HOUSTON, March 30, 2021 /PRNewswire/ -- Orbital Energy Group, Inc. OEG ("Orbital Energy" or the "Company") today reported unaudited financial results for the three and twelve months ended December 31, 2020.
Financial and Operating Highlights:
- Reported total revenues of $11.3 million for the fourth quarter of 2020 and $38.4 million for the full year 2020, compared to $5.7 million and $23.5 million for the fourth quarter and full year 2019, respectively;
- Gross profit was $3.1 million for the fourth quarter of 2020 and $7.1 million for the full year 2020, compared to $1.5 million for the fourth quarter of 2019 and $5.8 million for the full year 2019, the improvement attributable to increased revenues; this improvement is expected to continue throughout 2021;
- Gross margin was 27.7% for the fourth quarter of 2020 and 18.5% for the full year 2020, compared to 26.0% and 24.7% for the fourth quarter and full year 2019, respectively;
- Operating loss was $8.2 million for the fourth quarter of 2020 and $28.8 million for the full year 2020, compared to $4.9 million and $16.0 million for the fourth quarter and full year 2019, respectively, mainly due to higher SG&A expenses associated with Orbital Solar and Orbital Power Services;
- Held Cash and cash equivalents of $3.0 million and Restricted cash of $1.5 million as of December 31, 2020;
- Total backlog was $40.4 million compared to $9.6 million at December 31, 2019, reflecting backlog growth at both Orbital Solar and Orbital Power Services;
- Signed Master Services Agreement with a midwestern investor-owned utility, expected to generate significant recurring monthly revenues and increase the T&D division's revenues by approximately 30% on an annualized basis;
- Subsequent to year end, launched new subsidiary, Eclipse Foundation Group, a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation, industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains;
- During January 2021, the Company raised $45 million in equity capital, before costs and fees, to accelerate growth both organically and through strategic acquisitions;
- The Orbital Solar Services subsidiary was named the engineering, procurement, and construction ("EPC") company "of choice" for the newly-formed Black Sunrise Half Century Fund, which over the next three years expects to build over 1 gigawatt of solar power with a beginning investment of $725 million.
Commentary
"During 2020, we continued to successfully execute on our strategy to transform Orbital Energy Group into a diversified energy infrastructure services provider," said Jim O'Neil, vice chairman and CEO of Orbital Energy Group. "This includes the formation of our Orbital Power, Orbital Solar and Eclipse Foundation Services businesses, as well as expanding our gas products and integration services into renewable gas opportunities. Despite last year's COVID related challenges, we made progress in advancing our infrastructure strategy in 2020 and believe we are now well positioned for robust, long-term growth throughout our various business segments."
Mr. O'Neil added, "Our electric power transmission and distribution, utility scale solar, and foundation services are well positioned to take advantage of positive multi-year industry trends. Aging electric power infrastructure, the shift from fossil fuel to renewable generation, and advancing grid technologies are all factors supporting OEG's growth opportunities."
Conference Call
Management will host a conference call today, March 30, 2021 at 8:30 AM ET to discuss these results as well as recent corporate developments. After management's opening remarks, there will be a question-and-answer period. To access the call, please dial (888) 734-0328 or (678) 894-3054 and provide conference ID 5593249. A live webcast of the conference call and accompanying slide presentation can be accessed via the Investor Relations/Events & Presentations section of the Orbital Energy website (www.orbitalenergygroup.com).
For those unable to attend the live call, a telephonic replay will be available until April 15, 2021. To access the replay of the call dial (855) 859-2056 or (404) 537-3406 and provide conference ID 5593249. An archived copy of the webcast and slide presentation will also be available via the link provided above.
About Orbital Energy Group
Orbital Energy Group, Inc. OEG is creating a diversified full-service electrical, telecommunications, and renewable infrastructure services platform through the acquisition and development of innovative companies. Orbital Energy's group of businesses includes: Orbital Gas Systems, Inc., Orbital Power Services, Eclipse Foundation Group and Orbital Solar Services. Orbital Gas Systems is a 30-year leader in innovative gas solutions, serving the energy, power and processing markets through the design, installation and commissioning of industrial gas sampling, measurement and delivery systems. Orbital Power Services provides engineering, construction, maintenance and emergency response solutions to the power, utilities and midstream markets. Eclipse Foundation Group is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation, industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains. Orbital Solar Services provides engineering, procurement and construction ("EPC") expertise in the renewable energy industry and established relationships with solar developers and panel manufacturers in the utility scale solar market. As a publicly traded company, Orbital Energy Group is dedicated to maximizing shareholder value. But most important, our commitment to conduct business with a high level of integrity, respect, and philanthropic dedication allows the organization to make a difference in the lives of their customers, employees, investors and global community.
