Summary Financial Results – GAAP
($ in thousands)
($ in thousands) | Q1’23 | Q1’22 | % Chg. | ||||||||
Hardware revenue | $ | 725 | $ | 761 | -4.7 | % | |||||
Monitoring revenue | 1,024 | 990 | 3.4 | % | |||||||
Total revenue * | $ | 1,749 | $ | 1,751 | -0.1 | % | |||||
Gross profit | $ | 1,316 | $ | 1,258 | 4.6 | % | |||||
Gross margin | 75.2 | % | 71.8 | % |
* All of Acorn’s revenue is derived from its 99%-owned operating subsidiary, OmniMetrix.
Non-GAAP Measure Reconciliation of GAAP Revenue to Cash-Basis Revenue ($ in thousands) | |||||||
Q1'23 | Q1'22 | ||||||
Total GAAP revenue | $ | 1,749 | $ | 1,751 | |||
Less: Amortization of deferred revenue | (1,609 | ) | (1,504 | ) | |||
Plus: Sales recorded to deferred revenue | 1,654 | 1,803 | |||||
Other adjustments | 54 | – | |||||
Total cash-basis revenue ** | $ | 1,848 | $ | 2,050 | |||
Year-over-year comparison | -9.9 | % |
**See definition of Cash-Basis Revenue, a non-GAAP measure below.
CEO Commentary
“Importantly, we ended Q1’23 with a record ‘backlog’ of approximately
“Our Q1’23 gross margin rose to approximately 75%, benefitting from a higher percentage of monitoring revenue in the period, as well as from an increase in sales of commercial and industrial monitoring equipment, which carry higher price points than our distributor-generated residential business.
“We continue to target 20% annual cash-basis revenue growth for the full year, and if we are able to meet this goal, we’d expect to achieve positive cash flow and profitability at the consolidated corporate level. Importantly, Acorn has over
“Today commercial and industrial companies face many challenges, including rising labor and fuel costs, increasing environmental pressures, budget constraints and ROI goals. OmniMetrix solutions can have a positive impact across all these areas, making us an ideal partner for a broad array of businesses. Increasingly we are seeing customers being attracted to the reduced carbon footprint of remote monitoring as they see opportunities to minimize their environmental impact. We believe this trend, combined with our compelling ROI, should support our business development efforts.
“Acorn closed Q1’23 with
Financial Review
Q1’23 revenue of
Q1’23 gross profit increased to
Total operating expenses increased 2.2% to
Primarily reflecting gross profit growth outpacing operating costs and the benefit of interest income of
Liquidity and Cash Flow
Excluding deferred revenue and deferred costs which have essentially no impact on future cash flow, working capital of
Investor Call Details
Date/Time: | |
Dial-in Number: | 1-844-834-0644 or 1-412-317-5190 (Int'l) |
Online Replay/Transcript: | Audio file and call transcript will be posted to the |
Investor section of Acorn's website when available. | |
Submit Questions via Email: | acfn@catalyst-ir.com – before or after the call. |
About Acorn (www.acornenergy.com) and OmniMetrix™ (www.omnimetrix.net)
Safe Harbor Statement
This press release includes forward-looking statements, which are subject to risks and uncertainties. There is no assurance that Acorn will be successful in growing its business, reaching profitability, or maximizing the value of its operating company and other assets. A complete discussion of the risks and uncertainties that may affect Acorn Energy’s business, including the business of its subsidiary, is included in “Risk Factors” in the Company’s most recent Annual Report on Form 10-K as filed by the Company with the
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA) | |||||||
Three months ended | |||||||
2023 | 2022 | ||||||
Revenue | $ | 1,749 | $ | 1,751 | |||
COGS | 433 | 493 | |||||
Gross profit | 1,316 | 1,258 | |||||
Operating expenses: | |||||||
Research and development expense | 214 | 198 | |||||
Selling, general and administrative expense | 1,197 | 1,182 | |||||
Total operating expenses | 1,411 | 1,380 | |||||
Operating loss | (95 | ) | (122 | ) | |||
Interest income, net | 11 | — | |||||
Loss before income taxes | (84 | ) | (122 | ) | |||
Income tax expense | — | — | |||||
Net loss | (84 | ) | (122 | ) | |||
Non-controlling interest share of net income | (1 | ) | (1 | ) | |||
Net loss attributable to | $ | (85 | ) | $ | (123 | ) | |
Basic and diluted net loss per share attributable to | |||||||
Total attributable to | $ | 0.00 | $ | 0.00 | |||
Weighted average number of shares outstanding attributable to | |||||||
Basic and diluted | 39,734 | 39,688 |
CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE DATA) | |||||||
As of | As of | ||||||
(Unaudited) | (Audited) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 1,346 | $ | 1,450 | |||
Accounts receivable, net | 771 | 597 | |||||
