Acorn Energy, Inc. Announces Year End Results
“2008 was a terrific year for Acorn Energy’s operating companies. With revenue of
Moore continued, “Our three core businesses, led by talented entrepreneurs, address large and growing markets with innovative products and important reference customers. Our companies are benefiting from major trends in the energy and environmental sector as well as from innovations where they are creating new market categories. I am also gratified that we ended the year with
“Our decision to sell most of our Comverge shares at prices substantially above its current value has provided us with capital to accelerate the growth of our three core businesses,” Moore concluded.
Financial Highlights:
- During 2008, the Company sold 1,261,165 shares of Comverge. The Company received proceeds of approximately
$15.4 million for the year endedDecember 31, 2008 . The Company recorded a pre-tax gain of$8.9 million . ThroughDecember 31, 2008 , the Company sold approximately 2.3 million Comverge shares at an average sale price of$19.16 per share for proceeds of approximately$43.7 million . Subsequent toDecember 31, 2008 and throughMarch 26, 2009 , the Company sold an additional 175,000 shares of Comverge and received proceeds of approximately$1.2 million .
- The Company ended the year with approximately
$17.9 million of cash, including approximately$2.7 million of restricted cash. As ofMarch 1, 2009 the Company had approximately$14.1 million of cash, including restricted cash of approximately$2.7 million . The Company also has$3.4 million of debt incurred in connection with its recent acquisition of Coreworx.
- Revenues increased by
$15.0 million or 266% to$20.7 million in 2008 as compared to revenues of$5.7 million in 2007. Of the increase in revenues,$9.3 million was attributable to revenues from the CoaLogix segment which was included for the full year 2008, but was included in 2007 only for the period from acquisition inNovember 2007 to year end. In addition, 2008 revenues also include$2.3 million of revenues from Coreworx whose results are included from the date of acquisition (August 13, 2008 ). Revenues of the Company’s DSIT subsidiary increased by$3.4 million , or 170%, from$4.9 million in 2007 to$8.3 million in 2008 due to a$3.6 million increase in revenues for the Naval & RT Solutions segment. The increase resulted from the recording of a full-year’s revenues in 2008 on a three-year project for a sonar and acoustic system for the Israeli Ministry of Defense received in the middle of 2007 combined with increased revenues from DSIT’s other real-time and embedded solutions projects.
- Gross profit in 2008 increased by
$5.1 million or 363%, to$6.5 million from$1.4 million in 2007. The increase in gross profit was attributable to the inclusion in 2008 of a full year of CoaLogix and the inclusion of Coreworx from the date of its acquisition. CoaLogix and Coreworx gross profit in 2008 were$2.5 and$1.4 million , respectively. Gross profit in DSIT in 2008 was$2.7 million which reflects an increase of$1.4 million or 106% from$1.3 million in 2007. DSIT’s gross profit increase was due primarily to its increased sales as well as its improved margins.
Moore added, “The success of our three core businesses and our need to provide them with additional capital forced us to make some hard decisions regarding Local Power and Paketeria. We wrote-off our investments in both enterprises. Both investments were bets on really big ideas. Both investments were in early stage companies that needed more capital that we ultimately weren’t willing to supply.
“Our write-down of our investment in GridSense is another matter. We are still optimistic about the future of the business. However, due to the depressed value of its publicly traded shares and in accordance with generally accepted accounting principles, we recorded an impairment with respect to our investment and loan to GridSense,” concluded Moore.
Financial Lowlights
- In 2008, the Company recorded a loss provision on its loans to Paketeria of
$2.5 million due to Paketeria’s increasing operating difficulties and doubts as to its ability to repay its debt to the Company. Also in 2008, the Company recorded an equity loss of$1.6 million . As a result, the Company’s investment in Paketeria has been reduced to zero and the Company has ceased recording losses in Paketeria.
- In 2008, the Company recorded a loss provision on its loans to GridSense of
$0.6 million due to doubts as to its ability to repay its debt to the Company. Also in 2008, the Company recorded an equity loss of$0.2 million and impairment of$0.7 million with respect to its GridSense investment to bring the value of its investment in GridSense to its market value on the Toronto Stock Exchange on that date.
- Also in 2008, the Company took a cumulative charge of
$0.5 million with respect to its investment and loans to Local Power.
- Operating losses increased by
$8.0 million from$4.4 million in 2007 to$12.4 million in 2008 due to the following events in 2008:$3.7 million of impairments with respect to the Company’s loans to Paketeria, GridSense and loans and investment to Local Power$1.4 million loss from CoaLogix$0.8 million of loss from Coreworx$2.4 million of in-process research and development expensed in connection with the Company’s acquisition of Coreworx
Investor Conference Call –
The Company plans to hold a conference call on
About Acorn Energy, Inc.
Acorn Energy, Inc. is a publicly traded holding company focused on two goals: improving the efficiency of the energy grid and reducing the environmental impact of the energy sector. Acorn’s operating companies leverage advanced technologies to transform the existing energy infrastructure. Acorn’s strategy is to take primarily controlling positions in companies led by great entrepreneurs and add value by supporting those companies with marketing, strategy and business development. Acorn Energy is a global company with equity interests in CoaLogix, Comverge, Coreworx, DSIT and GridSense. For more information visit 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 CoaLogix, DSIT or Coreworx will continue to grow their respective businesses. A complete discussion of the risks and uncertainties which may affect Acorn Energy’s business generally 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.
