Thursday October 12, 4:02 pm Eastern Time
Press Release
Echelon Corporation Announces Net Profit of $128,000 for Third Quarter, 2000
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 12, 2000--Echelon Corporation (NASDAQ: ELON - news) today announced financial results for the quarter ended September 30, 2000.
``We're very pleased to have earned a profit for the third quarter,'' said M. Kenneth Oshman, Echelon's chairman, president and CEO. ``For many years Echelon has made strategic investments in product development, marketing and sales. These investments have resulted in solid revenue growth and strong gross margins. Now, the return on Echelon's investments also includes profits! This achievement is due to the support of Echelon's great customers, the efficiency of our dedicated suppliers, and the hard work of our talented employees, and to our faithful stockholders. We plan to celebrate this milestone next week at the LonWorld2000(TM) Conference and Exhibition on October 18 and 19 in Orlando, Florida. The keynote speakers for this conference are Mr. Alberto Perego of Enel SpA, Mr. Teruyoshi Kawai of NTT Data, and Ms. Pat Sueltz of Sun Microsystems. We look forward to an exciting and fruitful conference for Echelon and its business partners.''
Revenues for the quarter ended September 30, 2000 were $12.2 million, an increase of 25% over revenues of $9.8 million for the same period in 1999. Net profit for the quarter ended September 30, 2000 was $128,000, or zero cents per share on a fully diluted basis, based on a weighted average of 39,483,000 common shares outstanding, compared to a net loss of $743,000, or $0.02 per share, based on a weighted average of 33,028,000 common shares outstanding in the third quarter of 1999.
Revenues for the nine-month period ended September 30, 2000 were $36.3 million, an increase of 28% over revenues of $28.4 million for the same period one year ago. Net loss for the nine-month period ended September 30, 2000 was $1.0 million, or $0.03 per share, based on a weighted average of 34,342,000 common shares outstanding, compared to a net loss of $3.1 million, or $0.09 per share, based on a weighted average of 32,832,000 common shares outstanding for the same period in 1999.
Gross margin for the quarter ended September 30, 2000 was 60.3%, compared with 60.5% for the same period in 1999. Gross margin for the nine-month period ended September 30, 2000 was 60.0%, compared with 59.3% for the same period in 1999. Total operating expenses for the quarter ended September 30, 2000 were $8.0 million, compared to $7.0 million for the same period in 1999. Total operating expenses for the nine-month period ended September 30, 2000 were $24.2 million, compared to $20.8 million for the same period in 1999.
Interest and other income, net for the quarter ended September 30, 2000 was $826,000, compared with $352,000 for the same quarter last year. The increase was largely due to the interest income in the current quarter arising out of Echelon's sale of 3,000,000 shares of common stock to Enel SpA on September 11, 2000 at a per share price of $43.6425, yielding total proceeds of $131 million. Francesco Tato, Enel's director and CEO, will assume a seat on Echelon's Board of Directors.
Other important highlights from the third quarter include:
The signaling used by Echelon's PLT-22 power line networking technology was adopted by the American National Standards Institute (ANSI) as the ANSI/EIA 709.2-A-2000 Control Network Powerline (PL) Channel Specification. Designed to send information between everyday devices like appliances, electric meters, water heaters, security systems, and lighting systems through a home or building's AC power wiring, this technology employs advanced digital signal processing and error correction techniques designed to ensure reliable signaling. Echelon's PLT-22 power line transceiver is the only commercially available power line communications device that complies with Ministry of Post and Telecommunications (Japan), FCC (US), Industry Canada (Canada), and CEN (Europe) regulations for such applications.
Echelon commenced shipments of the next generations of both the LNS(TM) 3 Network Operating System and the LonMaker(TM) Integration Tool. These software products enable applications in home, utility, building, and factory automation to be hosted anywhere on the Internet. When used in conjunction with Echelon's i.LON(TM) 1000 Internet Server, the new LonMaker and LNS tools can enable customers to create peer-to-peer networks with fault-tolerant applications using the Internet as a broadband connection for sending and receiving information. Echelon believes that these tools offer unprecedented levels of scalability and performance to the thousands of companies that are currently designing, manufacturing and deploying everyday devices based on Echelon's open, interoperable LonWorks® platform.
Matsushita Electric Works (MEW), Ltd., the leader in the Japanese lighting control industry, announced that it has developed a set of lighting control products based on Echelon's LonWorks platform. The new products are designed to serve the rapidly emerging market for open, interoperable LonWorks based building control systems in Japan. These new MEW products (including a relay control unit) were created through close collaboration between MEW and Echelon and will be commercially available in December of this year, to be followed by overseas models which are currently under development in Japan.
NTT DATA Corporation, Japan's leading provider of information systems and computer networking, and an Echelon Authorized Network Integrator, signed an agreement with Echelon to open a LonWorks Authorized Training Center in Japan. By becoming an Echelon training partner, NTT DATA will provide Japanese-language courses to meet the increasing demand for LonWorks training and education in the burgeoning Asia Pacific marketplace. Echelon believes that extending the partnership between Echelon and NTT DATA to include training is an important step toward making LonWorks networks the de facto standard for building automation in Japan.
