American International Industries, Inc. Files SEC Form 10-Q, Quarterly Report, and Reports 1st Quarter Results
HOUSTON & KEMAH, Texas--(BUSINESS WIRE)--American International Industries, Inc. (OTCBB:AMIN - News)
Mr. Gary D. Woerz, Chief Financial Officer, said that the Company reported a net loss of $1,292,900 in the first quarter of 2007, compared to a net loss of $683,663 in the same period in 2006. Net revenues for the three month period ended March 31, 2007 were $6,612,570, compared to $6,859,882 for the three month period ended March 31, 2006. The decrease in revenues is due primarily to decreased pipe sales at Delta, which reported revenues of $2,660,246 for the three months ended March 31, 2007, compared to $3,842,433 for the same period in 2006; offset by increased revenues during the three months ended March 31, 2007 at NPI to $2,332,925 from $1,692,280 for the same period in 2006, principally due to NPI’s license to sell the MOTORTREND™ and Good Housekeeping Seal of Approval™ products; and increased revenues generated by the Hammonds Industries, Inc. (OTCBB:"HMDI") f/k/a International American Technologies, Inc., which reported revenues of $1,619,399, an increase of 22%, for the three months ended March 31, 2007 compared to $1,325,169 for the same period in 2006. The decrease in pipe sales at Delta for this quarter is not unusual and demand tends to fluctuate based on price. Also, some deliveries of orders for pipe were postponed until April. Pipe sales for the second quarter are more in line with prior quarters.
Our consolidated loss from operations for the three month period ended March 31, 2007 was $1,444,822, compared to a loss of $318,203 during the same three month period in the prior year. The primary reason for the decline was due to reduced profits from Delta of $409,374, increased losses at Hammonds of $341,314, which includes depreciation and amortization expense of $204,176, and increased corporate expenses of $381,289. During the three month period ended March 31, 2007, Delta had net income from operations of $81,097, compared to $490,471 for the same period in 2006. The decline was due primarily to decreased pipe sales and lower gross margins on pipe sales. Material prices and pipe rework costs are higher due to increased fuel costs being passed through by Delta’s vendors. Delta expects a strong business environment during the second quarter of the 2007 fiscal year as a result of the strong energy section. Delta has a backlog of $3,200,000 as of March 31, 2007. NPI had a net loss from operations of $51,295 during the three month period ended March 31, 2007, compared to a net loss from operations of $52,782 for the same period in the prior year. NPI's business is seasonal and historically most of NPI’s revenues and income have been generated in the third and fourth quarters. Hammonds Industries, our 40.7% owned subsidiary, which owns 100% of Hammonds, reported net losses from operations of $710,561 for the three month period ended March 31, 2007, compared to net losses of $369,247 during the same period in 2006. The increase in net loss is primarily attributable to costs associated with Hammonds’ introduction of its new line of Omni Directional Vehicles (ODVs). Corporate operating expenses increased by $381,289 during the three month period ended March 31, 2007, compared to the same period in the prior year, related to investment funding of transactions and commissions, increased compensation costs, legal and professional fees related to lawsuit settlements, real estate consulting fees, and the purchase of "key" man life insurance.
Other income was $199,958 for the three month period ended March 31, 2007, compared to other expenses of $126,030 for the same three month period in the prior year. Interest and dividend income increased by $100,451, primarily due to a significant increase in investment in certificates of deposit and interest on notes receivable. Net realized / unrealized gain on trading securities was $44,214 for the three month period ended March 31, 2007, compared to a loss of $9,549 for the same three month period in the prior year. The Company sold 180,500 Orion HealthCorp., Inc. (AMEX:ONH) shares for proceeds of $103,954 in February 2007. Through December 31, 2006, the Company had an unrealized loss on these shares of $633,227. The realized loss from the sale of the shares in 2007 was $585,228. The net income effect of the sale of these shares is a gain of $47,999 in 2007. Income from lawsuit settlements was $209,600 for the three month period ended March 31, 2007. Interest expense was $49,538 higher in the first quarter of 2007 than it was in the same period in 2006.
Our consolidated cash position increased $376,099 to $3,651,902 at March 31, 2007, compared to $3,275,803 at December 31, 2006. Total assets at March 31, 2007 were $36,707,442, compared to $36,596,931 at December 31, 2006. At March 31, 2007, consolidated working capital was $17,392,073, compared to working capital of $17,625,203 at December 31, 2006.
Mr. Woerz stated, "We expect NPI to have record shipments this year and an associated increase in profits from additional brand advertising through Motor Trend Magazine, Motor Trend Radio and TV, and Good Housekeeping Magazine." Also, NPI is in the process of expanding its worldwide customer base into the rapidly growing Asian market by offering its product lines through new distribution and marketing agreements.
In March 2007, Vision Opportunity Management Fund Limited (VOMF) exercised stock warrants to purchase 3,970,400 restricted shares of Hammonds Industries common stock at an exercise price of $0.18 per share for gross proceeds of $714,672. These funds will be used to enhance production capability at Hammonds. Additionally, Hammonds obtained $243,247 in long-term financing through an equipment loan. Hammonds recently purchased $240,000 in capital equipment. Once installed and operational, these latest additions will contribute dramatically to capacity and efficiency. Also, Hammonds is implementing manufacturing and cost saving procedures in order to generate increased revenues with greater cost efficiencies. During the three month period ended March 31, 2007, Hammonds projected backlog of orders has increased to approximately $8,000,000, representing a substantial increase from 2006.
For more detailed information, please refer to our March 31, 2007 Form 10-Q filing with the SEC on May 15, 2007.
American International Industries, Inc. is a holding company. The Company has holdings in Industry, Finance, Real Estate in Houston, Texas and surrounding areas, and Oil & Gas. The vision of the Company is to develop holdings in various industries through acquisition of existing companies, applying the financial resources and management expertise to foster the growth and profitability of the acquired businesses. The holding company serves as a financial and professional partner to the management of the subsidiaries. The role of the holding company is to improve each subsidiary's access to capital, achieve economies of scale by consolidating administrative functions, and utilize the financial and management expertise of corporate personnel across all units. The Company is continuing to work with management of the subsidiary companies to improve revenues, operations and profitability.
Private Securities Litigation Reform Act Safe Harbor Statement:
The matters discussed in this release contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes", "anticipates", "plans", "expects" and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those that we may anticipate in each of our segments reflected by our subsidiaries' operations include without limitations, continued value of our real estate portfolio, the strength of the real estate market in Houston, Texas as a whole, continued acceptance of the Company's products and services, increased levels of competition, new products and technology changes, the dependence upon financing, third party suppliers and intellectual property rights, the rules of regulatory authorities and risks associated with any potential acquisitions. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis, judgment, belief or expectation only as of the date hereof.Contact: American International Industries, Inc.
Investor Relations: Rebekah Ruthstrom, 281-334-9479 firstname.lastname@example.org