Echelon 10-Q 9 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 31, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	ECHELON CORP
Entity Central Index Key	31,347
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		44,160,919

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands		Sep. 30, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash and cash equivalents		$ 9,205	$ 13,340
Restricted investments		1,401	1,401
Short-term investments		15,999	28,829
Accounts receivable, net	[1]	3,995	3,948
Inventories		2,673	3,243
Deferred cost of goods sold		1,221	935
Other current assets		1,887	1,084
Current assets of discontinued operations held for sale		0	597
Total current assets		36,381	53,377
Property and equipment, net		696	10,190
Intangible assets, net		1,241	1,413
Goodwill		5,756	5,936
Other long‑term assets		1,048	694
Long-term assets of discontinued operations held for sale		0	36
Total assets		45,122	71,646
CURRENT LIABILITIES:
Accounts payable		2,070	3,614
Accrued liabilities		3,591	2,844
Current portion of lease financing obligations		131	2,459
Deferred revenues		4,098	3,126
Current liabilities of discontinued operations held for sale		0	1,024
Total current liabilities		9,890	13,067
LONG-TERM LIABILITIES:
Lease financing obligations, excluding current portion		0	13,662
Other long-term liabilities		530	1,740
Total long-term liabilities		530	15,402
STOCKHOLDERS’ EQUITY:
Common stock		474	472
Additional paid-in capital		356,135	356,181
Treasury stock		(28,130)	(28,130)
Accumulated other comprehensive income		(1,228)	(431)
Accumulated deficit		(292,803)	(285,169)
Total Echelon Corporation stockholders’ equity		34,448	42,923
Noncontrolling interest in discontinued operations of subsidiary		254	254
Total stockholders’ equity		34,702	43,177
Total liabilities and stockholders’ equity		$ 45,122	$ 71,646
[1]	Includes related party receivable of $1,404 and $158 as of September 30, 2015 and December 31, 2014, respectively

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Condensed Consolidated Balance Sheet (Parenthetical) [Abstract]
Accounts receivable, related rarties	$ 1,404	$ 158

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended				9 Months Ended
		Sep. 30, 2015		Sep. 30, 2014		Sep. 30, 2015		Sep. 30, 2014
Income Statement [Abstract]
Revenues		$ 9,983	[1]	$ 9,178	[1]	$ 29,214	[2]	$ 29,083	[2]
Cost of revenues		4,370	[3]	4,180	[3]	12,435	[4]	12,502	[4]
Gross profit		5,613		4,998		16,779		16,581
Operating expenses:
Product development	[4]	2,454		2,305		7,406		7,224
Sales and marketing	[4]	1,848		2,160		6,230		6,600
General and administrative	[4]	2,547		3,538		7,555		10,887
Lease termination charges		0		0		3,337		0
Loss on write down of property, equipment and other				4,409		0		4,409
Costs Incurred		0		227		0		227
Total operating expenses		6,849		12,639		24,528		29,347
Loss from continuing operations		(1,236)		(7,641)		(7,749)		(12,766)
Interest and other income, net		184		719		564		661
Interest expense on lease financing obligations		(5)		(271)		(385)		(839)
Loss from continuing operations before provision for income taxes		(1,057)		(7,193)		(7,570)		(12,944)
Income tax expense (benefit)		(10)		33		64		114
Net loss from continuing operations attributable to Echelon Corporation Stockholders		(1,047)		(7,226)		(7,634)		(13,058)
Net loss from discontinued operations, net of income taxes		0		(2,141)		0		(9,250)
Net loss from discontinued operations attributable to non-controlling interest, net of income taxes		0		179		0		535
Net loss from discontinued operations attributable to Echelon Corporation Stockholders, net of income taxes		0		(1,962)		0		(8,715)
Net loss attributable to Echelon Corporation Stockholders		$ (1,047)		$ (9,188)		$ (7,634)		$ (21,773)
Earnings Per Share [Abstract]
Basic and diluted net loss per share from continuing operations attributable to Echelon Corporation Stockholders (usd per shares)		$ (0.02)		$ (0.17)		$ (0.17)		$ (0.30)
Basic and diluted net loss per share from discontinued operations attributable to Echelon Corporation Stockholders (usd per shares)		0		(0.05)		0		(0.20)
Basic and diluted net loss per share attributable to Echelon Corporation Stockholders (usd per shares)		$ (0.02)		$ (0.21)		$ (0.17)		$ (0.50)
Shares used in computing net loss per share:
Basic (shares)		44,128		43,507		44,068		43,367
Diluted (shares)		44,128		43,507		44,068		43,367
[1]	Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets
[2]	Includes related party amounts of $1,680 and $683 for the three months ended September 30, 2015 and 2014, respectively; and related party amounts of $3,465 and $2,546 for the nine months ended September 30, 2015 and 2014, respectively. See Note 7 and Note 14 for additional information on related par
[3]	Included in cash and cash equivalents in the Company’s condensed consolidated balance sheets
[4]	See Note 6 for summary of amounts included representing stock-based compensation expense.

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Revenue from related parties	$ 1,680	$ 683	$ 3,465	$ 2,546

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Compehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Consolidated Statements of Comprehensive Loss [Abstract]
Net loss from continuing operations attributable to Echelon Corporation Stockholders	$ (1,047)	$ (7,226)	$ (7,634)	$ (13,058)
Net loss from discontinued operations, net of income taxes	0	(2,141)	0	(9,250)
Net loss	(1,047)	(9,367)	(7,634)	(22,308)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(177)	(902)	(812)	(932)
Unrealized holding gain (loss) on available-for-sale securities	1	(1)	15	(4)
Total other comprehensive loss	(176)	(903)	(797)	(936)
Comprehensive loss	(1,223)	(10,270)	(8,431)	(23,244)
Less: comprehensive loss from discontinued operations attributable to non-controlling interests	0	179	0	535
Comprehensive loss attributable to Echelon Corporation Stockholders	$ (1,223)	$ (10,091)	$ (8,431)	$ (22,709)

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net loss including noncontrolling interest	$ (7,634)	$ (22,308)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	1,413	2,640
Increase (decrease) in allowance for doubtful accounts	(17)	22
Lease termination charges	3,337	0
Loss on disposal of Grid business	0	254
Goodwill impairment charges	0	3,388
Loss on disposal of and write down of property, equipment and other	53	5,101
Reduction of (increase in) accrued investment income	(23)	18
Stock-based compensation	109	992
Adjustment to contingent consideration	(98)	0
Change in operating assets and liabilities:
Accounts receivable	(19)	2,953
Inventories	630	1,217
Deferred cost of goods sold	190	242
Other current assets	(418)	312
Accounts payable	(1,509)	(543)
Accrued liabilities	(55)	(865)
Deferred revenues	6	(751)
Deferred rent	(154)	(29)
Net cash used in operating activities	(4,189)	(7,357)
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of available‑for‑sale short‑term investments	(7,984)	(58,148)
Proceeds from maturities and sales of available‑for‑sale short‑term investments	20,852	80,116
Cash paid for acquisition, net of cash acquired	0	(1,155)
Proceeds from divestiture of Grid business	0	4,861
Change in other long‑term assets	(793)	232
Capital expenditures	(83)	(672)
Net cash provided by investing activities	11,992	25,234
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Principal payments of lease financing obligations	(11,147)	(1,676)
Restricted cash used as collateral for line of credit	0	(6,250)
Proceeds from exercise of stock options	0	17
Repurchase of common stock from employees for payment of taxes on vesting of restricted stock units and upon exercise of stock options	(152)	(411)
Net cash used in financing activities	(11,299)	(8,320)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(639)	(723)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(4,135)	8,834
CASH AND CASH EQUIVALENTS:
Beginning of period	13,340	14,648
End of period	9,205	23,482
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest on lease financing obligations	386	830
Cash paid for income taxes	187	265
NON CASH INVESTING ACTIVITIES:
Fair value of stock issued in connection with acquisition	$ 0	$ 715

