H/Cell Energy Reports FY2018 First Quarter Financial Results

FLEMINGTON, N.J., June 27, 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 first quarter ended March 31, 2018.

For the three months ended March 31, 2018, HCCC generated revenue of $1,726,324 and a net loss of $110,969, or $(0.02) in earnings per share, fully diluted. This compares to revenue of $1,866,845 and a net loss of $56,124, or $(0.01) in earnings per share, fully diluted, for the three months ended March 31, 2017.

Andrew Hidalgo, CEO of HCCC, commented, “The first quarter was a bit challenging as our filing was delayed due to the two year audit required for the PVBJ, Inc. (“PVBJ”) acquisition concluded in February 2018. We could not file our quarterly results until the two year audit was concluded for PVBJ. Initially, we felt that we could meet the filing deadline for the audit but as it turned out, there were unintentional entry errors in the historical PVBJ financials, which required an extensive accounting effort to rectify. We completed the PVBJ two year audit and it has been filed accordingly. The extra work required to assimilate PVBJ was reflected in higher than anticipated one-time fees for acquisition and accounting costs, which contributed to the net income loss in the first quarter. Also contributing to the first quarter net income loss were non-cash charges of $50,501 for stock option grants, amortization of intangible assets, depreciation and debt discount calculations. These non-cash charges do not affect the cash flow performance or working capital of HCCC. We believe it is important for investors to recognize financial performance independent of non-cash accounting charges for certain events. Overall, the subsidiaries are performing well and we anticipate profitable quarters ahead. We also believe that our financial condition remains solid with $591,978 in cash, $3,737,724 in assets and $426,490 in working capital as of March 31, 2018. For the first quarter, we also generated $136,278 in positive cash flow. We are excited about the acquisition of PVBJ, as it expands our revenue production and gives us a base of technicians that will be trained in the implementation of hydrogen technology. The market continues to create opportunities. HCCC has been recently contracted to conclude feasibility studies for the implementation of hydrogen energy systems in residential applications. We look forward to continuing our growth.” 

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
         
    March 31, 2018   December 31, 2017
    (Unaudited)   (Audited)
ASSETS        
Current assets        
Cash and cash equivalents   $ 591,978     $ 455,700  
Accounts receivable     1,110,552       808,050  
Prepaid expenses     18,716       14,669  
Costs and earnings in excess of billings     67,982       51,531  
Total current assets     1,789,228       1,329,950  
         
Property and equipment, net     409,376       102,573  
Security deposits and other non-current assets     22,234       8,416  
Deferred tax asset     44,257       44,257  
Customer lists, net     99,008        
Goodwill     1,373,621        
         
Total assets   $ 3,737,724     $ 1,485,196  
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
         
Current liabilities        
Accounts payable and accrued expenses   $ 1,073,289     $ 631,385  
Management fees payable – related party     15,000       31,257  
Billings in excess of costs and earnings     100,544       87,206  
Sales and withholding tax payable     55,969       61,239  
Current equipment notes payable     23,823        
Current capital lease payable     49,856        
Income tax payable     44,257       98,313  
Total current liabilities     1,362,738       909,400  
         
Noncurrent liabilities        
Capital leases     197,873        
Equipment notes payable     121,476        
Convertible note payable – related party, net of discount     2,214        
Total noncurrent liabilities     321,563        
         
Total liabilities     1,684,301       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;
   7,486,024 and 7,041,579 shares issued and outstanding
   as of March 31, 2018 and December 31, 2017, respectively
    748       704  
Additional paid-in capital     2,934,467       1,335,656  
Accumulated deficit     (842,723 )     (731,754 )
Accumulated other comprehensive loss     (39,069 )     (28,810 )
 Total stockholders’ equity   $ 2,053,423     $ 575,796  
         
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY   $ 3,737,724     $ 1,485,196  
                 

 
H/CELL ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS – OTHER COMPREHENSIVE INCOME
(UNAUDITED)
         
    For the Three Months Ended March 31,
      2018       2017  
         
Revenue        
Construction income   $ 1,694,535     $ 1,850,755  
Related party     31,789       16,090  
         
Total revenue     1,726,324       1,866,845  
         
Cost of goods sold        
Direct costs     1,209,413       1,413,820  
Direct costs – related party     31,617       15,905  
         
Total cost of goods sold     1,241,030       1,429,725  
         
Gross profit     485,294       437,120  
         
Operating expenses        
General and administrative expenses     574,684       493,244  
Total operating expenses     574,684       493,244  
         
Loss from operations     (89,390 )     (56,124 )
Income tax provision (benefit)            
         
Loss before other income and expense   $ (89,390 )   $ (56,124 )
         
Other expense        
Interest expense     3,946        
Interest expense – related party     14,215        
Loss on fixed asset disposal     3,418        
Total other expense     21,579        
         
Net loss   $ (110,969 )   $ (56,124 )
         
Other comprehensive loss, net        
         
Foreign currency translation adjustment     (10,259 )     11,369  
         
Comprehensive loss   $ (121,228 )   $ (44,755 )
         
         
Loss per share        
Basic   $ (0.02 )   $ (0.01 )
Diluted   $ (0.02 )   $ (0.01 )
         
Weighted average common shares outstanding        
Basic     7,486,024       5,657,309  
Diluted     7,486,024       5,657,309  
                 

 

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