ACFN - Earnings call 1 2021 | Acorn Energy, Inc.

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Operator

Good day, ladies and gentlemen, welcome to the Acorn Energy First Quarter Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the conference over to Tracy Clifford, CFO of Acorn Energy, and COO of its OmniMetrix subsidiary. Please go ahead.

Tracy Clifford

Thank you, and welcome everyone to today's conference call.

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

to financial the sufficient is resulting strategy, having company the example, with economic to the XXXX from of and operating disruptions for the associated rates, the risks years competitive capital financial For the high in impact customer performance and such as operations of and growing access technology, our business COVID-XX pandemic, and factors demand, subject maintaining in in executing customer as changes as well risks, to company's operating renewal base, changes growth. environment, future

Forward-looking Act undertakes forward-looking available may as their well to of and full factors nor no with any assurances XXXX. are Private or harbor as the Form currently also company made. to on Acorn's XXXX in disclose pursuant A future the and no discussion information to safe reflect company There in will achieve the are using statements to management's Acorn be able management provisions growth included Securities that is filed based Reform assumptions after OmniMetrix the in Litigation date beliefs XX-K on circumstances Exchange goals that uncertainties to the The Commission. or of risks statements as made years. the obligation these affect of to risk revision events Securities

the over CEO. call to turn I'll Acorn's Now, Jan, Jan?

Jan Loeb

by in performance $XXX,XXX positioned and moving once positive. we were leverage a confirms cost on increase profitability flow consolidated all progress were thank XX% the over as operating growth cash quarter as growth joining our increased strong continued we is basis, sequential and you, model and call. performance more is XXXX This you We representing business this forward. QX to for start which XX% in throughout structure. recent Tracy. our to and of improving morning, believe Good fiscal positive the building first flow Thank is a demonstrates in the off lean year-over-year XXXX today's again, able the XXXX, line. our built bottom both company bring revenue cash year, as profitable achieve And Acorn of improvements. that quarters on disciplined generate as have to than revenue that well to well to the and positive we QX well

have streams. recurring business achieved self-funding we and Acorn a goal margins with cash Importantly, our positioning generating revenue of as attractive growing and

the year improved generator products, commercial Our our Guard margin prior gross in product premier our higher XX% Pro. margin True sales monitor, to period monitor XXXX from due to Hero-X, and in XX% next-generation industrial from QX as and hi-fi such

and product both or reopening subsides for pipeline sales in and drive and first continue economy, that through new systems and improve conditions quarter for the normalize. Other support initiatives, as protection X the ourselves efforts We business we term corrosion pipelines. new position will fiscal management of invest recent COVID-XX engineers to products competitive our sales of monitoring for development electrical for We margins. and XXXX added gradually to long progress new power in release the as monitoring business our critical and upgraded To the help impact we generation our our and in data the which believe our advantage segments. OmniPro software launches leadership product outlook of include an technology R&D Annunciator extend growth Smart

air of which of both opening the monitor taking from of We of are steps compressor dialogs meetings, already and these its still sales our commercialization. stages to early hires businesses, and terms customer in are solution, seeing and we in is benefits AIRGuard also support

$XX,XXX no balance from the year have of we and the which upon our position line XXXX. off of not developed and strong to outstanding We generated operating quarter, factoring approximately a we chose tuck-in or expiration. the $XXX,XXX first renew growth possible end position to its and cash activities to outstanding line strengthen in which with grow net financial space. remains financial acquisitions million to include cash We of footing $X on feel business the at opportunities, eliminating consider in strong line our debt. Our paid value-enhancing credit partnerships our receivables could IoT And

they period in earnings order of We to our are are disciplined within in profile immediately. a shareholder if not considering very reasonable time, that reward risk meet to opportunities accretive such ensure and and value

strength under-penetrated our operate, we about prospects. our Given our financial results, operating improving significant and which about very and enthusiastic our and -- I'm and the steadily markets in business

solutions feel field our environmental customers or industrial penetration. solutions no We physical offer or infrastructure. Having moved also more of provide and deliver commercial, should the the of model even administration's to that the critical and of ongoing expensive markets remote somewhat our for sweet and business we versus environmental business considering by also out we're a are and on a inspection are with typically spot, our normalized have Biden still focus think reopening in that benefits we assets. into value environmental large renewed teams and our issues taxable positioned our the levels of profitability, the where a business NOL Certainly, monitoring enhance and our in monitoring even monitoring the strength rates shield economy cash asset our become to worse, And a flows. springboard million corporate value remote could valuable to more activity rise substantial from alternatives, if the low to plans. tax We $XX nearly the increase. Ultimately, proposition income of to benefits relatively tax NOL growth were business of which the strong little of residential

