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| 8-K - ACORN ENERGY, INC. | v193587_8k.htm |
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EXHIBIT
99.1
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ACORN
ENERGY ANNOUNCES Q2 2010 RESULTS
Montchanin, DE – August 12, 2010
– Acorn Energy, Inc. (Nasdaq: ACFN) today announced its results for the
second quarter ended June 30, 2010. Below are the highlights and
lowlights for the second quarter.
Q2
2010 and Recent Highlights:
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·
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Group
revenue for Q2 increased 17% to $9.1 million from $7.8
million
|
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·
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Group
gross profit increased 20% to $4.2 million from $3.5
million
|
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·
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CoaLogix
|
|
o
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Gross
margins grew to 41% in the first half of 2010 compared with 35% in the
first half of 2009
|
|
o
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Cormetech
alliance agreement substantially increases market
access
|
|
o
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New
plant is operational
|
|
o
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Resolution
of EES lawsuit
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|
o
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Extension
and expansion of credit lines
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|
·
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Coreworx
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|
o
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Acquisition
of Decision Dynamics
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|
o
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Launch
of Coreworx 6.5 featuring Project
Intelligence
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o
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Launch
of three new products: Nuclear ITAAC solution, Deliverables
Management, and Change Management
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|
o
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Secured
order for deployment of Coreworx on a major deep water project in
China
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o
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Secured
$0.3 million in research and development credit
financing
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·
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DSIT
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|
o
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Gross
margins grew to 45% in the first half of 2010 compared to 41% in the first
half of 2009
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o
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Operating
income of $1.0 million
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o
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Successful
demonstration of the PointShieldâ at a U.S. energy
facility
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·
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GridSense
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o
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Acquisition
of the assets of On-Line Monitoring for the assumption of
debt
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Q2
2010 Lowlights:
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·
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Loss
of $3.2 million for Q2 and $6.3 million for the first six months of 2010
due primarily to substantial investment in new product development and
sales and marketing on lower revenues at
Coreworx.
|
|
·
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US
Government nuclear loan guarantees delays have negatively impacted
Coreworx by slowing in process sales
opportunities
|
|
·
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Delays
by utilities in funding smart grid projects have negatively impacted
GridSense.
|
John
Moore, CEO of Acorn Energy stated, “As we had indicated previously, the first
half of 2010 resulted in modest revenue growth, while we expect the second half
to be more robust. This is based on a number of factors: we expect
CoaLogix to improve on its first half performance with a new plant coming on
stream in the third quarter increasing processing capacity; Coreworx has a large
number of proposals for providing software solutions to manage major energy
infrastructure construction projects, with many deals expected to close towards
the end of the year; DSIT is expected to continue its successful
expansion from military into commercial installations for securing exposed
water-based infrastructures from sabotage; and GridSense is expected to commence
delivery of its unique products to electric utilities to enhance grid
efficiencies as smart grid funds begin to flow from utilities benefiting from
Federal government stimulus.
“Each of
these missions is moving forward and we expect to reach our revenue projections
despite the slowdown in economic recovery which often creates delays in contract
awards.”
CoaLogix
This
leading company in the regeneration of SCR catalyst used by coal-fired power
plants to reduce NOx emissions for a cleaner environment has increased its
capacity (the first of three expansion phases) with the completion of its new
Steele Creek plant. This
addition is timely given the recently announced alliance agreement between
Cormetech and CoaLogix. Cormetech is teaming up with CoaLogix to offer its
utility customers CoaLogix’ regenerated catalysts as an optional and
complementary choice to its new catalyst. Cormetech is a North Carolina-based
world leading manufacturer of catalysts. In the U.S. alone there is an installed
base of $1.5 billion of catalysts, a large percentage of which are Cormetech’s.
Worldwide SCR installations by Cormetech total 1,100 in plants generating
100,000 MHW of power. The combination of new and regenerated catalyst can be
considerably less expensive than new catalyst and mitigates the expense and
problems associated with the disposal of deteriorated catalyst.
