Exhibit 99.1
Investor Relations
eOn Communications Corporation
800-955-5321
investorrelations@eoncc.com
For Release 4:30 PM ET, June 12, 2007
eOn Communications Reports Profitable Third Quarter Fiscal 2007
SAN JOSE, CA(June 12, 2007) – eOn Communications Corporation™ (NASDAQ: EONC), a leading provider of telecommunications solutions, today reported financial results for the third fiscal quarter ended April 30, 2007.
Net income was $20,000, or less than $0.01 per common share compared with a net loss of ($1,015,000) or ($0.07) per share in the prior quarter ended January 31, 2007 and net income of $294,000, or $0.02 per share in the quarter ended April 30, 2006. Net income for this quarter included an operating loss of $127,000 incurred developing eOn’s IP Hosting business and stock-based compensation of $78,000 as explained below. Revenues for the quarter were $3,570,000 (including related party revenue of $195,000) an increase of 17% compared to $3,047,000 for the same period last year, and an increase of 140% compared to revenues of $1,487,000 in the previous quarter.
Net loss for the nine months was ($955,000) or ($0.07) per common share, compared to net income of $1,406,000 or $0.11 per common share for the nine months ended April 30, 2006. Net income in the nine months ended April 30, 2006 included income from continuing operations of $630,000 or $0.05 per common share, income from discontinued operations of $559,000 or $0.04 per common share and extraordinary gain of $217,000 or $0.02 per common share. Revenue for the nine months was $7,765,000 (including related party revenue of $363,000) a decrease of 15% compared to $9,183,000 for the nine months ended April 30, 2006. Cash, cash equivalents and short-term marketable securities decreased 21% to $5,303,000 from $6,684,000 as of July 31, 2006.
During the nine months ended April 30, 2007, the Company implemented Statement of Financial Accounting Standards No. 123R, which requires companies to estimate the cost of all forms of stock-based compensation and record a commensurate expense in the statement of operations. Pro forma loss from continuing operations, excluding stock-based compensation of $236,000, would have been ($719,000) or ($0.05) per common share for the nine months ended April 30, 2007 compared to income from continuing operations of $630,000 or $0.05 per common share for the same period in the previous year.
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“We are pleased that we have returned to profitability, even after our expenditures in our new IP Hosting business. Revenue was up significantly in China and US government accounts,” stated David Lee, eOn’s chairman and chief executive officer.
“Our focus remains improving the Company’s performance by leveraging both organic growth and strategic partnerships,” added Lee.
Conference Call
The Company will host a conference call at 4:45 p.m. ET, June 12, 2007, to discuss first quarter results. To hear the call, dial 800-289-0572 or visit our investor relations website at investor.eoncc.com. A replay of the call will be posted to our investor relations website shortly following the call.
About eOn Communications™
eOn Communications Corporation™ is a global provider of innovative communications solutions. Backed by over 20 years of telecommunications engineering expertise, our solutions enable our customers to easily leverage advanced technologies in order to communicate more effectively. To find out more information about eOn Communications and its solutions, visit the World Wide Web at www.eoncommunications.com, or call 800-955-5321.
Note:
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including technical and competitive factors, which could cause the Company’s results and the timing of certain events to differ materially from those discussed in the forward-looking statements. Such risks are detailed in eOn Communications Corporation’s most recent Form 10-Q filing with the Securities and Exchange Commission.
eOn Communications Corporation, the mark eOn, and eQueue are trademarks of eOn Communications Corporation.