maintaining Sales would our very QX flows long-term an see net operating be more and tends of we sales grow result, new while and can cash as last from of at annualized come, reason at coming initiatives levels our income. experienced units year, our for opportunities quarter a expect and growth business snapback near and years sales quarters. our OmniMetrix, Historically, see terms equipment to this of well volume to of in As generating hardware in continue to different. spending due growth rate in slowest believe XX% no why to and and fueled we as and the business partly any to significant average equipment discipline we the we or XXXX stronger lower of QX, be trend XXXX in attractive

review more QX. With detail. are back CFO, call turn I'll Tracy? financials positive In growth across that seeing to we our the in overview, in Clifford, the our early to business fact, trends Tracy

Tracy Clifford

Thanks, Jan.

talked in XX% noted in we our industrial to on restructuring I the QX commercial review as leading an uniquely from hardware sale increase the QX QX and 'XX in with by in specification in a today, recognized to in increased commercial combined from press was you units monitor higher are due noted expenses expenses, enhanced increased at not XX% financial over themselves XX% and sales of on to customers, concentration including to and features, and in XX% revenue. QX first sale to new with customized of monitoring margins most to increase which next-generation designed related release to know sales fact sales R&D Hero-X 'XX life a previously, our decreased new also XX-Q increased due increase an higher increase at QX growth plan. Gross customer that hardware the in accessory to sold provide point 'XX by trade XX% several was hardware $XXX,XXX number that deferred from results of increase QX that 'XX shift a a overall The in an margin QX quarter of hardware $XX,XXX residential sales XX% them segment. Gross of margins accessories. quarters, development. the the of travel There $XX,XXX filed also the XXXX As they in commercial million also partially these in offset increase released the revenues first data next-generation to of and part the themselves. the quarter monitoring were prior that These our in of monitors, unit to to SEC. compared high-margin driven in revenue to and sale of $X.X to from due product we 'XX, increase 'XX increased versus increased in in margin of about I revenue I'll revenue pipeline by, show in units and from QX with in concentration customers for in expenses billable and and XXXX. OmniMetrix million industrial, to sales, and revenue operating monitors. The in X grew in value. functions XX% in and a allow to is industrial customer 'XX higher period profit versus and to to and based custom due highlights units X% hardware due monitoring $X.X increase are connections principally a some revenue. our that our monitoring due monitors XX% our gross rectifier growing to for OmniMetrix' installed The residential on year 'XX results SG&A sales, decrease specific

$XX,XXX increase in compensation to by due increased QX and revenue future and per Acorn's expenses. Due will and offset as a improved and operating net a to Acorn's return $X.XX travel quarters operating non-cash audit QX generated increased show increased dollars in to $X.XX a loss spend and income from 'XX upgrades attributable decrease our income structure. performance OmniMetrix of stock accounting at IT loss corporate $XXX,XXX 'XX 'XX and principally shareholders or on net expenses gross the in versus and $XX,XXX We to to in by activities infrastructure. of 'XX, our more we improved of expect $XX,XXX lean strong QX partially fees, QX OmniMetrix, of $XXX,XXX to costs travel over in 'XX. due tax share the pre-COVID for to a to continue $XXX,XXX SG&A $XXX,XXX in to trade levels share loss per enhancements QX margin

net QX in year the of XXXX. year 'XX. timing the Cash first sales looks quarter a beginning know, from revenue was recognize $XX,XXX recognize particularly the was supplement to from primarily may million basis year-end regarding sales the sales of XXXX, differ GAAP revenue, of consolidated expenses. Cash XX, were due generally from unit, growth because and cash insight million the Cash quarter approximately our Acorn receivable XXXX typically phase trends. outstanding non-cash you and $X.X metrics of over and cash less extending period on monitoring over collection defer generated receivable revenue X-year GAAP cash $X period from payment prior the and hardware As conserve to XX, of defer in prior contracts life typically first of basis 'XX, the we in we at for $X.X of several at last operating $XX,XXX, QX to sales at aggressively due of sales $X.X revenue balances PG increased consolidated that for income 'XX. of March provided $XXX,XXX CP the million than pandemic. to in XXXX. by versus X 'XX grew COVID-XX By to year. activities period. of significant operating at in sales XX% activities XX% payables In versus our million cash QX in $X.X $X.X to December exceeding to quarter focused and compared $X.X same and $XXX,XXX the customer million in QX We collections million had period 'XX, the the close from cash X% terms service, cash in Also, increased to we the basis QX segment December during million