DSIT
DSIT’s
results continue to improve with increased sales, gross profit, gross margin and
operating income as it looks to expand its portfolio of products with its new
lightweight, compact and portable Diver Detection Sonar (DDS) system, the
PointShield™.
PointShield™ is
a smaller, lighter version
of AquaShield™ that
will better meet the
protection requirements for on-water facilities in small, restricted areas, such
as water intake channels, canals or narrow entrances. DSIT has recently successfully
demonstrated the PointShield™ at a U.S. energy facility as it looks
to take advantage of Homeland Security opportunities in the U.S.
market.
Coreworx
Coreworx’
first half results have been below plan and are indicative of the challenges
faced by a small enterprise engaged in changing old methodologies used by very
large companies building mammoth construction projects. To provide prospective
customers with the confidence in Coreworx’ ability to successfully perform,
Coreworx has built robust solutions, and the infrastructure necessary to support
large customers/installations. As a result the Company is reporting
losses as the business “crosses the chasm” between the “early adopters” and the
“early majority”. Coreworx’ first half loss was $5.2 million due to increased
product development and sales/marketing costs. Importantly, Coreworx is working
to close on a number of large, near-term contracts and has a substantial and
building pipeline of prospective opportunities. Coreworx’ solutions
save owner operators as much as 10% on multibillion dollar construction projects
by increasing visibility to project deliverables, and cost enabling management
to drive completion on time and on budget.
GridSense
Acorn
commenced consolidating the results of GridSense on May 12, 2010 after acquiring
the outstanding shares not previously owned by Acorn. Also in May, GridSense
acquired Online Monitoring, Inc. (OMI), a recognized leader in the monitoring of
specific transformer parts in electric utility transformers for the assumption
of trade payables. OMI’s capabilities compliment those of GridSense and add
critical know-how and technology in smart grid distribution automation. We are
expecting an increase in sales as stimulus grants for the U.S. Smart Grid are
released to utilities.
U.S.
Sensor Systems, Inc. (USSI)
Acorn
began consolidating USSI’s results on February 23, 2010 and recorded $0.4
million in revenue against a net loss of $0.4 million in the first half of 2010.
For the second half of 2010, USSI’s fiber optic oilfield sensing equipment is
scheduled for participation in multiple field trials with major oil companies
and oil service companies. USSI is also awaiting responses from numerous
requested quotes for its fiber optic sensor systems in both the energy and
security markets. For the first half of 2010 USSI’s $0.4 million in new orders
included a U.S. Navy contract for $0.3 million for the design, development and
testing of a prototype security system that is being evaluated to protect 360
U.S. ports and harbors.
“Acorn is
well positioned for growth in the second half of the year with the new CoaLogix
capacity coming on-stream and a robust pipeline of opportunities across the
portfolio.” concluded Mr. Moore.
Conference
Call Information
The
Company will host an investor call on Friday, August 13, 2010 at 9:00am ET to
discuss its second quarter 2010 results and developments at the
Company.
To
participate in the conference call, please dial (800) 860-2442 or (412) 858-
4600 (Intl) (no pass code required). You may also access the call through the
Internet at www.acornenergy.com.
If you
are unable to participate in the live call, a digital replay of the call will be
available through 9:00am on August 30, 2010 by dialing (877) 344-7529 or (412)
317-0088 and entering access code # 443597.
About
Acorn Energy
Acorn
Energy, Inc. (NASDAQ: ACFN) is a publicly-traded holding company with equity
interests in CoaLogix, Coreworx, DSIT, GridSense and U.S. Sensor Systems Inc.
These companies leverage advanced technologies to transform and upgrade the
energy infrastructure around the world. Acorn companies are focused on three
problems in the energy sector: improving the efficiency of the energy grid,
reducing the risk for owners of large energy assets, and reducing the
environmental impact of the energy sector. Acorn's strategy is to take primarily
controlling positions in companies led by great entrepreneurs. For more
information visit http://www.acornenergy.com.
Safe
Harbor Statement
This press release includes
forward-looking statements, which are subject to risks and uncertainties. There
is no assurance that the Company and its operating companies will be able to
achieve the expected growth in revenues or meet the other expectations described
or referred to above. A complete discussion of the risks and
uncertainties which may affect Acorn Energy's business generally and 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.
Investor
Contact:
Paul G.
Henning
Cameron
Associates
(212)
554-5462
Paul@cameronassoc.com
-Financial
Tables to Follow-
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ACORN
ENERGY, INC. AND SUBSIDIARIES
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||||||||
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CONSOLIDATED
BALANCE SHEETS
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||||||||
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(IN
THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
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ASSETS
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As
of
June
30, 2010
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As
of
December
31, 2009
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(unaudited)
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Current
assets:
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||||||||
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Cash
and cash equivalents
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$ | 10,005 | $ | 11,208 | ||||
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Restricted
deposits
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1,939 | 1,627 | ||||||
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Accounts
receivable, net
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5,858 | 3,541 | ||||||
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Unbilled
revenue and work-in-process
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5,417 | 4,113 | ||||||
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Inventory
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3,730 | 1,848 | ||||||
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Other
current assets
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4,391 | 2,317 | ||||||
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Total
current assets
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31,340 | 24,654 | ||||||
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Property
and equipment, net
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8,975 | 3,357 | ||||||
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Other
investments and loans to equity investees
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2,537 | 2,796 | ||||||
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Funds
in respect of employee termination benefits
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2,141 | 2,074 | ||||||
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Restricted
deposits
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809 | 611 | ||||||
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Intangible
assets, net
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13,944 | 8,194 | ||||||
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Goodwill
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13,748 | 6,679 | ||||||
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Deferred
taxes
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252 | 227 | ||||||
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Other
assets
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477 | 143 | ||||||
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Total
assets
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$ | 74,223 | $ | 48,735 | ||||
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LIABILITIES
AND EQUITY
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Current
liabilities:
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Short-term
bank credit and current maturities of long-term bank debt
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$ | 1,121 | $ | 430 | ||||
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Accounts
payable
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3,684 | 1,607 | ||||||
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Accrued
payroll, payroll taxes and social benefits
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1,679 | 1,409 | ||||||
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Advances
from customers
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1,826 | 1,924 | ||||||
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Other
current liabilities
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6,961 | 3,064 | ||||||
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Total
current liabilities
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15,271 | 8,434 | ||||||
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Long-term
liabilities:
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||||||||
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Liability
for employee termination benefits
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3,259 | 3,129 | ||||||
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Long-term
debt
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355 | 405 | ||||||
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Other
long-term liabilities
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349 | 669 | ||||||
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Total
long-term liabilities
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3,963 | 4,203 | ||||||
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Equity:
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||||||||
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Acorn
Energy, Inc. stockholders
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Common
stock - $0.01 par value per share:
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169 | 132 | ||||||
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Authorized
– 30,000,000 shares; Issued –13,248,813 and 16,917,925
shares
at December 31, 2009 and June 30, 2010, respectively
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||||||||
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Additional
paid-in capital
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78,491 | 58,373 | ||||||
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Warrants
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274 | 290 | ||||||
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Accumulated
deficit
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-29,618 | -23,343 | ||||||
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Treasury
stock, at cost –1,275,081 shares at December 31, 2009
and
June 30, 2010, respectively
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-4,827 | -4,827 | ||||||
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Accumulated
other comprehensive income
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-213 | 152 | ||||||
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Total
Acorn Energy, Inc. stockholders’ equity
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44,276 | 30,777 | ||||||
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Non-controlling
interests
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10,713 | 5,321 | ||||||
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Total
equity
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54,989 | 36,098 | ||||||
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Total
liabilities and equity
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$ | 74,223 | $ | 48,735 | ||||
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CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
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(IN
THOUSANDS, EXCEPT NET LOSS PER SHARE DATA)
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Three
months ended
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Six
months ended
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June
30,
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June
30,
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2010
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2009
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2010
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2009
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Revenues:
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Catalytic
regeneration
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$ | 4,855 | $ | 4,547 | $ | 9,333 | $ | 9,937 | ||||||||
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Projects
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2,751 | 2,036 | 5,258 | 4,002 | ||||||||||||
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Software
license and services
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897 | 1,075 | 1,667 | 2,102 | ||||||||||||
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Smart
grid distribution products and services
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517 | -- | 517 | -- | ||||||||||||
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Other
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104 | 122 | 203 | 217 | ||||||||||||
| 9,124 | 7,780 | 16,978 | 16,258 | |||||||||||||
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Cost
of sales:
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Catalytic
regeneration
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3,000 | 2,931 | 5,546 | 6,466 | ||||||||||||
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Projects
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1,475 | 1,132 | 2,817 | 2,351 | ||||||||||||
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Software
license and services
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204 | 145 | 380 | 416 | ||||||||||||
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Smart
grid distribution products and services
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191 | -- | 191 | -- | ||||||||||||
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Other
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83 | 82 | 165 | 156 | ||||||||||||
| 4,953 | 4,290 | 9,099 | 9,389 | |||||||||||||
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Gross
profit
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4,171 | 3,490 | 7,879 | 6,869 | ||||||||||||
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Operating
expenses:
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Research
and development expenses, net of SRED credits of
$1,016
in 2009
|
872 | (624 | ) | 1,542 | (348 | ) | ||||||||||
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Dividends
received from EnerTech
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-- | -- | (135 | ) | -- | |||||||||||
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Selling,
general and administrative expenses
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7,565 | 4,629 | 13,886 | 8,807 | ||||||||||||
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Total
operating expenses
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8,437 | 4,005 | 15,293 | 8,459 | ||||||||||||
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Operating
loss
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(4,266 | ) | (515 | ) | (7,414 | ) | (1,590 | ) | ||||||||
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Finance
income (expense), net
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(355 | ) | 85 | (305 | ) | (84 | ) | |||||||||
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Gain
on investment in GridSense
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1,327 | -- | 1,327 | -- | ||||||||||||
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Gain
on sale of Comverge shares
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-- | 810 | -- | 1,227 | ||||||||||||
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Income
(loss) before taxes on income
|
(3,294 | ) | 380 | (6,392 | ) | (447 | ) | |||||||||
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Tax
expense on income
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(123 | ) | -- | (198 | ) | -- | ||||||||||
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Income
(loss) from operations of the Company and its consolidated
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(3,417 | ) | 380 | (6,590 | ) | (447 | ) | |||||||||
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subsidiaries
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||||||||||||||||
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Share
in losses of GridSense
|
-- | -- | -- | (129 | ) | |||||||||||
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Net
income (loss)
|
(3,417 | ) | 380 | (6,590 | ) | (576 | ) | |||||||||
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Net
(income) loss attributable to non-controlling interests
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265 | (37 | ) | 315 | (144 | ) | ||||||||||
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Net
income (loss) attributable to Acorn Energy Inc.
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$ | (3,152 | ) | $ | 343 | $ | (6,275 | ) | $ | (720 | ) | |||||
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Basic
and diluted earnings per share attributable to Acorn
Energy Inc.:
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||||||||||||||||
|
Net
income (loss) per share attributable to
|
$ | (0.21 | ) | $ | 0.03 | $ | (0.45 | ) | $ | (0.06 | ) | |||||
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Acorn
Energy Inc. – basic
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||||||||||||||||
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Net
income (loss) per share attributable to
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$ | (0.21 | ) | $ | 0.03 | $ | (0.45 | ) | $ | (0.06 | ) | |||||
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Acorn
Energy Inc. – diluted
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||||||||||||||||
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Weighted
average number of shares outstanding attributable
to
Acorn Energy Inc. – basic
|
15,161 | 11,377 | 13,839 | 11,456 | ||||||||||||
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Weighted
average number of shares outstanding attributable
to
Acorn Energy Inc. – diluted
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15,161 | 11,553 | 13,839 | 11,456 | ||||||||||||