For more information please visit: www.orbitalenergygroup.com
Important Cautions Regarding Forward Looking Statements
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The Company may experience significant fluctuations in future operating results due to a number of economic, competitive, and other factors, including, among other things, our reliance on third-party manufacturers and suppliers, government agency budgetary and political constraints, new or increased competition, changes in market demand, and the performance or reliability of our products. These factors and others could cause operating results to vary significantly from those in prior periods, and those projected in forward-looking statements. Additional information with respect to these and other factors, which could materially affect the Company and its operations, are included in certain forms the Company has filed with the Securities and Exchange Commission.
Investor Relations:
KCSA Strategic Communications
David Hanover
T: 212-896-1220
orbital@kcsa.com
Orbital Energy Group, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
December 31, | December 31, | |||||||
(In thousands, except share and per share amounts) | 2020 | 2019 | ||||||
Assets: | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 3,046 | $ | 23,351 | ||||
Restricted cash - current | 452 | — | ||||||
Trade accounts receivable, net of allowance | 8,487 | 5,295 | ||||||
Inventories | 1,123 | 1,631 | ||||||
Contract assets | 7,860 | 2,309 | ||||||
Note receivable, current portion | 44 | — | ||||||
Prepaid expenses and other current assets | 3,786 | 2,215 | ||||||
Assets held for sale, current portion | — | 6,893 | ||||||
Total current assets | 24,798 | 41,694 | ||||||
Property and equipment, less accumulated depreciation | 6,395 | 4,454 | ||||||
Investment | 1,063 | 4,865 | ||||||
Right of use assets - Operating leases | 7,054 | 5,524 | ||||||
Goodwill | 7,006 | — | ||||||
Other intangible assets, net | 13,697 | 4,298 | ||||||
Restricted cash | 1,026 | — | ||||||
Note receivable | 3,602 | 3,253 | ||||||
Deposits and other assets | 1,404 | 70 | ||||||
Total assets | $ | 66,045 | $ | 64,158 | ||||
Liabilities and Stockholders' Equity: | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 9,913 | $ | 2,904 | ||||
Notes payable, current | 12,246 | 473 | ||||||
Line of credit | 441 | — | ||||||
Operating lease obligations - current portion | 1,784 | 821 | ||||||
Accrued expenses | 5,882 | 5,159 | ||||||
Contract liabilities | 6,810 | 1,668 | ||||||
Liabilities held for sale, current portion | — | 4,970 | ||||||
Total current liabilities | 37,076 | 15,995 | ||||||
Notes payable, less current portion | 5,056 | — | ||||||
Operating lease obligations, less current portion | 5,211 | 4,852 | ||||||
Contingent consideration | 720 | — | ||||||
Other long-term liabilities | 835 | 194 | ||||||
Total liabilities | 48,898 | 21,041 | ||||||
Commitments and contingencies | ||||||||
Stockholders' Equity: | ||||||||
Preferred stock, par value $0.001; 10,000,000 shares authorized; no shares issued at December 31, 2020 or December 31, 2019 | — | — | ||||||
Common stock, par value $0.001; 325,000,000 shares authorized; 31,029,642 shares issued and 30,676,579 shares outstanding at December 31, 2020 and 28,736,436 shares issued and 28,383,373 shares outstanding at December 31, 2019 | 31 | 29 | ||||||
Additional paid-in capital | 171,616 | 170,106 | ||||||
Treasury stock at cost; 353,063 shares held at December 31, 2020 and December 31, 2019 | (413) | (413) | ||||||
Accumulated deficit | (149,681) | (122,234) | ||||||
Accumulated other comprehensive loss | (4,406) | (4,371) | ||||||
Total stockholders' equity | 17,147 | 43,117 | ||||||
Total liabilities and stockholders' equity | $ | 66,045 | $ | 64,158 | ||||
Orbital Energy Group, Inc. | ||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months | For the Year | |||||||||||||||
(in thousands, except share and per share amounts) | Ended December 31, | Ended December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenues | $ | 11,336 | $ | 5,700 | $ | 38,414 | $ | 23,492 | ||||||||
Cost of revenues | 8,194 | 4,217 | 31,315 | 17,680 | ||||||||||||
Gross profit | 3,142 | 1,483 | 7,099 | 5,812 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative expense | 8,237 | 5,972 | 29,395 | 20,063 | ||||||||||||
Depreciation and amortization | 1,464 | 389 | 4,749 | 1,544 | ||||||||||||
Research and development | (6) | 16 | 45 | 139 | ||||||||||||
Provision for bad debt | 1,616 | 21 | 1,639 | 131 | ||||||||||||
Other operating (income) expense | 1 | (7) | 24 | (20) | ||||||||||||
Total operating expenses | 11,312 | 6,391 | 35,852 | 21,857 | ||||||||||||