may expertise are I the line expected its operations AR As pay finance the believe expiration. a also as about cash previously, future we the of very and you that burden our following our opportunity and mentioned, to time, to February the my confidence noted excited under We line, XXXX cash towards questions. knowledgeable getting all seasoned flow ask Operator? to this goals provide the our successfully revolving call in marketing by line saying started that have of the existing to I'd company's at execute and current favorable give turn full renew remarks of conclude to and sufficient engineering just teams growth like future. I'd off to we the more and our our we liquidity back XX and we but and to in to dedication we're how expand line terms, did customer seek with sales COVID-XX. With that elected operator like any team, credit Jan to foreseeable not out for to service an continuing now that, our from the our depth in support product

Operator

[Operator Richard a [ Instructions] Joseph from Our first ], question private is who's investor.

Unknown Attendee

just a few had I questions.

First, been is And wanted it's note see Nice this I'm I made mean, you from what of case. the in hopefully foreseeable make, to work. just know now, can It's quarter quarter, guess, the positive at to guys a but feels it's net wanted money true like journey in been and income. first a something just that the quarter I future. statement. long and right I that fourth I looking the we

might X, sales X joined quarter? questions. it, few have for I you mentioned the the a just number minutes what so was late, So cash

Jan Loeb

Tracy?

Tracy Clifford

Let on just a Hold that. second. me pull

of me it out Let my get corner.

to $XXX,XXX the sales compared $X.X like to on if million million Our quarter. and then a million $X.X prior versus basis, million. $X.X $XXX,XXX cash it you'd were then, versus compared And PG for CP on segment-by-segment $X.X

Unknown Attendee

great. that's Okay,

you I -- nice is on again? and conferences they been Just Have mean, is know to for you it's them expect these do the happening? person unit travel big driver know and I picking the kind on this to the out have things? the I like conferences go mean, seen and had in are for there -- of up? a conferences -- they to they CP mentioned -- you things sales, I season go starting are this

Tracy Clifford

We conferences do and been Jan, being dates add summer to have late anything to are picking also up you planned fall. seen and some conferences, as but annual as occur more routine them There's far the we for of online seeing that? fall. early scheduled have the

Jan Loeb

the I we and Yes. EGSA which had because our the very Conference, point we competitors to of conference was salespeople exhibiting. our number just and ago XXX our were was that were -- to attended. we held there which was attended, was and of it out and none want X people CTO weeks generator good electrical A

of And so, there. we very picked number good leads up a

So but anywhere is going great the question to participating. sales answer we think to not are it's a where they picking up, and they used opportunity your and be, near is, force our are they there

Unknown Attendee

in to All group -- my one-time the is a it or question, do something last choose why X did you specific And often the to that just had release press mentioned of right. sale thing? you about kind not monitoring? And -- a use a is that hardware sale that they

Jan Loeb

and the careful about they to answer just firewall answer me they and Tracy everything why about their the this, the thing. one-time can did Let are very then they And behind want have firewall.

monitor that because So we technology, our it's set why technology, up chose to only our it systems. they -- have want not they internally, but best that's they've the through

I'll security Tracy ongoing So them. sales large about this very And handle a issue customer. let with with it's

Tracy Clifford

that did is to have and them prior this do that moment have committed in periods in sales remainder not to level first quantities. feel we some don't long customer throughout any specific had the XXXX. future at We expect just We partner. provide of the We the just any quarter, we term from sales in -- POs from

Unknown Attendee

is PG That a customer?

Tracy Clifford

Correct.

Operator

from Instructions] [ next Moore The Jeff Capital ]. comes Oak [Operator question with

Unknown Attendee

just I in had thoughts give update mentioned you on that prior an presentations. the was NASDAQ uplisting you if curious, could or general all

Jan Loeb

to some intend update things. other it it. in do this real year, do be do in probably with but done no right hope it conjunction will now. to most There's We We

our but to is plan stay year. have this still So it game done tuned, it

Unknown Attendee

say conjunction you When with what things, Okay. those some in other are other things?

Jan Loeb

thing an over something share. $X a a or like same we us probably would conjunction -- partnership And likely a acquisition or get with that. Most the stock reverse do that, split, also, we in must do

So We do a shot. in X all like want number that. things to it of

Unknown Attendee

Okay.

next probably so, or you're I'm months the So thinking guessing? in X

Jan Loeb

sooner hope are that I December is Well, being your But XX, good. it's math that in would than we but May, XXXX.