Inventory, net | 804 | 789 | |||||
Deferred cost of goods sold (COGS) | 898 | 887 | |||||
Other current assets | 312 | 288 | |||||
Total current assets | 4,131 | 4,011 | |||||
Property and equipment, net | 641 | 653 | |||||
Operating right-of-use assets, net | 272 | 298 | |||||
Deferred COGS | 759 | 807 | |||||
Other assets | 211 | 215 | |||||
Total assets | $ | 6,014 | $ | 5,984 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 361 | $ | 243 | |||
Accrued expenses | 137 | 171 | |||||
Deferred revenue | 4,047 | 3,984 | |||||
Current operating lease liabilities | 118 | 116 | |||||
Other current liabilities | 48 | 58 | |||||
Total current liabilities | 4,711 | 4,572 | |||||
Long-term liabilities: | |||||||
Deferred revenue | 2,169 | 2,187 | |||||
Noncurrent operating lease liabilities | 190 | 220 | |||||
Other long-term liabilities | 18 | 16 | |||||
Total long-term liabilities | 2,377 | 2,423 | |||||
Commitments and contingencies | |||||||
Stockholders’ Deficit: | |||||||
Common stock - | 397 | 397 | |||||
Additional paid-in capital | 102,911 | 102,889 | |||||
Accumulated stockholders’ deficit | (101,352 | ) | (101,267 | ) | |||
(3,036 | ) | (3,036 | ) | ||||
(1,080 | ) | (1,017 | ) | ||||
Non-controlling interests | 6 | 6 | |||||
Total stockholders’ deficit | (1,074 | ) | (1,011 | ) | |||
Total liabilities and stockholders’ deficit | $ | 6,014 | $ | 5,984 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) | |||||||
Three months ended | |||||||
2023 | 2022 | ||||||
Cash flows provided by operating activities: | |||||||
Net loss | $ | (84 | ) | $ | (122 | ) | |
Depreciation and amortization | 38 | 20 | |||||
Impairment of inventory | 3 | — | |||||
Non-cash lease expense | 31 | 29 | |||||
Stock-based compensation | 17 | 31 | |||||
Change in operating assets and liabilities: | |||||||
(Increase) decrease in accounts receivable | (174 | ) | 56 | ||||
Increase in inventory | (18 | ) | (57 | ) | |||
Decrease (increase) in deferred COGS | 37 | (135 | ) | ||||
(Increase) decrease in other current assets and other assets | (20 | ) | 7 | ||||
Increase in deferred revenue | 45 | 299 | |||||
Decrease in operating lease liability | (33 | ) | (30 | ) | |||
Increase in accounts payable, accrued expenses, other current liabilities and non-current liabilities | 75 | 123 | |||||
Net cash (used in) provided by operating activities | (83 | ) | 221 | ||||
Cash flows used in investing activities: | |||||||
Investments in technology | (26 | ) | (157 | ) | |||
Other capital investments | — | (2 | ) | ||||
Net cash used in investing activities | (26 | ) | (159 | ) | |||
Cash flows provided by financing activities: | |||||||
Warrant exercise proceeds | 5 | — | |||||
Net cash provided by financing activities | 5 | ̶̶̶̶̶— | |||||
Net (decrease) increase in cash | (104 | ) | 62 | ||||
Cash at the beginning of the period | 1,450 | 1,722 | |||||
Cash at the end of the period | $ | 1,346 | $ | 1,784 | |||
Non-cash investing and financing activities: | |||||||
Accrued preferred dividends to former CEO of OmniMetrix | $ | 1 | $ | 1 |
Definition of Non-GAAP Measure
OmniMetrix monitoring systems include the sale of equipment and of monitoring services. The majority of the sales of OmniMetrix equipment do not qualify as a separate unit of accounting. As a result, revenue (and related costs) associated with sale of equipment are recorded to deferred revenue (and deferred charges) upon shipment for PG and CP monitoring units. Revenue and related costs with respect to the sale of equipment are recognized over the estimated life of the units which is currently estimated to be three years. In the rare instance that a specific sale of OmniMetrix equipment does qualify as a separate unit of accounting (the unit is custom designed and sold without monitoring), the revenue is recognized when the unit is shipped to the customer and not deferred. Revenues from the prepayment of monitoring fees (generally paid twelve months in advance) are initially recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period. Acorn has provided a non-GAAP financial measure of cash-basis revenue (sales) to aid investors in better understanding our sales performance. Acorn believes this non-GAAP measure assists investors by providing additional insight into our operational performance and helps clarify sales trends. For comparability of reporting, management considers non-GAAP measures in conjunction with generally accepted accounting principles (GAAP) financial results in evaluating business performance. The non-GAAP financial measure presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.
Source:
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