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies: Basis of Presentation The condensed consolidated financial statements include the accounts of Echelon Corporation, a Delaware corporation, its wholly-owned subsidiaries, and a subsidiary in which it has a controlling interest (collectively referred to as the “Company”). The Company reports non-controlling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries and other consolidated entities have been eliminated in consolidation. In the third quarter of 2014, the Company announced and completed the sale of its Grid business to S&T AG ("S&T"), a publicly traded European IT systems provider with an existing focus on smart energy products and services. The results of the Grid business are now classified as discontinued operations. As a result of this transaction, the Company now operates in one reporting segment- the Industrial Internet of Things ("IIoT") segment. While the financial information furnished is unaudited, the condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) which the Company considers necessary for the fair presentation of the results of operations for the interim periods covered, and of the financial condition of the Company at the date of the interim balance sheet. The results for interim periods are not necessarily indicative of the results for the entire year. The condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2014 included in its Annual Report on Form 10‑K. There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2014 . Risks and Uncertainties The Company’s operations and performance depend significantly on worldwide economic conditions and their impact on purchases of the Company’s products, as well as the ability of suppliers to provide the Company with products and services in a timely manner. The impact of any of the matters described below could have an adverse effect on the Company’s business, results of operations and financial condition. • The Company’s sales are currently concentrated with a relatively small group of customers, as approximately 37.9% and 37.4% of net revenues for the three and nine months ended September 30, 2015 , respectively, were derived from two customers. Customers in any of the Company’s target market sectors may experience unexpected reductions in demand for their products and consequently reduce their purchases from us, resulting in either the loss of a significant customer or a notable decrease in the level of sales to a significant customer. In addition, if any of these customers are unable to obtain the necessary capital to operate their business, they may be unable to satisfy their payment obligations to the Company. • The Company utilizes third-party contract electronic manufacturers to manufacture, assemble, and test its products. If any of these third-parties were unable to obtain the necessary capital to operate their business, they may be unable to provide the Company with timely services or to make timely deliveries of products. • From time to time, the Company has experienced shortages or interruptions in supply for certain products or components used in the manufacture of the Company’s products that have been or will be discontinued. In order to ensure an adequate supply of these items, the Company has occasionally purchased quantities of these items that are in excess of the Company’s then current estimate of short-term requirements. If the long-term requirements do not materialize as originally expected, or if the Company develops alternative solutions that no longer employ these items and the Company is not able to dispose of these excess products or components, the Company could be subject to increased levels of excess and obsolete inventories. • Recently, in our effort to manage our costs and inventory risks, we decreased our inventory levels of certain products. If there is an unexpected increase in demand for these items, we might not be able to supply our customers with products in a timely manner. Use of Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions, and estimates that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates and judgments are used for revenue recognition, performance-based equity compensation, inventory valuation, intangible asset valuation, contingent consideration valuation, allowance for warranty costs, and other loss contingencies. In order to determine the carrying values of assets and liabilities that are not readily apparent from other sources, the Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances. Actual results experienced by the Company may differ materially from management’s estimates. Recently Issued Accounting Standards On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In July 2015, the FASB deferred the effective date of ASU 2014-09 so that it will apply to annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early application is permitted to the original effective date of December 15, 2016, in which case ASU 2014-09 would apply to annual reporting periods beginning December 15, 2016 (including interim reporting periods within those periods). The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In July 2015, the FASB issued an update to ASC 330, Inventory: Simplifying the Measurement of Inventory . Under this update, subsequent measurement of inventory is based on the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and disposal. This update does not apply to inventory that is measured using last-in, first-out or the retail inventory method. This update should be applied prospectively and will be adopted by the Company in the first quarter of fiscal year 2017. Early adoption is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements. Revenue Recognition The Company’s revenues are derived from the sale and license of its products and to a lesser extent, from fees associated with training, technical support, and custom software design services offered to its customers. Product revenues consist of revenues from hardware sales and software licensing arrangements. Service revenues consist of product technical support (including in limited circumstances software post-contract support services) and training. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery to the customer’s carrier (and acceptance, as applicable) has occurred, the sales price is fixed or determinable, collectability is probable, and there are no post-delivery obligations. For non-distributor hardware sales, including sales to third party manufacturers, these criteria are generally met at the time of delivery to the customer’s carrier. However, for arrangements that contain contractual acceptance provisions, revenue recognition may be delayed until acceptance by the customer or the acceptance provisions lapse unless the Company can objectively demonstrate that the contractual acceptance criteria have been satisfied, which is generally accomplished by establishing a history of acceptance for the same or similar products. For sales made to the Company’s distributor partners, revenue recognition criteria are generally met at the time the distributor sells the products through to its end-use customer. Service revenue is recognized as the training services are performed, or ratably over the term of the support period. The Company accounts for the rights of return, price protection, rebates, and other sales incentives offered to distributors of its products as a reduction in revenue. With the exception of sales to distributors, the Company’s customers are generally not entitled to return products for a refund. For sales to distributors, due to contractual rights of return and other factors that impact its ability to make a reasonable estimate of future returns and other sales incentives, revenues are not recognized until the distributor has shipped its products to the end customer . The Company's multiple deliverable revenue arrangements have historically been primarily related to sales of Grid products. As noted above, we completed the sale of our Grid division to S&T in September 2014. Revenues from the Grid division are included in discontinued operations (see Note 5). For further information regarding our accounting for multiple deliverable revenue arrangements, please see Note 1 - Significant Accounting Policies, in the Notes to Consolidated Financial Statements in our 2014 Annual Report on Form 10-K. Deferred Revenue and Deferred Cost of Goods Sold Deferred revenue consists substantially of amounts billed or payments received in advance of revenue recognition. Deferred cost of goods sold related to deferred product revenues includes direct product costs and applied overhead. Deferred cost of goods sold related to deferred service revenues includes direct labor costs and applied overhead. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of goods sold are recognized. Restricted Investments As of September 30, 2015 , restricted investments consist of balances maintained by the Company with an investment advisor in money market funds and permitted treasury bills. These balances represent collateral for a $1.0 million operating line of credit issued to the Company by its primary bank for credit card purchases, as well as one standby letter of credit for $113,000 . Because the Company’s agreement with the lender prevents the Company from withdrawing these funds, they are considered restricted. No amounts have ever been drawn against the standby letters of credit issued by the bank. Fair Value Measurements The Company measures at fair value its cash equivalents and available-for-sale investments using a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's own assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets; • Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when estimating fair value. Other than cash and money market funds, the Company's only financial assets and liabilities required to be measured at fair value on a recurring basis at September 30, 2015 , are its fixed income available-for-sale securities and its liability related to contingent consideration due to Lumewave, Inc. ("Lumewave") shareholders. See Note 2 of these Notes to Condensed Consolidated Financial Statements for a summary of the input levels used in determining the fair value of these assets and liabilities as of September 30, 2015 . Goodwill Goodwill is tested for impairment using a two-step approach. The Company evaluates goodwill, at a minimum, on an annual basis during the first quarter and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. There was no impairment of goodwill as a result of the annual impairment review performed during the quarter ended March 31, 2015 . Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit. The fair values of the reporting units were estimated using a combination of the income approach and the market approach. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of impairment loss, if any. The Company's goodwill impairment analysis is sensitive to changes in key assumptions used in its analysis, such as expected future cash flows, the degree of volatility in equity and debt markets, and its stock price. The continued decline in the Company's stock price and market capitalization could lead to an impairment charge to its long-lived assets, including goodwill. As of September 30, 2015 , management evaluated the current stock price, coupled with other inputs, and concluded that no impairment of either goodwill or long-lived assets was warranted as of September 30, 2015 as the Company's fair value exceeded its carrying value. For the quarter ended June 30, 2014, the Company concluded there were indicators of potential goodwill impairment for the Company’s Grid business, including continued weakness and increased uncertainty in the Grid market; changes in the extent and manner of use of the unit's long-lived assets; and changes in our long-term strategy for the Grid business. As a result of identifying indicators of impairment, the Company performed an impairment test of goodwill as of June 30, 2014. Based on the Company's analysis using the two-step approach defined above, the Company recorded a non-cash, goodwill impairment charge of $3.4 million in the second quarter of 2014. This impairment was reported as part of the discontinued operations results for the year ended December 31, 2014 . As a result, the Company has no goodwill remaining related to the Grid business that was disposed of during the quarter ended September 30, 2014 , with the entire remaining goodwill balance being attributable to the IIoT reporting unit. This includes goodwill of $1.3 million that was added during the year ended December 31, 2014 in conjunction with the acquisition of Lumewave, Inc. (see Note 4 for additional details). Long-Lived Assets We evaluate the recoverability of property, plant and equipment in accordance with ASC No. 360, Accounting for the Property, Plant, and Equipment ("ASC No. 360"). We perform periodic reviews to determine whether facts and circumstances exist that would indicate that the carrying amounts of property, plant and equipment might not be fully recoverable. If facts and circumstances indicate that the carrying amount of property, plant and equipment might not be fully recoverable, we compare projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining useful lives against their respective carrying amounts. In the event that the projected undiscounted cash flows are not sufficient to recover the carrying value of the assets, the assets are written down to their estimated fair values based on the expected discounted future cash flows attributable to the assets. Evaluation of impairment of property, plant and equipment requires estimates in the forecast of future operating results that are used in the preparation of the expected future undiscounted cash flows. Actual future operating results and the remaining economic lives of our property, plant and equipment could differ from our estimates used in assessing the recoverability of these assets. These differences could result in impairment charges, which could have a material adverse impact on our results of operations. During the quarter ended June 30, 2015 , the Company terminated the lease agreements for its corporate headquarter facility in San Jose, California. These leases were scheduled to expire in March 2020 and had been historically accounted for under authoritative guidance pertaining to leases in which the Company is both involved in the construction of the lease assets and for which certain sale-leaseback criteria are not met. This resulted in the Company being the "deemed owner" of the two buildings for accounting purposes only. Accordingly, the leases associated with these facilities were historically accounted for as financing obligations. In conjunction with the termination of these leases and associated financing obligations, in May 2015 the Company paid an up-front lease termination charge of $10.0 million , which allowed the Company to remove approximately $15.3 million of building related financing obligations from its balance sheet. At the same time, the Company entered into a short-term lease for one of the two buildings for the remainder of 2015 . As a result of the lease termination, the Company wrote the carrying value of the buildings and leasehold improvements down to its fair value, which was equal to the present value of the remaining lease payments under the short-term lease. The net effect of the lease termination transaction was a charge of $3.3 million during the quarter ended June 30, 2015 . As a result of the sale of the Grid business on September 30, 2014 , the Company made the decision to cease use of one building within its corporate headquarters and recharacterize the building as a rental property. Consequently, management performed an impairment analysis on this building and determined that its carrying value was not recoverable. In performing this analysis, management analyzed the expected cash flows from different sub-lease scenarios using recent lease data for similar facilities in the area including market activity, expected tenant improvements and commissions and period of time between recharacterization and lease up. As a result of this analysis, the Company recorded a write down of the building of $4.4 million during the three months ended September 30, 2014 .

