Echelon Reports Second Quarter Results(San Jose, CA– July 15, 2004) - Echelon Corporation (NASDAQ: ELON) today announced financial results for the quarter ended June 30, 2004 of $0.04 per diluted share, exceeding consensus analyst estimates of $0.025. Revenues for the quarter ended June 30, 2004 were $28.3 million, compared to revenues of $31.3 million for the same period in 2003. GAAP net income for the quarter ended June 30, 2004 was $1.5 million or $0.04 cents per fully diluted share, based on a weighted average of 40,900,000 common shares outstanding, compared to a GAAP net loss of $6.3 million, or $0.16 cents per share, based on a weighted average of 39,954,000 common shares outstanding for the same period in 2003. Revenues for the six-month period ended June 30, 2004 were $55.3 million, compared to revenues of $63.9 million for the same period in 2003. GAAP net income for the six-month period ended June 30, 2004 was $2.7 million, or $0.07 per fully diluted share, based on a weighted average of 40,888,000 common shares outstanding, compared to a GAAP net loss of $2.1 million, or $0.05 per share, based on a weighted average of 39,875,000 common shares outstanding for the same period in 2003. Gross margin for the quarter ended June 30, 2004 was 55.5%, compared with 53.0% for the same period in 2003. Gross margin for the six-month period ended June 30, 2004 was 56.0%, compared to 51.8% for the same period in 2003. Total operating expenses for the quarter ended June 30, 2004 were $14.6 million, compared to $23.9 million for the same period in 2003. Operating expenses during the second quarter of 2003 included approximately $10.1 million associated with the acquisition of certain assets of Metering Technology Corporation. Total operating expenses for the six-month period ended June 30, 2004 were $29.2 million, compared to $36.6 million for the same period in 2003. For the quarter ended June 30, 2004, non-GAAP net income, which excludes in-process research and development, intangible asset amortization, and other acquisition related costs, was $1.6 million, or $0.04 per share, compared to non-GAAP net income of $3.1 million, or $0.08 per share for the same period in 2003. Non-GAAP net income for the six-month period ended June 30, 2004 was $3.0 million, or $0.07 per share, compared to non-GAAP net income of $7.7 million, or $0.19 per share for the same period in 2003. All non-GAAP information in this release is reconciled in the "Non-GAAP Consolidated Condensed Statements of Operations" table below. "This was a very good quarter for Echelon, topping our expectations in both revenue and profit," said M. Kenneth Oshman, Echelon's chairman and chief executive officer. "I am very pleased with the growth that we are seeing in our LonWorks infrastructure business. We had expected to see double digit growth this year and so far things are performing to this expectation. Based on a number of things that we have learned over the past several months, our Network Energy Services (NES) system business will not roll-out as we expected this year, and we are therefore lowering our guidance for NES revenues for the year. While we are disappointed, we are certainly not discouraged since we see large opportunities on the horizon and we continue to receive positive feedback on both system functionality and price." Echelon's second quarter of 2004, as previously announced, was highlighted by a number of important events. The continuing success of Echelon's power line signaling technology was shown with the announcement that Gorenje, d.d., Slovenia's largest exporter of household appliances and one of Europe's largest household goods manufacturer, will be incorporating Echelon's power line smart transceivers into a new range of LonWorks® based appliances targeted at the mid-to-high end European consumer appliance market. Expected to debut on the market in the second quarter of 2005, the line should include refrigerators, dishwashers, microwave ovens, and conventional ovens to provide consumers with a complete, intelligent kitchen that are intended to actively manage and lower energy costs while improving performance, reliability and convenience. Open Systems, Echelon's concept of delivering continuing value and flexibility in automation systems to end-users, integrators and manufacturers through an open network architecture, showed continued market adoption with the announcement that the site planning committee for the 2004 Olympics in Athens installed energy management and heating, ventilating, and air-conditioning systems at the baseball, softball, and hockey venues. The systems utilize the LonWorks platform and Echelon's LNS® network operating system to monitor, control and manage the primary energy use system (HVAC) and back-up generation system. Echelon advanced its leadership position in defining the architecture for connecting networks of physical devices to enterprise and business systems by becoming a sponsor of the oBIX™ Technical Committee, a technical committee within the OASIS organization. OASIS is an international standards consortium for creating XML related standards. The oBIX Technical Committee is responsible for establishing the standards by which building automation systems will interface with IT systems including those for enterprise management. LonMark® International and Echelon announced that the LonWorld® Exhibition and Conference will be held in Shanghai, China from October 20-21, 2004. Asia has been the fastest growing geographic market for the LonWorks platform making China a natural location for the LonWorks industry event. Echelon announced the appointment of Toshifumi "Tommy" Matsumoto as President of Echelon Japan, K.K. Mr. Matsumoto joins Echelon after an extensive career with various AT&T companies in Japan and is currently a Trustee of the Japan Network Information Center (JPNIC) and Chairman of the Asia Pacific Networking Group (APNG). For those interested in further discussion regarding this release, Echelon's management will participate in a conference call today at 2:00 pm PDT. As part of the call, Echelon management will also discuss the outlook for the NES business for the remainder of this year and provide an assessment of current market conditions. To access the conference call, dial 1-800-946-0715 (callers outside the US please use +1-719-457-2643); however, due to a limited number of available phone lines, the company asks that only those persons without Web access call this number. The call will be available live today, and for playback on the Investor Relations section of Echelon's web site (www.echelon.com) through July 22, 2004. Use of Non-GAAP Financial Information Echelon provides non-GAAP net income and non-GAAP net income per share data as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. Echelon believes that this presentation of non-GAAP net income and non-GAAP net income per share provides useful information relating to its financial condition and results of operations, which provides management and investors with a more complete understanding of Echelon's past performance and certain additional financial and business trends. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with generally accepted accounting principles. About Echelon Corporation The protocol underlying LonWorks networks and the signaling used by Echelon's power line and free topology transceivers have been adopted as standards by the American National Standards Institute (ANSI). Echelon is a founding member of the LonMark Interoperability Association, an open industry forum of hundreds of leading manufacturers, integrators, and users dedicated to promoting the use of interoperable LonWorks devices. More information about LonMark interoperability is available at http://www.lonmark.org. Further information regarding Echelon can be found at http://www.echelon.com. ### Echelon, LonWorks, LonMark, LNS, LonWorld, the LonMark logo, and the Echelon logo are trademarks of Echelon Corporation registered in the United States and other countries. Other marks belong to their respective holders. This press release may contain statements relating to future plans, events or performance. Such statements may involve risks and uncertainties, including risks associated with uncertainties pertaining to risks that our NES system does not performed as designed or that our NES business is not successful or does not develop as planned, risks relating to the success or timing of Gorenje's introduction of its product line that incorporates Echelon technology; risks relating to the perceived performance of LonWorks-based energy management systems in venues at the Olympics; risks relating to the definition and release of any standards resulting from the oBIX technical committee and the successful integration of such standards into Echelon's products; risks associated with the LonWorld Exhibition and Conference in Shanghai, China being cancelled for any reason or unsuccessfully completed for any reason; risks relating to the development of markets for Echelon's products and services and the ability of those products and services to perform as designed and meet customer and consumer expectations; and other risks identified in Echelon's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The financial statements that follow should be read in conjunction with the notes set forth in Echelon's Form 10-Q when filed with the Securities and Exchange Commission; and with our 2003 annual report on Form 10-K, which was filed with the Securities and Exchange Commission in March 2004. ECHELON CORPORATION
ECHELON CORPORATION
ECHELON CORPORATION
ECHELON CORPORATION
Contact Information
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 |