Stabilis Solutions, Inc. - FORM 8-K - EX-99.2 - August 20, 2018

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Exhibit 99.2

Unaudited Pro Forma Condensed Combined Financial Statements

The following unaudited pro forma condensed combined financial statements are based on our historical consolidated financial statements as adjusted to give effect to the August 14, 2018 disposition of the U.S. based assets of our wholly owned subsidiary, M&I Electric Industries, Inc. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2018 and the 12 months ended December 31, 2017 give effect to the asset disposition as if it had occurred on January 1, 2017. The unaudited pro forma condensed combined balance sheet as of June 30, 2018 gives effect to the asset disposition as if it had occurred on June 30, 2018.

The unaudited pro forma financial information are for informational purposes only and are not necessarily indicative of what our financial performance and financial position would have been had the transaction been completed on the dates assumed nor is such unaudited pro forma financial information necessarily indicative of the results to be expected in any future period.

American Electric Technologies, Inc. and Subsidiaries

Unaudited Condensed Consolidated Pro-Forma Balance Sheet

(in thousands, except share and per share data)

 

     Consolidated as of June 30,
2018		     Adjustment to Reflect
the Divestiture of M&I
Electric Industries Inc.
U.S.  Operations		     Proforma  
     (unaudited)              
Assets       

Current assets:

       

Cash and cash equivalents

    $ 477     $ 4,272     $ 4,749  

Restricted short-term investments

      —         —         —    

Accounts receivable-trade, net

      516       —         516  

Inventories, net

      201       —         201  

Cost and estimated earnings in excess of billings on uncompleted contracts

      1,419       —         1,419  

Prepaid expenses and other current assets

      280       —         280  

Current portion of assets held for sale

      11,871       (11,871 )      —    
  

 

 

    

 

 

    

 

 

  

Total current assets

      14,764       (7,599 )      7,165  

Property, plant and equipment, net

      578       —         578  

Advances to and investments in foreign joint ventures

      9,869       —         9,869  

Deferred tax benefit

      40       —         40  

Other assets

      246       —         246  

Assets held for sale, less current portion

      6,506       (6,506 )      —    
  

 

 

    

 

 

    

 

 

  

Total assets

    $ 32,003     $ (14,105 )    $ 17,898  
  

 

 

    

 

 

    

 

 

  
Liabilities, Convertible Preferred Stock and Stockholders’ Equity       

Current liabilities:

       

Current portion of long-term note payable

    $ 360     $ (360 )    $ —    

Short-term note payable

      5,629       (5,429 )      200  

Accounts payable and other accrued expenses

      2,023       —         2,023  

Accrued payroll and benefits

      613       —         613  

Current portion of liabilities held for sale

      13,710       (13,710 )      —    
  

 

 

    

 

 

    

 

 

  

Total current liabilities

      22,335       (19,499 )      2,836  

Long-term note payable, net

      —         —         —    

Deferred compensation

      188       —         188  

Liabilities held for sale, less current portion

      —         —         —    
  

 

 

    

 

 

    

 

 

  

Total liabilities

      22,523       (19,499 )      3,024  
  

 

 

    

 

 

    

 

 

  

Convertible preferred stock:

       

Redeemable convertible preferred stock, Series A, net of discount of $532 at June 30, 2018 and $562 at December 31, 2017; $0.001 par value, 1,000,000 shares authorized, issued and outstanding at June 30, 2018 and December 31, 2017

      4,468       —         4,468  
  

 

 

    

 

 

    

 

 

  

Stockholders’ equity:

       

Common stock; $0.001 par value, 50,000,000 shares authorized, 9,078,837 and 8,850,532 shares issued and 8,884,862 and 8,669,650 shares outstanding at June 30, 2018 and December 31, 2017

      9       —         9  

Treasury stock, at cost 193,975 and 180,882 shares at June 30, 2018 and December 31, 2017

      (934 )      —         (934 ) 

Additional paid-in capital

      14,331       —         14,331  

Accumulated other comprehensive income

      (90 )      —         (90 ) 

Accumulated Deficit; including accumulated statutory reserves in equity method investments of $2,809 at June 30, 2018 and December 31, 2017

      (8,304 )      5,394       (2,910 ) 
  

 

 

    

 

 

    

 

 

  

Total stockholders’ equity

      5,012       5,394       10,406  
  

 

 

    

 

 

    

 

 

  

Total liabilities, convertible preferred stock and stockholders’ equity

    $ 32,003     $ (14,105 )    $ 17,898  
  

 

 

    

 

 

    

 

 

  