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eOn Communications Corporation
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Amounts in thousands, except share and per share information)
(Unaudited)
| Three Months Ended April 30, | Nine Months Ended April 30, | ||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||
REVENUE | |||||||||||||||
Third party revenue | $ | 3,375 | $ | 3,047 | $ | 7,402 | $ | 9,183 | |||||||
Related party revenue | 195 | — | 363 | — | |||||||||||
Net revenue | $ | 3,570 | $ | 3,047 | $ | 7,765 | $ | 9,183 | |||||||
COST OF REVENUE | |||||||||||||||
Third party cost of revenue | 1,525 | 1,107 | 2,982 | 3,191 | |||||||||||
Related party cost of revenue | 180 | — | 336 | — | |||||||||||
Cost of revenue | 1,705 | 1,107 | 3,318 | 3,191 | |||||||||||
Gross profit | 1,865 | 1,940 | 4,447 | 5,992 | |||||||||||
OPERATING EXPENSE | |||||||||||||||
Selling, general and administrative | 1,191 | 1,074 | 3,368 | 3,520 | |||||||||||
Research and development | 715 | 643 | 2,225 | 1,891 | |||||||||||
Other (income) expense, net | (2 | ) | (1 | ) | 28 | 63 | |||||||||
Total operating expense | 1,904 | 1,716 | 5,621 | 5,474 | |||||||||||
(Loss) income from continuing operations | (39 | ) | 224 | (1,174 | ) | 518 | |||||||||
Interest income | 59 | 45 | 219 | 112 | |||||||||||
Income (loss) from continuing operations before income taxes | 20 | 269 | (955 | ) | 630 | ||||||||||
Income tax expense | — | — | — | — | |||||||||||
Income (loss) income from continuing operations after income taxes | 20 | 269 | (955 | ) | 630 | ||||||||||
DISCONTINUED OPERATIONS | |||||||||||||||
Income from discontinued operations, net of tax of $0 and minority interest of $289, respectively | — | — | — | 256 | |||||||||||
Gain on disposal of discontinued operations, net of tax of $0 and $20 | — | 25 | — | 303 | |||||||||||
Income from discontinued operations | — | 25 | — | 559 | |||||||||||
Income (loss) before extraordinary item | 20 | 294 | (955 | ) | 1,189 | ||||||||||
EXTRAORDINARY ITEM | |||||||||||||||
Extraordinary gain, net of income taxes of $0 | — | — | — | 217 | |||||||||||
Net income (loss) | $ | 20 | $ | 294 | $ | (955 | ) | $ | 1,406 | ||||||
COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
Net income (loss) | $ | 20 | $ | 294 | $ | (955 | ) | $ | 1,406 | ||||||
Foreign currency translation adjustment | — | — | — | 8 | |||||||||||
Comprehensive income (loss) | $ | 20 | $ | 294 | $ | (955 | ) | $ | 1,414 | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 13,564 | 13,424 | 13,558 | 13,309 | |||||||||||
Diluted | 13,702 | 13,587 | 13,558 | 13,394 | |||||||||||
Basic income (loss) per share: | |||||||||||||||
From continuing operations after income taxes | $ | — | $ | 0.02 | $ | (0.07 | ) | $ | 0.05 | ||||||
From discontinued operations, net of tax and minority interest | — | — | — | 0.04 | |||||||||||
From extraordinary gain, net of income taxes | — | — | — | 0.02 | |||||||||||
Basic income (loss) per share | $ | — | $ | 0.02 | $ | (0.07 | ) | $ | 0.11 | ||||||
Diluted income (loss) per share: | |||||||||||||||
From continuing operations after income taxes | $ | — | $ | 0.02 | $ | (0.07 | ) | $ | 0.05 | ||||||
From discontinued operations, net of tax and minority interest | — | — | — | 0.04 | |||||||||||
From extraordinary gain, net of income taxes | — | — | — | 0.02 | |||||||||||
Diluted income (loss) per share | $ | — | $ | 0.02 | $ | (0.07 | ) | $ | 0.11 | ||||||
eOn Communications Corporation
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share information)
| April 30, 2007 | July 31, 2006 | |||||||
| (unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 578 | $ | 934 | ||||
Marketable securities | 4,725 | 5,750 | ||||||
Trade accounts receivable, net of allowance of $683 and $372, respectively | 2,419 | 1,639 | ||||||
Trade accounts receivable—related party | 108 | 27 | ||||||
Proceeds receivable from sale of discontinued operations | — | 89 | ||||||
Inventories | 2,473 | 2,167 | ||||||
Prepaid and other current assets | 165 | 289 | ||||||
Total current assets | 10,468 | 10,895 | ||||||
Property and equipment, net | 408 | 338 | ||||||
Long-term receivable, net of allowance of $232 | — | 153 | ||||||
Goodwill | 418 | 418 | ||||||
Investments | 301 | 301 | ||||||
Total assets | $ | 11,595 | $ | 12,105 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 507 | $ | 453 | ||||
Trade accounts payable—related party | 402 | 72 | ||||||
Deferred acquisition payment | 397 | 397 | ||||||
Accrued expenses and other | 1,171 | 1,376 | ||||||
Total current liabilities | 2,477 | 2,298 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, (10,000,000 shares authorized, no shares issued and outstanding) | — | — | ||||||
Common stock, $0.001 par value (50,000,000 shares authorized, 14,157,029 and 14,128,922 shares issued, respectively) | 14 | 14 | ||||||
Additional paid-in capital | 55,296 | 55,030 | ||||||
Treasury stock, at cost (676,900 shares) | (1,502 | ) | (1,502 | ) | ||||
Accumulated deficit | (44,690 | ) | (43,735 | ) | ||||
Total stockholders’ equity | 9,118 | 9,807 | ||||||
Total liabilities and stockholders’ equity | $ | 11,595 | $ | 12,105 | ||||