Loss from operations | (8,170) | (4,908) | (28,753) | (16,045) | ||||||||||||
Other income | 897 | 1,132 | 959 | 567 | ||||||||||||
Interest expense | (834) | (26) | (1,303) | (61) | ||||||||||||
Loss from continuing operations before income taxes and equity in net loss of affiliate | (8,107) | (3,802) | (29,097) | (15,539) | ||||||||||||
Net loss of affiliate | — | (333) | (4,806) | (1,043) | ||||||||||||
Loss from continuing operations before taxes | (8,107) | (4,135) | (33,903) | (16,582) | ||||||||||||
Income tax benefit | (335) | (1,191) | (3,546) | (2,956) | ||||||||||||
Loss from continuing operations, net of income taxes | (7,772) | (2,944) | (30,357) | (13,626) | ||||||||||||
Discontinued operations | ||||||||||||||||
Income from operations of discontinued power and electromechanical businesses | 141 | 6,673 | 3,653 | 12,908 | ||||||||||||
Income tax expense (benefit) | (92) | (722) | 743 | 411 | ||||||||||||
Income from discontinued operations, net of income taxes | 233 | 7,395 | 2,910 | 12,497 | ||||||||||||
Net Income (loss) | $ | (7,539) | $ | 4,451 | $ | (27,447) | $ | (1,129) | ||||||||
Basic and diluted weighted average common shares outstanding | 30,464,207 | 28,706,671 | 29,937,863 | 28,654,500 | ||||||||||||
Loss from continuing operations per common share - basic and diluted | $ | (0.26) | $ | (0.10) | $ | (1.02) | $ | (0.48) | ||||||||
Income from discontinued operations - basic and diluted | $ | 0.01 | $ | 0.26 | $ | 0.10 | $ | 0.44 | ||||||||
Loss per common share - basic and diluted | $ | (0.25) | $ | 0.16 | $ | (0.92) | $ | (0.04) | ||||||||
Orbital Energy Group, Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
For the Year Ended December | ||||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (27,447) | $ | (1,129) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 820 | 724 | ||||||
Amortization of intangibles | 4,421 | 1,637 | ||||||
Amortization of debt discount | 75 | — | ||||||
Amortization of note receivable discount | (288) | (70) | ||||||
Stock issued and stock to be issued for compensation, royalties and services | 280 | 215 | ||||||
Non-cash loss on equity method investment in affiliate | 4,806 | 1,043 | ||||||
Non-cash fair value gain on equity method investment purchase | — | (629) | ||||||
Non-cash royalties, net (see Note 2 - Investment and Note Receivable) | — | 5 | ||||||
Provision for bad debt | 1,639 | 136 | ||||||
Deferred income taxes | (1,006) | (2,574) | ||||||
Non-cash unrealized foreign currency gain | (310) | (422) | ||||||
Impairment of goodwill and other intangible assets | — | 278 | ||||||
Inventory reserve | (424) | 79 | ||||||
Loss on disposal of assets | 39 | 31 | ||||||
Gain on sale of businesses | (14) | (14,100) | ||||||
(Increase) decrease in operating assets: | ||||||||
Trade accounts receivable | 3,675 | 1,510 | ||||||
Inventories | 3,766 | (119) | ||||||
Contract assets | (2,250) | (512) | ||||||
Prepaid expenses and other current assets | 1,614 | 121 | ||||||
Right of use assets - Operating leases | (1,151) | 1,825 | ||||||
Deposits and other assets | (1,197) | 31 | ||||||
Increase (decrease) in operating liabilities: | ||||||||
Accounts payable | (3,521) | 1,708 | ||||||
Operating lease liabilities | 929 | (1,755) | ||||||
Accrued expenses | (1,208) | 2,189 | ||||||
Refund liabilities | — | (1,339) | ||||||
Contract liabilities | 1,720 | (401) | ||||||
NET CASH USED IN OPERATING ACTIVITIES | (15,032) | (11,518) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Cash paid for acquisition, net of cash received | (2,981) | — | ||||||
Purchases of property and equipment | (1,696) | (321) | ||||||
Cash paid for working capital adjustment on Power group disposition | (2,804) | — | ||||||
Sale of discontinued operations, net of cash | (227) | 35,396 | ||||||
Proceeds from sale of restricted investment | — | 400 | ||||||
Proceeds from sale of property and equipment | 605 | 21 | ||||||
Purchase of other intangible assets | (11) | (353) | ||||||
Purchase of convertible note receivable | (260) | — | ||||||
Purchase of investment | (532) | (2,068) | ||||||
Proceeds from Notes receivable | — | 313 | ||||||
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (7,906) | 33,388 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from overdraft facility | — | 6,842 | ||||||
Payments on overdraft facility | — | (8,208) | ||||||
Proceeds from line of credit | 100 | 27,483 | ||||||
Payments on line of credit | (109) | (28,462) | ||||||
Payments on financing lease obligations | (4) | (4) | ||||||
Cash payments for repurchases of common stock | — | (413) | ||||||
Proceeds from notes payable | 8,145 | — | ||||||
