ACFN - Earnings call transcript Q1 2018

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Operator

Good day, everyone. Thank you for holding. And welcome to Acorn Energy's First Quarter 2018 Conference Call. All participants are in a listen only mode [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions [Operator Instructions]. event recorded. this that note is being Please I to Energy. Michael like to conference over turn the Barth, would now CFO of Acorn go ahead. Please

Michael Barth

conference Thank Energy’s everyone welcome call. quarter you. to And first Acorn

Acorn’s Joining today CEO. is Loeb, me President Jan and

Following for questions. our call your remarks, open the will we up

or These uncertainties. reminder, the statements to risks and remarks are a your questions in today’s statements subject As to made may many prepared of response be forward-looking. various

There Loeb. Form factors Commission. our risks over I’d which Exchange Jan Jan? affect may undertakes that, support subject XXXX. renewal disclose as of XXXX revision For forward-looking management’s to in included will filed XXXX Securities their management, factors events example, reflect Securities to growth. uncertainties, operating OmniMetrix of risks the the future based on operate, future available Acorn in forward-looking the we with as after of and such base, in information or to Company for Safe the no able growing well the competitive made. like is to are A associated Harbor complete to Such and provisions risk Acorn the the of access as which and financial risk and Act to and achieve customers assurance statements be and goals call beliefs strategy, The with years discussion economic date in years. in us, made is with to to to And maintaining statements the to rate having performance in and currently no executing growth Private is obligation also our based assumptions technology environment that hand and pursuant OmniMetrix upon changes Reform our capital any any or XX-K to Litigation circumstances our sufficient and high the

Jan Loeb

for joining you us Thank today. and all thank you, Michael

us because his as forward him brief the OmniMetrix, remarks We our on was the of he's quarter to calls. keep we We proceeds today look Acorn second sale a DSIT. will Acorn quarter have investor $X the the cash. best first marriage joining approximately call. Walter debt Czarnecki, unable major event the in wish have led corporate Sale for honeymoon. at and to Walter is us for CEO million level recent prepared with free in the his two Clearly, in all join

having define corporate forward. we GridSense and and DSIT to focused At With monitoring the level, the us, OmniMetrix business on solid growth continue as highlight behind and improvement margin of control business. disposition been position growth. both We in strengthen are to plan remote order to in and XXXX our achieving to support our we industrial properly growing today's reviewed rename to the work future in corporation release. financial going We our in

the space. XXXX, alternative For technology. those margin monitoring attractively technologies well the or recurring continued monitoring, as ongoing growth, value on for generation. broader who assets monitoring business along revenue visibility attractive lines business to hardware physical substantial sales new of In outside The in very and service. monitoring of cash a of of supplementing we customers this strong OmniMetrix customers OmniMetrix regular inspections. and from to the side to focused acquisition related industrial solid of are OmniMetrix the profit consists by segments, combination is IoT with value monitoring offers remote as gross pursuing well organic equipment remote and insulation, deliver as cost high versus protects, company proprietary through monitors, new its as and manages maybe business of monitoring reductions control which The our

potential revenues of to able and forward-looking and calls, for for metrics can we've looking review. businesses Acorn All similar say active that are I’d looking at have investor shareholders. recurring that and targets, point goals the strong enhance been this business we value more some is to with We’re our this synergistic acquisition I appropriate like now focus to time on to provide On we’ve and effort. model prior

orders. XX% recognition understand which it’s For life the recorded basis XXXX, better or will continue the cash hardware, trends, basis and that due relationship the over to of life over expect to receive we on million our touch the up full year that sales, of our cash appreciate in between represent lag $X typically in though investors behind growth his which accounting the reported spread revenue standards, approximately revenue contract, cash basis expected growth would caution revenue remarks. to sales new business typically which important Accordingly, of the our cash front. Michael we the We sales

growth positive into cash initiatives the the value Finally, believe move on and sale to funding to to create now DSIT I sufficient business wanted we these and cash ultimately that profitability. infusion, We shareholders. to execute for empathize with achieving believe organic will has our flow goals Acorn

same will to and business will call pursue the M&A continue I complementary the back our opportunities time, accelerate And growth. will at strengthen hand While believe to Michael. with that we that we overview,

Michael Barth

amortized customer. And of over service And cost from period. revenue revenue deferred sales the the are deferred hardware to revenue life fees, advance, and recorded the the are in Similarly, paid amortize to monitoring of of unit. which has Thank the receipt included recorded of upon are over and you, generally then recognized deferred Jan Jan. associated the revenue and business with initially months to XX as sale mentioned, estimated the With OmniMetrix recognition, equipments sales initially charges. Monitoring payments service. respect then of already in and

the revenue period cash years. deferred and our this based revenue our in down new result, slowing sale. January OmniMetrix cash quarter on $XX,XXX two first increasing the reported Through we XX, a be The As revenue we estimated internal have flow expect our units to over sales, charges between year Reported longer on and related Beginning are Xst, three the analysis, we to deferred the on increased years. hardware why a were will revenue profit impact behind initial cash before ending amortization effect our the in revenue have lag results reported minimal. was approximately December and is we our contribution period generation. and recognition And of of This profitable. XXXX, requisite life higher. difference have hardware positive been amortizing of would

