ELON met expectations w/-.02 but missed the whisper number of +.01
Thursday April 20, 4:01 pm Eastern Time
Company Press Release
Echelon Corporation Announces First
Quarter 2000 Revenues Increase 30% from
Prior Year
PALO ALTO, Calif.--(BUSINESS WIRE)--April 20, 2000--Echelon
Corporation (Nasdaq:ELON - news) today announced financial results in line with expectations for the
quarter ended March 31, 2000.
Revenues for the quarter ended March 31, 2000 were $11.4 million, an increase of 30% over revenues of
$8.8 million for the same period in 1999. Net loss for the quarter ended March 31, 2000 was $651,000, or
$0.02 per share, based on a weighted average of 33,651,000 common shares outstanding, compared to a
net loss of $1.6 million, or $0.05 per share, based on a weighted average of 32,639,000 common shares
outstanding in the first quarter of 1999. Gross margin for the quarter ended March 31, 2000 was 58.4%,
compared with 57.9% for the same period in 1999. Total operating expenses for the quarter ended March
31, 2000 were $7.6 million, compared to $7.0 million for the same period in 1999.
``We are very pleased with the results of our first quarter,' said M. Kenneth Oshman, the Company's
chairman, chief executive officer, and president. ``In March, we began shipments of our new i.LON(TM)
1000 Internet Server, a breakthrough product that enables millions of everyday devices networked with
Echelon's LonWorks© technology in homes, buildings, factories, and transportation systems to become part
of the Web. The i.LON 1000 paves the way for a wide range of new Internet-based markets and
applications for industry and consumers alike. Initial demand for this important new product was very good.
The quarter was notable for many very exciting and important announcements, highlighting the accelerating
momentum of LonWorks networks around the globe.'
Echelon's free topology networking technology was adopted as an open American National Standards
Institute (ANSI) standard under ANSI/EIA 709.3-1999. Designed to send information between everyday
devices like appliances, lighting systems, heating and air conditioning controls, security systems, motors, and
pumps, Echelon's free topology twisted pair technology employs advanced digital signal processing that
automatically adapts to a wide range of wire types and compensates for different installation methods.
At the 2000 International Consumer Electronics Show (CES), Echelon and LonWorks networks were
featured in the home networking exhibits of Cisco Systems, Microsoft Corporation, and Sun Microsystems.
Using products and technology from Echelon, these industry leaders showed the role that smart devices play
in new services which enable service providers to attract new subscribers, reduce customer churn, and create
new revenue streams.
NTT DATA Corporation, the leading provider of information systems and computer networking in Japan,
joined Echelon's Authorized Network Integrator Program. As an Echelon Authorized Network Integrator,
NTT DATA plans to offer design, construction, operations, and maintenance services of LonWorks based
control systems to real estate and construction companies starting this April.
Echelon and Toshiba Corporation announced a renewal of their license agreement, under which Toshiba will
continue to produce, market, and sell Neuron© Chips and Neuron Chip derivatives for an additional ten
years. Neuron Chips are cost-effective, optimized LonWorks enabled microcontrollers that enable
intelligence to be built into everyday electronic devices and enable these devices to communicate with each
other and through the Internet. Millions of Neuron Chips are already in use worldwide in buildings, factories,
trains, homes, planes, and hundreds of other applications.
Echelon and the Home and Building Control business of Honeywell signed a three-year International
Purchase Agreement. Under this agreement, Honeywell intends to establish LonWorks networks and
Echelon's LNS(TM) network operating system as a worldwide standard for the control infrastructure in
Honeywell's building control systems. In addition, the agreement establishes Echelon as their primary supplier
of LonWorks infrastructure products such as installation tools, routers, and network interfaces.
Another important milestone was that the i.LON 1000 Internet Server successfully completed worldwide
field trials and has achieved certification by Cisco Systems under the Cisco NetWorks(TM) Program.
The German LonUsers© Organization (LNO) recommended that Echelon's LNS network operating system
and plug-in architecture be used as the basis for a common network infrastructure by its members throughout
Germany and, ultimately, Europe. With more than 140 member companies, LNO is the largest independent
LonWorks user group and includes a cross section of some of Germany's most respected and influential
automation companies, including ABB, Honeywell AG, JCI, and the Landis & Staefa division of Siemens.
Echelon and LG Electronics (LGE) of Korea joined forces to promote open, interoperable networked
devices in the home. LGE, one of the world's largest manufacturers of home appliances, will provide
interoperable, Internet-connected home appliances such as refrigerators, microwaves, and other appliances
using Echelon's LonWorks control networks. As part of its commitment to LonWorks, LGE has joined the
LonMark© Interoperability Association as a sponsor member.
