Quantcast

See headlines for ACFN
View Print Version
More from GlobeNewswire

Acorn Achieves Q2 Revenue Increase of 12% and Gross Margin and Bottomline Improvements in OmniMetrix Remote Monitoring & Control IoT Business; Investor Call Tomorrow at 11am ET - Dial 844-834-0644

By GlobeNewswire,  August 14, 2019, 04:01:00 PM EDT

Acorn Achieves Q2 Revenue Increase of 12% and Gross Margin and Bottomline Improvements in OmniMetrix Remote Monitoring & Control IoT Business; Investor Call Tomorrow at 11am ET - Dial 844-834-0644


WILMINGTON, Del., Aug. 14, 2019 (GLOBE NEWSWIRE) -- Acorn Energy, Inc. (OTCQB: ACFN), a provider of remote monitoring and control systems and services for generators, pipelines, compressors and other industrial equipment, through its OmniMetrix subsidiary, today announced results for its second quarter ended June 30, 2019 (Q2'19). Acorn will host an investor call tomorrow at 11:00 a.m. EDT (see details below for the call and Q&A session) to review its results and outlook.

Walter Czarnecki, President and CEO of OmniMetrix, commented, "OmniMetrix achieved continued revenue growth, improved gross margins, and an operating profit during Q2'19. We continued to deploy our next generation products, the Hero 2 Rectifier Monitor and AirGuard Compressor Monitor. We also made progress on new product development on both hardware and software products, which will further improve the customer experience we deliver and help us maintain our costs as we grow.

"We added several new customers in the quarter, including another Fortune 500 energy company. Our progress resulted in improved gross margins of 65% vs. 60% in the prior-year period and an operating profit of $40,000. Our ongoing product development initiatives and investments in additional sales and marketing resources are expected to fuel continued growth in the markets we serve."

Jan Loeb, President and CEO of Acorn, added, "With steadily improving operating performance at OmniMetrix and overall cost controls, Acorn reduced its consolidated operating loss to $203,000 in Q2'19 versus $261,000 in Q1'19 and $544,000 in Q2'18. We also achieved a critical milestone in our strategic plan by using a portion of the proceeds of a rights offering to reacquire a 19% interest in OmniMetrix for $1.273 million, increasing Acorn's ownership to 99% from 80%. We feel this is a very positive transaction for our shareholders given the continued growth and improving operating results at OmniMetrix and the attractive purchase terms for the ownership stake which were established in November 2015.

"We plan to make incremental investments in sales and marketing at OmniMetrix during 2019 in order to pursue growth opportunities while continuing to maintain discipline on overhead costs. We also continue to evaluate opportunities to expand our business and enhance value for shareholders."

OmniMetrix Summary Financial Results

($ in thousands) Q2'19

  Q2'18

  Change     1H 2019

  1H 2018

  Change  
Monitoring revenue $ 804   $ 657   22 %   $ 1,570   $ 1,299   21 %
Hardware revenue $ 573   $ 573   0 %   $ 1,134   $ 1,140   -1 %
Total revenue $   1,377   $ 1,230   12 %   $   2,704   $   2,439   11 %
Gross profit $ 901   $ 736   22 %   $ 1,722   $ 1,481   16 %
Gross margin   65 %   60 %       64 %   61 %  
                               

OmniMetrix's Q2'19 revenue rose 12% to $1,377,000 from $1,230,000 in Q2'18 due to strength in ongoing monitoring revenue which grew 22%. Monitoring revenue growth reflects an increase in the number of end points being monitored, more than 90% of which renew annually. Similarly, revenue rose 11% in the first six months of 2019 (1H'19) compared to the first six months of 2018, driven by monitoring revenue growth.

Gross profit grew 22% in Q2'19 to $901,000, compared to gross profit of $736,000 in Q2'18. Gross margin increased to 65% in Q2'19 from 60% in Q2'18 due to increased revenue, improved margins on hardware, and a more favorable sales mix, as monitoring revenue has a higher gross margin than hardware. The gross margin on hardware increased to 40% in Q2'19 from 34% in Q2'18. Gross margin on monitoring revenue was level at 83% in both periods.

OmniMetrix's Q2 total operating expenses increased 6% to $861,000 versus $814,000 in Q2'18, primarily due to higher selling, general and administrative expenses (SG&A) targeted at driving business growth. SG&A costs were flat in Q2'19 versus Q1'19.

Revenue and gross profit growth more than offset slightly higher operating expenses, allowing OmniMetrix to generate operating profit of $40,000 in Q2'19 versus a loss of $78,000 in Q2'18 and a loss of $52,000 in Q1'19. For the 1H'19, Omnimetrix was able to reduce its operating loss by over 90% to $12,000 vs. $133,000 in 1H'18.

Acorn Consolidated Financial Results

Acorn's corporate SG&A costs decreased nearly 50% to $243,000 in Q2'19 compared to $466,000 in Q2'18, reflecting ongoing implementation of cost reduction initiatives including a material reduction in personnel costs, board fees and other public company costs, including professional service fees. SG&A costs in Q2'19 increased $34,000 or 16% from Q1'19 due to tax and other seasonal expenses. Corporate overhead is not expected to change materially except as needed to support growth in OmniMetrix.

Lower corporate expense coupled with revenue growth at OmniMetrix allowed Acorn to reduce its consolidated operating loss by 63% to $203,000 in Q2'19 versus $544,000 in Q2'18.

The net loss attributable to Acorn shareholders improved to $199,000, or $0.01 per share, in Q2'19 compared to $538,000, or $0.02 per share, in Q2'18.

Net loss attributable to Acorn shareholders was $436,000, or $0.01 per share, in 1H'19 versus $1.8 million, or $0.06 per share, in 1H'18. The prior-year period included a loss of $829,000 ($0.03 per share) on the sale of Acorn's remaining interest in DSIT.

