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AETI Announces Improved Profits in the Second Quarter

20:00 EDT 12 Aug 2015 | Globe Newswire

HOUSTON, Aug. 13, 2015 (GLOBE NEWSWIRE) -- American Electric Technologies, Inc. (NASDAQ:AETI), a leading provider of power delivery solutions for the global energy industry, today announced its second quarter 2015 financial results.

The Company reported net income attributable to common shareholders of $0.5 million, up 146% from the $0.2 million reported in the first quarter and up from the $1.4 million loss in the 2nd quarter of 2014. The Q2 2014 results included the impairment of the Company's American Access Technologies business.

Fully diluted earnings per share were $0.06 for the quarter, up from $0.02 in Q1 of 2015 and up from a loss of ($0.17) in the second quarter of 2014.

"Although the oil & gas markets have been challenging so far this year, I'm pleased we were able to achieve higher gross margin percentages and profitability based on continued improvement in project execution and on our focus on higher margin, energy-related services," said Charles Dauber, AETI president and chief executive officer.

Gross margins increased to 17% during the quarter from 15% in both Q1 of this year and Q2 of 2014.

The Company reported consolidated revenue of $12.3 million in the quarter, down from $15.3 million in Q1 of this year and down from the $13.4 million in the second quarter of 2014.

Dauber continued, "Although revenues were lower in Q2 as a result of the slowdown in land and offshore oil drilling markets and reduced power generation business, as we look ahead to the second half of the year, we see business in our mid and down-stream oil & gas and power generation sectors picking up and have been booking orders in those sectors for end of the year deliveries."

M&I Electric Brazil, the Company's wholly owned subsidiary in Brazil, contributed $1.0 million of revenue and $0.26 million of profit in the quarter, its first profitable quarter after starting operations in Q3 of last year. The Company's international joint ventures reported net equity income after expenses, of $0.2 million for the quarter, up from breakeven performance in Q1 of this year, but down from the $0.9 million in the second quarter of 2014.

"Internationally, our wholly-owned subsidiary M&I Electric Brazil is growing and profitable in the quarter. We were pleased that our BOMAY joint venture in China continues to have a good year and are working with our Singapore Joint Venture Partner, Sonepar, to get the MIEFE joint venture back on track," added Dauber.

The Company reported EBITDA, a non-U.S. GAAP measure, from continuing operations of $0.7 million, up from $0.5 million in Q1 2015 but down from $1.2 million in Q2 2014.

The Company reported backlog of $16.5 million for the second quarter of 2015 which is down from the $20.3 million reported for the first quarter.

Conference Call

AETI will conduct a conference call at 10 a.m. EST on August 13 to discuss the results with analysts, investors and other interested parties. Individuals who wish to participate in the conference call should dial 866-952-1908 passcode 624731 in the United States and Canada. International callers should dial +1 785-424-1827 passcode 624731.

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; Bay St. Louis, Mississippi; and Macaé and Rio de Janeiro, 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, 2015. 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, percentages calculated on total sales)
         
  For the Three Months Ended June 30, For the Six Months Ended June 30,
  2015 2014 2015 2014
Net sales  $ 12,302  $ 13,430  $ 27,613  $ 29,278
Cost of sales  10,258  11,402  23,286  24,815
Gross profit  2,044  2,028  4,327  4,463
         
Operating expenses:        
Research and development  90  159  228  226
Selling and marketing  493  570  1,096  1,233
General and administrative  1,256  1,148  2,523  2,355
Total operating expenses  1,839  1,877  3,847  3,814
         
Income (loss) from consolidated continuing operations  205  151  480  649
         
Net equity income from foreign joint ventures' operations:        
BOMAY  265  960  456  1,508
MIEFE  19  112  (56)  74
AAG  --  38  --  2
Foreign joint ventures' operations related expenses  (109)  (178)  (207)  (290)
Net equity income from foreign joint ventures' operations  175  932  193  1,294
         
Income (loss) from consolidated continuing operations and net equity income from foreign joint ventures' operations  380  1,083  673  1,943
         
Other income (expense):        
Interest expense and other, net  (45)  (21)  (64)  (33)
Foreign transaction gain  134  --  134  --
Continuing operations income (loss) before income taxes  469  1,062  743  1,910
         
Provision for (benefit from) income taxes on continuing operations  (78)  --  (78)  --
Net income (loss) from continuing operations  547  1,062  821  1,910
Discontinued operations income (loss)  --  (2,384)  --  (2,652)
         