American Electric Technologies, Inc. and Subsidiaries

Unaudited Condensed Consolidated Pro-Forma Statement of Operations

(in thousands, except share and per share data)

 

     Consolidated For the
Six Months Ended June 30,
2018		     Adjustment to Reflect
the Divestiture of M&I
Electric Industries Inc.
U.S.  Operations		      Proforma  

Net sales

    $ 3,951     $ —        $ 3,951  

Cost of sales

      3,114       —          3,114  
  

 

 

    

 

 

     

 

 

  

Gross margin

      837       —          837  
  

 

 

    

 

 

     

 

 

  

Operating expenses:

        

Research and development

      —         —          —    

Selling and marketing

      190       —          190  

General and administrative

      936       —          936  
  

 

 

    

 

 

     

 

 

  

Total operating expenses

      1,126       —          1,126  
  

 

 

    

 

 

     

 

 

  

Loss from continuing operations

      (289 )      —          (289 ) 

Net equity income from foreign joint ventures’ operations:

        

Equity income from foreign joint ventures’ operations

      455       —          455  

Foreign joint ventures’ operations related expenses

      (110 )      —          (110 ) 
  

 

 

    

 

 

     

 

 

  

Net equity income from foreign joint ventures’ operations

      345       —          345  
  

 

 

    

 

 

     

 

 

  

Income (loss) from continuing operations and net equity income from foreign joint ventures’ operations

      56       —          56  
  

 

 

    

 

 

     

 

 

  

Interest expense and other, net

      68       —          68  
  

 

 

    

 

 

     

 

 

  

Income (loss) from continuing operations before income taxes

      124       —          124  

Provision for (benefit from) income taxes on continuing operations

      189       —          189  
  

 

 

    

 

 

     

 

 

  

Net income (loss) from continuing operations

      (65 )      —          (65 ) 

Loss from discontinued operations

      (4,838 )      4,838        —    

Provision for (benefit from) income taxes on discontinued operations

      —         —          —    
  

 

 

    

 

 

     

 

 

  

Net Loss from discontinued opeations

      (4,838 )      4,838        —    

Net gain (loss) before dividends on redeemable convertible preferred stock

      (4,903 )      4,838        (65 ) 

Dividends on redeemable convertible preferred stock

      (179 )      —          (179 ) 
  

 

 

    

 

 

     

 

 

  

Net income (loss) attributable to common stockholders

    $ (5,082 )    $ 4,838      $ (244 ) 
  

 

 

    

 

 

     

 

 

  

American Electric Technologies, Inc. and Subsidiaries

Unaudited Condensed Consolidated Pro-Forma Statement of Operations

(in thousands, except share and per share data)

 

     Consolidated For the
Year Ended December 31,
2017		     Adjustment to Reflect
the Divestiture of M&I
Electric Industries Inc.
U.S. Operations		     Proforma  

Net sales

    $ 47,130     $ (41,414 )    $ 5,716  

Cost of sales

      44,702       (40,136 )      4,566  
  

 

 

    

 

 

    

 

 

  

Gross margin

      2,428       (1,278 )      1,150  
  

 

 

    

 

 

    

 

 

  

Operating expenses:

       

Research and development

      280       (280 )      —    

Selling and marketing

      2,465       (1,975 )      490  

General and administrative

      4,194       (2,183 )      2,011  
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      6,939       (4,438 )      2,501  
  

 

 

    

 

 

    

 

 

  

Loss from continuing operations

      (4,511 )      3,160       (1,351 ) 

Net equity income from foreign joint ventures’ operations:

       

Equity income from foreign joint ventures’ operations

      656       —         656  

Foreign joint ventures’ operations related expenses

      (250 )      —         (250 ) 
  

 

 

    

 

 

    

 

 

  

Net equity income from foreign joint ventures’ operations

      406       —         406  
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations and net equity income from foreign joint ventures’ operations

      (4,105 )      3,160       (945 ) 
  

 

 

    

 

 

    

 

 

  

Other income (expense):

       

Interest expense and other, net

      (1,078 )      1,054       (24 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations before income taxes

      (5,183 )      4,214       (969 ) 

Provision for (benefit from) income taxes on continuing operations

      (2,955 )      —         (2,955 ) 
  

 

 

    

 

 

    

 

 

  

Net income (loss) before dividends on redeemable convertible preferred stock

      (2,228 )      4,214       1,986  

Dividends on redeemable convertible preferred stock

      (356 )        (356 ) 
  

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to common stockholders

    $ (2,584 )    $ 4,214     $ 1,630  
  

 

 

    

 

 

    

 

 

  

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