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H/Cell Energy Reports FY2018 Third Quarter Financial Results

FLEMINGTON, N.J., Nov. 08, 2018 (GLOBE NEWSWIRE) -- H/Cell Energy Corporation (OTCQB-HCCC) (“HCCC”), a company that designs and implements clean energy solutions featuring hydrogen energy systems, has announced financial results for its fiscal 2018 third quarter ended September 30, 2018.

For the three months ended September 30, 2018, HCCC generated revenue of $1,839,491 and a net loss of $267,328, or ($0.04) in earnings per share fully diluted, which includes $69,199 in non-cash charges. For the nine months ended September 30, 2018, HCCC generated revenue of $5,575,640 and a net loss of $364,342, or ($0.05) in earnings per share fully diluted, which includes $200,848 in non-cash charges. As of September 30, 2018, HCCC has submitted overall proposals in the amount of $12,751,061 and had a backlog of projects to complete totaling $715,595. The balance sheet as of September 30, 2018 remained solid with $331,236 in cash, $3,548,607 in assets and $417,338 in working capital.

Andrew Hidalgo, CEO of HCCC, commented, "In the third quarter, we committed to investing in the expansion of the renewable energy effort at our Pride Group subsidiary in Australia, which resulted in significant capital expenditures in labor, training and business development. We believe this investment will be the key to launching our renewable energy efforts in the Asia-Pacific region as we are currently quoting many projects in a very active market. Further, our PVBJ subsidiary had a higher level of material purchases in the third quarter for projects to be completed in the fourth quarter. In addition to the capital expenditures for growth initiatives, we absorbed non-cash charges in the third quarter and the year-to-date financials for compliance purposes. Non-cash charges do not affect the cash flow performance or working capital of HCCC. Our subsidiaries are performing well exclusive of these corporate expenses. We have recently initiated several hydrogen energy projects and combined with our continued investments in expanding the renewable energy market effort, we are very encouraged about the future quarters. HCCC continues to build momentum by training our existing subsidiaries in clean energy, identifying many new opportunities and expanding our customer base. We look forward to future growth and building shareholder value.”

About H/Cell Energy Corporation:

H/Cell Energy Corporation is an integrator that focuses on the design and implementation of clean energy solutions including solar, battery, fuel cell and hydrogen generation systems. In addition, through its subsidiaries, HCCC also provides environmental systems and security systems integration. HCCC serves the residential, commercial and government sectors. Please visit our website at www.hcellenergy.com for more information.

Forward Looking Statements:

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on current expectations and actual results could differ materially. H/Cell Energy Corporation does not undertake an obligation to update or revise any forward-looking statement. The information set forth herein speaks only as of the date hereof.

H/Cell Energy Corporation
Investor Relations
908-837-9097 x-2

 
H/CELL ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
         
    September 30, 2018   December 31, 2017
    (Unaudited)   (Audited)
 ASSETS        
Current assets        
Cash and cash equivalents   $ 331,236     $ 455,700  
Accounts receivable (net retention)     1,230,621       808,050  
Prepaid expenses     23,282       14,669  
Costs and earnings in excess of billings     73,180       51,531  
Total current assets     1,658,319       1,329,950  
         
Property and equipment, net     362,933       102,573  
Security deposits and other non-current assets     20,711       8,416  
Deferred tax asset     44,257       44,257  
Customer lists, net     88,766       -  
Goodwill     1,373,621       -  
         
Total assets   $ 3,548,607     $ 1,485,196  
         
 LIABILITIES AND STOCKHOLDERS' EQUITY        
         
Current liabilities        
Accounts payable and accrued expenses   $ 830,708     $ 631,385  
Management fees payable – related party     -       31,257  
Earn-out payable     186,346       -  
Billings in excess of costs and earnings     51,798       87,206  
Sales and withholding tax payable     45,154       61,239  
Current equipment notes payable     32,538       -  
Current capital lease payable     68,240       -  
Income tax payable     26,197       98,313  
Total current liabilities     1,240,981       909,400  
         
Noncurrent liabilities        
Note payable     222,963       -  
Capital leases     149,590       -  
Equipment notes payable     118,606       -  
Convertible note payable – related party, net of discount     14,268       -  
Total noncurrent liabilities     505,427       -  
         
Total liabilities     1,746,408       909,400  
         
Commitments and contingencies         
         
Stockholders' equity        
Preferred stock - $0.0001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding     -       -  
Common stock - $0.0001 par value; 25,000,000 shares authorized; 7,586,024 and 7,041,579 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively     758       704  
Additional paid-in capital     2,967,004       1,335,656  
Accumulated deficit     (1,096,096 )     (731,754 )
Accumulated other comprehensive loss     (69,467 )     (28,810 )
Total stockholders' equity     1,802,199     $ 575,796  
         
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY   $ 3,548,607     $ 1,485,196  
                 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 
H/CELL ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS – OTHER COMPREHENSIVE INCOME
         
    For the Three Months
Ended September 30,
  For the Nine Months
Ended September 30,
    2018   2017   2018   2017
                 
Revenue                
Construction income   $ 1,830,992     $ 1,292,905     $ 5,535,352     $ 5,050,155
Related party     8,499       45,666       40,288       85,919
Total revenue     1,839,491       1,338,571       5,575,640       5,136,074
                 
Cost of goods sold                
Direct costs     1,438,669       870,369       3,901,125       3,432,098
Direct costs – related party     9,019       37,304       40,636       87,649
Total cost of goods sold     1,447,688       907,673       3,941,761       3,519,747
                 
Gross profit     391,803       430,898       1,633,879       1,616,327
                 
Operating expenses                
General and administrative expenses     607,125       437,344       1,850,140       1,379,415
Management fees – related party     19,500       46,000       58,500       138,000
Total operating expenses     626,625       483,344       1,908,640       1,517,415
                 
Income (loss) from operations     (234,822 )     (52,446 )     (274,761 )     98,912
Income tax provision (benefit)     -       -       -       -
                 
Income (loss) before other income and expense     (234,822 )     (52,446 )     (274,761 )     98,912
                 
Other expenses                
Interest expense     7,544       -       21,636       -
Interest expense – related party     19,877       -       52,768       -
Change in fair value earn-out     4,290       -       11,028       -
Loss on fixed asset disposal     795       -       4,149       -
Total other expenses     28,216       -       78,553       -
                 
Net income (loss)   $ (267,328 )   $ (52,446 )   $ (364,342 )   $ 98,912
                 
Other comprehensive income (loss), net                
                 
Foreign currency translation adjustment     (7,828 )     5,928       (40,657 )     24,345
                 
Comprehensive income (loss)   $ (275,156 )   $ (46,518 )   $ (404,999 )   $ 123,257
                 
Earnings (loss) per share                
Basic   $ (0.04 )   $ (0.01 )   $ (0.05 )   $ 0.02
Diluted   $ (0.04 )   $ (0.01 )   $ (0.05 )   $ 0.01
Weighted average common shares outstanding                
Basic     7,586,024       7,084,436       7,469,307       6,601,873
Diluted     7,586,024       7,084,436       7,469,307       7,526,763
                               

/EIN News/ --

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