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AETI Announces Continued Earnings Growth for Third Quarter

Monday, November 12, 2012 7:00 AM


HOUSTON, Nov. 12, 2012 (GLOBE NEWSWIRE) -- American Electric Technologies, Inc. (Nasdaq:AETI), today announced results for the third quarter of 2012, with net income, backlog, earnings per share and EBITDA all up on slightly lower revenue for the third quarter of 2012 compared to the third quarter of 2011.

The Company reported income before taxes up 20% to $0.8 million during the third quarter of 2012 compared to third quarter 2011. These improved results were driven by continued strength in the company's core global oil & gas business.

The Technical Products and Services group reported a quarter ending backlog of $20 million, primarily from core oil and gas product bookings, which is the largest for that segment in more than two years.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, adjusted for selected non-cash items, a non-GAAP measure, was $1.2 million for the third quarter of 2012, up 20% compared to Adjusted EBITDA of $1.0 million for the third quarter of 2011.

Domestic operating income showed improvement during the third quarter of 2012 with $0.1 million, compared to the third quarter of 2011 of $0.05 million on 14% lower revenue. Domestic operating income was up $1.9 for the nine months of 2012 versus the same period 2011 primarily from $1.8 higher revenues with improved margins and lower corporate costs.

"Our continued improvement in our domestic results came from our core North American oil and gas markets," commented Charles Dauber, AETI president and chief executive officer. "In the quarter, we saw strong increases in our midstream and downstream oil and gas business, and expect this to continue into 2013."

During the quarter, the Company also reported continued strength in its netequity income in foreign joint venture operations with $0.7 million for both the three months ended September 30, 2012 and 2011. These results continue to be primarily driven by strong demand in China from the Company's BOMAY joint venture operations for land drilling rig power systems and increased business in the Company's joint venture in Brazil.

The company reported a $3.3 million improvement in income before taxes for the nine months ended September 30, 2012 compared to the same period in 2011.

Fully diluted earnings attributable to common stockholders was $0.06 per share for the third quarter of 2012, a $0.02 per share improvement compared to $0.04 per share in the third quarter of 2011.

In the quarter, the Company made several significant announcements:

The Company announced its Brazil joint venture has acquired the assets of Assort Services LTDA ("Assort") of Rio De Janeiro, Brazil, becoming the largest off-shore oil & gas electrical service provider in Brazil.

The Company also announced it had been selected by Westlake Chemical's Engineering & Procurement supplier Chengda Engineering to supply turnkey power delivery products and services for Westlake's Chlor-Alkali expansion project in Geismar, La.

Detailed information of the financial results for the three months and nine months ended September 30, 2012 is included in the Company's quarterly report on Form 10-Q which will be filed with the Securities and Exchange Commission on or before November 14, 2012.

American Electric Technologies, Inc. and Subsidiaries
Business Segments (in thousands and percentages are calculated on segment sales and total sales) Unaudited
 
  Three Months Ended September 30, Nine Months Ended September 30,
  2012   2011   2012   2011  
Revenue:                
Technical Products and Services   $ 8,903    $ 8,123    $ 27,373    $ 19,907  
Electrical and Instrumentation Construction   1,495    3,561    7,102    11,839  
American Access Technologies  1,327    2,020    4,554    5,454  
   $ 11,725    $ 13,704    $ 39,029    $ 37,200  
                 
Gross profit:                
Technical Products and Services   $ 1,507 17%  $ 1,487 18%  $ 4,464 16%  $ 2,830 14%
Electrical and Instrumentation Construction   61 4%  214 6%  593 8%  830 7%
American Access Technologies  121 9%  482 24%  577 13%  1,227 22%
   $ 1,689 14%  $ 2,183 16%  $ 5,634 14%  $ 4,887 13%
                 
