OREANDA-NEWS. American Electric Technologies, Inc. (NASDAQ:AETI), a leading supplier of power delivery solutions for the global energy industry, today announced its first quarter 2016 financial results.

The Company reported a net loss attributable to common shareholders in the first quarter of $3.0 million on consolidated revenue of $8.3 million.  First quarter revenues were up slightly from $7.7 million in the fourth quarter of 2015 but down from $15.3 million in the first quarter of 2015, driven by lower bookings in the third quarter of 2015.

The Company reported an increase in quarter ending backlog to $19.6 million, up from $19.0 million at the end of the fourth quarter of 2015.

“While the overall market remains challenging, we are entering the second quarter with our largest backlog in over a year and are encouraged with our progress pursuing customers in the power generation, refining and petrochemical markets with our IntelliSafeTM arc-resistant switchgear solutions,” said Charles Dauber, president and chief executive officer, AETI.

Gross margins improved by $0.4 million in the first quarter compared to the fourth quarter of 2015, but were down versus $2.3 million in the first quarter of 2015 due to lower revenue levels.

In the quarter, the Company implemented additional cost reduction actions to align the organization with reduced business levels. The Company recognized non-recurring costs of $0.4 million related to severance in our Houston and Beaumont operations.

The Company’s international joint ventures reported a net equity loss of $0.2 million for the quarter, where $0.1 million of equity income from BOMAY in China, was offset by a loss of $0.3 million from MIEFE in Singapore which included $0.2 million of one-time impairment costs.

The Company reported a net loss attributable to common shareholders in the first quarter of $3.0 million, up from a loss in the fourth quarter of 2015 of $3.6 million, and down from $0.2 million profit in the first quarter of 2015.

The Company reported fully diluted loss from operations per share of ($0.36) for the quarter, up from a fully diluted loss of ($0.45) per share in the fourth quarter of 2015 but down from fully diluted earnings of $0.02 per share reported in the first quarter of 2015.

The Company reported EBITDA, a non-U.S. GAAP measure, from operations of ($2.7) million for the quarter, up from ($2.8) million in the fourth quarter of 2015 and down from $0.5 million in the first 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.

Conference Call
AETI will conduct a conference call at 10 a.m. EDT on May 16, 2016 to discuss the results with analysts, investors and other interested parties. Individuals who wish to participate in the conference call should dial 888-542-1104 passcode 601516, in the United States and Canada.  International callers should dial +1 719-325-2466 passcode 601516.

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 Maca? and Rio de Janeiro, Brazil.  In addition, AETI has minority interests in two joint ventures, which have facilities located in Xian, China and Singapore.

 
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 March 31,
    2016       2015  
Net sales $   8,298     $   15,311  
Cost of sales     8,207         13,028  
Gross profit     91         2,283  
Operating expenses:      
Research and development     523         138  
Selling and marketing     876         603  
General and administrative     1,346         1,267  
Total operating expenses     2,745         2,008  
Income (loss) from operations     (2,654 )       275  
Net equity income from foreign joint ventures’ operations:      
Equity income from BOMAY     79         191  
Equity income (loss) from MIEFE     (274 )       (75 )
Foreign joint ventures’ operations related expenses     (51 )       (98 )
Net equity income (loss) from foreign joint ventures’ operations     (246 )       18  
               
Income (loss) from operations and net equity income from foreign joint ventures’ operations       (2,900 )       293  
Other income (expense):      
Interest expense and other, net     (39 )       (19 )
Income (loss) before income taxes     (2,939 )       274  
Provision for (benefit from) income taxes     (56 )       -  
Net income (loss) before dividends on redeemable convertible preferred stock     (2,883 )       274  
Dividends on redeemable convertible preferred stock     (88 )       (87 )
Net income (loss) attributable to common stockholders $   (2,971 )   $   187  
Earnings (loss) per common share:      
Basic $   (0.36 )   $   0.02  
Diluted $   (0.36 )   $   0.02  
Weighted - average number of common shares outstanding:      
Basic     8,263,223         8,206,684  
Diluted     8,263,223         8,441,782  
       
   
American Electric Technologies, Inc. and Subsidiaries   
Condensed Consolidated Balance Sheets   
(in thousands, except share and per share data)  
         
  March 31,    December 31,  
    2016       2015    
Assets        
Current assets:        
Cash and cash equivalents $   7,109     $   7,989    
Restricted short-term investments     507         507    
Accounts receivable-trade, net of allowance of $271 and $225 at March 31, 2016 and December 31, 2015     4,628         6,853    
Inventories, net of allowance of $78 and $60 at March 31, 2016 and December 31, 2015     965         1,325    
Cost and estimated earnings in excess of billings on uncompleted contracts     4,006         2,302    
Prepaid expenses and other current assets     283         324    
Total current assets    17,498         19,300    
Property, plant and equipment, net     7,848         7,915    
Advances to and investments in foreign joint ventures    11,251         11,104    
Intangibles     218         218    
Other assets     72         49    
  Total assets $  36,887     $   38,586    
Liabilities, Convertible Preferred Stock and Stockholders’ Equity        
Current liabilities:        
Revolving line of credit $   2,000     $   1,043    
Current portion of long-term note payable     300         300    
Accounts payable     3,555         4,031    
Accrued payroll and benefits     625         476    
Other accrued expenses     486         666    
Billings in excess of costs and estimated earnings on uncompleted contracts     2,289         1,629    
Other current liabilities     143         210    
Total current liabilities     9,398         8,355    
Long-term note payable      4,200         4,200    
Deferred compensation     294         305    
Deferred income taxes     3,058         3,064    
  Total liabilities    16,950         15,924    
Convertible preferred stock:        
Redeemable convertible preferred stock, Series A, net of discount of $658 at March 31, 2016 and $671 at December 31, 2015; $0.001 par value, 1,000,000 shares authorized, issued and outstanding at March 31, 2016 and December 31, 2015     4,342         4,329    
Stockholders’ equity:        
Common stock; $0.001 par value, 50,000,000 shares authorized, 8,436,295 and 8,385,929 shares issued and 8,290,418 and 8,254,001 shares outstanding at March 31, 2016 and December 31, 2015     8         8    
Treasury stock, at cost 145,877 shares at March 31, 2016 and 131,928 shares at December 31, 2015     (828 )       (792 )  
Additional paid-in capital    12,202         12,032    
Accumulated other comprehensive income     409         310    
Retained earnings; including accumulated statutory reserves in equity method investments of $2722 at March 31, 2016 and December 31, 2015     3,804         6,775    
Total stockholders’ equity    15,595         18,333    
  Total liabilities, convertible preferred stock and stockholders’ equity $  36,887     $   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 March 31,  
    2016       2015    
Net income (loss) attributable to common stockholders $   (2,971 )   $   187    
Add: Depreciation and amortization     221         237    
Interest expense and other, net     39         19    
Provision (benefit) for income taxes     (56 )       -    
Dividend on redeemable preferred stock     88         87    
EBITDA $    (2,679 )   $    530    
         

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.