Financial Instruments

Financial Instruments	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Financial Instruments	Financial Instruments: The Company’s financial instruments consist of cash equivalents, restricted investments, short-term investments, accounts receivable, accounts payable, and lease financing obligations. The carrying value of the Company’s financial instruments approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments, which are classified as either cash equivalents, restricted investments, or short-term investments, and accounts receivable. With respect to its investments, the Company has an investment policy that limits the amount of credit exposure to any one financial institution and restricts placement of the Company’s investments to financial institutions independently evaluated as highly creditworthy. With respect to its accounts receivable, the Company performs ongoing credit evaluations of each of its customers’ financial condition. For a customer whose credit worthiness does not meet the Company’s minimum criteria, the Company may require partial or full payment prior to shipment. Alternatively, prior to shipment, customers may be required to provide the Company with an irrevocable letter of credit or arrange for some other form of coverage to mitigate the risk of uncollectibility, such as a bank guarantee. Additionally, the Company establishes an allowance for doubtful accounts and sales return allowances based upon factors surrounding the credit risk of specific customers, historical trends, and other available information. Items Measured at Fair Value on a Recurring Basis On a recurring basis, the Company measures certain of its financial assets, namely its cash equivalents and available-for-sale investments, and its liability related to contingent consideration due to Lumewave shareholders, at fair value. The fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis was determined using the following inputs at September 30, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 5,294 $ 5,294 $ — $ — U.S. government securities (2) 17,400 — 17,400 — Total $ 22,694 $ 5,294 $ 17,400 $ — Liabilities: Contingent consideration $ 870 $ — $ — $ 870 Total $ 870 $ — $ — $ 870 The fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis was determined using the following inputs at December 31, 2014 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 9,023 $ 9,023 $ — $ — U.S. government securities (2) 30,230 — 30,230 — Total $ 39,253 $ 9,023 $ 30,230 $ — Liabilities: Contingent consideration $ 968 $ — $ — $ 968 Total $ 968 $ — $ — $ 968 (1) Included in cash and cash equivalents in the Company’s condensed consolidated balance sheets (2) Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets Cash equivalents consist of either investments with remaining maturities of three months or less at the date of purchase, or money market funds for which the carrying amount is a reasonable estimate of fair value. The Company’s available-for-sale securities consist of U.S. government securities with a minimum and weighted average credit rating of A-1+. The Company values these securities based on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, the Company classifies all of its fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. The Company's procedures include controls to ensure that appropriate fair values are recorded by comparing prices obtained from a third party independent source. The contingent consideration payable to Lumewave's shareholders, which the Company recognized upon its purchase of Lumewave in August 2014 and is included in other long-term liabilities in the Company's condensed consolidated balance sheets as of December 31, 2014 and in other current liabilities as of September 30, 2015 , is classified within Level 3 because significant assumptions for this obligation are not observable in the market. The table below includes a rollforward of the balance sheet amounts for financial instruments classified by the Company within Level 3 of the valuation hierarchy for the nine months ended September 30, 2015 (in thousands): Contingent Consideration BALANCE AT DECEMBER 31, 2014 $ 968 Amortization of interest and change in fair value of contingent consideration (98 ) BALANCE AT SEPTEMBER 30, 2015 $ 870 As of September 30, 2015 , the Company’s available-for-sale securities had contractual maturities of eleven months and an average remaining term to maturity of three months. As of September 30, 2015 , the amortized cost basis, aggregate fair value, and gross unrealized holding gains and losses of the Company’s short-term investments by major security type were as follows (in thousands): Amortized Cost Aggregate Fair Value Unrealized Holding Gains Unrealized Holding Losses U.S. government securities $ 17,392 $ 17,400 $ 8 $ — The amortized cost basis, aggregate fair value and gross unrealized holding gains and losses for the Company’s available-for-sale short-term investments, by major security type, were as follows as of December 31, 2014 (in thousands): Amortized Cost Aggregate Fair Value Unrealized Holding Gains Unrealized Holding Losses U.S. government securities $ 30,237 $ 30,230 $ — $ 7 Market values were determined for each individual security in the investment portfolio. The Company reviews its investments on a regular basis to evaluate whether or not any have experienced an other-than-temporary decline in fair value. Items Measured at Fair Value on a Recurring Basis In addition to assets and liabilities that are measured at fair value on a recurring basis, the company is also required to measure certain items at fair value on a nonrecurring basis. In the third quarter of 2014, as part of the Company's review of property, equipment and other assets (long-lived assets), as discussed above, an impairment charge of $4.4 million was recorded against the building asset to write down this asset to its fair value of zero . The impairment was attributable to a combination of factors, including changes in the extent and manner of use of the reporting unit's long-lived assets; market activity, expected tenant improvements and commissions and period of time between recharacterization and lease up. Fair value was determined based on discounted cash flow analyses, which are unobservable Level 3 inputs. The cash flows used in the income approach were based on cash flows from various sub-lease scenarios, including varying lease rates, tenant improvements and commission costs, operating expenses and terms of occupation. We calculated the fair value for the building asset by using a probability weighted average of the estimated fair value from the various scenarios.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share: The following is a reconciliation of the numerators and denominators of the basic and diluted net loss from continuing and discontinued operations per share computations for the three and nine months ended September 30, 2015 and 2014 (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Net loss (Numerator): Net loss from continuing operations attributable to Echelon Corporation Stockholders $ (1,047 ) $ (7,226 ) $ (7,634 ) $ (13,058 ) Net loss from discontinued operations attributable to Echelon Corporation Stockholders — (1,962 ) — (8,715 ) Net loss attributable to Echelon Corporation Stockholders $ (1,047 ) $ (9,188 ) $ (7,634 ) $ (21,773 ) Shares (Denominator): Weighted average common shares outstanding 44,128 43,507 44,068 43,367 Shares used in basic computation 44,128 43,507 44,068 43,367 Common shares issuable upon exercise of stock options (treasury stock method) — — — — Shares used in diluted computation 44,128 43,507 44,068 43,367 Net loss per share: Basic and diluted net loss per share from continuing operations attributable to Echelon Corporation Stockholders $ (0.02 ) $ (0.17 ) $ (0.17 ) $ (0.30 ) Basic and diluted net loss per share from discontinued operations attributable to Echelon Corporation Stockholders $ 0.00 $ (0.05 ) $ 0.00 $ (0.20 ) Basic and diluted net loss per share attributable to Echelon Corporation Stockholders $ (0.02 ) $ (0.21 ) $ (0.17 ) $ (0.50 ) For the three and nine months ended September 30, 2015 and 2014 , the diluted net loss per share calculation is equivalent to the basic net loss per share calculation from continuing operations, discontinued operations, and total net loss attributable to Echelon Corporation Stockholders, as there were no potentially dilutive stock options due to the Company’s net loss position. The number of stock options, stock appreciation rights, restricted stock units (“RSUs”), restricted stock awards (“RSAs”), and contingently issuable shares excluded from this calculation for the three and nine months ended September 30, 2015 and 2014 was 3,698,259 and 4,362,649 , respectively.

Acquisition

Acquisition	9 Months Ended
	Sep. 30, 2015
Business Combinations [Abstract]
Acquisitions	Acquisitions On August 15, 2014 , the Company purchased 100% of the outstanding shares of Lumewave . The acquisition was aimed at expanding the Company’s outdoor lighting business. The purchase price consisted of $1.8 million in cash paid at closing and $715,000 in common stock of the Company distributed at closing. Additionally, if certain gross profit targets for the Lumewave business are achieved during the period from August 16, 2014 through August 15, 2016 , an additional $1.3 million in consideration will be payable to the selling shareholders of Lumewave . The fair value of this additional consideration was $925,000 as of September 30, 2014 . The purchase price was subject to adjustment based on the final working capital balances. As a result of the final agreed-upon working capital balances, the selling shareholders agreed to repay $225,000 , which was received by the Company in 2014. The cash purchase price has been adjusted for this $225,000 working capital adjustment. The assets acquired and liabilities assumed have been reflected in the Company’s condensed consolidated balance sheet as of September 30, 2015 , and the results of operations of Lumewave are included in the condensed consolidated statement of operations since August 16, 2014 . The following table summarizes the purchase price allocation based on estimated fair values of assets acquired and liabilities assumed at the acquisition date (amounts in thousands): Amount Cash and cash equivalents $ 630 Accounts receivable 107 Inventory 31 Other current assets 259 Property and equipment 23 Identifiable intangible assets 1,500 Goodwill 1,257 Accounts payable (352 ) Accrued liabilities (255 ) $ 3,200 Identifiable intangible assets include $800,000 in developed technology, $500,000 in customer relationships, and $200,000 for trade names. The identifiable intangible assets will be amortized over a period of 6.5 years. Transaction costs associated with the acquisition were not material. The method used to value the identified intangibles was an income method approach which incorporated a discount rate ranging from 21% to 22% . Pro forma information for this acquisition is not presented as the results of the acquired business are not material to the Company’s consolidated financial statements. The contingent consideration was measured at fair value based on management’s estimate of achieving the specified targets and discounted to its then present value of $925,000 . The contingent consideration is payable in a combination of cash and the Company’s common stock. Both the fair value of the cash and equity portions of the contingent consideration are recorded as a liability and will be remeasured each reporting period, with any change in their fair values recorded to earnings. As of September 30, 2015 , the fair value of the contingent consideration was $870,000 and is recorded in Accrued liabilities in the Company's condensed consolidated balance sheet. The equity component of the contingent consideration will ultimately be settled by issuing additional equity upon final determination of the targets being achieved. The number of shares to be issued will be based on the average closing price of the Company's stock during the six days prior to the acquisition date.