Provision for income taxes on discontinued operations  --  --  --  --
Net income (loss) from discontinued operations  --  (2,384)  --  (2,652)
         
Net income (loss) before dividends on redeemable convertible preferred stock  547  (1,322)  821  (742)
Dividends on redeemable convertible preferred stock  (87)  (86)  (174)  (172)
Net income (loss) attributable to common stockholders  $ 460  $ (1,408)  $ 647  $ (914)
         
Earnings (loss) from continuing operations per common share:        
Basic  $ 0.06  $ 0.12  $ 0.08  $ 0.21
Diluted  $ 0.06  $ 0.11  $ 0.08  $ 0.20
Weighted - average number of continuing operations shares outstanding:        
Basic  8,250,833  8,176,808  8,235,901  8,115,214
Diluted  8,293,947  9,723,076  8,279,014  9,710,422
Loss per common share from discontinued operations:        
Basic and diluted  $ --   $ (0.29)  $ --   $ (0.32)
Total earnings (loss) per common share:        
Basic  $ 0.06  $ (0.17)  $ 0.08  $ (0.11)
Diluted  $ 0.06  $ (0.17)  $ 0.08  $ (0.11)
Weighted - average number of common shares outstanding:        
Basic  8,250,833  8,176,808  8,235,901  8,115,214
Diluted  8,293,947  8,176,808  8,279,014  8,115,214
 
 
American Electric Technologies, Inc. and Subsidiaries 
Condensed Consolidated Balance Sheets 
(in thousands, except share and per share data)
     
  June 30, 2015 December 31,
  (unaudited) 2014
Assets    
Current assets:    
Cash and cash equivalents  $ 8,246  $ 3,550
Accounts receivable-trade, net of allowance of $285 and $315 at June 30, 2015 and December 31, 2014  7,641  11,877
Inventories, net of allowance of $108 and $73 at June 30, 2015 and December 31, 2014  2,110  2,769
Cost and estimated earnings in excess of billings on uncompleted contracts  3,789  2,989
Prepaid expenses and other current assets  504  750
Total current assets  22,290  21,935
Property, plant and equipment, net  8,363  8,373
Advances to and investments in foreign joint ventures  11,436  12,054
Other assets  502  242
Long-term assets held for sale  650  650
Total assets  $ 43,241  $ 43,254
Liabilities and Stockholders' Equity    
Current liabilities:    
Accounts payable  $ 4,271  $ 6,447
Accrued payroll and benefits  710  1,145
Other accrued expenses  459  640
Billings in excess of costs and estimated earnings on uncompleted contracts  2,715  1,983
Revolving line of credit  1,500  --
Current portion of long-term note payable  267  222
Other current liabilities  67  150
Total current liabilities  9,989  10,587
Long-term note payable   3,644  3,778
Deferred income taxes  2,996  3,046
Deferred compensation  297  290
Total liabilities  16,926  17,701
Convertible preferred stock:    
Redeemable convertible preferred stock, Series A, net of discount of $695 at June 30, 2015 and $719 at December 31, 2014; $0.001 par value, 1,000,000 shares authorized, issued and outstanding at June 30, 2015 and December 31, 2014  4,305  4,281
Stockholders' equity:    
Common stock; $0.001 par value, 50,000,000 shares authorized, 8,250,897 and 8,185,323 shares issued and outstanding at June 30, 2015 and December 31, 2014  8  8
Treasury stock, at cost 131,928 shares at June 30, 2015 and 111,640 shares at December 31, 2014  (792)  (722)
Additional paid-in capital  11,674  11,418
Accumulated other comprehensive income  756  851
Retained earnings; including accumulated statutory reserves in equity method investments of $2,237 and $2,100 at June 30, 2015 and December 31, 2014  10,364  9,717
Total stockholders' equity  22,010  21,272
Total liabilities and stockholders' equity  $ 43,241  $ 43,254
 
 
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,
  2015 2014 2015 2014
Net income (loss) attributable to common stockholders  $ 460  $ (1,408)  $ 647  $ (914)
Add: Discontinued operations income (loss)  --  2,384  --  2,652
Depreciation and amortization  222  131  459  259
Interest expense and other, net  45  21  64  33
Provision for (benefit benefit) for income taxes  (78)  --  (78)  --
Dividend on redeemable preferred stock  87  86  174  172
EBITDA  $ 736  $ 1,214  $ 1,266  $ 2,202
         
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 2014 10-K which was filed on March 30, 2015.
CONTACT: Investor Contact:
         American Electric Technologies, Inc.
         Andrew L. Puhala
         713-644-8182
         investorrelations@aeti.com

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