Welcome!

Microsoft Cloud Authors: Pat Romanski, Lori MacVittie, Andreas Grabner, Jim Kaskade, John Basso

News Feed Item

Echelon Reports Fourth Quarter and Full Year 2012 Results

SAN JOSE, Calif., Feb. 12, 2013 /PRNewswire/ -- Echelon Corporation (NASDAQ: ELON) today announced financial results for the fourth quarter and full year 2012 ended December 31, 2012.

  • Q4 Revenues: $23.8 million
  • Q4 GAAP Net Loss: $4.1 million; GAAP Net Loss per Share: $0.10
  • Q4 Non-GAAP Net Loss: $2.7 million; Non-GAAP Net Loss per Share: $0.06
  • 2012 Revenues: $134.0 million
  • 2012 GAAP Net Loss: $12.8  million; GAAP Net Loss per Share: $0.30 
  • 2012 Non-GAAP Net Loss: $4.7 million; Non-GAAP Net Loss per Share: $0.11

"While 2012 was a challenging year in the smart grid market, we made some significant strides in Echelon's strategic transformation. We entered new territories with our subsystems strategy, developed new advanced metering products via our Echelon-Holley joint venture and successfully implemented cost saving and gross margin enhancing initiatives," said Ron Sege, chairman and CEO of Echelon.

"We ended the fourth quarter with a number of promising system and sub-system pilots and deployments, indicating that our strategy of targeting geographies with strong fundamentals for investment in grid modernization is sound. As we expect 2013 to be another year of modest demand in the smart grid market, we will continue the difficult task of restructuring our operations while investing in our strategic initiatives."

Total revenues for the fourth quarter were $23.8 million, down from $40.5 million in the same period last year. Revenues from Echelon's systems sales, reflecting sales to our utility customers, were $10.7 million for the fourth quarter, down from $26.4 million in the same period last year. Revenues from Echelon's sub-systems, largely from commercial customers, were $13.1 million in the fourth quarter, down from $14.2 million a year ago. Included in sub-systems revenues were $2.9 million of sales to Enel in the fourth quarter compared to $2.1 million in the same period last year.

For the full year of 2012, revenues were $134.0 million compared to $156.5 million in 2011. System and sub-system revenues both decreased 14% to $85.2 million and $48.8 million, respectively. Within sub-system sales, Enel project sales decreased 9% to $6.5 million.

Gross margin in the fourth quarter of 2012 was 47.0% compared to 39.2% in the fourth quarter of 2011. Total operating expenses for the quarter were $14.9 million compared to $19.8 million in the fourth quarter of 2011.

GAAP net loss for the fourth quarter was $4.1 million, or $0.10 cents per share, compared to a net loss of $4.2 million, or $0.10 cents per share, in the same period last year. Non-GAAP net loss for the fourth quarter was $2.7 million, or $0.06 cents per share, compared to a non-GAAP net loss of $1.3 million, or $0.03 cents per share for the fourth quarter of 2011. 

GAAP net loss for the full year of 2012 was $12.8 million, or $0.30 cents per share, compared to GAAP net loss of $13.0 million, or $0.31 cents per share, for the same period in 2011. Non-GAAP net loss for the year was $4.7 million, or $0.11 cents per share, compared to non-GAAP net loss of $3.4 million, or $0.08 cents per share in 2011.

Restructuring Charge
The company expects to incur a $2.5 to $3.0 million restructuring charge in the first quarter related to a workforce reduction that will affect approximately 15% of its employees. These actions are expected to be implemented over the next 12 months.

Business Outlook
Echelon offers the following guidance for the first quarter of 2013:

  • Total revenues are expected to be between $24.0 million and $26.0 million, with systems and sub-systems revenues accounting for about 50% each.
  • Non-GAAP gross margin is expected to be approximately 45-46%.
  • Stock-based compensation expense is expected to be approximately $1.0 million.
  • Non-GAAP loss per share amounts are expected to range from $0.06 to $0.11, based on a fully diluted weighted average shares outstanding of 43.0 million.
  • GAAP loss per share is expected to be between $0.16 and $0.21.

For those interested in further discussion regarding this release, Echelon's management will participate in a conference call today at 2:00 p.m. Pacific/5:00 p.m. Eastern Time. To access the call, dial 888-771-4371 or 847-585-4405 outside the U.S and provide the confirmation number 34104452. An archived replay of the webcast will be available approximately two hours following the end of the call.

Use of Non-GAAP Financial Information
Echelon continues to provide all information required in accordance with GAAP, but believes that an investor's evaluation of our ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, we provide non-GAAP net income and non-GAAP net income per share data as additional information relating to Echelon's operating results. Echelon presents these non-GAAP financial measures to provide investors with an additional tool for evaluating Echelon's operating results in a manner that focuses on what Echelon believes to be its ongoing business operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with GAAP. 

