OREANDA-NEWS. 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.” 

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 Maca?, 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 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, 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