Delaware | 000-29748 | 77-0203595 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition |
Item 9.01. | Financial Statements and Exhibits |
Exhibit Number | Description | |
99.1 | Press Release dated May 5, 2016, of Echelon Corporation. |
ECHELON CORPORATION | ||||||
By: | /s/ C. Michael Marszewski | |||||
C. Michael Marszewski Vice President and Chief Financial Officer | ||||||
Date: May 5, 2016 |
Exhibit Number | Description | |
99.1 | Press Release dated May 5, 2016, of Echelon Corporation. |
2901 Patrick Henry Drive Santa Clara, CA 95054 Phone: +1-408-938-5200 Fax: +1-408-790-3800 info@echelon.com www.echelon.com |
• | Revenues: $8.6 million |
• | Operating expenses reached their lowest level in at least 10 years, down 27% (21% non-GAAP) from a year ago |
• | GAAP Net Loss: $953,000; GAAP Net Loss per Share: $0.22 |
• | Non-GAAP Net Loss: $1.2 million; Non-GAAP Net Loss per Share: $0.27 |
• | Cash & investments of $23.7 million |
• | Cash burn of $2.4 million compared to $4.0 million a year ago |
• | Tax Benefit Preservation “382” Plan adopted to protect the Company’s ability to use its significant net operating losses to offset future tax liabilities. |
• | Phase two of the Cambridge, MA lighting project to retrofit the city’s remaining 2,000+ decorative fixtures using a variety of LED fixtures is underway using the Lumewave™ by Echelon adaptive control system, allowing for a combination of wireless and power line carrier communications. Combined with the approximately 5,000 fixtures networked in 2015, we believe Cambridge is the first city in the US to have “border-to-border” intelligent lighting installed and operating. Multiple zones across the City allow for tailored dimming schedules to meet citizen and safety needs. |
• | Our project to install another border-to-border city-wide intelligent lighting network in Bellingham, WA is nearing completion. This system is connecting 3,615 streetlights, with wireless technology on roadway lights and ‘invisible’ powerline communication on highly-visible decorative luminaries. |
• | We have begun a lighting pilot for a city of 86,000 in the Midwest that includes our innovative powerline RF gateway for powerline and RF communications. |
• | We have received an order and expect to begin a lighting pilot for parking lots and garages in a city of more than 1 million residents in Canada, in the summer. |
• | We have received an order and expect to begin a lighting pilot for in a city of almost 100,000 residents in the Pacific Northwest, also this summer. |
• | We expect to be deploying a city-wide intelligent lighting system in Vadnais Heights, MN this summer. |
• | We completed a successful adaptive lighting parking garage pilot at a Silicon Valley Fortune 100 company HQ. |
• | In our embedded business we had multiple design wins including in control applications for supermarket refrigeration and gas pump card readers. |
• | Cloud and enterprise central management system (CMS) |
◦ | The LumInsight 1.01 platform can now support a range of applications from simple room-level regulatory compliance to enterprise-wide monitoring and control of lighting systems to strategic applications as a public cloud service. |
◦ |
• | Multi-protocol, multi-technology gateways |
◦ | The Lumewave™ Powerline-RF Gateway was introduced to customers in the fall. This next-generation outdoor lighting control solution seamlessly integrates two of the most widely used lighting control connectivity technologies, power line and wireless, to provide flexibility, reduce deployment costs and ease maintenance. |
◦ | Lumewave Gateway & Base Station 2.0 is a smaller, new Gateway and Base Station based on a Linux platform that is available for Ethernet or Cellular for either LAN or WWAN communications. |
◦ | Echelon SmartServer 2.2 SP4 is Echelon’s controller/gateway that combines features required for lighting control and building automation. This release introduces the Outdoor Lighting System (OLS) modules on the SmartServer to enhance outdoor lighting applications and provide richer capabilities for ESCO’s. |
• | End controller nodes |
◦ | Lumewave EMB 900 is a new Lumewave RF end node controller for parking garages lights and other related fixtures. Models are available with integrated coax and antenna that install within the fixture and models that mount on the side or bottom/top of fixtures. |
◦ | Lumewave Top900 480 volt is a versatile RF lighting controller that supports a wide range of voltages (100-480 volt) with one stock-keeping unit. This simplifies ordering, design and installation for partners and customers. |
◦ | Lumewave Top900 868 Mhz lighting controller demo kits are now available for our European customers to test the viability of RF products for Echelon’s European customers. |
• | We announced the appointment of Rick Schuett as Senior Vice President of Worldwide Sales. Schuett brings more than 20 years of leadership, core lighting experience, and proven sales success to the Echelon team. Rick will drive the Company’s go-to-market strategies in both the lighting and the LonWorks-based embedded systems business. |
• | At the recently-completed Lightfair International, among the world’s largest annual architectural and commercial lighting trade show, the Company showcased our new LumInsight CMS and our Lumewave Powerline-RF Gateway. Judging from interactions at the booth, interest in networking and control solutions is increasing significantly in the industry. The Powerline-RF gateway received a “Top 10 Must See” award from the well-respected Edison Report. |