Echelon's management uses certain non-GAAP financial information, namely operating results excluding restructuring charges as well as the impact of stock-based compensation charges made in accordance with ASC 718 (formerly SFAS 123R), to evaluate its ongoing operations and for internal planning and forecasting purposes. Accordingly, we believe it is useful for Echelon's investors to review, as applicable, information that both includes and excludes these charges (and the related tax impact) in order to assess the performance of Echelon's business and for planning and forecasting in future periods. Whenever Echelon reports such non-GAAP financial measures, a complete reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure is provided.  Investors are encouraged to review these reconciliations to ensure they have a thorough understanding of the reported non-GAAP financial measures and their most directly comparable GAAP financial measures.

About Echelon Corporation
Echelon Corporation (ELON) is an energy control networking company, with the world's most widely deployed proven, open standard, multi-application platform, selling complete systems and embedded sub-systems for smart grid, smart city and smart building applications. Our platform is embedded in more than 100 million devices, 35 million homes, and 300,000 buildings and powers energy savings applications for smart grids, smart cities and smart buildings. We help our customers reduce operational costs, enhance satisfaction and safety, grow revenues and prepare for a dynamic future. More information about Echelon can be found at http://www.echelon.com.

Visit the Smart Energy Blog by Echelon.

Echelon and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries. Other product or service names mentioned herein are the trademarks of their respective owners.

Risk Factors Regarding Forward-Looking Statements
This press release may contain statements relating to future plans, events or performance, including statements regarding Echelon's potential business in certain geographies; the potential for system and sub-system pilots and deployments to expand; and Echelon's anticipated performance, including revenue and gross margin rates, for the first quarter of 2013. Such statements may involve risks and uncertainties, including risks associated with uncertainties pertaining to the continued development and growth of markets for Echelon's products and services; the risk that failure to achieve revenue growth, maintain expense controls or achieve gross margins targets will delay the timeframe for achieving profitability; the risk that global economic conditions will affect our customers' ability to receive regulatory or other approval or financing for system or sub-system-based deployments; risks relating to the timely development of Echelon's products and services, and the ability of those products and services to perform as designed and meet customer expectations; the risk that Echelon does not meet expected or required shipment, delivery or acceptance schedules for its products and that Echelon may incur penalties or additional expenses or delay revenue recognition as a result; and other risks identified in Echelon's  SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

The financial statements that follow should be read in conjunction with the notes set forth in Echelon's Annual Report on Form 10-K when filed with the Securities and Exchange Commission.

Investor Relations Contacts:
Annie Leschin/Vanessa Lehr
StreetSmart Investor Relations
+1 (415) 775-1788
[email protected]

 

 

ECHELON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 






December 31,
2012


December 31,
2011

ASSETS








Current Assets:




   Cash and cash equivalents

$     18,876


$     17,658

   Short-term investments

42,979


40,998

   Accounts receivable, net

15,725


35,215

   Inventories

11,729


11,125

   Deferred cost of goods sold

846


6,536

   Other current assets

2,662


4,044





Total current assets

92,817


115,576





Property and equipment, net

21,777


27,201

Other long-term assets

8,989


8,928






$ 123,583


$ 151,705

 

LIABILITIES AND STOCKHOLDERS' EQUITY








Current Liabilities:




Accounts payable

$     8,551


$  18,313

Accrued liabilities

4,637


7,755

Current portion of lease financing obligations

2,056


1,870

Deferred revenues

4,912


12,716





Total current liabilities

20,156


40,654





Long-term liabilities

19,632


21,943





Total stockholders' equity

83,795


89,108






$ 123,583


$ 151,705

 

 

 

ECHELON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

 






Three Months Ended

 December 31,


Twelve Months Ended

December 31,


2012


2011


2012


2011

Revenues:








Product

$ 22,088


$ 39,484


$129,475


$152,699

Service

1,710


1,051


4,542


3,788









Total revenues

23,798


40,535


134,017


156,487









Cost of revenues:








Cost of product (1)

12,039


24,026


75,391


87,063

Cost of service (1)

570


601


2,171


2,262









Total cost of revenues

12,609


24,627


77,562


89,325









Gross profit

11,189


15,908


56,455


67,162









Operating expenses:








Product development (1)

6,559


8,750


30,009


34,755

Sales and marketing (1)

4,949


6,536


21,461


25,719

General and administrative (1)

3,426


4,489


15,050


17,897

Restructuring charges

--


--


1,176


--









Total operating expenses

14,934


19,775


67,696


78,371









Loss from operations

(3,745)


(3,867)


(11,241)


(11,209)

Interest and other income (expense), net

(167)


129


(361)


6

Interest expense on lease financing obligations

(329)


(357)


(1,360)


