Summary Financial Results | |||||||||||
($ in thousands) | Q2’23 | Q2'22 | Change | 6M’23 | 6M'22 | Change | |||||
Monitoring revenue | $ | 1,065 | $ | 966 | +10.2% | $ | 2,089 | $ | 1,956 | +6.8% | |
Hardware revenue | $ | 908 | $ | 655 | +38.6% | $ | 1,633 | $ | 1,416 | +15.3% | |
Total revenue * | $ | 1,973 | $ | 1,621 | +21.7% | $ | 3,722 | $ | 3,372 | +10.4% | |
Gross profit | $ | 1,490 | $ | 1,246 | +19.6% | $ | 2,806 | $ | 2,504 | +12.1% | |
Gross margin | 75.5% | 76.9% | 75.4% | 74.3% |
* 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) | Q2’23 | Q2'22 | 6M’23 | 6M'22 | ||||
Total GAAP revenue | $ | 1,973 | $ | 1,621 | $ | 3,722 | $ | 3,372 |
Less: Amortization of deferred revenue | (1,673) | (1,479) | (3,282) | (2,983) | ||||
Plus: Sales recorded to deferred revenue | 1,824 | 1,422 | 3,478 | 3,225 | ||||
Other adjustments and write-offs | 1 | 31 | 55 | 31 | ||||
Total cash-basis revenue ** | $ | 2,125 | $ | 1,595 | $ | 3,973 | $ | 3,645 |
Year-over-year growth | +33.2% | +9.0% |
**See definition of Non-GAAP measure below.
CEO Commentary
“We achieved our second consecutive quarter of monitoring revenue growth, following the end of the revenue impact from the sunsetting of wireless carrier support for 3G monitoring technology. Building upon 3% growth in Q1, monitoring revenues grew 10% in Q2 and we expect positive momentum to continue over the balance of 2023 and beyond.
“Cash-basis revenue grew 33% in Q2’23, also indicative of strength across the business, and we closed Q2’23 with a record backlog of
“Our Q2’23 gross margin remained stable at 76%, though down slightly from 77% in Q2’22 due to the relative strength of equipment sales, which carry a lower margin than monitoring revenues.
“Given both the business and environmental benefits of our solutions, we remain confident in our ability to achieve our long-term 20% annual, cash-basis revenue growth goal. We delivered consolidated profitability and positive cash flow in Q2’23, and if we are able to meet our revenue growth goal, we’d expect to be profitable and operating cash-flow positive at the consolidated corporate level for the full year. Our operating company, OmniMetrix, has been profitable since 2019 and remained so through the pandemic.
“We have been working very hard the past several years to position Acorn for sustainable growth and profitability. Given Acorn’s net operating loss carryforwards (NOLs) of over
“With heatwaves, flooding and related power outages this summer, the value of stand-by generators, as well as Demand Response (DR) programs, for electric grid operators has been in the news. We continue to advance our work with our DR partner
Financial Review
Q2’23 revenue of
Q2’23 gross profit increased to
Total operating expenses decreased 4.2% to
Net income attributable to
Liquidity and Cash Flow
Excluding deferred revenue and deferred cost of goods sold (COGS), which have virtually no impact on future cash flow, net 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 OmniMetrixTM (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) | ||||||||||||
Six months ended | Three months ended | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Revenue | $ | 3,722 | $ | 3,372 | $ | 1,973 | $ | 1,621 | ||||
COGS | 916 | 868 | 483 | 375 | ||||||||
Gross profit | 2,806 | 2,504 | 1,490 | 1,246 | ||||||||
Operating expenses: | ||||||||||||
R&D expense | 402 | 410 | 188 | 212 | ||||||||
Selling, general and administrative (SG&A) expense | 2,416 | 2,387 | 1,219 | 1,205 | ||||||||
Impairment of software | — | 51 | — | 51 | ||||||||
Total operating expenses | 2,818 | 2,848 | 1,407 | 1,468 | ||||||||
Operating (loss) income | (12 | ) | (344 | ) | 83 | (222 | ) | |||||
Interest income (expense), net | 27 | (1 | ) | 16 | (1 | ) | ||||||
Income (loss) before income taxes | 15 | (345 | ) | 99 | (223 | ) | ||||||
Income tax expense | — | — | — | — | ||||||||
Net income (loss) | 15 | (345 | ) | 99 | (223 | ) | ||||||