Income(loss) from domestic operations and net equity income from foreign joint ventures' operations:                 
Technical Products and Services   $ 1,389 16%  $ 1,140 14%  $ 3,941 14%  $ 1,754 9%
Electrical and Instrumentation Construction   61 4%  214 6%  593 8%  830 7%
American Access Technologies  (227) -17%  66 3%  (530) -12%  55 1%
Corporate and other unallocated expenses   (1,100)    (1,368)    (3,912)    (4,460)  
Income (loss) from domestic operations  123 1%  52 0%  92 0%  (1,821) -5%
Equity income from BOMAY  624    666    2,385    1,343  
Equity income (loss) from MIEFE  (1)    66    19    (72)  
Equity income from AAG  123    90    167    49  
Foreign operations expenses  (23)    (113)    (246)    (359)  
Net equity income from foreign joint ventures' operations  723    709    2,325    961  
Income (loss) from domestic operations and net equity income from foreign joint ventures' operations  846 7%  761 6%  2,417 6%  (860) -2%
Interest expense and other, net  (29)    (79)    (116)    (182)  
Income (loss) before income taxes  817    682    2,301    (1,042)  
Provision for (benefit from) income taxes  232    323    566    (352)  
Net income (loss) before mandatorily redeemable preferred stock  585    359    1,735    (690)  
Dividends on mandatorily redeemable preferred stock  (85)    --     (140)    --   
Net income attributable to common stockholders  $ 500 4%  $ 359 3%  $ 1,595 4%  $ (690) -2%
                   
American Electric Technologies, Inc. and Subsidiaries 
Condensed Consolidated Balance Sheets 
(in thousands, except share and per share data)
  September 30, 2012 December 31, 2011
  (unaudited)  
Assets    
Current assets:    
Cash and cash equivalents  $ 6,084  $ 3,749
Accounts receivable-trade, net of allowance of $241 and $393 at September 30, 2012 and December 31, 2011, respectively  8,232  11,291
Inventories, net  5,577  4,945
Costs and estimated earnings in excess of billings on uncompleted contracts  1,486  2,026
Prepaid expenses and other current assets  153  336
Total current assets  21,532  22,347
Property, plant and equipment, net  4,561  4,489
Investments in foreign joint ventures  11,059  9,308
Other assets  330  87
Total assets  $ 37,482  $ 36,231
     
Liabilities and Stockholders' Equity    
Current liabilities:    
Accounts payable  $ 4,445  $ 5,772
Accrued payroll and benefits  1,070  1,414
Other accrued expenses  438  855
Billings in excess of costs and estimated earnings on uncompleted contracts  2,135  2,909
Short-term notes payable  94  154
Total current liabilities  8,182  11,104
Notes payable  1,500  5,057
Deferred income taxes  2,957  2,433
Deferred compensation  121  116
Total liabilities  12,760  18,710
Convertible preferred stock    
Mandatorily redeemable convertible preferred stock; $.001 par value, shares issued and outstanding 1,000,000 September 30, 2012, none December 31,2011  4,184  --
     
     
Common stockholders' equity:    
Common stock; $0.001 par value, 50,000,000 shares authorized, 7,933,908 and 7,828,509 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively  8  8
Additional paid-in capital  9,555  8,171
Treasury stock; 20,222 shares at cost  (92)  --
Accumulated other comprehensive income  978  849
Retained earnings; including accumulated statutory reserves in equity method investments of $1,620 and $1,284 at September 30, 2012 and December 31, 2011, respectively  10,089  8,493
Total common stockholders' equity  20,538  17,521
Total liabilities, preferred stock and stockholders' equity  $ 37,482  $ 36,231
     
American Electric Technologies, Inc. and Subsidiaries 
Condensed Consolidated Statements of Operations 
Unaudited
(in thousands, except share and per share data)
  Three Months Ended September 30, Nine Months Ended September 30,
  2012 2011 2012 2011
         
