Acorn Delivers Improved Q1 Top- and Bottom-Line Performance Reflecting Continued Revenue Growth and Higher Margins from IoT Remote Monitoring of Generators, Pipelines & Compressors

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WILMINGTON, Del., May 15, 2019 (GLOBE NEWSWIRE) -- (OTCQB: ), a provider of remote monitoring and control systems and services for generators, pipelines, compressors and other industrial equipment, through its OmniMetrix subsidiary, today announced results for its first quarter ended March 31, 2019 (Q1'19). Acorn will host a conference call tomorrow at 10:00 a.m. EDT (details below) to review its results and outlook.

Walter Czarnecki, President and CEO of OmniMetrix, commented, "OmniMetrix achieved continued revenue growth, improved gross margins and positive adjusted EBITDA during Q1'19. During the first quarter we shipped and activated more of our next generation Hero2 Rectifier Monitors for cathodic protection of pipelines, as well as our recently launched AIRGuard remote monitoring and control solution for industrial air compressors. These products reflect our vision of providing an expanding array of the most innovative monitoring and control solutions to an expanding base of customers seeking to enhance their risk management programs while also reducing operating costs.

“Importantly, while continuing to expand our customer footprint, our product engineering and other cost management initiatives enabled us to improve Q1’19 adjusted gross margin to 64% from 62% in Q1'18.”

Jan Loeb, President and CEO of Acorn, added, "Building on OmniMetrix’s improved operating performance, we were also successful in further reducing Acorn’s corporate general and administrative expenses by $104,000 or 33% in Q1'19 versus Q1'18. As a result, Acorn was able to trim its consolidated operating loss to $261,000 in Q1'19 versus $368,000 in Q1'18.

"We see substantial growth opportunities for OmniMetrix, for example in the area of remote monitoring and control for standby generators, a marketplace with very limited penetration of remote monitoring. We plan to make incremental investments in sales and marketing at OmniMetrix during 2019 in order to better pursue opportunities, all while continuing to maintain cost disciplines required to improve our bottom line. We also continue to evaluate strategic opportunities to expand our business and create enhanced value for shareholders."

Driven by an increase in monitoring revenue, OmniMetrix’s Q1'19 revenue rose 10% to $1,327,000 from $1,209,000 in Q1'18. Monitoring growth reflects an increase in the number of end points being monitored, more than 90% of which renew annually. The year-over-year decline in hardware revenue is primarily attributed to two sizeable orders that were placed in March 2018.

Gross profit grew 10% to $821,000 in Q1'19, compared to gross profit of $745,000 in Q1'18. Q1'19 included a $30,000 accrual related to a residual inventory purchase commitment for discontinued technology in cost of sales. If we add back this write-off, adjusted gross profit grew 14% and adjusted gross margin increased to 64% in Q1'19 from 62% in Q1'18. The increased adjusted gross margin is due to a change in the sales mix to higher-margin products.

Hardware gross margin increased to 38% in Q1'19 from 37% in Q1'18. Gross margin on monitoring revenue was level at 83% in both Q1'19 and Q1'18.

OmniMetrix's Q1'19 operating expenses increased to $873,000 versus $800,000 in Q1'18 primarily due to a $47,000 increase in personnel costs related to growth initiatives and an increase in R&D expense of $15,000 pertaining to continued development of next generation monitors.

Revenue and gross profit growth more than offset higher operating expenses, enabling OmniMetrix to reduce its operating loss to $52,000 in Q1'19 versus an operating loss of $55,000 in Q1'18. Excluding the residual inventory purchase commitment write-off, the operating loss in Q1’19 would have been $22,000, a 60% reduction from Q1’18.

Lower corporate expense coupled with revenue growth at OmniMetrix allowed Acorn to reduce its consolidated operating loss by 29% to $261,000 in Q1'19 versus $368,000 in Q1'18.

Net loss attributable to Acorn shareholders improved to $237,000, or $0.01 per share, in Q1'19 compared to $1.2 million, or $0.04 per share, in Q1'18. The prior-year period included a loss of $829,000 on the sale of Acorn's remaining interest in DSIT.

In March 2019, OmniMetrix negotiated a more favorable accounts receivable credit line with its existing lending partner. The new line provides accounts receivable formula-based financing of the lesser of 75% of eligible receivables or $1 million. OmniMetrix had $140,000 outstanding on this credit line at March 31, 2019.

Earlier this month Acorn filed a preliminary S-1 Registration Statement for a rights offering seeking to raise gross proceeds of $2.4 million. Net proceeds from the rights offering are intended to finance the contemplated reacquisition of the 20% minority interest in OmniMetrix that Acorn does not already own and to provide OmniMetrix with additional sales and marketing resources to facilitate expansion into additional geographic markets and new product applications, as well as to support next-generation product development. Any net proceeds not so utilized would be used for general working capital purposes.

The Registration Statement relating to the rights offering has been filed with the Securities and Exchange Commission but has not yet become effective.  Acorn may not accept any offers to purchase Acorn Common Stock pursuant to the rights prior to the time the Registration Statement becomes effective.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of Acorn securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.      

 

More news and information about Acorn Energy, Inc.

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Globe Newswire: 21:35 GMT Wednesday 15th May 2019

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