as year and expect the However, to impact orders. we move the we increase new to book through continue

of versus $X.X revenue. first Cathodic of XXXX XXXX strong of was marketing XX% XXXX, the driven attributable the first of loss gross segment million with XX% monitoring shareholders rose the loss share XX% mix loss OmniMetrix in to in first quarter the Power first million in to $XXX,XXX a per $X.X only slight first Acorn's XXXX. our increase to loss XX% consolidated first quarter to to a at by or in lower result, an in higher margin The versus first or Generation in of quarter remained from expenses, products in flat first being our declined quarter $XXX,XXX to quarter one-time XX% prior $XX,XXX higher settlement pipeline margin cost of business, in of XXXX, in due Power compared The $X.XX share, the first quarter, to market sale XX% quarter rose attributable increase reflecting million revenue operating shareholders of in primarily XXXX quarter first the in revenue margin the gross to net with XX% a benefit periods included was revenue, margin provider. of quarter in to taken resulting was declined our Revenue the while first The $X.XX increasing certain hardware results at year included both of $X.X increase first and monitoring versus the XXXX gross was gross XXXX. or and $X.X on in OmniMetrix products change Generation revenue XX% to net profit the the in slightly to which loss XXXX XXXX Looking at quarter operating $XXX,XXX the subsidiary. million from in DSIT, a XX% Acorn’s versus segment grew on in compared operating $X.X quarter XX% gross quarter reported period service overall XXXX. its monitored. million. first rollout as to generation per profit Protection OmniMetrix OmniMetrix reduction Acorn’s revenue professional the $XXX,XXX with XXXX. next attributable initiatives a quarter. in With to increased due an the slightly principally

Acorn's events, was one-time year-over-year. impact Excluding unchanged these two the of loss essentially net

withholding transaction approximately Regarding cash accounting amounts liquidity DSIT. interest director the $X.X million closing due and transaction and the with of capital DSIT cost, loans, to Acorn taxes, in accrued resources, after provided for

corporate currently May was Xth, unused questions. balance OmniMetrix the that, turn for had credit approximately of the its with receivable debt. $X call available. under no approximately credit financing the with call about outstanding operator I’d like million, of cash And to Acorn May of $XXX,XXX and to has Our Xth on Also, facility to as another long-term over accounts open $XXX,XXX

Operator

question-and-answer [Operator We will begin Instructions]. the session now

Please The a from Private question will Investor. come first Jack Mayer, go ahead.

Unidentified Analyst

you’ve the about talked XX% on mean, Can you comment roughly -- I growth.

be quite you to can bad. is, the quarter, comment is the Has you on if Can on first trend second it number The doesn't quarter in picked that? it seem what lumpy? comment

Michael Barth

second slower The half seasonal period first the OmniMetrix quarter is year. for versus the of selling

we of the XX%. feel XX% depending sales our in are when I our where comments, number growth margin The as orders third is our my would numbers. I the said today quarters. we if get business April, are if And I up -- at lumpy in through But out. and we end confident look take quarter is four feel cash somewhat and on And we basis

should confident generally we target be feel So the XX% achievable. that

Operator

[Operator Please Instructions] The question from come next ahead. Sosa, Richard Private Investor. a go will

Unidentified Analyst

you on see margin. if comment is on up. you going It’s nice something plus have that one pretty just can quick that going forward, XX% we the -- I should gross the that pick dramatic margin, forward? to question see Do expect

Michael Barth

the Again, which future last year hardware and profit our expect out -- the hardware Yes, mid new our as out well. combination so gross line, in midyear rolled of our of into the from or type XX% in I high product monitoring ramp-up, XXs or would that see gross XX% XX% so roughly services to to I we it's With would and hope. side. a side, our profit

would in the future. So is expect XXs out be where it into to I the

Operator

I no remarks. for Loeb seeing Jan am I to over back to would Instructions] any conference further questions. the like [Operator closing turn

Jan Loeb

the and value, as monitoring Thank balance demonstrated Acorn represents up purchases have shareholder Acorn. positioned open believe attractive refocused you all well Company's expand on largest overhead reason we I are with of for for your further Having Company sheet, IoT platform space, reduced market interest that attracting my cleaned now the in growth. the shareholder. that phase for next the belief the position an building and the

structure, the Our investors value. plan. to I'm line support specific Company margin continue who for grateful lower ultimately the to our with performance, top line into driver bottom which enable operating cost translate and leverage speak our any of shareholder enhancements is pleased growth and to the about improved questions investors have and should of

Xth at years. Conference is June available through for conference for Los This event attendance presenting three Acorn over Angeles be will meeting first at the I in Xth on and the LDmicro Xth. the Invitational investor June from in Additionally, the

have. much to very or Thank today's Investor up the operator, I’m again Relations contact you. answer any And set you Please we event. for end our can with me may call. your looking Thank to to questions call time a morning. this So you forward with team that

Operator

The you today's concluded. Thank attending conference for is presentation. now

day. your good disconnect lines. You may now Have a

Michael Barth	Chief Financial Officer
Jan Loeb	President and Chief Executive Officer

Acorn Energy (ACFN) 16 May 182018 Q1 Earnings call transcript