Discontinued Operations

Discontinued Operations	9 Months Ended
	Sep. 30, 2015
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Discontinued Operations During the third quarter of 2014, the Company announced that it had reached an agreement to sell its Grid business in order to focus on its IIoT business and on future opportunities in this market. On September 30, 2014, the Company completed the sale of its Grid business to S&T, a publicly traded European IT systems provider. The consideration received for the sale of the Grid business totaled approximately $4.9 million . Additionally, the Company could receive an additional $1.0 million if the revenues of the Grid business exceed $50 million for the calendar year 2015. Based on the historical results of the Grid business and near-term estimates, management of the Company does not believe the sales targets will be achieved. Due to the significant uncertainty in achievement, no value has been given to this contingent consideration. The Company also entered into a sub-lease arrangement as well as a supply arrangement for a component used in the manufacture of certain Grid products. At the time of the sale, each of these arrangements had a term of 39 months and each has been considered indirect cashflows as they were deemed to be insignificant. As a result of the Company's decision to terminate its corporate headquarters leases, the sub-lease arrangement will now expire in December 2015. The sale of the Grid business resulted in a loss of $254,000 , net of income taxes, recorded as loss on sale of discontinued operations for the three and nine months ended September 30, 2014 . The assets and liabilities of the Company's joint venture (see Note 16) were not included in the sale to S&T. As of December 31, 2014, the Company was in the process of negotiating the sale of the joint venture's remaining net assets and recorded the assets and liabilities of the joint venture at the lower of their carrying amount or fair value less cost to sell and had classified them as held for sale on the Company's condensed consolidated balance sheets. The remaining asset and liabilities principally relate to inventory, deferred revenues and the related deferred costs of sales, and accrued liabilities. As of September 30, 2015, the Company has determined that the joint venture's remaining net assets will not be sold and have been stated at their fair value. As a result of restructuring activities during quarter ended September 30, 2014 , a total of $1.4 million of restructuring costs is included in loss from discontinued operations for the three and nine months ended September 30, 2014 . All of this amount has been paid as of September 30, 2015 . The Company has classified the results of operations of the Grid business as discontinued operations for all periods presented. There was no activity related to the Grid business during the three and nine months ended September 30, 2015 . The table below provides a summary of the components of the net loss from discontinued operations for the three and nine months ended September 30, 2014 , and excludes certain shared overhead costs that were previously allocated to the Grid segment as ASC 205-20 prohibits the allocation of general overhead costs to discontinued operations. Three Months Ended Nine Months Ended September 30, 2014 September 30, 2014 Revenues (1) $ 5,467 $ 18,392 Cost of revenues 3,433 11,774 Operating expenses 3,921 15,614 Loss from discontinued operations before income taxes (1,887 ) (8,996 ) Income taxes — — Loss on sale of Grid business (254 ) (254 ) Net loss from discontinued operations, net of income taxes (2,141 ) (9,250 ) Net loss from discontinued operations attributable to non-controlling interest, net of income taxes 179 535 Net loss from discontinued operations attributable to Echelon Corporation Stockholders, net of income taxes $ (1,962 ) $ (8,715 ) (1) Includes related party amounts of $0 and $112,000 for the three and nine months ended September 30, 2014 , respectively. The sale agreement contains certain indemnification provisions related to the Grid business whereby the Company may have obligations related to the period it owned the Grid business. The Company believes the estimated fair value of these indemnification provisions are minimal and accordingly, no liability is recorded for these indemnifications as of September 30, 2015 .

Stockholders' Equity and Employ

Stockholders' Equity and Employee Stock Option Plans	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity and Employee Stock Option Plans [Abstract]
Stockholders' Equity and Employee Stock Option Plans	Stockholders’ Equity and Employee Stock Option Plans: Stock-based Compensation Expense The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 , respectively, and its allocation within the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Cost of revenues $ (34 ) $ 76 $ (102 ) $ 235 Product development 94 130 229 (37 ) Sales and marketing (19 ) 79 (109 ) 174 General and administrative 115 225 91 962 Discontinued operations — (824 ) — (342 ) Total $ 156 $ (314 ) $ 109 $ 992 Stock Award Activity The total intrinsic value of options exercised during the three and nine months ended September 30, 2015 was $0 and $0 , respectively. The total intrinsic value of options exercised during the three and nine months ended September 30, 2014 was $0 and $3,000 , respectively. The intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the options. There were no options exercised during the nine months ended September 30, 2015 . The total fair value of RSUs vested and released during the three and nine months ended September 30, 2015 was $58,000 and $374,000 , respectively. The total fair value of RSUs vested and released during the three and nine months ended September 30, 2014 was approximately $351,000 and $1.1 million , respectively. The fair value is calculated by multiplying the fair market value of the Company’s stock on the vesting date by the number of shares vested.

Significant Customers

Significant Customers	9 Months Ended
	Sep. 30, 2015
Risks and Uncertainties [Abstract]
Significant Customers	Significant Customers: The Company markets its products and services throughout the world to original equipment manufacturers (OEMs) and systems integrators in the building, industrial, transportation, utility/home, and other automation markets. During the three and nine months ended September 30, 2015 and 2014 , the Company had two customers that accounted for a significant portion of its revenues: Avnet Europe Comm VA (“Avnet”), the Company’s primary distributors of its IIoT products in Europe and Enel Distribuzione Spa ("Enel"), an Italian utility company. For the three and nine months ended September 30, 2015 and 2014 , the percentage of the Company’s revenues attributable to sales made to these customers was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Avnet 21.1 % 26.9 % 25.5 % 27.4 % Enel 16.8 % 7.4 % 11.9 % 8.8 % Total 37.9 % 34.3 % 37.4 % 36.2 %

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments And Contingencies	Commitments and Contingencies: Legal Actions From time to time, in the ordinary course of business, the Company may be subject to other legal proceedings, claims, investigations, and other proceedings, including claims of alleged infringement of third-party patents and other intellectual property rights, and commercial, employment, and other matters. In accordance with generally accepted accounting principles, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. While the Company believes it has adequately provided for such contingencies as of September 30, 2015 , the amounts of which were immaterial, it is possible that the Company’s results of operations, cash flows, and financial position could be harmed by the resolution of any such outstanding claims. Line of Credit Until December 2014, the Company maintained a $5.0 million line of credit with its primary bank. The line of credit was secured by a collateral of the first priority on $6.3 million of our investments placed in a separate account. In December 2014, the Company cancelled this line of credit. It continues to maintain an operating credit line of $1.0 million with its primary bank for company credit card purchases, as well as one standby letter of credit for $113,000 . These lines of credit continue to be secured by a collateral of the first priority on $1.4 million of the Company's investments (presented as restricted investments in the Condensed Consolidated Balance Sheets). The restricted investments are classified as current assets due to the contractual duration of the underlying credit agreement. No amounts have ever been drawn against the standby letters of credit issued by the bank.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss): Foreign currency translation adjustment (Amount in thousands) Unrealized gain (loss) on available-for-sale securities (Amount in thousands) Accumulated Other Comprehensive Income (Loss) (Amount in thousands) Beginning balance at December 31, 2014 $ (424 ) $ (7 ) $ (431 ) Current period other comprehensive income (loss) (812 ) 15 (797 ) Balance at September 30, 2015 (1,236 ) 8 (1,228 ) None of the above amounts have been reclassified to the condensed consolidated statement of operations.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Inventories	Inventories: Inventories are stated at the lower of cost (first‑in, first‑out) or market and include material, labor and manufacturing overhead. When required, provisions are made to reduce excess and obsolete inventories to their estimated net realizable value. Inventories consist of the following (in thousands): September 30, December 31, Purchased materials $ 154 $ 402 Finished goods 2,519 2,841 $ 2,673 $ 3,243

Accrued Liabilities

Accrued Liabilities	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued Liabilities: Accrued liabilities consist of the following (in thousands): September 30, December 31, Accrued payroll and related costs $ 2,090 $ 1,463 Warranty reserve 121 143 Restructuring charges 84 701 Contingent consideration 870 — Other accrued liabilities 426 537 $ 3,591 $ 2,844

Segment Disclosure

Segment Disclosure	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
Segment Disclosure	Segment Disclosure: ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments, products and services, geographic areas of operations and major customers. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing business performance. The Company’s chief operating decision-making group is the Executive Staff, which is comprised of the Chief Executive Officer and his direct reports (CODM). The Company operates in one principal industry segment - the IIoT segment, which is its reportable segment. The Company operates in three main geographic areas: the Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific / Japan (“APJ”). Each geographic area provides products and services to the Company’s customers located in the respective region. The Company’s long-lived and other assets include property and equipment, goodwill, purchased technology, and deposits on its leased facilities. Long-lived assets are attributed to geographic areas based on the country where the assets are located. As of September 30, 2015 and December 31, 2014 , long-lived assets of approximately $6.3 million and $15.6 million , respectively, were domiciled in the United States. Long-lived assets for all other locations are not material to the condensed consolidated financial statements. In North America, the Company sells its products primarily through a direct sales organization and select third-party electronics representatives. Outside North America, the Company sells its products through direct sales organizations, value-added resellers, and local distributors, primarily in EMEA and APJ. Revenues are attributed to geographic areas based on the country where the products are shipped to or the services are delivered. Summary revenue information by geography for the three and nine months ended September 30, 2015 and 2014 is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Americas $ 3,038 $ 2,988 $ 9,359 $ 9,325 EMEA 5,006 3,520 13,889 11,045 APJ 1,939 2,670 5,966 8,713 Total $ 9,983 $ 9,178 $ 29,214 $ 29,083 For information regarding the Company’s major customers, please refer to Note 7, Significant Customers.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes: The provision (benefit) for income taxes for the three months ended September 30, 2015 and 2014 were $(10,000) and $33,000 , respectively. The provision for income taxes for the nine months ended September 30, 2015 and 2014 were $64,000 and $114,000 , respectively. The difference between the statutory rate and the Company’s effective tax rate is primarily due to the impact of foreign taxes, changes in the valuation allowance on deferred tax assets, and changes in the accruals related to unrecognized tax benefits. As of September 30, 2015 and December 31, 2014 , the Company had gross unrecognized tax benefits of approximately $926,000 and $1.4 million , respectively, of which $427,000 and $469,000 , respectively, if recognized, would impact the effective tax rate on income from continuing operations. The Company’s policy is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense. As of September 30, 2015 and December 31, 2014 , the Company had accrued $76,000 and $99,000 , respectively, for interest and penalties. The $23,000 reduction in interest and penalties on gross unrecognized tax benefits during the nine months ended September 30, 2015 was primarily attributable to the expiration of the statute of limitations in certain foreign jurisdictions.