Non-controlling interest share of net income | (4 | ) | (1 | ) | (3 | ) | (* | ) | ||||
Net income (loss) attributable to | $ | 11 | $ | (346 | ) | $ | 96 | $ | (223 | ) | ||
Basic and diluted net income (loss) per share attributable to | $ | 0.00 | $ | (0.01 | ) | $ | 0.00 | $ | (0.01 | ) | ||
Weighted average number of shares outstanding attributable to | ||||||||||||
Basic | 39,746 | 39,688 | 39,758 | 39,688 | ||||||||
Diluted | 39,780 | 39,688 | 39,784 | 39,688 |
* | Less than |
CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||
As of | As of | |||||
(Unaudited) | (Audited) | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash | $ | 1,573 | $ | 1,450 | ||
Accounts receivable, net | 701 | 597 | ||||
Inventory, net | 803 | 789 | ||||
Deferred COGS | 917 | 887 | ||||
Other current assets | 398 | 288 | ||||
Total current assets | 4,392 | 4,011 | ||||
Property and equipment, net | 614 | 653 | ||||
Operating right-of-use assets, net | 246 | 298 | ||||
Deferred COGS | 733 | 807 | ||||
Other assets | 224 | 215 | ||||
Total assets | $ | 6,209 | $ | 5,984 | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 321 | $ | 243 | ||
Accrued expenses | 157 | 171 | ||||
Deferred revenue | 4,154 | 3,984 | ||||
Operating lease liabilities | 119 | 116 | ||||
Other current liabilities | 30 | 58 | ||||
Total current liabilities | 4,781 | 4,572 | ||||
Long-term liabilities: | ||||||
Deferred revenue | 2,213 | 2,187 | ||||
Operating lease liabilities | 160 | 220 | ||||
Other long-term liabilities | 18 | 16 | ||||
Total long-term liabilities | 2,391 | 2,423 | ||||
Commitments and contingencies | ||||||
Stockholders’ deficit: | ||||||
Common stock - | 397 | 397 | ||||
Additional paid-in capital | 102,924 | 102,889 | ||||
Accumulated stockholders’ deficit | (101,256 | ) | (101,267 | ) | ||
(3,036 | ) | (3,036 | ) | |||
(971 | ) | (1,017 | ) | |||
Non-controlling interest | 8 | 6 | ||||
Total stockholders’ deficit | (963 | ) | (1,011 | ) | ||
Total liabilities and stockholders’ deficit | $ | 6,209 | $ | 5,984 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) | ||||||
Six months ended | ||||||
2023 | 2022 | |||||
Cash flows provided by (used in) operating activities: | ||||||
Net income (loss) | $ | 15 | $ | (345 | ) | |
Depreciation and amortization | 76 | 48 | ||||
Impairment of inventory | 8 | — | ||||
Impairment of software | — | 51 | ||||
Non-cash lease expense | 63 | 59 | ||||
Stock-based compensation | 30 | 53 | ||||
Change in operating assets and liabilities: | ||||||
(Increase) decrease in accounts receivable | (104 | ) | 292 | |||
Increase in inventory | (22 | ) | (298 | ) | ||
Decrease (increase) in deferred COGS | 44 | (117 | ) | |||
Increase in other current assets and other assets | (119 | ) | (1 | ) | ||
Increase (decrease) in accounts payable and accrued expenses | 64 | (125 | ) | |||
Increase in deferred revenue | 196 | 242 | ||||
Decrease in operating lease liability | (67 | ) | (62 | ) | ||
(Decrease) increase in other current liabilities and non-current liabilities | (29 | ) | 9 | |||
Net cash provided by (used in) operating activities | 155 | (194 | ) | |||
Cash flows used in investing activities: | ||||||
Investments in technology | (37 | ) | (266 | ) | ||
Other capital investments | -— | (3 | ) | |||
Net cash used in investing activities | (37 | ) | (269 | ) | ||
Cash flows used in financing activities: | ||||||
Warrant exercise proceeds | 5 | — | ||||
Net cash provided by financing activities | 5 | — | ||||
Net increase (decrease) in cash | 123 | (463 | ) | |||
Cash at the beginning of the year | 1,450 | 1,722 | ||||
Cash at the end of the period | $ | 1,573 | $ | 1,259 | ||
Supplemental cash flow information: | ||||||
Cash paid during the period for: | ||||||
Interest | $ | 1 | $ | 1 | ||
Non-cash investing and financing activities: | ||||||
Accrued preferred dividends to former CEO of OmniMetrix | $ | 2 | $ | 2 |
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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