Telia AB, a leading Swedish telecom company, has chosen Echelon's LonWorks system as a standard for
networking everyday devices in Telia's Connected Home initiative. Telia's Connected Home initiative involves
collaborating on the development of network-delivered services via networked devices in the home. The
initiative will involve typical products and services for the home including networked kitchen appliances,
interactive entertainment centers, home control and security systems, and home offices. Telia is currently
working to roll out the concept to a small collection of homes in Europe and will conduct initial field trials in
select areas of Scandinavia during the year 2000.
Echelon signed an International LonWorks Open Systems Reseller Agreement with TAC AB, a leading
supplier of IT solutions for integrated building control systems. Under the agreement, TAC and its channel of
independent network integrators will become authorized resellers of Echelon's LNS network operating
system and LonMaker(TM) for Windows© Integration Tool products. Echelon and TAC will also carry out
joint marketing programs to increase the use of LonWorks networks in the building controls market.
Working together, Echelon and TAC will expand the leading position of LonWorks networks as the premier
solution for networking of everyday devices in the buildings market.
For those interested in further discussion regarding this release, Echelon's management will participate in a
conference call at 2:00 P.M. PST today, April 20, 2000. To access the conference call, dial 888/293-1205
(toll-free) any time after 1:50 P.M. PDST. The call will be available live today, and for playback on the
Investor Relations section of Echelon's web site (www.echelon.com) through April 24, 2000.
About Echelon Corporation
Echelon Corporation is the developer of LonWorks networks, recognized internationally as a standard for
open, interoperable control networks. With thousands of application developers and millions of devices
installed worldwide, LonWorks is the leading cross-industry standard for networking everyday devices in
building, home, industrial, transportation, and public utility applications. Echelon offers a full range of
off-the-shelf hardware and software products to support the development, installation and management of
intelligent, open and interoperable control networks.
Products that have been verified to conform to Echelon's LonMark interoperability guidelines are eligible to
carry the LonMark logo, an indicator that a product has been designed to interoperate over a LonWorks
network.
Echelon is based in Palo Alto, Calif., with international offices in China, France, Germany, Japan, Korea, The
Netherlands, and the United Kingdom. Further information can be found at echelon.com.
Additional information about the LonMark Interoperability Association can be found at
lonmark.org.
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 the timing and
level of customer orders, demand for products and services, development of markets for Echelon's products
and services, 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.
Note to Editors: Echelon, the Echelon logo, LONMARK, the LONMARK logo, Neuron, LonUsers, and
LonWorks are trademarks of Echelon Corporation registered in the United States and other countries.
i.LON, LNS, LonMaker, and Bringing the Internet to Life are trademarks of Echelon Corporation. Other
marks belong to their respective holders.
ECHELON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2000 1999
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash, cash equivalents and short-term
investments $24,030 $24,304
Accounts receivable, net 7,394 7,303
Inventories 4,387 3,159
Other current assets 2,155 2,297
Total current assets 37,966 37,063
Property and equipment, net 2,657 2,648
------- -------
$40,623 $39,711
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,858 $ 2,586
Accrued liabilities 2,446 2,540
Current portion of deferred revenues 1,419 1,647
Total current liabilities 6,723 6,773
Total stockholders' equity 33,900 32,938
------- -------
$40,623 $39,711
ECHELON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
March 31,
(Unaudited)
2000 1999
REVENUES:
Product $ 10,940 $ 8,173
Service 503 635
Total revenues 11,443 8,808
COST OF REVENUES:
Cost of product 4,284 3,325
Cost of service 482 380
Total cost of revenues 4,766 3,705
Gross profit 6,677 5,103
OPERATING EXPENSES:
Product development 2,363 2,440
Sales and marketing 4,078 3,500
General and administrative 1,169 1,039
Total operating expenses 7,610 6,979
Loss from operations (933) (1,876)
INTEREST AND OTHER INCOME, NET 322 362
Loss before provision for income taxes (611) (1,514)
Provision for income taxes 40 59
Net loss $ (651) $ (1,573)
Basic net loss per share $ (0.02) $ (0.05)
Shares used in computing
basic net loss per share 33,651 32,639
Contact:
Echelon Corporation
Lyn Balistreri, 650/855-7402 (Press)
lbalistreri@echelon.com
Chris Stanfield, 650/855-7443 (Investor Relations)
stanfield@echelon.com |