Related Parties

Related Parties	9 Months Ended
	Sep. 30, 2015
Related Party Transactions [Abstract]
Related Parties	Related Parties: In June 2000, the Company entered into a stock purchase agreement with Enel pursuant to which Enel purchased 3.0 million newly issued shares of its common stock for $130.7 million . The closing of this stock purchase occurred on September 11, 2000. At the closing, Enel had agreed that it would not, except under limited circumstances, sell or otherwise transfer any of those shares for a specified time period. That time period expired September 11, 2003. To the Company’s knowledge, Enel has disposed none of its 3.0 million shares. Under the terms of the stock purchase agreement, Enel has the right to nominate one member of the Company’s board of directors. A representative of Enel served on the board until March 14, 2012; no Enel representative is presently on the board. At the time the Company entered into the stock purchase agreement with Enel, it also entered into a research and development agreement with an affiliate of Enel (the “R&D Agreement”). Under the terms of the R&D Agreement, the Company cooperated with Enel to integrate its L ON W ORKS technology into Enel’s remote metering management project in Italy, the Contatore Elettronico. The Company completed the sale of its components and products for the deployment phase of the Contatore Elettronico project during 2005. During 2006, the Company supplied Enel and its designated manufacturers with limited spare parts for the Contatore Elettronico system. In October 2006, the Company entered into a new development and supply agreement and a software enhancement agreement with Enel. Under the development and supply agreement, Enel and its contract manufacturers purchase additional electronic components and finished goods from the Company. Under the software enhancement agreement, the Company provides software enhancements to Enel for use in its Contatore Elettronico system. The software enhancement was assigned to S&T as part of the sale of the Company's Grid division in September 2014. The development and supply agreement will expire in December 2015, although delivery of products can extend beyond then and the agreement may be extended under certain circumstances. For the three months ended September 30, 2015 and 2014 , the Company recognized revenue from products and services sold to Enel and its designated manufacturers of approximately $1.7 million and $683,000 , respectively. For the nine months ended September 30, 2015 and 2014 , the Company recognized revenue from products and services sold to Enel and its designated manufacturers of approximately $3.5 million and $2.5 million , respectively. Please refer to Note 5 for information related to discontinued operations. As of September 30, 2015 and December 31, 2014 , $1.4 million and $158,000 , respectively, of the Company’s total accounts receivable balance related to amounts owed by Enel and its designated manufacturers.

Restructuring

Restructuring	9 Months Ended
	Sep. 30, 2015
Restructuring and Related Activities [Abstract]
Restructuring	Restructuring: On September 30, 2014, and again in the fourth quarter of 2014, in connection with the sale of the Grid business, the Company undertook restructuring actions affecting approximately 44 employees to be terminated between September 2014 and December 31, 2014, as part of the strategic plan to focus on the Company's IIoT business. The following table sets forth a summary of restructuring activities related to the Company’s September 2014 restructuring program (in thousands): December 31, 2014 Costs Incurred Cash Payments September 30, 2015 Termination benefits $ 701 $ — $ 617 $ 84

Joint Venture

Joint Venture	9 Months Ended
	Sep. 30, 2015
Equity Method Investments and Joint Ventures [Abstract]
Joint Venture	Joint Venture: On March 23, 2012, the Company entered into an agreement with Holley Metering Limited (“Holley Metering”), a designer and manufacturer of energy meters in China, to create a joint venture, Zhejiang Echelon-Holley Technology Co., Ltd. (“Echelon-Holley”). The joint venture's intended focus was on the development and sales of smart energy products for China and rest-of-world markets. The Company has a 51.0% ownership interest in the joint venture and exercises controlling influence. Therefore, Echelon-Holley’s accounts are included in the Company’s Condensed Consolidated Financial Statements as of September 30, 2015 and 2014, and for the three and nine months then ended. Holley Metering’s interests in Echelon-Holley’s net assets are reported in the non-controlling interest in subsidiary on the Condensed Consolidated Balance Sheet as of September 30, 2015 . Net loss attributable to the non-controlling interest in Echelon-Holley was nil and $179,000 during three months ended September 30, 2015 and 2014, respectively, and nil and $535,000 during the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015 , Echelon and Holley Metering had contributed in cash a total of approximately $4.0 million in Share Capital, as defined, to Echelon-Holley in proportion to their respective ownership interests. In connection with the decision to sell the Grid business announced in the third quarter of 2014, the Company undertook a process to sell the remaining net assets of the joint venture and recorded the assets and liabilities of the joint venture at the lower of their carrying amount or fair value less cost to sell, and classified them as held for sale on the accompanying balance sheet at December 31, 2014 . The major classes of assets and liabilities that were classified as held for sale were inventory, deferred revenues and the related deferred costs of sales, and accrued liabilities. In addition, the net losses attributable to the non-controlling interest were also presented as part of discontinued operations in the condensed consolidated statements of operations for the years ended December 31, December 31, 2014 and 2013 . During the quarter ended September 30, 2015 , the Company concluded that it would no longer pursue a sale, but would instead work with Holley Metering to shut the joint venture down. The remaining net assets of the joint venture are immaterial as of September 30, 2015 . As the net losses attributable to the joint venture were immaterial in prior years, they have been presented as part of discontinued operations in the condensed consolidated statement of operations for the three and nine months ended September 30, 2014 .

