Echelon Reports 147% Quarterly Revenue Growth, First Quarterly Operating Profit
$0.13 EPS in Line With Analyst Expectations
SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 17, 2002--Echelon Corporation (Nasdaq:ELON - news) today announced financial results for the fourth quarter ended December 31, 2001, meeting analysts' expectations.
``This quarter capped an exceptional year for Echelon,'' said M. Kenneth Oshman, Echelon's chairman and chief executive officer. ``We delivered impressive earnings growth, our sixth consecutive profitable quarter and, for the first time in our history, a quarterly operating profit. Our project with Enel is charging forward as anticipated and on track for substantial growth this new year. While worldwide economic conditions continue to be tight, we are excited about our business and expect 2002 to show continued revenue growth and increased profits.''
Revenues for the quarter ended December 31, 2001 were $32.1 million, an increase of 147% over revenues of $13.0 million for the same period in 2000. Net income for the quarter ended December 31, 2001 was $5.2 million, or 13 cents per share on a fully diluted basis, based on a weighted average of 40,612,000 common shares outstanding, compared to net income of $1.1 million, or 3 cents per share on a fully diluted basis, based on a weighted average of 41,197,000 common shares outstanding for the fourth quarter of 2000.
Revenues for the year ended December 31, 2001 were $76.6 million, an increase of 55% over revenues of $49.3 million for the year ended December 31, 2000. Net income for the year ended December 31, 2001 was $6.0 million, or 15 cents per share on a fully diluted basis, based on a weighted average of 41,141,000 common shares outstanding, compared to net income of $84,000, or 0 cents per share on a fully diluted basis, based on a weighted average of 39,734,000 common shares outstanding for the year ended December 31, 2000.
Gross margin for the quarter ended December 31, 2001 was 47.4% compared to 56.1% for the same period in 2000. Gross margin for the year ended December 31, 2001 was 51.4% compared to 58.9% for the year ended December 31, 2000. Total operating expenses for the quarter ended December 31, 2001 were $10.8 million compared to total operating expenses of $8.7 million for the same period in 2000. Total operating expenses for the year ended December 31, 2001 were $39.8 million, compared to $32.8 million for the year ended December 31, 2000.
Over the course of the fourth quarter Echelon made several announcements regarding the use of the company's LonWorks® technology platform in new applications for both the home and utility markets. Following are some highlights from the quarter's significant events as reported in previously issued press releases:
Echelon previewed the newest members of its i.LON(TM) IP connectivity products for LonWorks networks, the i.LON 10 Ethernet Adapter and i.LON 100 Internet Server. The i.LON 10 is designed to provide an extremely low-cost entry point for Internet device connectivity. The i.LON 100 is targeted at small- to mid-size commercial and industrial networks, such as those typically used at schools, convenience stores, banks, water treatment plants, pumping stations, and factories. Pre-release units are expected in the first half of 2002.
Echelon announced its next generation development tool for LonWorks networks, the NodeBuilder® 3 Development Tool. The new tool incorporates a rich suite of features that are designed to enable developers to quickly and easily build smart, communicating devices using Neuron® chips, a family of very low-cost microcontrollers optimized for intelligent distributed control applications. Over 18 million Neuron chips are in use around the world today, providing the ``brains'' for intelligent, communicating building control systems, train control systems, elevators, security systems, home appliances, thermostats, and many other devices.
The largest LonWorld(TM) Tradeshow and Conference ever was held in Frankfurt, Germany. Messe Frankfurt, the show organizer, reported that over 1,400 persons attended the two-day conference. As a result of the very successful show, in December Echelon and Messe Frankfurt agreed to key terms for extending Messe Frankfurt's stewardship of the LonWorld Tradeshow and Conference to events held in the North American market. Based on the terms, the next LonWorld event will be held on October 31st and November 1st, 2002 in Toronto, Canada, co-located with Messe Frankfurt's inaugural ISH North America building show.
As part of Echelon's booth at the show, Whirlpool Corporation showed appliances that provided a number of value-added services that were accessible using a wireless Web pad and a residential gateway that ran IBM's Service Management Framework software, Echelon's LonWorks access bundle for Open Services Gateway Initiative (OSGi) gateways, and a number of Whirlpool-created services designed to the OSGi specifications. Whirlpool's LonWorks based products were part of a ``three-home'' showcase of connected appliances in the booth that also included appliances from Samsung Electronics of Korea and Merloni S.p.A. of Italy. All three sets of appliances used Echelon's field-proven, ANSI/EIA 709.2-compliant PLT-22 Power Line Transceiver to communicate over the power wiring.
Halensmart Company Ltd., a division of Rambler Investment Ltd., Hong Kong, established a price/performance benchmark for LonWorks home products when they announced the availability of a lamp dimmer module priced at $33.80 each. Halensmart has announced that the dimmer module is the first in a planned series of very low-cost LonWorks based consumer products that it plans to introduce that use Echelon's PLT-22 power line transceiver to communicate over existing power lines.
Echelon announced that it was a Bronze Sponsor of the INTEGER Hong Kong Pavilion (located at Tamar, on the central Hong Kong waterfront), a 20,000 square foot exhibition and research facility. The INTEGER Pavilion demonstrates how intelligent and environmentally friendly technologies can deliver better value and performance in housing. LonWorks networks provide the critical controls backbone for systems throughout the Pavilion. An estimated 10% of Hong Kong's population is expected to pass through the Pavilion's doors during 2002.