Echelon completed its Open Systems 2000 seminar program in Asia Pacific. The series was co-sponsored by a number of companies including CNA, National, Yamatake Building Systems and Yokogawa M&C Corporation/Yokogawa Johnson. The program took place from July 12 through September 7 in eleven cities across seven countries. The Open Systems 2000 seminars consisted of a presentation and demonstration illustrating the power and flexibility of the LonWorks platform for open, interoperable, Internet-connected device networks for commercial buildings. Over 1,200 people attended the tour, representing a large spectrum of the building industry including owners, planners, architects, specifiers and engineers.
For those interested in further discussion regarding this release, Echelon's management will participate in a conference call at 2:00 P.M. PDST today, October 12, 2000. To access the conference call, dial (800) 734-1246 (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 October 19, 2000.
About Echelon Corporation
Echelon Corporation (NASDAQ: ELON - news) is the world leader in networking everyday devices. The company offers a comprehensive line of hardware and software products for automating building, home, industrial, transportation, and utility applications using LonWorks networks, and international, cross-industry, open standard for interoperable device networks. Echelon is Bringing the Internet to Life(TM) by linking the millions of everyday devices connected with LonWorks networks to the Internet.
Echelon is based in Sunnyvale, California, with international offices in China, France, Germany, Japan, Korea, The Netherlands and the United Kingdom. Further information can be found at echelon.com.
Echelon's LonWorld2000 Conference and Exhibition is designed to help end-users, integrators, service providers, and manufacturers learn how to use the LonWorks system in their business. The conference will take place October 18-19 at the Orange County Convention Center in Orlando, Florida and features a series of forums, classes and presentations along with an exhibition of products and services covering the home/utility, building, industrial, and transportation markets. Sponsorship, registration and exhibition information about LonWorld2000 can be found at lonworld2000.com.
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 performance of Echelon's products, the success and market acceptance of its new products, the levels of demand for Echelon products and services, including training and education, the acceptance or adoption of Echelon technology as industry standards, and the timing and level of commercial availability of Echelon's products both within and outside the United States, 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 registered trademarks and i.LON, LNS, LonMaker, Digital Home, LonWorld2000, and Bringing the Internet to Life are trademarks of Echelon Corporation registered in the United States and other countries. Other marks belong to their respective holders.
ECHELON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2000 1999
(Unaudited)
-------------------------
ASSETS
CURRENT ASSETS:
Cash, cash equivalents
and short-term
investments $150,346 $ 24,304
Accounts receivable, net 7,712 7,303
Inventories 6,650 3,159
Other current assets 5,078 2,297
-------- --------
Total current assets 169,786 37,063
Property and equipment, net 2,904 2,648
Other long-term assets 674 --
-------- --------
$173,364 $ 39,711
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,379 $ 2,586
Accrued liabilities 1,874 2,540
Deferred revenues 1,052 1,647
-------- --------
Total current liabilities 6,305 6,773
-------- --------
Total stockholders' equity 167,059 32,938
-------- --------
$173,364 $ 39,711
======== ========
ECHELON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
2000 1999 2000 1999
REVENUES:
Product $ 11,738 $ 9,301 $ 34,778 $ 26,665
Service 491 473 1,545 1,699
-------- -------- -------- --------
Total revenues 12,229 9,774 36,323 28,364
-------- -------- -------- --------
COST OF REVENUES:
Cost of product 4,433 3,473 13,088 10,386
Cost of service 422 387 1,452 1,166
-------- -------- -------- --------
Total cost
of revenues 4,855 3,860 14,540 11,552
-------- -------- -------- --------
Gross profit 7,374 5,914 21,783 16,812
-------- -------- -------- --------
OPERATING EXPENSES:
Product development 2,866 2,227 8,141 6,854
Sales and marketing 3,808 3,705 12,048 10,798
General and
administrative 1,360 1,035 3,989 3,135
-------- -------- -------- --------
Total operating
expenses 8,034 6,967 24,178 20,787
-------- -------- -------- --------
Income/(loss) from
operations (660) (1,053) (2,395) (3,975)
-------- -------- -------- --------
INTEREST AND OTHER
INCOME, NET 826 352 1,478 1,045
-------- -------- -------- --------
Income/(loss)
before provision
for income taxes 166 (701) (917) (2,930)
Provision for
income taxes 38 42 114 130
-------- -------- -------- --------
Net income/(loss) $ 128 $ (743) $ (1,031) $ (3,060)
======== ======== ======== ========
Net income/
(loss) per share
Basic $ 0.00 $ (0.02) $ (0.03) $ (0.09)
======== ======== ======== ========
Diluted $ 0.00
========
Shares used
in computing net
income/(loss)
per share
Basic 35,284 33,028 34,342 32,832
======== ======== ======== ========
Diluted 39,483
========
--------------------------------------------------------------------------------
Contact:
Echelon Corporation
Chris Stanfield, 408/938-5243 (Investor Relations)
stanfield@echelon.com
Lyn Balistreri, 408/938-5202 (Press)
lbalistreri@echelon.com |