• | We announced that we joined the Smart Lighting Engineering Research Center at Rensselaer Polytechnic Institute to support and participate in the institute’s pursuit of the study and commercialization of transformational smart lighting systems. |
• | The Company has adopted an inducement plan to enable it to continue to attract top talent as it executes its business plan. |
• | Total revenues are expected to be $7.5 million to $7.9 million, reflecting the previously-announced reductions in revenues from Enel |
• | Non-GAAP gross margin is expected to be in a range of 55% to 57% |
• | Operating expenses are expected to be in a range of $5.6 million to $5.9 million |
• | Non-GAAP loss per share is expected to be between $0.26 and $0.40, based on 4.4 million fully diluted weighted average shares outstanding |
• | GAAP loss per share is expected to be between $0.31 and $0.46 per share |
March 31, 2016 | December 31, 2015 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 5,288 | $ | 7,691 | ||||
Restricted investments | 1,401 | 1,401 | ||||||
Short-term investments | 16,993 | 16,978 | ||||||
Accounts receivable, net | 4,219 | 4,030 | ||||||
Inventories | 3,327 | 2,893 | ||||||
Deferred cost of goods sold | 1,086 | 1,122 | ||||||
Other current assets | 1,071 | 1,109 | ||||||
Total current assets | 33,385 | 35,224 | ||||||
Property and equipment, net | 535 | 595 | ||||||
Other long-term assets | 2,181 | 2,227 | ||||||
$ | 36,101 | $ | 38,046 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 2,403 | $ | 2,267 | ||||
Accrued liabilities | 1,475 | 2,885 | ||||||
Deferred revenues | 3,270 | 3,359 | ||||||
Total current liabilities | 7,148 | 8,511 | ||||||
Long-term liabilities | 713 | 614 | ||||||
Total stockholders’ equity | 28,240 | 28,921 | ||||||
$ | 36,101 | $ | 38,046 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Revenues | $ | 8,647 | $ | 9,868 | |||
Cost of revenues (1) | 3,837 | 4,244 | |||||
Gross profit | 4,810 | 5,624 | |||||
Operating expenses: | |||||||
Product development (1) | 2,240 | 2,612 | |||||
Sales and marketing (1) | 1,313 | 2,188 | |||||
General and administrative (1) | 1,999 | 2,821 | |||||
Total operating expenses | 5,552 | 7,621 | |||||
Loss from operations | (742 | ) | (1,997 | ) | |||
Interest and other income (expense), net | (205 | ) | 838 | ||||
Interest expense on lease financing obligations | — | (252 | ) | ||||
Loss before provision for income taxes | (947 | ) | (1,411 | ) | |||
Income tax (benefit)/ expense | 6 | 13 | |||||
Net loss | $ | (953 | ) | $ | (1,424 | ) | |
Basic and diluted net loss per share | $ | (0.22 | ) | $ | (0.32 | ) | |
Shares used in computing net loss per share: | |||||||
Basic | 4,417 | 4,395 | |||||
Diluted | 4,417 | 4,395 | |||||
(1) Amounts include stock-based compensation costs as follows: | |||||||
Cost of revenues | $ | 42 | $ | (41 | ) | ||
Product development | 46 | 99 | |||||
Sales and marketing | (109 | ) | (83 | ) | |||
General and administrative | 98 | 182 | |||||
Total stock-based compensation expenses | $ | 77 | $ | 157 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
GAAP net loss | $ | (953 | ) | $ | (1,424 | ) | |
Stock-based compensation | 77 | 157 | |||||
Adjustment to contingent consideration | (318 | ) | — | ||||
Total non-GAAP adjustments to earnings from operations | (241 | ) | 157 | ||||
Income tax effect of reconciling items | — | — | |||||
Non-GAAP net loss | $ | (1,194 | ) | $ | (1,267 | ) | |
Non-GAAP net loss per share: | |||||||
Diluted | $ | (0.27 | ) | $ | (0.29 | ) | |
Shares used in computing net loss per share: | |||||||
Diluted | 4,417 | 4,395 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Cash flows provided by (used in) operating activities: | |||||||
Net loss | $ | (953 | ) | $ | (1,424 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 144 | 601 | |||||
Increase in allowance for doubtful accounts | — | 37 | |||||
Increase in accrued investment income | (11 | ) | (8 | ) | |||
Stock-based compensation | 77 | 157 | |||||
Adjustment to contingent consideration | (318 | ) | (101 | ) | |||
Change in operating assets and liabilities: | |||||||
Accounts receivable | (189 | ) | (136 | ) | |||
Inventories | (433 | ) | 87 | ||||
Deferred cost of goods sold | 40 | (22 | ) | ||||
Other current assets | 41 | (231 | ) | ||||
Accounts payable | 113 | (1,459 | ) | ||||
Accrued liabilities | (904 | ) | 14 | ||||
Deferred revenues | (131 | ) | 141 | ||||
Deferred rent | 109 | (9 | ) | ||||
Net cash used in operating activities | (2,415 | ) | (2,353 | ) | |||
Cash flows provided by (used in) investing activities: | |||||||
Purchases of available‑for‑sale short‑term investments | (3,992 | ) | (3,991 | ) | |||
Proceeds from maturities and sales of available‑for‑sale short‑term investments | 4,000 | 4,000 | |||||
Change in other long‑term assets | — | 16 | |||||
Capital expenditures | (5 | ) | (113 | ) | |||
Net cash provided by (used in) investing activities | 3 | (88 | ) | ||||
Cash flows provided by (used in) financing activities: | |||||||
Principal payments of lease financing obligations | — | (587 | ) | ||||
Repurchase of common stock from employees for payment of taxes on vesting of restricted stock units and upon exercise of stock options | (1 | ) | (104 | ) | |||
Net cash used in financing activities | (1 | ) | (691 | ) | |||
Effect of exchange rates on cash: | 10 | (851 | ) | ||||
Net change in cash and cash equivalents | (2,403 | ) | (3,983 | ) | |||
Cash and cash equivalents: | |||||||
Beginning of period | 7,691 | 13,340 | |||||
End of period | $ | 5,288 | $ | 9,357 | |||