ACFN - Earnings call transcript Q2 2021

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Operator

Good day, ladies and gentlemen. Welcome to the Acorn Energy second quarter conference call.

As time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time.

As a reminder, today's conference is being recorded. turn Energy over OmniMetrix and to CFO Tracy subsidiary. like Acorn of COO would the to call Clifford, I of its Ms. Clifford, ahead. please go

Tracy Clifford

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

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

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

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

Jan? call Acorn's CEO. hand over will the I Now, to

Jan Loeb

$XXX,XXX growth joining $X.X remote gross to majority we Year-to-date, thank on Acorn as future profitable Having to and profitability, nearly consecutive are the income are we Thanks and and $XXX,XXX you In small a loss and quarter. our income increase of This continuing the quarter over year this also half. our strong first progress directly business increased QX monitoring show fell improved profit today's Good our achieved morning, a Tracy. making build enhance revenue, taxable of our to improved profit income of cash into large business. results our from operating third to bottomline, million revenue XXXX, we and ago call. a moved the in well-positioned morning loss net flows. $XX another by of in to reported net with million the net for carry-forward

a to GAAP revenue includes revenue Cash in the that benefit XX% revenue GAAP. long deferred GAAP measure margins use Our Gross an months ongoing of we growth margin our of $X.X is is non revenues reconciliation million ongoing generation of important year-to-date amortized revenue periods that services XX% to been improvements revenue line grew cash all year revenue grew initiatives, future the hardware over Gross over of value of as business basis in XXXX as our have time and cash equipment that more first difference provided primary launch controls. track offer due a $X.X customer a variety and next improving design cost to basis million for from press the gross to the of monitoring XX% well ago. our including improvements. term release cash in the and add progress. to basis to due being that our and growth XX% impressive monitoring revenue with profit is with six basis while A versus GAAP goal of are

opportunities monitoring as well product invest to and new revenue that margin can and initiatives related support for existing as continue markets industrial, We remote in improvements. IoT

we Conference at week excellent Corrosion it the example, National NACA, interest. remote received A/C Association Engineers launched of last For and just solution disconnect a

Our backed by product new development experience We are development design support our sales engineers to knowledgeable and sales support first and and technical staff. and are in efforts products led engineering first-class engineering our quarter the added team by two efforts. late business our

We scale to competitive which of and our advantage. needs substantially growing have conditions key normalize. customer of going more term markets these growth our component benefits significant a large company. already assuming opportunities from OmniMetrix industrial excellent unpenetrated but expect deep We seen our IoT success hires team business and service forward, The to serve progress present with long experience is and continue

strengthen position provides or strong remains growth our credit organically well This grow cash to which approximately million debt. to $X our financial grown outstanding financial consider partnerships possible of business line as with position. offerings enhancing to no as product and opportunities Our on expand as market acquisitions continue our value to such footing and tuck-in

routing ensure our at issues list deliver working at the substantial evaluating ongoing make the capital to territories been business in fit in disruptions COVID-XX corporate spending, sales The our our and growth things benefits, monitoring half corporate disciplined and partly making. they remote top last locations environmental and positioning administration's to to value extremely restricted cost fueled solutions customer alternative strong. cost criteria and of that execution XXXX, a trucks, reward of the due inspection hardware expanding particularly that had in Fundamentally, year of often equipment are environmental industrial Sales decision is of the physical on first are are market opportunities of current and teams and standpoint. managerial, our that large risk units by of our environmental impact. from spend the shareholder increasingly We in Considering and equipment factors due and to our activity. infrastructure new substantial focus remote rebound of initiatives these sense allocation, with reduction

to streams that on revenue monitoring margin market equipment related continuing follow. focused are monitoring high expand and and recurring share the our We sales

category, XXXX add revenues we endpoints fit will turn the I I year, in represent overview, should our to will our financials CFO Tracy not to full approximately review the call to I note monitoring in historically that business, that of more year XX% first Tracy? new half OmniMetrix sure Clifford, With am revenues. a that normal which As detail. in

Tracy Clifford

And Jam. you again, morning everyone. