EX-99.1 2 dex991.htm EARNINGS RELEASE Earnings Release

Exhibit 99.1

 

LOGO

 

Investor Relations

eOn Communications

800-955-5321

investorrelations@eoncc.com

 

For Release 4:30 PM ET, December 13, 2005

 

eOn Communications Reports Profitable First Quarter Fiscal 2006 Results

 

ATLANTA (December 13, 2005) – eOn Communications Corporation (NASDAQ: EONC), a leading provider of telecommunications solutions, today reported financial results for the first fiscal quarter ended October 31, 2005.

 

Excluding Cortelco Shanghai, revenues for the quarter were $3,172,000, a decrease of 30.6% compared with $4,571,000 for the same period last year. Excluding Cortelco Shanghai, income from continuing operations was $181,000, or $0.01 per common share, an increase of 120.7% compared to income from continuing operations of $82,000 or $0.01 per share in the quarter ended October 31, 2004.

 

On October 26, 2005, the Company announced that it signed a memorandum of understanding to sell its 54% interest in Cortelco Shanghai Telecom Equipment Company to the 46% minority holder, Shanghai Fortune Telecommunication Technology Development Co. Ltd. and members of management of Cortelco Shanghai. Accordingly, the results of operations of Cortelco Shanghai for all periods presented are reported as discontinued operations. Income from discontinued operations was $107,000, or $.01 per common share compared to income from discontinued operations of $16,000 or $0.00 per common share in the quarter ended October 31, 2004.

 

Net income for the quarter was $505,000, or $0.04 per common share, an increase of 415.3% compared to net income of $98,000, or $0.01 per common share in the quarter ended October 31, 2004. The net income of $505,000 consisted of three components: $181,000 from continuing operations, $107,000 from discontinued operations and an extraordinary gain of $217,000.

 

The Company issued the final amount of common stock required to be made pursuant to the original Cortelco Shanghai purchase agreement in the quarter ended October 31, 2005. Because the value of the assets acquired exceeded the value of the stock issued, the Company realized an extraordinary gain on the purchase. The extraordinary gain was $217,000, or $0.02 per common share.

 

“I am pleased to report that our ongoing efforts to better align our expenses and revenues have yielded profitable results for the quarter.” stated David Lee, eOn’s chairman and chief executive officer. “We expect these actions, combined with our sales initiatives here and in China, will also generate profitable results in our second quarter.”


Conference Call

 

The Company will host a conference call at 4:45 p.m. ET, December 13, 2005, to discuss first quarter results. To hear the call, dial 800-310-6649 or visit our investor relations website at investor.eoncc.com. A replay of the call will be posted to our investor relations website shortly following the call.

 

About eOn Communications

 

eOn Communications Corporation is a global provider of innovative communications solutions. Backed by over 20 years of telecommunications engineering expertise, our solutions enable our customers to easily leverage advanced technologies in order to communicate more effectively. To find out more information about eOn Communications and its solutions, visit the World Wide Web at www.eoncommunications.com, or call 800-955-5321.

 

Note:

 

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including technical and competitive factors, which could cause the Company's results and the timing of certain events to differ materially from those discussed in the forward-looking statements. Such risks are detailed in eOn Communications Corporation's most recent Form 10-Q filing with the Securities and Exchange Commission.

 

eOn Communications Corporation, the mark eOn, and eQueue are trademarks of eOn Communications Corporation.


eOn Communications Corporation

Condensed Consolidated Statements of Operations

(Dollars in thousands, except per share data)

 

    

Three Months Ended

October 31,


 
     2005

    2004

 

REVENUE

                

Net revenue

   $ 3,172     $ 4,571  

COST OF REVENUE

                

Cost of revenue

     1,060       2,067  
    


 


Gross profit

     2,112       2,504  
    


 


OPERATING EXPENSE

                

Selling, general and administrative

     1,355       1,568  

Research and development

     586       866  
    


 


Total operating expense

     1,941       2,434  
    


 


Income from continuing operations

     171       70  

Interest income

     34       21  

Other expense, net

     (24 )     (9 )
    


 


Income from continuing operations before income taxes

     181       82  

Income tax expense

     —         —    
    


 


Income from continuing operations after income taxes

     181       82  

DISCONTINUED OPERATIONS

                

Income from discontinued operations, net of tax of $36 and $4, respectively and minority interest of $91 and $13, respectively

     107       16  
    


 


Income before extraordinary item

     288       98  

EXTRAORDINARY ITEM

                

Extraordinary gain, net of income taxes of $0

     217       —    
    


 


Net income

   $ 505     $ 98  
    


 


Weighted average shares outstanding:

                

Basic

     12,961       12,821  

Diluted

     13,039       12,918  

Basic income per share:

                

From continuing operations after income taxes

   $ 0.01     $ 0.01  

From discontinued operations, net of tax and minority interest

     0.01       —    

Extraordinary gain, net of income taxes

     0.02       —    
    


 


Net income

   $ 0.04     $ 0.01  
    


 


Diluted income per share:

                

From from continuing operations after income taxes

   $ 0.01     $ 0.01  

From discontinued operations, net of tax and minority interest

     0.01       —    

Extraordinary gain, net of income taxes

     0.02       —    
    


 


Net income

   $ 0.04     $ 0.01  
    


 


 

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eOn Communications Corporation

Condensed Consolidated Balance Sheets

(Dollars in thousands, except share and per share amounts)

 

     October 31,
2005


    July 31,
2005


 
     (unaudited)        

ASSETS

                

Current assets:

                

Cash and cash equivalents

   $ 749     $ 870  

Marketable securities

     3,600       3,600  

Trade accounts receivable, net of allowance of $1,176 and $1,106, respectively

     2,601       2,145  

Trade accounts receivable - related party

     16       19  

Notes receivable - related party

             —    

Inventories

     2,132       2,155  

Prepaid and other current assets

     195       206  

Current assets of discontinued operations

     7,598       7,408  
    


 


Total current assets

     16,891       16,403  

Property and equipment, net

     368       434  

Goodwill

     21       21  

Non-current assets of discontinued operations

     53       271  
    


 


Total assets

   $ 17,333     $ 17,129  
    


 


LIABILITIES AND STOCKHOLDERS’ EQUITY

                

Current liabilities:

                

Trade accounts payable

   $ 653     $ 703  

Trade accounts payable - related party

     160       157  

Deferred acquisition payment

     —         914  

Accrued expenses and other

     1,508       1,603  

Current liabilities of discontinued operations

     5,093       4,952  
    


 


Total current liabilities

     7,414       8,329  

Minority interest of discontinued operations

     1,236       1,145  

Commitments and contingencies

     —         —    

Stockholders’ equity:

                

Preferred stock, $0.001 par value, (10,000,000 shares authorized, no shares issued and outstanding)

     —         —    

Common stock, $0.001 par value (50,000,000 shares authorized, 14,075,151 and 13,579,957 shares issued, respectively)

     14       13  

Additional paid-in capital

     54,969       54,455  

Treasury stock, at cost (676,900 shares)

     (1,502 )     (1,502 )

Accumulated deficit

     (44,867 )     (45,372 )

Accumulated other comprehensive income

     69       61  
    


 


Total stockholders’ equity

     8,683       7,655  
    


 


Total liabilities and stockholders’ equity

   $ 17,333     $ 17,129  
    


 


 

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