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The condensed consolidated financial statements include the accounts of Echelon Corporation, a Delaware corporation, its wholly-owned subsidiaries, and a subsidiary in which it has a controlling interest (collectively referred to as the “Company”). The Company reports non-controlling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries and other consolidated entities have been eliminated in consolidation. In the third quarter of 2014, the Company announced and completed the sale of its Grid business to S&T AG ("S&T"), a publicly traded European IT systems provider with an existing focus on smart energy products and services. The results of the Grid business are now classified as discontinued operations. As a result of this transaction, the Company now operates in one reporting segment- the Industrial Internet of Things ("IIoT") segment. While the financial information furnished is unaudited, the condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) which the Company considers necessary for the fair presentation of the results of operations for the interim periods covered, and of the financial condition of the Company at the date of the interim balance sheet. The results for interim periods are not necessarily indicative of the results for the entire year. The condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2014 included in its Annual Report on Form 10‑K. There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2014 .
Risks and Uncertainties	Risks and Uncertainties The Company’s operations and performance depend significantly on worldwide economic conditions and their impact on purchases of the Company’s products, as well as the ability of suppliers to provide the Company with products and services in a timely manner. The impact of any of the matters described below could have an adverse effect on the Company’s business, results of operations and financial condition. • The Company’s sales are currently concentrated with a relatively small group of customers, as approximately 37.9% and 37.4% of net revenues for the three and nine months ended September 30, 2015 , respectively, were derived from two customers. Customers in any of the Company’s target market sectors may experience unexpected reductions in demand for their products and consequently reduce their purchases from us, resulting in either the loss of a significant customer or a notable decrease in the level of sales to a significant customer. In addition, if any of these customers are unable to obtain the necessary capital to operate their business, they may be unable to satisfy their payment obligations to the Company. • The Company utilizes third-party contract electronic manufacturers to manufacture, assemble, and test its products. If any of these third-parties were unable to obtain the necessary capital to operate their business, they may be unable to provide the Company with timely services or to make timely deliveries of products. • From time to time, the Company has experienced shortages or interruptions in supply for certain products or components used in the manufacture of the Company’s products that have been or will be discontinued. In order to ensure an adequate supply of these items, the Company has occasionally purchased quantities of these items that are in excess of the Company’s then current estimate of short-term requirements. If the long-term requirements do not materialize as originally expected, or if the Company develops alternative solutions that no longer employ these items and the Company is not able to dispose of these excess products or components, the Company could be subject to increased levels of excess and obsolete inventories. • Recently, in our effort to manage our costs and inventory risks, we decreased our inventory levels of certain products. If there is an unexpected increase in demand for these items, we might not be able to supply our customers with products in a timely manner.
Use of Estimates	Use of Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions, and estimates that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates and judgments are used for revenue recognition, performance-based equity compensation, inventory valuation, intangible asset valuation, contingent consideration valuation, allowance for warranty costs, and other loss contingencies. In order to determine the carrying values of assets and liabilities that are not readily apparent from other sources, the Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances. Actual results experienced by the Company may differ materially from management’s estimates.
Recently Issued Accounting Standards	Recently Issued Accounting Standards On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In July 2015, the FASB deferred the effective date of ASU 2014-09 so that it will apply to annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early application is permitted to the original effective date of December 15, 2016, in which case ASU 2014-09 would apply to annual reporting periods beginning December 15, 2016 (including interim reporting periods within those periods). The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In July 2015, the FASB issued an update to ASC 330, Inventory: Simplifying the Measurement of Inventory . Under this update, subsequent measurement of inventory is based on the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and disposal. This update does not apply to inventory that is measured using last-in, first-out or the retail inventory method. This update should be applied prospectively and will be adopted by the Company in the first quarter of fiscal year 2017. Early adoption is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.
Revenue Recognition	Revenue Recognition The Company’s revenues are derived from the sale and license of its products and to a lesser extent, from fees associated with training, technical support, and custom software design services offered to its customers. Product revenues consist of revenues from hardware sales and software licensing arrangements. Service revenues consist of product technical support (including in limited circumstances software post-contract support services) and training. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery to the customer’s carrier (and acceptance, as applicable) has occurred, the sales price is fixed or determinable, collectability is probable, and there are no post-delivery obligations. For non-distributor hardware sales, including sales to third party manufacturers, these criteria are generally met at the time of delivery to the customer’s carrier. However, for arrangements that contain contractual acceptance provisions, revenue recognition may be delayed until acceptance by the customer or the acceptance provisions lapse unless the Company can objectively demonstrate that the contractual acceptance criteria have been satisfied, which is generally accomplished by establishing a history of acceptance for the same or similar products. For sales made to the Company’s distributor partners, revenue recognition criteria are generally met at the time the distributor sells the products through to its end-use customer. Service revenue is recognized as the training services are performed, or ratably over the term of the support period. The Company accounts for the rights of return, price protection, rebates, and other sales incentives offered to distributors of its products as a reduction in revenue. With the exception of sales to distributors, the Company’s customers are generally not entitled to return products for a refund. For sales to distributors, due to contractual rights of return and other factors that impact its ability to make a reasonable estimate of future returns and other sales incentives, revenues are not recognized until the distributor has shipped its products to the end customer . The Company's multiple deliverable revenue arrangements have historically been primarily related to sales of Grid products. As noted above, we completed the sale of our Grid division to S&T in September 2014. Revenues from the Grid division are included in discontinued operations (see Note 5). For further information regarding our accounting for multiple deliverable revenue arrangements, please see Note 1 - Significant Accounting Policies, in the Notes to Consolidated Financial Statements in our 2014 Annual Report on Form 10-K.
Deferred Revenue and Deferred Cost of Goods Sold	Deferred Revenue and Deferred Cost of Goods Sold Deferred revenue consists substantially of amounts billed or payments received in advance of revenue recognition. Deferred cost of goods sold related to deferred product revenues includes direct product costs and applied overhead. Deferred cost of goods sold related to deferred service revenues includes direct labor costs and applied overhead. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of goods sold are recognized.
Restricted Investments	Restricted Investments As of September 30, 2015 , restricted investments consist of balances maintained by the Company with an investment advisor in money market funds and permitted treasury bills. These balances represent collateral for a $1.0 million operating line of credit issued to the Company by its primary bank for credit card purchases, as well as one standby letter of credit for $113,000 . Because the Company’s agreement with the lender prevents the Company from withdrawing these funds, they are considered restricted. No amounts have ever been drawn against the standby letters of credit issued by the bank.
Fair Value Measurements	Fair Value Measurements The Company measures at fair value its cash equivalents and available-for-sale investments using a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's own assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets; • Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when estimating fair value. Other than cash and money market funds, the Company's only financial assets and liabilities required to be measured at fair value on a recurring basis at September 30, 2015 , are its fixed income available-for-sale securities and its liability related to contingent consideration due to Lumewave, Inc. ("Lumewave") shareholders. See Note 2 of these Notes to Condensed Consolidated Financial Statements for a summary of the input levels used in determining the fair value of these assets and liabilities as of September 30, 2015 .
Goodwill	Goodwill Goodwill is tested for impairment using a two-step approach. The Company evaluates goodwill, at a minimum, on an annual basis during the first quarter and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. There was no impairment of goodwill as a result of the annual impairment review performed during the quarter ended March 31, 2015 . Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit. The fair values of the reporting units were estimated using a combination of the income approach and the market approach. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of impairment loss, if any. The Company's goodwill impairment analysis is sensitive to changes in key assumptions used in its analysis, such as expected future cash flows, the degree of volatility in equity and debt markets, and its stock price. The continued decline in the Company's stock price and market capitalization could lead to an impairment charge to its long-lived assets, including goodwill. As of September 30, 2015 , management evaluated the current stock price, coupled with other inputs, and concluded that no impairment of either goodwill or long-lived assets was warranted as of September 30, 2015 as the Company's fair value exceeded its carrying value. For the quarter ended June 30, 2014, the Company concluded there were indicators of potential goodwill impairment for the Company’s Grid business, including continued weakness and increased uncertainty in the Grid market; changes in the extent and manner of use of the unit's long-lived assets; and changes in our long-term strategy for the Grid business. As a result of identifying indicators of impairment, the Company performed an impairment test of goodwill as of June 30, 2014. Based on the Company's analysis using the two-step approach defined above, the Company recorded a non-cash, goodwill impairment charge of $3.4 million in the second quarter of 2014. This impairment was reported as part of the discontinued operations results for the year ended December 31, 2014 . As a result, the Company has no goodwill remaining related to the Grid business that was disposed of during the quarter ended September 30, 2014 , with the entire remaining goodwill balance being attributable to the IIoT reporting unit. This includes goodwill of $1.3 million that was added during the year ended December 31, 2014 in conjunction with the acquisition of Lumewave, Inc. (see Note 4 for additional details).
Long-Lived Assets	Long-Lived Assets We evaluate the recoverability of property, plant and equipment in accordance with ASC No. 360, Accounting for the Property, Plant, and Equipment ("ASC No. 360"). We perform periodic reviews to determine whether facts and circumstances exist that would indicate that the carrying amounts of property, plant and equipment might not be fully recoverable. If facts and circumstances indicate that the carrying amount of property, plant and equipment might not be fully recoverable, we compare projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining useful lives against their respective carrying amounts. In the event that the projected undiscounted cash flows are not sufficient to recover the carrying value of the assets, the assets are written down to their estimated fair values based on the expected discounted future cash flows attributable to the assets. Evaluation of impairment of property, plant and equipment requires estimates in the forecast of future operating results that are used in the preparation of the expected future undiscounted cash flows. Actual future operating results and the remaining economic lives of our property, plant and equipment could differ from our estimates used in assessing the recoverability of these assets. These differences could result in impairment charges, which could have a material adverse impact on our results of operations. During the quarter ended June 30, 2015 , the Company terminated the lease agreements for its corporate headquarter facility in San Jose, California. These leases were scheduled to expire in March 2020 and had been historically accounted for under authoritative guidance pertaining to leases in which the Company is both involved in the construction of the lease assets and for which certain sale-leaseback criteria are not met. This resulted in the Company being the "deemed owner" of the two buildings for accounting purposes only. Accordingly, the leases associated with these facilities were historically accounted for as financing obligations. In conjunction with the termination of these leases and associated financing obligations, in May 2015 the Company paid an up-front lease termination charge of $10.0 million , which allowed the Company to remove approximately $15.3 million of building related financing obligations from its balance sheet. At the same time, the Company entered into a short-term lease for one of the two buildings for the remainder of 2015 . As a result of the lease termination, the Company wrote the carrying value of the buildings and leasehold improvements down to its fair value, which was equal to the present value of the remaining lease payments under the short-term lease. The net effect of the lease termination transaction was a charge of $3.3 million during the quarter ended June 30, 2015 . As a result of the sale of the Grid business on September 30, 2014 , the Company made the decision to cease use of one building within its corporate headquarters and recharacterize the building as a rental property. Consequently, management performed an impairment analysis on this building and determined that its carrying value was not recoverable. In performing this analysis, management analyzed the expected cash flows from different sub-lease scenarios using recent lease data for similar facilities in the area including market activity, expected tenant improvements and commissions and period of time between recharacterization and lease up. As a result of this analysis, the Company recorded a write down of the building of $4.4 million during the three months ended September 30, 2014 .

Financial Instruments (Tables)

Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Fair value of asset measured on a recurring basis	The fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis was determined using the following inputs at September 30, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 5,294 $ 5,294 $ — $ — U.S. government securities (2) 17,400 — 17,400 — Total $ 22,694 $ 5,294 $ 17,400 $ — Liabilities: Contingent consideration $ 870 $ — $ — $ 870 Total $ 870 $ — $ — $ 870 The fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis was determined using the following inputs at December 31, 2014 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 9,023 $ 9,023 $ — $ — U.S. government securities (2) 30,230 — 30,230 — Total $ 39,253 $ 9,023 $ 30,230 $ — Liabilities: Contingent consideration $ 968 $ — $ — $ 968 Total $ 968 $ — $ — $ 968 (1) Included in cash and cash equivalents in the Company’s condensed consolidated balance sheets (2) Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets
Level 3 Rollforward	he table below includes a rollforward of the balance sheet amounts for financial instruments classified by the Company within Level 3 of the valuation hierarchy for the nine months ended September 30, 2015 (in thousands): Contingent Consideration BALANCE AT DECEMBER 31, 2014 $ 968 Amortization of interest and change in fair value of contingent consideration (98 ) BALANCE AT SEPTEMBER 30, 2015 $ 870
Fair value of short term investment unrealized holdings and gains	As of September 30, 2015 , the amortized cost basis, aggregate fair value, and gross unrealized holding gains and losses of the Company’s short-term investments by major security type were as follows (in thousands): Amortized Cost Aggregate Fair Value Unrealized Holding Gains Unrealized Holding Losses U.S. government securities $ 17,392 $ 17,400 $ 8 $ — The amortized cost basis, aggregate fair value and gross unrealized holding gains and losses for the Company’s available-for-sale short-term investments, by major security type, were as follows as of December 31, 2014 (in thousands): Amortized Cost Aggregate Fair Value Unrealized Holding Gains Unrealized Holding Losses U.S. government securities $ 30,237 $ 30,230 $ — $ 7

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Reconciliation of Basic and Diluted Earnings (Loss) Per Share	The following is a reconciliation of the numerators and denominators of the basic and diluted net loss from continuing and discontinued operations per share computations for the three and nine months ended September 30, 2015 and 2014 (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Net loss (Numerator): Net loss from continuing operations attributable to Echelon Corporation Stockholders $ (1,047 ) $ (7,226 ) $ (7,634 ) $ (13,058 ) Net loss from discontinued operations attributable to Echelon Corporation Stockholders — (1,962 ) — (8,715 ) Net loss attributable to Echelon Corporation Stockholders $ (1,047 ) $ (9,188 ) $ (7,634 ) $ (21,773 ) Shares (Denominator): Weighted average common shares outstanding 44,128 43,507 44,068 43,367 Shares used in basic computation 44,128 43,507 44,068 43,367 Common shares issuable upon exercise of stock options (treasury stock method) — — — — Shares used in diluted computation 44,128 43,507 44,068 43,367 Net loss per share: Basic and diluted net loss per share from continuing operations attributable to Echelon Corporation Stockholders $ (0.02 ) $ (0.17 ) $ (0.17 ) $ (0.30 ) Basic and diluted net loss per share from discontinued operations attributable to Echelon Corporation Stockholders $ 0.00 $ (0.05 ) $ 0.00 $ (0.20 ) Basic and diluted net loss per share attributable to Echelon Corporation Stockholders $ (0.02 ) $ (0.21 ) $ (0.17 ) $ (0.50 )

