%.
During the three months ended June 30, 2010, Delta Seaboard
International, Inc. ("Delta"), in which we hold a 48.1% shareholder
interest, had revenues of $2,045,082, compared to $2,331,214 during
the three-month period ended June 30, 2009, representing a decrease
of $286,132, or 12.3%. During the six months ended June 30, 2010,
Delta had revenues of $4,283,740, compared to $4,795,125 during the
six-month period ended June 30, 2009, representing a decrease of
$511,385, or 10.7%. The decrease in revenues is mainly due to a
decrease in rig service revenues for the three and six months ended
June 30, 2010, compared to the same periods in the prior year, of
$815,544 and $1,016,049, respectively. Rig service revenues have
decreased due to major maintenance on two rigs during 2010. One of
the two rigs is back in service and maintenance on the second rig
is near completion. The decrease in rig service revenues was
partially offset by an increase in pipe sales for the three and six
months ended June 30, 2010, compared to the same period in the
prior year, of $529,412 and $504,664, respectively. Pipe sales have
increased due to increased drilling activity in the oil and gas
industry.
Revenues for Shumate Energy Technologies ("SET"), our
wholly-owned subsidiary, for the three months ended June 30, 2010
were $1,367,052, compared to $1,907,496 for the same period in
2009, representing a decrease of $540,444, or 28.3%. For the
six months ended June 30, 2010, SET's revenues were $2,573,408,
compared to $3,994,317 for the six months ended June 30, 2009,
representing a decrease of $1,420,909, or 35.6%. SET revenues
have decreased due to a decline in drilling activity.
Revenues for Northeastern Plastics, Inc. ("NPI"), our
wholly-owned subsidiary, during the three months ended June 30,
2010 were $2,713,513, compared to $1,993,405 for the three months
ended June 30, 2009, representing an increase of $720,108, or
36.1%. NPI's revenues were $4,202,070 for the six months ended
June 30, 2010, compared to $3,637,687 for the six months ended June
30, 2009, representing an increase of $564,383, or
15.5%. NPI's revenues increased due to the addition of several
new accounts and increased orders for existing accounts.
In 2010, the Company formed a new subsidiary, Downhole
Completion Products, Inc. ("DCP"). The results of DCP for the
three and six months ended June 30, 2010 are included in our
results of operations. For the three and six months ended June 30,
2010, DCP's revenues were $298,907 and $361,849, respectively.
Cost of sales for the three months ended June 30, 2010 was
$4,616,897, compared to $4,004,522 for the three months ended June
30, 2009, representing an increase of $612,375, or 15.3%. Cost
of sales for the six months ended June 30, 2010 was $8,177,068,
compared to $7,998,524 for the six months ended June 30, 2009,
representing an increase of $178,544, or 2.2%. Margins for the
three months ended June 30, 2010 were 28%, compared to 35% for the
three months ended June 30, 2009. Margins for the six months
ended June 30, 2010 were 28%, compared to 36% for the six months
ended June 30, 2009. The primary reason for the decline in
margins is due to the change in the mix of the revenues during the
period. NPI's margins are lower than those of our oil and gas
related businesses. NPI's revenues during the three and six
months ended June 30, 2010 were 42% and 37%, respectively, of total
revenues compared to 32% and 29% for the three and six months ended
June 30, 2009, respectively. Additionally, Delta experienced a
decline in margins during the three months ended March 31, 2010
compared to the same period in the prior year due to the sale of
high-priced pipe from inventory. Margins on pipe sales were 2% for
the three months ended March 31, 2010, compared to 25% during the
same period in the prior year due to a decline in drilling
activity. Drilling activity has been increasing since the
first quarter and we look forward to experiencing higher margins on
pipe sales for the remainder of the year.
Selling, general and administrative expense for the three months
ended June 30, 2010 was $2,451,615, compared to $2,746,616 for the
three months ended June 30, 2009, representing a decrease of
$295,001, or 10.7%. Selling, general and administrative
expense for the six months ended June 30, 2010 was $5,875,994,
compared to $5,399,702 for the six months ended June 30, 2009,
representing an increase of $476,292, or 8.8%. The increase in
selling, general and administrative expenses is due primarily to
non-cash stock-based compensation of $1,037,610, of which $847,750
was to the executive officers of Delta in consideration for
extending their employment agreements. Stock-based
compensation for the six months ended June 30, 2010 was $1,037,610,
compared to $41,250 for the six months ended June 30, 2009,
representing an increase of $996,360. This increase was
partially offset by lower selling, general and administrative
expense associated with the decline in rig service revenues at
Delta.
