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Acorn Achieves Solid Bottomline Improvement in 2019 on 8% Revenue Increase; New Veteran IoT Executive Heads Expanded Sales & Marketing Effort; Investor Call Tomorrow at 11am ETWILMINGTON, Del., March 25, 2020 (GLOBE NEWSWIRE) -- Acorn Energy, Inc. (OTCQB: ACFN), a provider of remote monitoring and control systems and IoT services for generators, pipelines, compressors and other industrial equipment through its operating subsidiary, OmniMetrix, today announced results for its fourth quarter (Q4’19) and year ended December 31, 2019. Acorn will host an investor call tomorrow at 11:00 a.m. ET to discuss its business outlook (details below). Jan Loeb, Acorn’s CEO, commented, "We extended our trend of growth and higher gross margins in the fourth quarter, achieving an operating profit of $83,000 at OmniMetrix, versus a loss of $34,000 in Q4’18. We also trimmed Acorn’s Q4’19 consolidated operating loss by 57% to $114,000 versus $264,000 in Q4’18. “OmniMetrix improved its Q4’19 gross margin to 68%, compared to 62% in Q4’18, reflecting the contribution of higher-margin, next generation products, including its Hero 2 Rectifier Monitor, and its ongoing focus on higher-margin commercial and industrial applications such its TrueGuard-Pro industrial generator monitor. “While revenue growth fell below our long-term targets, principally due to some turnover in our senior sales staff, we have brought on board some very strong new sales professionals, including Dan Hess, Director of Sales, who brings significant IoT and related sales experience (see bio below). We have also developed several sales and marketing initiatives, including the introduction of a number of new products and the addition of new market verticals. We believe these efforts can return us to our long-term annual growth goal of 20% or more. “Importantly, Acorn ended the year with a strong balance sheet and, as of March 20, 2020, we had consolidated cash of $1.6 million, which included $371,000 in settlement proceeds with the Israel Tax Authorities that we were able to transfer from our restricted account in Israel to our operating bank account. We also have $115,000 available to borrow on our working capital credit line. We feel we are well positioned to weather the impact of the Covid-19 disruption on our sales and marketing activity over the next several months. The business value of our remote monitoring and control services actually becomes even more clear in an environment where personnel and field activities can be sidelined by illness and travel or other restrictions. “Acorn increased its ownership in OmniMetrix to 99% in 2019, through the repurchase of a 19% interest in OmniMetrix for $1.3 million, including accrued dividends, which was funded by a portion of our June rights offering proceeds. We believe this was a significant, value-enhancing transaction given the attractive long-term growth prospects, margins and recurring revenue profile of the OmniMetrix business. We will continue to look for other value-enhancing opportunities that may arise during the current economic challenges.” OmniMetrix Summary Financial Results
Omnimetrix revenue rose 8% to $5.5M in 2019 from $5.1M in 2018, driven by a 23% increase in monitoring revenue, offset by a 9% decrease in hardware revenue, principally reflecting the impact of some sales team turnover. Monitoring revenue growth reflects an increase in the number of hardware units in the field being monitored, more than 90% of which renew. Q4'19 revenue from OmniMetrix increased 7% to $1.4M from $1.3M in Q4'18, also driven by higher monitoring revenue offset by lower hardware revenue. Gross profit grew 17% in Q4’19 to $946,000, compared to $810,000 in Q4'18. Gross margin increased to 68% in Q4’19 from 62% in Q4’18, due primarily to increased monitoring revenue which has a higher gross margin than hardware revenue, as well as to improved hardware margins. Hardware margins rose to 38% in 2019 from 36% in 2018, benefiting from engineering, product design and capability enhancements built into next-generation monitoring products. OmniMetrix's Q4’19 total operating expenses increased 2% to $863,000 versus $844,000 in Q4'18, due to higher selling, general and administrative expenses. Increased revenue and margin expansion, partially offset by modestly higher operating expenses, enabled OmniMetrix to generate an operating profit of $83,000 in Q4'19 versus an operating loss of $34,000 in Q4'18. For full year 2019, OmniMetrix generated operating profit of $177,000 versus an operating loss of $146,000 in 2018. Acorn Consolidated Financial Results Lower corporate expense, coupled with gross profit growth at OmniMetrix, allowed Acorn to reduce its Q4’19 consolidated operating loss to $114,000 compared to $264,000 recorded in Q4'18. Q4’19 net loss attributable to Acorn shareholders was $61,000, or ($0.00) per share, compared to net loss attributable to Acorn shareholders of $245,000, or ($0.01) per share, in Q4'18. The prior-year period included a net gain of $222,000, or $0.01 per share, related to the company’s sale of an interest in DSIT. For the full year, net loss attributable to Acorn shareholders was $618,000, or ($0.02) per share in 2019, versus a loss of $2.0 million, or ($0.07) per share in 2018, which included a loss of $607,000, or ($0.02) per share, related to the sale of Acorn's interest in DSIT. Liquidity and Capital Resources As of March 20, 2020, we had consolidated cash of $1.6 million, which included $371,000 in settlement proceeds with the Israel Tax Authorities and $115,000 available to borrow on our working capital credit line. Management believes that the company’s current cash, plus expected cash from OmniMetrix’s operations and borrowings available from lines of credit, will provide sufficient liquidity to finance the operating activities of the company for at least the next twelve months. New Director of Sales The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which was declared a pandemic by the World Health Organization in March 2020. The ultimate disruption which may be caused by the outbreak is uncertain; however it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible effects may include, but are not limited to, disruption to the Company’s customers and revenue, absenteeism in the Company’s labor workforce, unavailability of products and supplies used in operations, and a decline in value of assets held by the Company, including inventories, property and equipment and marketable securities.
About Acorn (www.acornenergy.com) and OmniMetrixTM (www.omnimetrix.net) Safe Harbor Statement Follow us Investor Relations Contacts ACORN ENERGY, INC. AND SUBSIDIARIES
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