Revenue  $ 11,725  $ 13,704  $ 39,029  $ 37,200
Cost of sales  10,036  11,521  33,395  32,313
Gross profit  1,689  2,183  5,634  4,887
Operating expenses:        
Research and development  --  161  36  597
Selling and marketing  471  619  1,831  1,844
General and administrative  1,095  1,351  3,675  4,267
Total operating expenses  1,566  2,131  5,542  6,708
Income (loss) from domestic operations  123  52  92  (1,821)
Net equity income from foreign joint ventures' operations:        
Equity income from foreign joint ventures' operations  746  822  2,571  1,320
Foreign joint ventures' operations related expenses  (23)  (113)  (246)  (359)
Net equity income from foreign joint ventures' operations  723  709  2,325  961
Income (loss) from domestic operations and net equity income from foreign joint ventures' operations  846  761  2,417  (860)
         
Interest expense and other, net  (29)  (79)  (116)  (182)
Income (loss) before income taxes  817  682  2,301  (1,042)
Provision for (benefit from) income taxes  232  323  566  (352)
Net income (loss) before mandatorily redeemable preferred stock  585  359  1,735  (690)
Dividends on mandatorily redeemable preferred stock  (85)  --   (140)  -- 
Net income (loss) attributable to common stockholders  $ 500  $ 359  $ 1,595  $ (690)
         
Earnings (loss) per common share:         
Basic  $ 0.06  $ 0.05  $ 0.20  $ (0.09)
Diluted  $ 0.06  $ 0.04  $ 0.19  $ (0.09)
Weighted-average number of common shares outstanding:        
Basic  7,915,039  7,825,574  7,895,318  7,808,658
Diluted  8,223,410  8,081,843  8,252,835  7,808,658
         
American Electric Technologies, Inc. and Subsidiaries 
Non-GAAP Financial Measures and Reconciliations
Computation of Earnings , Including Net Equity Income from Foreign Joint Ventures, Before Interest, 
Dividends, Taxes, Depreciation, Amortization and Other NonCash Items ("Adjusted EBITDA")
Unaudited
(In thousands)
         
         
  Three months ended September 30, Nine months ended September 30,
  2012 2011 2012 2011
Net Income attributable to common stockholders  $ 500  $ 359  $ 1,595  $ (690)
Add:        
Dividends on mandatorily redeemable preferred stock  85  --   140  -- 
Depreciation and amortization  209  197  676  579
Interest expense and other, net  29  79  116  182
Provision (benefit) for income taxes  232  323  566  (352)
Non-cash charges:        
Stock-based compensation  111  88  326  200
Water wastewater charges  --   --   212  -- 
         
Adjusted EBITDA (1)  $ 1,166  $ 1,046  $ 3,631  $ (81)
         
(1) The Company is disclosing adjusted EBITDA, which is a non-GAAP measure, because it is used by management and provided to investors to provide comparability of underlying operational results. 
         

Conference Call

AETI will conduct a conference call at 3:00pm Eastern on Monday, November 12, 2012, to discuss the results with analysts, investors and other interested parties. Individuals who wish to participate in the conference call should dial 1-888-554-1422, pass code 203013, in the United States or 1-719-955-1565, pass code 203013, from outside the United States.

American Electric Technologies, Inc. (Nasdaq:AETI) is a leading global supplier of power delivery solutions to the energy industry. AETI offers M&I Electric power distribution and control products, electrical services, and E&I Construction services, as well as American Access Technologies zone enclosures, and Omega Metals custom fabrication services. South Coast Electric Systems L.L.C., a subsidiary, services Gulf Coast marine and vessel customers.

AETI is headquartered in Houston and has global sales, support and manufacturing operations in Beaumont, Texas, Keystone Heights, Fla. and Bay St. Louis, Miss. In addition, AETI has minority interests in three joint ventures, which have facilities located in Xian, China, Singapore and Macae, Brazil. 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 demand for our products, international expansion, 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, 2012. 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.

CONTACT: Media Contacts:
         Ward Creative Communications
         for American Electric Technologies, Inc.
         Molly LeCronier
         713-869-0707
         mlecronier@wardcc.com
         
         Investor Contacts:
         American Electric Technologies, Inc.
         713-644-8182
         investorrelations@aeti.com

(Source: PrimeZone )
(Source: Quotemedia)

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