Subsequent to the close of the quarter, Echelon announced that it signed a definitive agreement, subject to certain closing conditions, to acquire privately-held BeAtHome.com, Inc. of Fargo, N.D. BeAtHome offers an award-winning, innovative, and intuitive software solution and value-added services platform for web-based monitoring and control applications to the home, commercial and utility markets. In addition to winning an Innovations award at the Consumer Electronics Show and a Product of the Year Award from Electronic House Magazine in 2001, BeAtHome's Energy Management System application was named 2002 Best of Innovations by the Consumer Electronics Association and was named the Best of CES Home Automation and Networking product by TechTV at the 2002 Consumer Electronics Show.
For those interested in further discussion regarding this release, Echelon's management will participate in a conference call today at 2:00 p.m. PDT. To access the conference call, dial 800/388-8975 (callers outside the US please use +1-973-694-2225); 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 January 24, 2002.
About Echelon Corporation
Echelon Corporation is the creator of the LonWorks platform, the world's most widely used standard for connecting everyday devices such as appliances, thermostats, air conditioners, electric meters, and lighting systems to each other and to the Internet. Echelon's hardware and software products enable manufacturers and integrators to create smart devices and systems that lower cost, increase convenience, improve service, and enhance productivity, quality, and safety. Thousands of companies have developed and installed more than 18 million LonWorks based devices into homes, buildings, factories, trains, and other systems worldwide.
The protocol underlying LonWorks networks and the signaling used by Echelon's power line and free topology transceivers have both been adopted as standards by the American National Standards Institute (ANSI). Echelon is also 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 is available at lonmark.org. Further information regarding Echelon can be found at echelon.com.
Echelon, LonWorks, LonMark, Neuron, NodeBuilder, and the Echelon logo are trademarks of Echelon Corporation registered in the United States and other countries. LonWorld, i.LON, and Bringing the Internet to Life(TM) are trademarks of Echelon Corporation. 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 the timing and level of customer orders, demand for products and services, risks that the R&D activities or subsequent product deployment activities with Enel are not successful, do not meet their target dates, are not on track for growth, or are terminated, or that the contemplated transactions are challenged by third parties, risks that our development projects with other parties are not successful including risks and uncertainties pertaining to approvals for and satisfying conditions to the consummation of the acquisition of BeAtHome, the successful integration of Echelon and BeAtHome's technology, products and services, risks relating to the development of markets for Echelon's products and services and the ability of those products and services to meet customer and consumer expectations, and other risks identified in Echelon's SEC filings. Actual results, including actual revenues and profits, 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-K when filed with the Securities and Exchange Commission.
ECHELON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2001 2000
----------------------
ASSETS
CURRENT ASSETS:
Cash, cash equivalents and
short-term investments $111,653 $150,793
Accounts receivable, net 29,113 9,548
Inventories 10,316 5,745
Other current assets 11,556 5,203
-------- --------
Total current assets 162,638 171,289
Property and equipment, net 16,480 3,085
Other long-term assets 6,536 1,302
-------- --------
$185,654 $175,676
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 7,409 $ 4,200
Accrued liabilities 2,426 1,606
Current portion of deferred
revenues 1,055 1,106
-------- --------
Total current liabilities 10,890 6,912
-------- --------
Deferred rent 47 3
Total stockholders' equity 174,717 168,761
-------- --------
$185,654 $175,676
======== ========
ECHELON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
(Unaudited)
-------------------- --------------------
2001 2000 2001 2000
-------- -------- -------- --------
REVENUES:
Product $ 31,763 $ 12,483 $ 74,777 $ 47,261
Service 338 493 1,812 2,038
-------- -------- -------- --------
Total revenues 32,101 12,976 76,589 49,299
-------- -------- -------- --------
COST OF REVENUES:
Cost of product 16,292 5,137 34,842 18,225
Cost of service 606 565 2,347 2,017
-------- -------- -------- --------
Total cost of revenues 16,898 5,702 37,189 20,242
-------- -------- -------- --------
Gross profit 15,203 7,274 39,400 29,057
-------- -------- -------- --------
OPERATING EXPENSES:
Product development 4,820 3,018 17,028 11,159
Sales and marketing 4,316 3,901 15,787 15,949
General and
administrative 1,703 1,750 6,942 5,787
Non-recurring charges -- -- -- (48)
-------- -------- -------- --------
Total operating expenses 10,839 8,669 39,757 32,847
-------- -------- -------- --------
Income/(loss) from
operations 4,364 (1,395) (357) (3,790)
-------- -------- -------- --------
INTEREST AND OTHER
INCOME, NET 1,083 2,541 6,655 4,019
-------- -------- -------- --------
Income before provision
for income taxes 5,447 1,146 6,298 229
Provision for income
taxes 218 31 252 145
-------- -------- -------- --------
Net income $ 5,229 $ 1,115 $ 6,046 $ 84
======== ======== ======== ========
Net income per share
Basic $ 0.14 $ 0.03 $ 0.16 $ 0.00
======== ======== ======== ========
Diluted $ 0.13 $ 0.03 $ 0.15 $ 0.00
======== ======== ======== ========
Shares used in computing
net income per share
Basic 38,502 37,814 38,443 35,222
======== ======== ======== ========
Diluted 40,612 41,197 41,141 39,734
======== ======== ======== ========
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Contact:
Echelon Corporation
Steve Nguyen, 408/938-5272 (Press)
qnguyen@echelon.com
Chris Stanfield, 408/938-5243 (Investor Relations)
stanfield@echelon.com |
