Press Releases

SG Blocks Announces Second Quarter Financial Results

NEW YORK, NY -- (Marketwired) -- 08/09/17 -- SG Blocks, Inc. (NASDAQ: SGBX) ("SG Blocks" or the "Company"), a premier designer, innovator and fabricator of container-based structures, today announced its operating results for the three months ended June 30, 2017, as published in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.

Operating Results for the Quarter Ended June 30, 2017:

  • Total revenues increased 17% to $1,001,734 for the three months ended June 30, 2017, compared to $828,477 for the three month period ending June 30, 2016.

  • Gross profit for the three months ended June 30, 2017 was $145,787 compared to $141,732 for the three month period ending June 30, 2016.

  • GAAP net loss was $(1,705,672), or $(3.15) per basic and diluted share, for the three months ended June 30, 2017 with 541,424 weighted average basic and diluted shares outstanding as of June 30, 2017.

  • Non-GAAP net loss was $318,998, or $ (0.59) per basic and diluted share, for the three months ended June 30, 2017, with 541,424 weighted average basic and diluted shares outstanding as of June 30, 2017. Reconciliations between net income, earnings per share and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliation of EBITDA and Adjusted EBITDA to the nearest GAAP measure, net loss."

  • As of June 30, 2017, the Company had $5,662,488 of cash and cash equivalents and short-term investments.

Paul Galvin, Chief Executive Officer of SG Blocks, stated, "It's been a very busy quarter for us at SG Blocks. The recent public offering of our shares now traded on Nasdaq, resulting in net proceeds of approximately $7.2 million, has placed the Company on its strongest financial footing to date, with no debt and a clean capital structure. With a construction backlog of $9.7 million on June 30th, we are galvanized around our core as the first company to receive an ESR rating from the ICC, and we are driving growth with disciplined decisions, product leadership and focused execution. We are very optimistic about the future and we look forward to building atop recent operational momentum while driving towards measurable earnings growth."

Galvin concluded, "I want to also take this opportunity to thank all of those who have supported us and helped get us where we are today. We are grateful and humbled by your support. Rest assured, we will continue to work diligently on your behalf as we focus on building shareholder value."

Mahesh Shetty, Chief Financial Officer of SG Blocks, stated, "We have held the line on our operating expenses and look forward to expanding our margins as we execute on our pipeline."

SG Blocks will host a corresponding conference call to discuss the results with Chief Executive Officer Paul Galvin and Chief Financial Officer Mahesh Shetty today at 4:30 PM ET/1:30 PM PT. To participate in the conference call, investors from the U.S. and Canada should dial (877) 407-9716 ten minutes prior to the scheduled start time. International callers should dial (201) 493-6779.

In addition, the call will be broadcast live over the Internet and can be accessed through the Investor Relations section of the Company's website at www.sgblocks.com. The broadcast will be archived online upon completion of the conference call. A telephonic replay of the conference call will also be available until 11:59 p.m. ET on Wednesday, August 23, 2017 by dialing (844) 512-2921 in the U.S. and Canada and (412) 317-6671 internationally and entering the pin number: 13668248.