Rights Offering

On June 28, 2019, the Company completed a rights offering, raising $2,206,000 in net proceeds after $188,000 in expenses. Pursuant to this offering 9,975,553 shares of Acorn common stock were purchased for $0.24 per share.

Repurchase of 19% Stake in OmniMetrix

On July 1, 2019 Acorn utilized proceeds from the rights offering to reacquire a 19% interest in its OMX Holdings, Inc. subsidiary ("Holdings"), which owns 100% of the membership interests of OmniMetrix, for $1,273,000, including $323,000 of accrued dividends. Acorn now controls 99% of Holdings.

Remaining proceeds from the rights offering will provide OmniMetrix with sales and marketing resources to facilitate expansion, as well as support next-generation product development and general working capital.

Liquidity and Capital Resources

On a consolidated basis, Acorn used cash of $423,000 in operating activities during 1H'19 versus $1.9 million used in the prior-year period. Of the $423,000 used in operating activities, $81,000 related to OmniMetrix and $342,000 related to Acorn corporate.

In March 2019, OmniMetrix negotiated a more favorable accounts receivable credit line which provides financing of the lesser of 75% of eligible receivables or $1 million. OmniMetrix had $191,000 outstanding on this credit line at June 30, 2019 and $312,000 was available to borrow.

As of August 9, 2019, giving effect to the repurchase of the OmniMetrix stake, Acorn had cash and cash equivalents of approximately $1,577,000 (excluding restricted cash of $304,000 held in a bank in Israel).

Management believes that its current cash plus any cash generated from operations and borrowings from available lines of credit should provide sufficient liquidity to finance the operating activities of Acorn and the operations of OmniMetrix for at least the next twelve months.

Conference Call Details
Date/Time: Thursday, August 15th at 11:00 am EDT
Dial-in Number: 1-844-834-0644 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 a 99% equity stake in OmniMetrix, 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 25 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,
 
    2019     2018     2019     2018  
                         
Revenue   $ 2,704     $ 2,439     $ 1,377     $ 1,230  
Cost of sales - products and services     952       958       476       494  
Cost of sales - other     30                    
Gross profit     1,722       1,481       901       736  
Operating expenses:                                
Research and development expenses     283       260       139       131  
Selling, general and administrative expenses     1,903       2,133       965       1,149  
Total operating expenses     2,186       2,393       1,104       1,280  
Operating loss     (464 )     (912 )     (203 )     (544 )
Finance expense, net     (1 )     (79 )     (1 )     (27 )
Loss before income taxes     (465 )     (991 )     (204 )     (571 )
Income tax expense                        
Net loss after income taxes     (465 )     (991 )     (204 )     (571 )
Share of income in DSIT           33              
Impairment of investment in DSIT           (33 )            
Loss on sale of interest in DSIT, net of withholding taxes and transaction costs           (829 )            
Net loss     (465 )     (1,820 )     (204 )     (571 )
Non-controlling interest share of net loss     29       60       5       33  
Net loss attributable to Acorn Energy, Inc. shareholders   $ (436 )   $ (1,760 )   $ (199 )   $ (538 )
                                 
Basic and diluted net loss per share attributable to Acorn Energy, Inc. shareholders:   $ (0.01 )   $ (0.06 )   $ (0.01 )   $ (0.02 )
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders - basic     30,515       29,531       30,675       29,537  
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders -diluted     30,515       29,531       30,675       29,537  
 



ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

    As of

June 30, 2019
    As of

December 31, 2018
 
ASSETS                
Current assets:                
Cash and cash equivalents   $ 2,933     $ 973  
Restricted cash     304       290  
Accounts receivable, net     808       665  
Inventory, net     369       261  
Deferred charges     680       803  
Other current assets     144       144  
Total current assets     5,238       3,136  
Property and equipment, net     80       73  
Other assets     747       710  
Total assets   $ 6,065     $ 3,919  
LIABILITIES AND EQUITY(DEFICIT)                
Current liabilities:                
Short-term credit   $ 191     $  
Accounts payable     313       246  
Accrued expenses     467       430  
Deferred revenue     2,691       2,734  
Due to former Acorn director (resigned as of August 6, 2018)     323       250  
Other current liabilities     121       127  
Total current liabilities     4,106       3,787  
Non-current liabilities:                
Deferred revenue     1,445       1,327  
Due to former Acorn director (resigned as of August 6, 2018)           33  
Other non-current liabilities     13       2  
Total non-current liabilities     1,458       1,362  
Commitments and contingencies                
Equity(deficit):                
Acorn Energy, Inc. shareholders                
Common stock - $0.01 par value per share:                
Authorized - 42,000,000 shares; Issued - 39,591,339 and 30,357,706 shares at June 30, 2019 and December 31, 2018, respectively     396       304  
Additional paid-in capital     102,484       100,340  
Warrants     1,118       1,118  
Accumulated deficit     (100,500 )     (100,064 )
Treasury stock, at cost - 801,920 shares at June 30, 2019 and December 31, 2018     (3,036 )     (3,036 )
Total Acorn Energy, Inc. shareholders' equity(deficit)     462       (1,338 )
Non-controlling interests     39       108  
Total equity(deficit)     501       (1,230 )
Total liabilities and equity(deficit)   $ 6,065     $ 3,919  

 

Source: Acorn Energy, Inc.

This article appears in: News Headlines

Referenced Stocks: ACFN










Today's Market Activity

NASDAQ 7751.77
-239.62  ▼  3.00%
DJIA 25628.90
-623.34  ▼  2.37%
S&P 500 2847.11
-75.84  ▼  2.59%
Data as of Aug 23, 2019