August 7, 2019 - 9:05 AM EDT
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H/Cell Energy Reports FY2019 Second Quarter Financial Results

DALLAS, Aug. 07, 2019 (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 second quarter ended June 30, 2019.

For the three months ended June 30, 2019, HCCC generated revenue of $1,927,921 and a net loss of $105,223 which includes $75,980 of non-cash charges that do not affect the cash flow performance or working capital of HCCC. This amounts to a $(0.01) per share loss. For the six months ended June 30, 2019, HCCC generated revenue of $3,632,194 and a net loss of $248,861 which includes $187,133 of non-cash charges that again, do not affect the cash flow performance or working capital of HCCC. This amounts to a $(0.03) per share loss.

Andrew Hidalgo, CEO of HCCC, commented, "The second quarter was a very encouraging quarter for a number of reasons. Revenue production was up 12% from the previous quarter. Excluding non-cash charges that do not affect the cash flow performance or working capital of HCCC, the company only lost $29,243 on $1,927,921 of revenue for the three months ended June 30, 2019 and $61,728 on $3,632,194 of revenue for the six months ended June 30, 2019. That loss is attributed to corporate expenses as both our subsidiaries were operationally profitable. In the second quarter, we incurred most of our annual audit fees and along with the cost of concluding a financing transaction, corporate expenses were much higher than we initially projected. HCCC recently executed a $3 million equity financing line as previously reported. This was a significant milestone for HCCC and for the first time, gives us access to substantial growth capital going forward. With this new equity financing arrangement, we find ourselves in the best position yet to take HCCC to the next level. Our opportunities remain abundant. As of June 30, 2019, HCCC had over $40 million in bids of which close to $4 million is specific to renewable energy. The clean energy market is robust and we are in a unique position as an advanced clean energy integrator to take advantage of the opportunities to come. We look forward to successful quarters ahead.”

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
CONDENSED CONSOLIDATED BALANCE SHEETS

 June 30, 2019 December 31, 2018
 (Unaudited) (Audited)
ASSETS    
Current assets   
Cash and cash equivalents$313,530  $359,134 
Accounts receivable 1,191,224   1,087,381 
Prepaid expenses 15,163   16,282 
Current right-of-use (ROU) asset 86,018   - 
Costs and earnings in excess of billings 14,753   45,478 
Total current assets 1,620,688   1,508,275 
    
Property and equipment, net 455,044   476,436 
Security deposits and other non-current assets 32,505   32,530 
Deferred tax asset 50,000   50,000 
Customer lists, net 73,403   83,645 
ROU asset 154,378   - 
Other long term asset 30,000   - 
Goodwill 1,373,621   1,373,621 
    
Total assets $3,789,639  $3,524,507 
    
LIABILITIES AND STOCKHOLDERS' EQUITY    
    
Current liabilities   
Accounts payable and accrued expenses$869,668  $891,354 
Earn-out payable 199,679   190,736 
Billings in excess of costs and earnings 37,325   195,331 
Sales and withholding tax payable 66,489   59,857 
Current equipment notes payable 32,230   38,991 
Current operating lease liability 86,018   - 
Current finance lease payable 73,091   65,265 
Current convertible notes payable – related party, net of discounts 257,659   - 
Income tax payable 32,442   48,643 
 Total current liabilities  1,654,601   1,490,177 
    
Noncurrent liabilities   
Line of credit 230,415   28,359 
Lease operating liability 154,378   - 
Finance leases 284,431   232,876 
Equipment notes payable 57,083   121,038 
Convertible notes payable – related party, net of discounts 105,158   29,122 
Total noncurrent liabilities 831,465   411,395 
    
Total liabilities 2,486,066   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; 7,621,024 and 7,586,024 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively 762   758 
Additional paid-in capital 2,898,598   2,983,476 
Accumulated deficit (1,534,625)  (1,285,764)
Accumulated other comprehensive loss (61,162)  (75,535)
Total stockholders' equity  1,303,573   1,622,935 
    
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $3,789,639  $3,524,507 
        

H/CELL ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS – OTHER COMPREHENSIVE INCOME
(UNAUDITED)

 For the Three Months Ended June 30, For the Six Months Ended June 30,
 2019 2018 2019 2018
        
Revenue        
Construction income$1,927,921  $2,009,825  $3,632,194  $3,704,360 
Related party -   -   -   31,789 
Total revenue  1,927,921   2,009,825   3,632,194   3,736,149 
        
Cost of goods sold        
Direct costs 1,309,322   1,253,043   2,505,760   2,462,456 
Direct costs – related party -   -   -   31,617 
Total cost of goods sold  1,309,322   1,253,043   2,505,760   2,494,073 
        
Gross profit  618,599   756,782   1,126,434   1,242,076 
        
Operating expenses        
General and administrative expenses 631,457   687,831   1,238,509   1,243,015 
Management fees – related party 19,500   19,500   39,000   39,000 
Total operating expenses  650,957   707,331   1,277,509   1,282,015 
        
Income  (loss) from operations (32,358)  49,451   (151,075)  (39,939)
        
Other expenses       
Interest expense 10,258   10,146   12,091   14,092 
Interest expense – related party 58,060   18,676   94,155   32,891 
Change in fair value earn-out 4,547   6,738   8,943   6,738 
(Gain) loss on fixed asset disposal -   (64)  (17,403)  3,354 
Total other expenses 72,865   35,496   97,786   57,075 
        
Net income (loss) $(105,223) $13,955  $(248,861) $(97,014)
        
Other comprehensive income (loss), net        
        
Foreign currency translation adjustment (4,239)  (22,570)  14,373   (32,829)
        
Comprehensive loss $(109,462) $(8,615) $(234,488) $(129,843)
        
Earnings (loss) per share        
Basic$(0.01) $0.00  $(0.03) $(0.01)
Diluted$(0.01) $0.00  $(0.03) $(0.01)
Weighted average common shares outstanding        
Basic 7,621,024   7,483,980   7,607,295   7,450,235 
Diluted 7,621,024   8,819,225   7,607,295   7,450,235 
        

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Source: GlobeNewswire (August 7, 2019 - 9:05 AM EDT)

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