Unknown Attendee

repurchases you. NASDAQ thank consideration the also, guys have And you Okay, given for share uplisting? to any then

Jan Loeb

have No, not. we

Operator

is The ] investor. who with next question -- comes from [ a Mayer Jack private

Unknown Attendee

Congratulations you questions. Couple what on quarter. on think generally. Are you good you comment a outside doing trying just can very to what America of been North comment has I geographically? Can you're that expand If all? at on

Jan Loeb

-- and ours on It become a have of from orders our would we that Italy is previous kind in in like some a ours. of Europe. some not Italy. technology maybe I liked new said of They to distributor focus our have and Southern call

business it's a It and up is to feel time There requires ours. of efforts focus North enough we set a investment. a be a support investment have That's with support growth difference and a customer focused. significant not customer difference. is our We time decent requires People like really our right America. Mexico, us in now opportunity where but should big that in for a there

Unknown Attendee

When Excellent. -- that can you in do possible separate possibly, are you plus do about from you you growth, view you organically that the talk think -- acquisitions? do light do acquisitions XX% you or of

Jan Loeb

all is organic. That

Unknown Attendee

this dealing just organic. Is it retain the comment with something can behind you've The was If customer about to up one-time talked altogether? that. that about this on the people larger issue That's come the a wanting event with Excellent. with before monitoring firewall. that concern Is before? you

Jan Loeb

for the charge it really we for customized. is impact -- the is while we revenue customer only our in we a we GAAP positive because before sales since to over the big it is a Its basis, what on obviously, charge normally a accounting -- it come product. equipment of a more somewhat it's And than impact in X-year have across would over for customer just kind a on non-customized We We charge us, a explain anticipate coming and period. time type -- us, across the future. take customer

product, we impact because So non-monitored it's don't take recognize on this, we the it's -- much revenue see a you the so but as the shipped.

great it it's past, had with done is customer ongoing in because very expect an impact for an necessarily hasn't think the order, deal it happy we such particular -- this magnitude us, quarter it X The I and but us, So see this seen the to on we're it and basis. in we've wasn't very happy. wasn't it a of

Unknown Attendee

respect And it. Got then finally, with NASDAQ. to

you'd that conjunction do in leaving at to you You the explained any there need to capital, that requirements be more need need able to to it uplist like to if you don't have just wanted to you Should aside, do but raise to that other moment? with make things, that anything are you uplist? you would

Jan Loeb

just $X Well, we our goes stock, we enhanced unless think our stock would need to reverse over people yes, is value because our base capital good. otherwise, need such. our And be would split are to

Operator

The Catalyst of from Bill next comes question IR. Jones [Operator Instructions]

William Jones;IR;Catalyst Global

you Can hear me?

Jan Loeb

hear can you I Yes, now.

William Jones;IR;Catalyst Global

you. Thank Okay.

have you plans private a from you their investor. And there known chain any that mitigate it's the that semiconductors, to firms problems and in have are emailed chips, or supply is, impacts? question do issues a those bigger have that facing We any for was question are tech small some

Jan Loeb

Yes.

So semiconductor well production is that known the States. issues there in it's United some in

were. well. done we early think things X I the what #X is we've there I recognizing think were issues pretty So that is, in

we early normally in what that particular ahead in we would a of our amount put or -- XXXX, quarter requirements very have for our And we vendors of -- to orders this do. in -- -- on significant so,

on parts. getting to our the and that tweak think sure have tweaked now. have ordered we vendors at of to product I we're to our the then have we vendors boards POs use we our stay So to doing our are boards alternative And top so the in we've Obviously, vendors order have that. also, that make we ability good and

instance flexibility the engineers that certain to our that continue and done have that. we So and have do in

have that's top but So to us we And don't producing least I least of to getting vigilant our they that parts, that problem now, are make on vendors a for need. with at and right now. at the stay sure we see boards certainly

Operator

would over I Loeb the to At closing to turn any this back for conference time, remarks. like Jan

Jan Loeb

conclude of a in very out economic Thank saying just like are XXXX. although, to by you. to and I regarding start not the we that good uncertainties, we're off would woods COVID-XX

year. normal We are consolidated to be expect on the profitable net trends more growth returning and a to basis for

continue thank shareholders. to right prudent up call with I'm adjacent support concludes any internally both contact the questions will time you opportunities. Again, and investors a and although the markets, you And We for the growth today. Acorn. complementary relations potential we again for your accretive our me. be We regarding Thank in always our can happy opportunities about interest I finding to in your company, believe, see I of with investor call. speak you to Operator, with any our this or set appreciate

Operator

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

may You now disconnect.

Acorn Energy (ACFN) 12 May 212021 Q1 Earnings call transcript