Acorn Reports Q1 with Continued Growth and Margin Expansion in Remote Monitoring & Control of Industrial Assets (IoT)
Acorn Reports Q1 with Continued Growth and Margin Expansion in Remote Monitoring & Control of Industrial Assets (IoT)
  • Roberta Chan
  • 승인 2018.05.16 12:35
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Dial-in Number for Investor Call Wednesday, 5/16 at 11:00 am EDT is 844-834-0644

WILMINGTON, Del., May 15, 2018 (GLOBE NEWSWIRE) -- Acorn Energy, Inc. (OTCQB:ACFN), a provider of remote monitoring and control systems and services for generators, pipelines and other industrial assets, today announced results for its first quarter ended March 31, 2018. Acorn will host a conference call tomorrow at 11:00 a.m. EDT (details below) to review its results and outlook.

Jan Loeb, President and CEO of Acorn, commented, "We demonstrated solid operating progress in the first quarter with new orders increasing 12% and revenue rising 10% versus a year ago, in what is generally our seasonally slowest selling period. We were also successful in expanding our gross margin to 62% from 56% in the first quarter of 2017, generating a 21% increase in Gross Profit. Our OmniMetrix industrial monitoring and control subsidiary trimmed its operating loss to $55,000 in the first quarter from $196,000 in the first quarter of last year.

"We also completed the sale of our remaining stake in DSIT Solutions in the first quarter, a significant milestone for the Company. Proceeds from the sale allowed us to pay off our debt and provided approximately $1.9 million in net cash, after withholding taxes, transaction costs and the repayment of loans, to fund operations and growth. We are now fully focused on the expansion of our IoT business, both organically and through the purchase of attractively-valued, complementary technologies or lines-of-business.

“Remote monitoring and control is an exciting and high-growth area, benefitting from IoT innovation with a clear and compelling value proposition. The strong growth, recurring revenue and attractive margin profile of this business provides a solid foundation on which to build value. Beyond growth, we are also focused on moving Acorn to our goal of cash-flow-breakeven and ultimately to profitability and believe we can accomplish the first goal over the next year. Once profitable, we have over $60 million of tax loss carryforwards to shelter us from income taxes.

"In summary, this is a very exciting time for Acorn. Over the past two years, we successfully streamlined the business and its overhead, exited loss-making businesses, eliminated corporate debt and raised cash through strategic divestments, all of which substantially improved our operating results. With a clear path to growth and profitability, we believe Acorn is well positioned to build shareholder value.”

Financial Results
Reflecting OmniMetrix’s results, first quarter 2018 revenue increased 10% to $1,209,000 from $1,096,000 in the first quarter of 2017. As shown in the table below, the improvement was driven principally by increased sales of monitoring services.

           
($ in thousands) Q1'18   Q1'17   %
Increase
Hardware revenue $ 567   $ 554   2 %
Monitoring revenue $ 642   $ 542   18 %
Total revenue $ 1,209   $ 1,096   10 %

On January 1, 2018, the Company adopted ASC 606 for revenue recognition. The adoption of ASC 606 did not have a material impact on OmniMetrix’s financial results, however, OmniMetrix did update the estimated unit life of its hardware from two years to three years, which had a negative impact on hardware revenue recognized during the first quarter of 2018.

OmniMetrix’s first quarter 2018 gross profit grew 21% to $745,000, reflecting an in increase in gross margin to 62%, compared to first quarter 2017 gross profit of $614,000 and a gross margin of 56%. The margin increase was principally due to the rollout of higher-margin, next-generation products in the Power Generation segment, which helped raise the overall hardware margin to 37% in the first quarter of 2018 from 27% in first quarter of 2017.

OmniMetrix's first quarter 2018 SG&A expenses decreased $47,000 versus first quarter of 2017 due to certain one-time marketing initiatives in 2017, while R&D expenses increased $37,000 versus first quarter of 2017, related to the continued development of next-generation Power Generation and Cathodic Protection monitoring technology.

Higher revenue and gross profit, combined with lower operating costs, allowed OmniMetrix to trim its operating loss to $55,000 in the first quarter of 2018 from $196,000 in the first quarter of 2017.

On a consolidated basis (including corporate costs), Acorn's operating costs increased by $162,000 to $1,113,000 in the first quarter of 2018, versus $951,000 in the first quarter of 2017. The increase was due to a $167,000 benefit from a settlement with a professional service provider recorded in the first quarter of 2017. Accordingly, Acorn's consolidated operating loss increased to $368,000 in first quarter 2018 from $337,000 in the first quarter of 2017. Excluding the impact of the 2017 settlement, Acorn's first quarter loss would have decreased by $136,000 versus the first quarter of 2017.

Acorn reported a first quarter 2018 net loss attributable to shareholders of $1,222,000, or $0.04 per share, compared to a net loss attributable to shareholders of $220,000, or $0.01 per share, in the first quarter of 2017. The first quarter of 2018 included a $829,000 loss on Acorn's sale of DSIT. Excluding this loss, Acorn would have reported a first quarter 2018 loss of $393,000 or $0.01 per share. The first quarter 2017 loss of $220,000 included a $167,000 benefit from a settlement reached with a professional service provider on an outstanding invoice. Absent this benefit, the first quarter 2017 loss would have been $387,000 or $0.01 per share.

Liquidity and Capital Resources
The February 2018 closing of the DSIT transaction provided Acorn with approximately $1.9 million in cash after transaction costs, taxes, and debt and interest repayments to directors and DSIT. Acorn's corporate cash balance on May 9, 2018, was approximately $2.0 million. The Company has no long-term debt.