(1,468)









Loss before provision for income taxes

(4,241)


(4,095)


(12,962)


(12,671)

Income tax expense

71


100


219


329









Net loss

(4,312)


(4,195)


(13,181)


(13,000)

Net loss attributable to non-controlling interest

(207)


--


(363)


--

Net loss attributable to Echelon Corporation stockholders

$  (4,105)


$  (4,195)


$ (12,818)


$ (13,000)









Net loss per share attributable to Echelon Corporation stockholders:








Basic

$  (0.10)


$  (0.10)


$  (0.30)


$  (0.31)

Diluted

$  (0.10)


$  (0.10)


$  (0.30)


$  (0.31)









Shares used in computing net loss per share:








Basic

42,905


42,290


42,650


42,083

Diluted

42,905


42,290


42,650


42,083










 

 

(1) Amounts include stock-based compensation costs as follows:









Cost of product

$    104


$   237


$   566


$   864

Cost of service

29


50


111


112

Product development

430


1,080


2,304


3,891

Sales and marketing

436


741


1,896


2,251

General and administrative

412


797


2,099


2,531









      Total stock-based compensation expenses

$ 1,411


$2,905


$6,976


$9,649

 

 

 

ECHELON CORPORATION
RECONCILIATION OF NON-GAAP TO GAAP RESULTS
Excluding adjustments itemized below
(In thousands, except per share amounts)
(Unaudited)

 

An itemized reconciliation between net earnings on a GAAP basis and non-GAAP basis is as follows:







Three Months Ended    December 31,



Twelve Months Ended        December 31,


2012


2011



2012


2011










GAAP net loss

$ (4,105)


$ (4,195)



$ (12,818)


$ (13,000)










   Stock-based compensation

1,411


2,905



6,976


9,649

   Restructuring charges

--


--



1,176


--










   Total non-GAAP adjustments to earnings from operations

1,411


2,905



8,152


9,649










   Income tax effect of reconciling items

--


--



--


--










Non-GAAP net loss

$ (2,694)


$  (1,290)



$ (4,666)


$(3,351)










Non-GAAP net loss per share:









   Diluted

$  (0.06)


$  (0.03)



$  (0.11)


$ (0.08)










Shares used in computing net loss per share:









   Diluted

42,905


42,290



42,650


42,083









 

 

ECHELON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 




Twelve Months Ended

December 31,


2012


2011

Cash flows provided by (used in) operating activities:




Net loss including non-controlling interest

$   (13,181)


$   (13,000)

Adjustments to reconcile net income to net cash provided by (used in) operating activities:




Depreciation and amortization

6,579


5,921

Loss on disposal of fixed assets

22


128

Increase in allowance for doubtful accounts

40


25

Reduction of (increase in) accrued investment income

(6)


70

Stock-based compensation

6,976


9,649

Change in operating assets and liabilities:




Accounts receivable

19,405


(10,121)

Inventories

(642)


(2,106)

Deferred cost of goods sold

5,686


(3,926)

Other current assets

1,386


164

Accounts payable

(9,669)


8,033

Accrued liabilities

(3,249)


1,185

Deferred revenues

(7,906)


3,806

Deferred rent

(43)


(53)





Net cash provided by (used in) operating activities

5,398


(225)





Cash flows provided by (used in) investing activities:




Purchase of available-for-sale short-term investments

(83,926)


(71,978)

Proceeds from maturities and sales of available-for-sale short-term investments

81,957


87,850

Change in other long-term assets

(15)


(17)

Capital expenditures

(1,129)


(2,349)





Net cash provided by (used in) investing activities

(3,113)


13,506





Cash flows provided by (used in) financing activities:




Principal payments of lease financing obligations

(1,971)


(1,731)

Repurchase of common stock from employees for payment of taxes on vesting of restricted stock units and upon exercise of stock options

(1,325)


(2,265)

Proceeds from exercise of stock options

--


945

Proceeds from non-controlling interests

1,960


--





Net cash used in financing activities

(1,336)


(3,051)





Effect of exchange rates on cash:

269


(247)





Net increase in cash and cash equivalents

1,218


9,983

Cash and cash equivalents:




Beginning of period

17,658


7,675





End of period

$   18,876


$   17,658

 

SOURCE Echelon Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, provided an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data professionals...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and G...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Businesses and business units of all sizes can benefit from cloud computing, but many don't want the cost, performance and security concerns of public cloud nor the complexity of building their own private clouds. Today, some cloud vendors are using artificial intelligence (AI) to simplify cloud deployment and management. In his session at 20th Cloud Expo, Ajay Gulati, Co-founder and CEO of ZeroStack, will discuss how AI can simplify cloud operations. He will cover the following topics: why clou...
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, discussed key challenges and solutions to powering a ride sharing and/or multimodal model in the age ...