Payments on notes payable | (4,131) | (303) | ||||||
NET CASH PROVIDED (USED IN) BY FINANCING ACTIVITIES | 4,001 | (3,065) | ||||||
Effect of exchange rate changes on cash | 110 | 44 | ||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (18,827) | 18,849 | ||||||
Cash, cash equivalents and restricted cash at beginning of year | 23,351 | 4,502 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR | $ | 4,524 | $ | 23,351 | ||||
Reconciliation of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) are non-GAAP financial measures and are reconciled in the table below. These non-GAAP financial measures do not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) should not be construed as a substitute for net loss or as a better measure of liquidity than cash flow from operating activities, which is determined in accordance with United States generally accepted accounting principles ("GAAP"). EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) exclude components that are significant in understanding and assessing the company's results of operations and cash flows. In addition, EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) are not terms defined by GAAP and as a result our measure of EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) might not be comparable to similarly titled measures used by other companies. However, EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) are used by management to evaluate, assess and benchmark the company's operational results and the company believes EBITDA, Adjusted EBITDA, and Adjusted Net Income (loss) are relevant and useful information which are often reported and widely used by analysts, investors and other interested parties in the Company's industry. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of its operating performance, to provide an additional measure of performance and liquidity and to provide additional information with respect to the Company's ability to meet future debt service, capital expenditure and working capital requirements. Adjusted Net Income (loss) eliminates the amortization expenses associated with intangible assets acquired with Orbital Gas Systems Limited, CUI-Canada and Reach Construction as well as non-cash expenses associated with impairments, Gains on sale of businesses, non-cash gains and losses related to the Company's investment in VPS and stock and stock options for compensation, royalties and services during the period.
(in thousands) | For the Three Months Ended | For the Year Ended | ||||||||||||||
(Unaudited) | December 31 | December 31 | ||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
EBITDA: | ||||||||||||||||
Net income (loss) | $ | (7,539) | $ | 4,451 | $ | (27,447) | $ | (1,129) | ||||||||
Plus: Interest expense | 834 | 29 | 1,303 | 338 | ||||||||||||
Plus: (Benefit) provision for taxes | (427) | (1,913) | (2,803) | (2,545) | ||||||||||||
Plus: Depreciation and amortization | 1,625 | 390 | 5,241 | 2,361 | ||||||||||||
EBITDA | $ | (5,507) | $ | 2,957 | $ | (23,706) | $ | (975) | ||||||||
Adjusted EBITDA: | ||||||||||||||||
Less: Gain on disposal of discontinued operation | — | (10,469) | (14) | (14,100) | ||||||||||||
Plus: Bad debt | 1,616 | 46 | 1,639 | 136 | ||||||||||||
Plus: Impairment of goodwill and intangible assets | — | 278 | — | 278 | ||||||||||||
Plus: Stock and stock to be issued for compensation, royalties and services | 268 | 60 | 280 | 215 | ||||||||||||
Plus: Pretax gain on assets contributed as part of the purchase of VPS | — | — | — | (629) | ||||||||||||
Plus: Net loss of affiliate | — | 333 | 4,806 | 1,043 | ||||||||||||
Adjusted EBITDA | $ | (3,623) | $ | (6,795) | $ | (16,995) | $ | (14,032) | ||||||||
Adjusted net income (loss): | ||||||||||||||||
Net Income (loss) | $ | (7,539) | $ | 4,451 | $ | (27,447) | $ | (1,129) | ||||||||
Less: Gain on disposal of discontinued operation | — | (10,469) | (14) | (14,100) | ||||||||||||
Plus: Impairment of goodwill and intangible assets | — | 278 | - | 278 | ||||||||||||
Plus: Amortization expense of Orbital, CUI-Canada and Reach Construction acquisition intangibles | 1,321 | 243 | 4,194 | 1,126 | ||||||||||||
Plus: Stock and stock to be issued for compensation, royalties and services | 268 | 60 | 280 | 215 | ||||||||||||
Plus: Pretax gain on assets contributed as part of the purchase of VPS | — | — | — | (629) | ||||||||||||
Plus: Net loss of affiliate | — | 333 | 4,806 | 1,043 | ||||||||||||
Adjusted net loss | $ | (5,950) | $ | (5,104) | $ | (18,181) | $ | (13,196) | ||||||||
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SOURCE Orbital Energy Group, Inc.
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