In the fourth quarter of 2017, OmniMetrix renewed its Loan and Security Agreement, providing OmniMetrix with access to accounts receivable formula-based financing of the lesser of 75% of eligible receivables or $1 million. Under this facility, approximately $160,000 was outstanding as of May 9, 2018, with approximately $500,000 of additional availability.

Conference Call Details

  Date/Time: Wednesday, May 16th at 11:00 am EDT
  Dial-in Number: 844-834-0644 or 1-412-317-5190 (International)
  Online Replay/Transcript: Audio file and call transcript will be posted to the
    Investor section of Acorn's website when available.
  Email Option for Q&A: acfn@catalyst-ir.com – before or after the call.

About Acorn (www.acornenergy.com) and OmniMetrix™ (www.omnimetrix.net)
Acorn Energy, Inc. owns an 80% equity stake in OmniMetrix, Inc. and consolidates its assets, liabilities and results of operations. OmniMetrix is a pioneer and leader in machine-to-machine (M2M) and Internet of Things (IoT) wireless remote monitoring and control for gas pipelines and stand-by generators used in cell towers, medical facilities, data centers, public transportation systems and for other critical equipment, including at federal, state and municipal government facilities. OmniMetrix offers proven, cost-effective solutions for making critical systems more reliable with thousands of monitored assets and thousands of customers, including 23 in the Fortune 500 or Fortune Global 500.

Safe Harbor Statement
This press release includes forward-looking statements, which are subject to risks and uncertainties. There is no assurance that Acorn will be successful in growing its business; reaching profitability; or maximizing the value of its operating company and other assets. A complete discussion of the risks and uncertainties, which may affect Acorn Energy’s business, including the businesses of its subsidiaries is included in “Risk Factors” in the Company’s most recent Annual Report on Form 10-K as filed by the Company with the Securities and Exchange Commission.

Follow us
Investors Hangout
Twitter: @Acorn_IR

Investor Relations Contacts
William Jones, 267-987-2082
David Collins, 212-924-9800
Catalyst IR
acfn@catalyst-ir.com

 

 
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
 
  Three months ended March 31,
    2018       2017  
       
Revenue $ 1,209     $ 1,096  
Cost of sales   464       482  
Gross profit   745       614  
Operating expenses:      
Research and development expense   129       92  
Selling, general and administrative expense   984       859  
Total operating expenses   1,113       951  
Operating loss   (368 )     (337 )
Finance expense, net   (52 )     (34 )
Loss before income taxes   (420 )     (371 )
Income tax expense   -       -  
Net loss after income taxes   (420 )     (371 )
Share of income in DSIT   33       36  
Impairment of investment in DSIT   (33 )     -  
Loss on sale of interest in DSIT, net of withholding taxes and transaction costs   (829 )     -  
Loss before discontinued operations   (1,249 )     (335 )
Income from discontinued operations, net of income taxes   -       65  
Net loss   (1,249 )     (270 )
Non-controlling interest share of net loss   27       50  
Net loss attributable to Acorn Energy, Inc. shareholders $ (1,222 )   $ (220 )
       
Basic and diluted net income (loss) per share attributable to Acorn Energy, Inc. shareholders:      
Continuing operations $ (0.04 )   $ (0.01 )
Discontinued operations   -       0.00  
Total attributable to Acorn Energy, Inc. shareholders $ (0.04 )   $ (0.01 )
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders – basic   29,513       29,335  
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders –diluted   29,513       29,323  
               

 

   
ACORN ENERGY, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)  
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)  
   
  As of
March 31,
2018
  As of
December 31,
2017
 
 
 
ASSETS        
Current assets:        
Cash and cash equivalents $ 2,421     $ 481    
Accounts receivable, net   1,011       1,103    
Inventory, net   202       229    
Investment in DSIT         5,800    
Deferred charges   963       999    
Other current assets   144       91    
Total current assets   4,741       8,703    
Property and equipment, net   122       139    
Other assets   438       380    
Total assets $ 5,301     $ 9,222    
LIABILITIES AND EQUITY (DEFICIT)        
Current liabilities:        
Short-term credit $ 503     $ 313    
Accounts payable   328       489    
Accrued expenses   542       466    
Deferred revenue   2,758       2,753    
Due to Acorn directors   312       1,690    
Due to DSIT   116       1,624    
Other current liabilities   192       185    
Total current liabilities   4,751       7,520    
Non-current liabilities:        
Deferred revenue   840       811    
Other non-current liabilities   69       139    
Total non-current liabilities   909       950    
Commitments and contingencies        
Equity (Deficit):        
Acorn Energy, Inc. shareholders        
Common stock - $0.01 par value per share:        
Authorized – 42,000,000 shares; Issued – 30,320,750 and
30,302,271 shares at March 31, 2018 and December 31, 2017,
respectively
  303       303    
Additional paid-in capital   99,830       99,819    
Warrants   1,600       1,600    
Accumulated deficit   (99,285 )     (98,215 )  
Treasury stock, at cost – 801,920 shares at March 31, 2018 and
December 31, 2017
  (3,036 )     (3,036 )  
Total Acorn Energy, Inc. shareholders’ equity (deficit)   (588 )     471    
Non-controlling interests   229       281    
Total equity (deficit)   (359 )     752    
Total liabilities and equity (deficit) $ 5,301     $ 9,222    

 


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