Acorn's Q2 Revenues Grow 18% in Remote Monitoring and Control of Standby Generators and Pipelines

8/14/2018, 10:02 PM (Source: GlobeNewswire)

WILMINGTON, Del., Aug. 14, 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 second quarter ended June 30, 2018. Acorn will host a conference call tomorrow at 11:00 a.m. EDT (details below) to review its results and outlook.

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Jan Loeb, President and CEO of Acorn, commented, "We continue to achieve solid organic growth in our remote monitoring business. We believe that growth opportunities for remote monitoring and control of industrial assets and for the Internet of Things (IoT) in general are still in the early stages, particularly considering growing customer awareness of the operational, financial and compliance benefits that technology can provide. Not only has OmniMetrix delivered another quarter of strong growth, but it also achieved stronger gross margins due to ongoing investments in R&D and the rollout of next generation products.

"In addition to supporting OmniMetrix’s long term organic growth, we also continue to look for attractive, complementary acquisitions that would enhance our financial performance and leverage the tax benefits of our over $60 million of net operating loss carryforwards. Our goal is to find a suitable acquisition target to increase our size and presence in the IoT space.  

“Finally, we plan to change our corporate name and trading symbol this year to more accurately reflect the industrial monitoring focus of our company."

Financial Results
Driven by increases in both monitoring and hardware revenue, OmniMetrix’s second quarter 2018 revenue rose 18% to $1,230,000 from $1,045,000 in the second quarter of 2017. Monitoring revenue reflects a significant increase in number of units being monitored, more than 90% of which renew annually, and the hardware revenue increase reflects higher sales of monitoring equipment in the period versus the same period last year.

    
($ in thousands)  Q2'18  Q2'17Increase 
    
Monitoring revenue$  657 $  545 21%
Hardware revenue$  573 $  500 15%
Total revenue$  1,230 $1,045 18%
Gross profit$  736 $  594 24%
Gross margin   60%   57%300 bps
        

In the first six months of 2018, revenue increased 14% to $2,439,000, as compared to the first six months of 2017. As shown below, the increase was driven primarily by growth of monitoring revenue, which stems from a significant increase in the number of units monitored.

    
($ in thousands)

Six Months
2018
Six Months
2017
Increase
    
Monitoring revenue$  1,299 $  1,087 20%
Hardware revenue$  1,140 $  1,054 8%
Total revenue$   2,439 $  2,141 14%
Gross profit$   1,481 $  1,208 23%
Gross margin   61%   56%500 bps
        

OmniMetrix’s second quarter 2018 gross profit grew 24% to $736,000, reflecting an in increase in gross margin to 60%, compared to second quarter 2017 gross profit of $594,000 and gross margin of 57%. Similarly, gross profit grew 23% to $1,481,000 for the first six months of 2018, compared to the first six months of 2017, and gross margin improved to 61% from 56% in the prior-year period. The gross margin increases were principally due to the rollout of higher-margin, next-generation monitoring products, as evidenced by hardware gross margin increasing to 35% in the first six months of 2018 from 27% in the first six months of 2017. Gross margin on monitoring was 83% in the first six months of 2018 compared to 85% in the prior-year period, with the decrease due to due to a change in the mix of products monitored.

OmniMetrix's second quarter 2018 operating expenses were $814,000 versus $794,000 in the second quarter of 2017, as higher SG&A costs were partially offset by lower R&D expenses.

OmniMetrix trimmed its operating loss to $78,000 in the second quarter of 2018 from $200,000 in the second quarter of 2017 as revenue and gross profit growth outpaced slightly higher operating costs. Likewise, OmniMetrix reduced its loss to $133,000 in the first six months of 2018 from $396,000 in the first six months of 2017.

Acorn's corporate SG&A costs increased to $466,000 in second quarter 2018 from $307,000 in the prior-year period. Second quarter 2018 SG&A expenses included one-time bonuses totaling $150,000 paid to Acorn's CEO and former Executive Chairman of the Board in recognition of their efforts in executing the 2018 DSIT Transaction. Excluding bonuses, corporate SG&A expense increased $9,000 in second quarter 2018, or 3% over the prior-year period.

Acorn's consolidated operating loss increased $37,000 to $544,000 in second quarter 2018 from $507,000 in the second quarter of 2017.

Acorn reported a second quarter 2018 net loss attributable to shareholders of $538,000, or $0.02 per share, compared to a net loss attributable to shareholders of $491,000, or $0.02 per share, in the second quarter of 2017. 