Other income was $2,126,329 for the three months ended June 30,
2010, compared to other expense of $113,564 for the three months
ended June 30, 2009, representing an improvement of $2,239,893 from
the prior period. Other income was $2,682,835 for the six
months ended June 30, 2010, compared to $8,286 for the six months
ended June 30, 2009, representing an improvement of $2,674,549 from
the prior period. Other income for the three and six months
ended June 30, 2010 includes compensation for consulting services
of $1,370,000. The Company received 1,000,000 shares of ADB
International Group, Inc. common stock valued at $1.37 per share
for these consulting services. Other income for the three and
six months ended June 30, 2010 included gains on the sale of assets
of $781,204. During the three months ended June 30, 2010,
American sold an 8 acre tract of land valued at $175,480 for
$340,445 and recognized a $164,965 gain for this transaction.
During the three months ended June 30, 2010, American sold its 51%
ownership in Delta's facilities valued at $422,737 and the
purchaser assumed a $943,500 note payable on the
property. American recognized a $520,763 gain for this
transaction. Additionally, other income for the six months ended
June 30, 2010 included the receipt of $700,000 by Delta as a cash
settlement for its claims in an insurance lawsuit.
For more detailed information, please refer to our June 30, 2010
Form 10-Q filing with the SEC, which was filed on August 16,
2010.
American International Industries, Inc. is a diversified holding
company, with a business model similar to General Electric, Tyco
International, and Berkshire Hathaway. The Company has
holdings in Industry, Finance, and Real Estate in Houston Texas and
surrounding areas, and Oil & Gas. The vision of the
Company is to develop holdings in various industries through
acquisition of existing companies, applying the financial resources
and management expertise to foster the growth and profitability of
the acquired businesses. The holding company serves as a
financial and professional partner to the management of the
subsidiaries. The role of the holding company is to improve
each subsidiary's access to capital, achieve economies of scale by
consolidating administrative functions, and utilize the financial
and management expertise of corporate personnel across all
units. The Company is continuing to work with management of
the subsidiary companies to improve revenues, operations and
profitability.
Forward-looking Statement:
This press release may contain forward-looking statements,
including information about management's view of the Company's
future expectations, plans and prospects, within the safe harbor
provisions under The Private Securities Litigation Reform Act of
1995 (the "Act"). In particular, when used in the preceding
discussion, the words "believes," "expects," "intends," "plans,"
"anticipates," or "may," and similar conditional expressions are
intended to identify forward-looking statements within the meaning
of the Act, and are subject to the safe harbor created by the Act.
Any statements made in this news release other than those of
historical fact, about an action, event or development, are
forward-looking statements. Factors that could cause actual results
to differ materially from those that we may anticipate in each of
our segments reflected by our subsidiaries' operations include,
among others:, continued value of our real estate portfolio; the
strength of the real estate market in Houston, Texas as a whole;
the ability to expand its interests in the energy sector; increased
levels of competition; the dependence upon financing, the
rules of regulatory authorities and risks associated with any
potential acquisitions. These statements involve known and unknown
risks, uncertainties and other factors, which may cause the results
of the Company, its divisions and concepts to be materially
different than those expressed or implied in such statements. These
risk factors and others are included from time to time in documents
the Company files with the Securities and Exchange Commission,
including but not limited to, its Form 10-Ks, Form 10-Qs and Form
8-Ks. Other unknown or unpredictable factors also could have
material adverse effects on the Company's future results. The
forward-looking statements included in this press release are made
only as of the date hereof. The Company cannot guarantee future
results, levels of activity, performance or achievements.
Accordingly, you should not place undue reliance on these
forward-looking statements. Finally, the Company undertakes no
obligation to update these statements after the date of this
release, except as required by law, and also takes no obligation to
update or correct information prepared by third parties that are
not paid for by the Company.
CONTACT: American International Industries, Inc.
Investor Relations:
Rebekah Ruthstrom
281-334-9479
amin@americanii.com
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