H/Cell Energy Reports FY2019 Year End Financial Results


DALLAS, March 25, 2020 (GLOBE NEWSWIRE) -- H/Cell Energy Corporation (OTCQB-HCCC) (“HCCC”), a company that designs and implements clean energy solutions featuring hydrogen and fuel cell technology, has announced financial results for its fiscal year ended December 31, 2019.

Fiscal Year 2019 Highlights:

  • Both wholly-owned subsidiaries generated an operating profit for the year
  • HCCC generated $2.0 million in consolidated gross profit
  • HCCC entered into a $3 million equity line of credit for growth capital
  • HCCC successfully established a renewable energy division in Australia
  • HCCC obtained contract awards for $5.2 million in new projects in the last four months of 2019
  • HCCC increased its bid list to approximately $38 million

For the twelve months ended December 31, 2019, HCCC generated revenue of $6,817,324 and a net loss of $724,393, which includes $405,215 of non-cash charges that do not affect the cash flow performance or working capital of HCCC. This amounts to $(0.09) in loss per share. The results compare to revenue of $7,505,889 and a net loss of $554,010 or $(0.07) in loss per share, for the prior year ended December 31, 2018.

Andrew Hidalgo, CEO of HCCC, commented, "Fiscal year 2019 was a year of investment in the growth for our business. We established a renewable energy effort in Australia, which generated expense for labor, materials and training that took away from the core revenue production as compared to last year. However, we needed to establish a renewable energy footprint in Australia and by doing so, we believe that 2020 should see significant gains in renewable energy revenue production. We have already seen an increase in bids and projects awarded in renewable energy. With our $3 million equity line of credit, subject to market conditions, we have access to capital to continue the growth anticipated for 2020. Both of our subsidiaries are operationally profitable and we are managing our corporate expenses as effectively as possible. HCCC still maintains $3.5 million in assets and approximately $275,000 in cash as of December 31, 2019. Our bid activity remains high and we see 2020 as a year that will strengthen our balance sheet.”

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.

Contact:

H/Cell Energy Corporation
Investor Relations
3010 LBJ Freeway, Suite 1200
Dallas, Texas 75234
972-888-6009 USA

H/CELL ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
     
  December 31, 2019 December 31, 2018
     
ASSETS     
Current assets    
Cash and cash equivalents $277,620  $359,134 
Accounts receivable (net retention)  803,659   1,087,381 
Prepaid expenses  15,258   16,282 
Costs and earnings in excess of billings  26,045   45,478 
Total current assets   1,122,582   1,508,275 
     
Property and equipment, net  478,238   476,436 
Security deposits and other non-current assets  32,233   32,530 
Deferred tax asset  46,000   50,000 
Customer lists, net  63,161   83,645 
Right of use asset  222,524   - 
Deferred offering cost  130,072   - 
Goodwill  1,373,621   1,373,621 
     
Total assets  $3,468,431  $3,524,507 
     
LIABILITIES AND STOCKHOLDERS' EQUITY     
     
Current liabilities    
Accounts payable and accrued expenses $702,133  $891,354 
Billings in excess of costs and earnings  47,098   195,331 
Sales and withholding tax payable  39,751   59,857 
Current operating lease liability  87,897   - 
Current equipment notes payable  27,435   38,991 
Current finance lease payable  75,743   65,265 
Current line of credit  269,746   - 
Current convertible note payable  80,500   - 
Income tax payable  41,426   48,643 
Total current liabilities   1,371,729   1,299,441 
     
Noncurrent liabilities    
Line of credit  -   28,359 
Lease operating liability  137,071   - 
Earn-out payable  209,199   190,736 
Equipment note payable  72,140   121,038 
Finance leases  307,804   232,876 
Convertible note payable – related party, net of discount  473,770   29,122 
Total noncurrent liabilities  1,199,984   602,131 
     
Total liabilities  2,571,713   1,901,572 
     
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; 7,725,524 and 7,586,024 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively  772   758 
Additional paid-in capital  2,969,686   2,983,476 
Accumulated deficit  (2,010,157)  (1,285,764)
Accumulated other comprehensive loss  (63,583)  (75,535)
Total stockholders' equity   896,718   1,622,935 
     
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY  $3,468,431  $3,524,507 
         

H/CELL ENERGY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS – OTHER COMPREHENSIVE INCOME

  For the Years Ended December 31,
   2019   2018 
     
Revenue     
Sales $6,817,324  $7,505,889 
Related party  -   40,548 
Total revenue   6,817,324   7,546,437 
     
Cost of goods sold     
Direct costs  4,854,878   5,492,607 
Direct costs – related party  -   40,376 
Total cost of goods sold   4,854,878   5,532,983 
     
Gross profit   1,962,446   2,013,454 
     
Operating expenses     
General and administrative expenses  2,335,285   2,368,860 
Management fees – related party  80,500   78,000 
Total operating expenses   2,415,785   2,446,860 
     
Loss from operations  (453,339)  (433,406)
     
Other expenses (income)    
Interest expense  42,897   26,584 
Interest expense – related party  233,345   79,622 
Change in fair value earn-out  18,463   15,418 
Gain on fixed asset disposal  (36,651)  (17,277)
Total other expenses  258,054   104,347 
     
Net loss before taxes  (711,393)  (537,753)
     
Income tax provision   13,000   16,257 
     
Net loss  $(724,393) $(554,010)
     
Other comprehensive income (loss), net     
     
Foreign currency translation adjustment  11,952   (46,725)
     
Comprehensive loss  $(712,441) $(600,735)
     
Loss per share     
Basic $(0.09) $(0.07)
Diluted $(0.09) $(0.07)
Weighted average common shares outstanding     
Basic  7,644,653   7,586,024 
Diluted  7,644,653   7,586,024