Adjusted for the non-recurring impact of the net loss on the sale of the Company’s remaining stake in DSIT of $829,000, or $0.03 per share, recorded in the first quarter of 2018, Acorn had an adjusted net loss attributable to shareholders of $931,000, or $0.03 per share for the first six months of 2018, versus a net loss of $711,000, or $0.02 per share, in the prior-year period.

Liquidity and Capital Resources
As of June 30, 2018, Acorn had cash and cash equivalents of $1,781,000. There was also $190,000 of short-term credit outstanding (and $130,000 of unused credit available) under OmniMetrix’s revolving credit facility.

    
Conference Call Details   
     Date/Time:  Wednesday, August 15th 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., 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 that may affect Acorn Energy’s business, including the business of its subsidiary, 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
Twitter: @Acorn_IR and @OmniMetrix

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

ACORN ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

 
  Six months ended
June 30,
  Three months ended
June 30,
 
  2018  2017  2018  2017 
             
Revenue $2,439  $2,141  $1,230  $1,045 
Cost of sales  958   933   494   451 
Gross profit  1,481   1,208   736   594 
Operating expenses:                
Research and development expenses  260   268   131   176 
Selling, general and administrative expenses  2,133   1,784   1,149   925 
Total operating expenses  2,393   2,052   1,280   1,101 
Operating loss  (912)  (844)  (544)  (507)
Finance expense, net  (79)  (86)  (27)  (52)
Loss before income taxes  (991)  (930)  (571)  (559)
Income tax expense            
Net loss after income taxes  (991)  (930)  (571)  (559)
Shares of income in DSIT  33   69      33 
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  (1,820)  (861   (571)  (526 
Income from discontinued operations, net of
income taxes
     65       
Net loss  (1,820)  (796)  (571)  (526)
Non-controlling interest share of net loss  60   85   33   35 
Net loss attributable to Acorn Energy, Inc.
shareholders
 $(1,760) $(711) $(538) $(491)
                 
Basic and diluted net loss per share attributable
to Acorn Energy, Inc. shareholders:
                
Continuing operations $(0.06) $(0.02  $(0.02) $(0.02)
Discontinued operations    $0.00       
Total attributable to Acorn Energy, Inc. shareholders $(0.06) $(0.02) $(0.02) $(0.02)
Weighted average number of shares
outstanding attributable to Acorn Energy, Inc.
shareholders – basic
  29,531   29,368   29,537   29,402 
Weighted average number of shares
outstanding attributable to Acorn Energy, Inc.
shareholders –diluted
  29,531   29,368   29,537   29,402 
 


ACORN ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

  
  As of
June 30, 2018
  As of
December 31,
2017
 
ASSETS        
Current assets:        
Cash and cash equivalents $1,781  $481 
Accounts receivable, net  754   1,103 
Inventory, net  257   229 
Investment in DSIT     5,800 
Deferred charges  917   999 
Other current assets  176   91 
Total current assets  3,885   8,703 
Property and equipment, net  106   139 
Other assets  485   380 
Total assets $4,476  $9,222 
LIABILITIES AND EQUITY (DEFICIT)        
Current liabilities:        
Short-term credit $190  $313 
Accounts payable  423   489 
Accrued expenses  499   466 
Deferred revenue  2,762   2,753 
Due to Acorn directors  180   1,690 
Due to DSIT     1,624 
Other current liabilities  186   185 
Total current liabilities  4,240   7,520 
Non-current liabilities:        
Deferred revenue  965   811 
Due to Acorn directors  163    
Other non-current liabilities  47   139 
Total non-current liabilities  1,175   950 
Commitments and contingencies        
Equity (Deficit):        
Acorn Energy, Inc. shareholders        
Common stock - $0.01 par value per share:        
Authorized – 42,000,000 shares; Issued – 30,339,228 and
30,302,271 shares at June 30, 2018 and December 31, 2017,
respectively
  303   303 
Additional paid-in capital  99,846   99,819 
Warrants  1,600   1,600 
Accumulated deficit  (99,823)  (98,215)
Treasury stock, at cost – 801,920 shares at June 30, 2018 and
December 31, 2017
  (3,036)  (3,036)
Total Acorn Energy, Inc. shareholders’ equity (deficit)  (1,110)  471 
Non-controlling interests  171   281 
Total equity (deficit)  (939)  752 
Total liabilities and equity (deficit) $4,476  $9,222 
  

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