Acquisition Purchase Price Allo

Acquisition Purchase Price Allocation (Tables)	9 Months Ended
	Sep. 30, 2015
Business Combinations [Abstract]
Allocation of Purchase Price Consideration	(amounts in thousands): Amount Cash and cash equivalents $ 630 Accounts receivable 107 Inventory 31 Other current assets 259 Property and equipment 23 Identifiable intangible assets 1,500 Goodwill 1,257 Accounts payable (352 ) Accrued liabilities (255 ) $ 3,200

Discontinued Operations (Tables

Discontinued Operations (Tables)	9 Months Ended
	Sep. 30, 2015
Discontinued Operations and Disposal Groups [Abstract]
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures	The Company has classified the results of operations of the Grid business as discontinued operations for all periods presented. There was no activity related to the Grid business during the three and nine months ended September 30, 2015 . The table below provides a summary of the components of the net loss from discontinued operations for the three and nine months ended September 30, 2014 , and excludes certain shared overhead costs that were previously allocated to the Grid segment as ASC 205-20 prohibits the allocation of general overhead costs to discontinued operations. Three Months Ended Nine Months Ended September 30, 2014 September 30, 2014 Revenues (1) $ 5,467 $ 18,392 Cost of revenues 3,433 11,774 Operating expenses 3,921 15,614 Loss from discontinued operations before income taxes (1,887 ) (8,996 ) Income taxes — — Loss on sale of Grid business (254 ) (254 ) Net loss from discontinued operations, net of income taxes (2,141 ) (9,250 ) Net loss from discontinued operations attributable to non-controlling interest, net of income taxes 179 535 Net loss from discontinued operations attributable to Echelon Corporation Stockholders, net of income taxes $ (1,962 ) $ (8,715 ) (1) Includes related party amounts of $0 and $112,000 for the three and nine months ended September 30, 2014 , respectively.

Stockholders' Equity And Empl29

Stockholders' Equity And Employee Stock Option Plans (Tables)	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity and Employee Stock Option Plans [Abstract]
Stock-based Compensation Expense	Stock-based Compensation Expense The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 , respectively, and its allocation within the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Cost of revenues $ (34 ) $ 76 $ (102 ) $ 235 Product development 94 130 229 (37 ) Sales and marketing (19 ) 79 (109 ) 174 General and administrative 115 225 91 962 Discontinued operations — (824 ) — (342 ) Total $ 156 $ (314 ) $ 109 $ 992

Significant Customers (Tables)

Significant Customers (Tables)	9 Months Ended
	Sep. 30, 2015
Risks and Uncertainties [Abstract]
Revenues attributable to sales to major customers	For the three and nine months ended September 30, 2015 and 2014 , the percentage of the Company’s revenues attributable to sales made to these customers was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Avnet 21.1 % 26.9 % 25.5 % 27.4 % Enel 16.8 % 7.4 % 11.9 % 8.8 % Total 37.9 % 34.3 % 37.4 % 36.2 %

Accumulated Other Comprehensi31

Accumulated Other Comprehensive Income (Tables)	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss)	Foreign currency translation adjustment (Amount in thousands) Unrealized gain (loss) on available-for-sale securities (Amount in thousands) Accumulated Other Comprehensive Income (Loss) (Amount in thousands) Beginning balance at December 31, 2014 $ (424 ) $ (7 ) $ (431 ) Current period other comprehensive income (loss) (812 ) 15 (797 ) Balance at September 30, 2015 (1,236 ) 8 (1,228 )

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Inventories consist of the following (in thousands): September 30, December 31, Purchased materials $ 154 $ 402 Finished goods 2,519 2,841 $ 2,673 $ 3,243

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2015
Payables and Accruals [Abstract]
Accrued liabilities	Accrued liabilities consist of the following (in thousands): September 30, December 31, Accrued payroll and related costs $ 2,090 $ 1,463 Warranty reserve 121 143 Restructuring charges 84 701 Contingent consideration 870 — Other accrued liabilities 426 537 $ 3,591 $ 2,844

Segment Disclosure (Tables)

Segment Disclosure (Tables)	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
Revenue information by geography	Summary revenue information by geography for the three and nine months ended September 30, 2015 and 2014 is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Americas $ 3,038 $ 2,988 $ 9,359 $ 9,325 EMEA 5,006 3,520 13,889 11,045 APJ 1,939 2,670 5,966 8,713 Total $ 9,983 $ 9,178 $ 29,214 $ 29,083

Restructuring (Tables)

Restructuring (Tables)	9 Months Ended
	Sep. 30, 2015
Restructuring and Related Activities [Abstract]
Schedule of Restructuring and Related Costs	The following table sets forth a summary of restructuring activities related to the Company’s September 2014 restructuring program (in thousands): December 31, 2014 Costs Incurred Cash Payments September 30, 2015 Termination benefits $ 701 $ — $ 617 $ 84

Summary of Significant Accoun36

Summary of Significant Accounting Policies (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2015USD ($)customer	Sep. 30, 2014customer	Sep. 30, 2015USD ($)customer	Sep. 30, 2014customer
Accounting Policies [Abstract]
Percentage of net revenue	37.90%	34.30%	37.40%	36.20%
Number of Major Customers	2	2	2	2
Line of Credit Maintained | $	$ 1,000,000		$ 1,000,000

Summary of Significant Accoun37

Summary of Significant Accounting Policies Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Goodwill [Line Items]
Goodwill		$ 5,756		$ 5,936
Goodwill impairment charges	$ 3,400	0	$ 3,388
Lumewave [Member]
Goodwill [Line Items]
Goodwill		$ 1,257

Summary of Significant Accoun38

Summary of Significant Accounting Policies Long-Lived Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accounting Policies [Abstract]
Early Contract Termination Fees			$ 10,000
Increase (Decrease) in Capital Lease Obligations			15,300
Lease termination charges	$ 0	$ 0	3,337	$ 0
Loss on write down of property, equipment and other		$ 4,409	$ 0	$ 4,409

Financial Instruments (Details)

Financial Instruments (Details) - USD ($) $ in Thousands		Sep. 30, 2015	Dec. 31, 2014
Fair value of asset measured on a recurring basis
Fixed income available-for-sale securities		$ 17,400	$ 30,230
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair value of asset measured on a recurring basis
Money market funds	[1]	5,294	9,023
Fixed income available-for-sale securities	[2]	0	0
Total		5,294	9,023
Contingent consideration		0	0
Level 3 financial liabilities ending balance		0	0
Significant Other Observable Inputs (Level 2) [Member]
Fair value of asset measured on a recurring basis
Money market funds	[1]	0	0
Fixed income available-for-sale securities	[2]	17,400	30,230
Total		17,400	30,230
Contingent consideration		0	0
Level 3 financial liabilities ending balance		0	0
Significant Unobservable Inputs (Level 3) [Member]
Fair value of asset measured on a recurring basis
Money market funds	[1]	0	0
Fixed income available-for-sale securities	[2]	0	0
Total		0	0
Contingent consideration		870	968
Level 3 financial liabilities ending balance		870	968
Fair Value, Measurements, Recurring [Member]
Fair value of asset measured on a recurring basis
Money market funds	[1]	5,294	9,023
Fixed income available-for-sale securities	[2]	17,400	30,230
Total		22,694	39,253
Contingent consideration		870	968
Level 3 financial liabilities ending balance		$ 870	$ 968
[1]	Included in cash and cash equivalents in the Company’s condensed consolidated balance sheets
[2]	Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets

Financial Instruments Contingen

Financial Instruments Contingent Consideration (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Amortization of interest and change in fair value of contingent consideration	$ (98)	$ 0
Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
BALANCE AT DECEMBER 31, 2014	968
Amortization of interest and change in fair value of contingent consideration	(98)
BALANCE AT SEPTEMBER 30, 2015	$ 870

Financial Instruments-Available

Financial Instruments-Available for Sale Securities (Details 1) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair value of short term investment unrealized holdings and gains
Amortized Cost	$ 17,392	$ 30,237
Aggregate fair value	17,400	30,230
Unrealized Holdings gains	8	0
Unrealized Holdings Losses	$ 0	$ 7

Financial Instruments (Details

Financial Instruments (Details Textual) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Financial Instruments (Textual) [Abstract]
Maximum remaining maturities period of investments included in cash equivalents		11 months
Average short-term investments maturity period		3 months
Loss on write down of property, equipment and other	$ 4,409	$ 0	$ 4,409
Building [Member]
Property, Plant and Equipment [Line Items]
Fair value of building asset		$ 0

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net loss (Numerator):
Net loss from continuing operations attributable to Echelon Corporation Stockholders	$ (1,047)	$ (7,226)	$ (7,634)	$ (13,058)
Net loss from discontinued operations attributable to Echelon Corporation Stockholders	0	(1,962)	0	(8,715)
Net loss attributable to Echelon Corporation Stockholders	$ (1,047)	$ (9,188)	$ (7,634)	$ (21,773)
Shares (Denominator):
Weighted average common shares outstanding (shares)	44,128	43,507	44,068	43,367
Shares used in basic computation (shares)	44,128	43,507	44,068	43,367
Common shares issuable upon exercise of stock options (treasury stock method)	0	0	0	0
Shares used in diluted computation (shares)	44,128	43,507	44,068	43,367
Net loss per share:
Basic and diluted net loss per share from continuing operations attributable to Echelon Corporation Stockholders (usd per shares)	$ (0.02)	$ (0.17)	$ (0.17)	$ (0.30)
Basic and diluted net loss per share from discontinued operations attributable to Echelon Corporation Stockholders (usd per shares)	0	(0.05)	0	(0.20)
Basic and diluted net loss attributable to Echelon Corporation Stockholders (usd per shares)	$ (0.02)	$ (0.21)	$ (0.17)	$ (0.50)