SG BLOCKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
Successor
2017
Predecessor
2016
Successor
2017
Predecessor
2016
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue:
Construction revenue $ 882,499 $ 801,692 $ 1,402,457 $ 1,004,216
Engineering services 119,235 26,785 203,870 52,007
Project management - - - -
Total 1,001,734 828,477 1,606,327 1,056,223
Cost of revenue:
Construction revenue 738,860 664,848 1,133,026 816,076
Engineering services 117,087 21,897 174,285 43,898
Project management - - - -
Total 855,947 686,745 1,307,311 859,974
Gross profit 145,787 141,732 299,016 196,249
Operating expenses:
Payroll and related expenses 292,550 200,318 635,598 367,254
General and administrative expenses 330,118 432,249 724,059 557,069
Marketing and business development expense 37,618 12,877 66,186 22,729
Pre-project expenses 7,508 22,233 16,647 26,411
Total 667,794 667,677 1,442,490 973,463
Operating loss (522,007 ) (525,945 ) (1,143,474 ) (777,214 )
Other income (expense):
Interest expense (165,194 ) (265,253 ) (330,388 ) (429,017 )
Interest income 4 5 8 8
Loss on conversion of convertible debentures (1,018,475 ) - (1,018,475 ) -
Change in fair value of financial instruments - - 96,327 -
Total (1,183,665 ) (265,248 ) (1,252,528 ) (429,009 )
Net loss before reorganization items (1,705,672 ) (791,193 ) (2,396,002 ) (1,206,223 )
Reorganization items:
Legal and professional fees - (80,239 ) - (171,893 )
Gain on reorganization - 713,379 - 713,379
Total - 633,140 - 541,486
Net loss $ (1,705,672 ) $ (158,053 ) $ (2,396,002 ) $ (664,737 )
Net loss per share - basic and diluted:
Basic and diluted $ (3.15 ) $ 0.00 $ (6.75 ) $ (0.01 )
Weighted average shares outstanding:
Basic and diluted 541,424 42,918,927 354,703 42,918,927
SG BLOCKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,
2017
December 31,
2016
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 5,632,463 $ 549,100
Short-term investment 30,025 30,017
Accounts receivable, net 97,441 234,518
Costs and estimated earnings in excess of billings on uncompleted contracts 258,149 33,349
Prepaid expenses 317,344 124,720
Inventory - 9,445
Total current assets 6,335,422 981,149
Equipment, net 4,180 5,559
Goodwill 4,162,173 4,162,173
Intangible assets, net 3,322,879 3,587,250
Totals $ 13,824,654 $ 8,736,131
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 1,444,068 $ 350,772
Billings in excess of costs and estimated earnings on uncompleted contracts 439,191 48,478
Deferred revenue - 72,788
Conversion option liabilities - 384,461
Total current liabilities 1,883,259 856,499
Convertible debentures, net of discounts - 2,446,337
Total liabilities 1,883,259 3,302,836
Commitments and Contingencies
Stockholders' equity:
Preferred stock, $1.00 par value, 5,405,010 shares authorized; 0 issued and outstanding as of June 30, 2017 and 1,801,670 issued and outstanding as of December 31, 2016 - 1,801,670
Common stock, $0.01 par value, 300,000,000 shares authorized; 3,982,238 issued and outstanding as of June 30, 2017 and 163,901 issued and outstanding as of December 31, 2016 39,823 1,639
Additional paid-in capital 15,604,150 4,936,562
Accumulated deficit (3,702,578 ) (1,306,576 )
Total stockholders' equity 11,941,395 5,433,295
Totals $ 13,824,654 $ 8,736,131
SG BLOCKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Successor
For the Six Months Ended
June 30,
2017
Predecessor
For the Six Months Ended
June 30,
2016
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $ (2,396,002 ) $ (664,737 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense 1,379 1,629
Amortization of debt issuance costs - 5,204
Amortization of discount on convertible debentures 330,388 387,965
Amortization of intangible assets 293,191 -
Interest income on short-term investment (8 ) (8 )
Loss on conversion of convertible debentures 1,018,475 -
Change in fair value of financial instruments (96,327 ) -
Interest expense on debtor in possession financing - 35,848
Gain on reorganization - (713,379 )
Stock-based compensation 209,383 119,146
Changes in operating assets and liabilities:
Accounts receivable 137,077 (104,858 )
Cost and estimated earnings in excess of billings on uncompleted contracts (224,800 ) -
Prepaid expenses (192,624 ) (28,589 )
Inventory 9,445 118,011
Intangible assets (28,820 ) -
Accounts payable and accrued expenses 378,123 269,317
Accounts payable and accrued expenses - subject to compromise - (22,457 )
Related party accounts payable and accrued expenses - (163,522 )
Billings in excess of costs and estimated earnings on uncompleted contracts 390,713 14,650
Deferred revenue (72,788 ) (87,115 )
Net cash used in operating activities (243,195 ) (832,895 )
Cash flows provided by investing activities:
Security deposit refund - 2,700
Net cash provided by investing activities - 2,700
Cash flows from financing activities:
Proceeds from issuance of convertible debentures - 1,319,001
Proceeds from public stock offering, net of offering costs 6,826,558 -
Payments on convertible debentures (1,500,000 ) -
Net cash provided by financing activities 5,326,558 1,319,001
Net increase in cash and cash equivalents 5,083,363 488,806
Cash and cash equivalents - beginning of period 549,100 466,997
Cash and cash equivalents - end of period $ 5,632,463 $ 955,803
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ - $ -
Supplemental disclosure of non-cash financing activities:
Conversion of debtor in possession financing to convertible debentures $ - $ 600,000
Conversion of convertible debentures to common stock $ 2,583,334 $ -
Conversion of preferred stock to common stock $ 1,801,670 $ -
Offering costs not paid and included in accounts payable and accrued expenses $ 715,173 $ -
SG BLOCKS, INC. AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA to the nearest GAAP measure, net loss
Six Months Ended June 30,
2017
Three Months Ended June 30,
2017
Net loss $ (2,396,002 ) $ (1,705,672 )
Addback interest expense 330,388 165,194
Addback depreciation and amortization 294,570 148,005
EBITDA (non-GAAP) (1,771,044 ) (1,392,473 )
Addback loss on conversion of convertible debentures 1,018,475 1,018,475
Less change in fair value of financial instruments (96,327 ) -
Addback stock compensation expense 209,383 55,000
Adjusted EBITDA (non-GAAP) $ (639,513 ) $ (318,998 )

About SG Blocks, Inc.

SG Blocks, Inc. is a premier innovator in advancing and promoting the use of code-engineered cargo shipping containers for safe and sustainable construction. The firm offers a product that exceeds many standard building code requirements, and also supports developers, architects, builders and owners in achieving greener construction, faster execution, and stronger buildings of higher value. For more information, visit www.sgblocks.com.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in the Company's filings with the Securities and Exchange Commission. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.

Contact Information

Media
Rubenstein Public Relations
Kati Bergou
212-805-3014
kbergou@rubensteinpr.com

Investors
Jason Assad
678-570-6791
Jassad@sgblocks.com

Source: SG Blocks, Inc.