CONTACT:
Julia Davis
Marketing Manager
Acorn Energy Inc.
(302) 656 1707
jdavis@acornenergy.com
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT NET INCOME (LOSS) PER SHARE DATA)
Year ended December 31,
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2006 2007 2008
---- ---- ----
Sales:
Projects $3,186 $4,061 $7,805
Catalytic regeneration services -- 797 10,099
Software license and services -- -- 2,330
Other 931 802 462
----- ----- ------
Total sales 4,117 5,660 20,696
----- ----- ------
Cost of sales:
Projects 2,022 2,891 5,244
Catalytic regeneration services -- 681 7,642
Software license and services -- -- 921
Other 741 676 356
----- ----- ------
Total cost of sales 2,763 4,248 14,163
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Gross profit 1,354 1,412 6,533
Operating expenses:
Research and development expenses, net 324 415 1,169
Acquired in-process research and development -- -- 2,444
Selling, general and administrative expenses 4,618 5,278 11,667
Impairments 40 112 3,664
----- ----- ------
Total operating expenses 4,982 5,805 18,944
----- ----- ------
Operating loss (3,628) (4,393) (12,411)
Gain on early redemption of convertible
debentures -- -- 1,259
Finance expense, net (30) (1,585) (3,031)
Gain on sale of shares in Comverge -- 23,124 8,861
Gain on public offering of Comverge -- 16,169 --
Gain (loss) on private placement of equity
investments -- (37) 7
Other income - settlement of a claim 330 -- --
------ ------ ------
Income (loss) before taxes on income (3,328) 33,278 (5,315)
Income tax benefit (expense) (183) 445 (342)
------ ------ ------
Income (loss) from operations of the Company
and its consolidated subsidiaries (3,511) 33,723 (5,657)
Share in losses of Paketeria (424) (1,206) (1,560)
Share in losses of GridSense -- -- (926)
Share in losses of Comverge (210) -- --
Minority interests -- -- 248
------ ------ -----
Net income (loss) from continuing operations (4,145) 32,517 (7,895)
Loss on sale of discontinued operations and
contract settlement, net of tax (2,069) -- --
Net income from discontinued operations, net
of tax 78 -- --
------ ------ ------
Net income (loss) ($6,136) $32,517 ($7,895)
======= ======= =======
Basic net income (loss) per share:
Income (loss) per share from continuing
operations ($0.48) $3.30 ($0.69)
Discontinued operations (0.23) -- --
----- ----- -----
Net income (loss) per share ($0.71) $3.30 ($0.69)
====== ===== ======
Weighted average number of shares outstanding
- basic 8,689 9,848 11,374
===== ===== ======
Diluted net income (loss) per share:
Income (loss) per share from continuing
operations ($0.48) $2.80 ($0.69)
Discontinued operations (0.23) -- --
----- ----- -----
Net income (loss) per share ($0.71) $2.80 ($0.69)
====== ===== ======
Weighted average number of shares outstanding
- diluted 8,689 12,177 11,374
===== ====== ======
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
ASSETS As of December 31,
------------------
2007 2008
---- ----
Current assets:
Cash and cash equivalents $19,644 $15,142
Restricted deposit -- 2,157
Accounts receivable, net 1,775 4,524
Unbilled work-in-process 1,784 581
Inventory 119 1,148
Other current assets 1,391 2,080
------ ------
Total current assets 24,713 25,632
------ ------
Property and equipment, net 1,335 2,447
Available for sale - Investment in Comverge 55,538 2,462
Investment in Paketeria 1,439 --
Investment in GridSense -- 129
Other investments 668 1,117
Funds in respect of employee termination benefits 1,607 1,677
Restricted deposit 1,517 579
Other intangible assets, net 5,987 10,357
Goodwill 3,945 6,342
Other assets 218 313
------- -------
Total assets $96,967 $51,055
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank credit and current maturities of
long-term debt $761 $445
Notes payable -- 3,400
Convertible debt, net 4,237 --
Accounts payable 910 2,285
Accrued payroll, payroll taxes and social
benefits 1,118 1,314
Other current liabilities 3,844 4,350
------ ------
Total current liabilities 10,870 11,794
------ ------
Long-term liabilities:
Liability for employee termination benefits 2,397 2,651
Long-term debt 12 --
Deferred income taxes 16,038 29
Other liabilities 325 458
------ -----
Total long-term liabilities 18,772 3,138
------ -----
Minority interests -- 1,975
Commitments and contingencies
Shareholders' equity:
Common stock - $0.01 par value per share:
Authorized - 20,000,000 shares; Issued -
11,134,795 and 12,454,528 shares at December
31, 2007 and 2008, respectively 111 124
Additional paid-in capital 49,306 54,735
Warrants 1,330 1,020
Accumulated deficit (9,692) (17,587)
Treasury stock, at cost - 777,371 and 841,286
shares at December 31, 2007 and 2008,
respectively (3,592) (3,719)
Accumulated other comprehensive income (loss) 29,862 (425)
------ ----
Total shareholders' equity 67,325 34,148
------ ------
Total liabilities and shareholders' equity $96,967 $51,055
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SOURCE Acorn Energy, Inc.