Earnings Per Share (Details Tex

Earnings Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Number of potentially dilutive stock options	0	0	0	0
Number of stock option, stock appreciation rights, and restricted stock units	3,698,259	4,362,649	3,698,259	4,362,649

Acquisition Purchase Price Al45

Acquisition Purchase Price Allocation (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Goodwill	$ 5,756	$ 5,936
Lumewave [Member]
Business Acquisition [Line Items]
Cash and cash equivalents	630
Accounts receivable	107
Inventory	31
Other current assets	259
Property and equipment	23
Identifiable intangible assets	1,500
Goodwill	1,257
Accounts payable	(352)
Accrued liabilities	(255)
Business Combination, Consideration Transferred	$ 3,200

Acquisition (Details)

Acquisition (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Aug. 15, 2014
Business Acquisition [Line Items]
Fair value of stock issued in connection with acquisition	$ 0	$ 715
Lumewave [Member]
Business Acquisition [Line Items]
Percentage of voting interests acquired			100.00%
Payments to acquire businesses	1,800
Fair value of stock issued in connection with acquisition	715
Contingent consideration high range of outcomes			$ 1,300
Initial accounting adjustment of contingent consideration	225
Identifiable intangible assets	$ 1,500
Useful life	6 years 6 months
Fair value inputs, discount range, low end of range	21.00%
Fair value inputs, discount range, high end of range	22.00%
Contingent consideration	$ 870	$ 925
Developed Technology Rights [Member] | Lumewave [Member]
Business Acquisition [Line Items]
Identifiable intangible assets	800
Customer Relationships [Member] | Lumewave [Member]
Business Acquisition [Line Items]
Identifiable intangible assets	500
Trade Names [Member] | Lumewave [Member]
Business Acquisition [Line Items]
Identifiable intangible assets	$ 200

Discontinued Operations (Detail

Discontinued Operations (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Discontinued Operations and Disposal Groups [Abstract]
Proceeds from divestiture of Grid business			$ 4,900,000	$ 0	$ 4,861,000
Contingent consideration discontinued operations		$ 1,000,000		1,000,000
Revenue targets to earn contingent consideration		50,000,000		50,000,000
Fair value of contingent consideration receivable		0		0
Term of sub-lease and supply arrangement deemed insignificant in disposal			39 months
Restructuring and related charges included in discontinued operations					1,400,000
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on sale of Grid business				0	(254,000)
Net loss from discontinued operations, net of income taxes		0	$ (2,141,000)	0	(9,250,000)
Net loss from discontinued operations attributable to non-controlling interest, net of income taxes		0	179,000	0	535,000
Net loss from discontinued operations attributable to Echelon Corporation Stockholders, net of income taxes		0	(1,962,000)	0	(8,715,000)
Revenue from related parties		$ 1,680,000	683,000	$ 3,465,000	2,546,000
Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	[1]		5,467,000		18,392,000
Cost of revenues			3,433,000		11,774,000
Operating expenses			3,921,000		15,614,000
Loss from discontinued operations before income taxes			(1,887,000)		(8,996,000)
Income taxes			0		0
Loss on sale of Grid business			(254,000)		(254,000)
Net loss from discontinued operations, net of income taxes			(2,141,000)		(9,250,000)
Net loss from discontinued operations attributable to non-controlling interest, net of income taxes			179,000		535,000
Net loss from discontinued operations attributable to Echelon Corporation Stockholders, net of income taxes			(1,962,000)		(8,715,000)
Revenue from related parties			$ 0		$ 112,000
[1]	Includes related party amounts of $0 and $112,000 for the three and nine months ended September 30, 2014, respectively.

Stockholders' Equity and Empl48

Stockholders' Equity and Employee Stock Option Plans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	$ 156	$ (314)	$ 109	$ 992
Cost of Revenues [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	(34)	76	(102)	235
Product development [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	94	130	229	(37)
Sales and marketing [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	(19)	79	(109)	174
General and administrative [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	115	225	91	962
Discontinued Operations [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	$ 0	$ (824)	$ 0	$ (342)

Stockholders' Equity and Empl49

Stockholders' Equity and Employee Stock Option Plans (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stockholders' Equity and Employee Stock Option Plans (Textual) [Abstract]
Total intrinsic value of options exercised	$ 0	$ 0		$ 3,000
Total fair value of RSUs vested and released	$ 58,000	$ 351,000	$ 374,000	$ 1,100,000

Significant Customers (Details

Significant Customers (Details Textual) - customer	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues attributable to sales [Line Items]
Numbers of customers	2	2	2	2
Total	37.90%	34.30%	37.40%	36.20%
Avnet [Member]
Revenues attributable to sales [Line Items]
Total	21.10%	26.90%	25.50%	27.40%
Enel [Member]
Revenues attributable to sales [Line Items]
Total	16.80%	7.40%	11.90%	8.80%

Commitments and Contingencies L

Commitments and Contingencies Line of Credit (Details)	Sep. 30, 2015USD ($)debt_instrument	Dec. 31, 2014USD ($)	Nov. 30, 2014USD ($)
Debt Instrument [Line Items]
Line of credit borrowing capacity	$ 1,000,000
Restricted investments	1,401,000	$ 1,401,000
Line of Credit [Member]
Debt Instrument [Line Items]
Line of credit borrowing capacity			$ 5,000,000
Restricted investments			$ 6,300,000
Standby Letters of Credit [Member]
Debt Instrument [Line Items]
Line of credit borrowing capacity	113,000
Restricted investments	$ 1,400,000
Number of Letter of Credit | debt_instrument	1

Accumulated Other Comprehensi52

Accumulated Other Comprehensive Income (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	$ (431)
Current period change	(797)
Balance at end of period	(1,228)
Foreign currency translation adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(424)
Current period change	(812)
Balance at end of period	(1,236)
Unrealized gain (loss) on available-for-sale securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(7)
Current period change	15
Balance at end of period	$ 8

Inventories Inventories (Detail

Inventories Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Inventories [Abstract]
Purchased materials	$ 154	$ 402
Finished goods	2,519	2,841
Inventory, Net	$ 2,673	$ 3,243

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Accrued payroll and related costs	$ 2,090	$ 1,463
Warranty reserve	121	143
Restructuring charges	84	701
Contingent consideration	870	0
Other accrued liabilities	426	537
Accrued liabilities	$ 3,591	$ 2,844

Segment Disclosure (Details 1)

Segment Disclosure (Details 1) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2015		Sep. 30, 2014		Sep. 30, 2015		Sep. 30, 2014
Revenue Information by Geography [Abstract]
Revenues	$ 9,983	[1]	$ 9,178	[1]	$ 29,214	[2]	$ 29,083	[2]
Americas [Member]
Revenue Information by Geography [Abstract]
Revenues	3,038		2,988		9,359		9,325
EMEA [Member]
Revenue Information by Geography [Abstract]
Revenues	5,006		3,520		13,889		11,045
Asia Pacific [Member]
Revenue Information by Geography [Abstract]
Revenues	$ 1,939		$ 2,670		$ 5,966		$ 8,713
[1]	Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets
[2]	Includes related party amounts of $1,680 and $683 for the three months ended September 30, 2015 and 2014, respectively; and related party amounts of $3,465 and $2,546 for the nine months ended September 30, 2015 and 2014, respectively. See Note 7 and Note 14 for additional information on related par

Segment Disclosure (Details Tex

Segment Disclosure (Details Textual) $ in Millions	9 Months Ended
	Sep. 30, 2015USD ($)segmentgeographic_area	Dec. 31, 2014USD ($)
Segment Reporting [Abstract]
Number of reportable segments	1
Number of geographic areas | geographic_area	3
Long-lived assets US | $	$ 6.3	$ 15.6

Income Taxes (Details Textual)

Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (10)	$ 33	$ 64	$ 114
Income Taxes (Textual) [Abstract]
Unrecognized tax benefits	926		926		$ 1,400
Unrecognized tax benefits that would impact effective tax rate	427		427		469
Accrued for interest and penalties	$ 76		76		$ 99
Reduction in gross unrecognized tax benefits			$ 23

Related Parties (Details Textua

Related Parties (Details Textual) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2000USD ($)shares	Sep. 30, 2015USD ($)board_membershares	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)board_membershares	Sep. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Related Party Transactions [Abstract]
Stock issued during period (shares) | shares	3,000,000
Stock issued during period	$ 130,700
Number of shares sold by related party. | shares		0		0
Number of board members related party can nominate | board_member		1		1
Number of related party representatives on board | board_member		0		0
Revenue from Related Parties		$ 1,680	$ 683	$ 3,465	$ 2,546
Accounts receivable, related rarties		$ 1,404		$ 1,404		$ 158

Restructuring Plan (Details)

Restructuring Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Restructuring Reserve [Roll Forward]
Costs Incurred	$ 0	$ 227	$ 0	$ 227
September 2014 Restructuring Plan [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve			701
Cash Payments			617
Restructuring Reserve	$ 84		$ 84

Restructuring Plan (Details Tex

Restructuring Plan (Details Textual)	12 Months Ended
	Dec. 31, 2014employee
September 2014 Restructuring Plan [Member]
Number of Employees Reduced by Restructuring	44

Joint Venture (Details Textual)

Joint Venture (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Joint Venture (Textual) [Abstract]
Ownership interest in the joint venture	51.00%		51.00%
Net loss from discontinued operations attributable to non-controlling interest, net of income taxes	$ 0	$ (179)	$ 0	$ (535)
Registered capital of the Joint venture	$ 4,000		$ 4,000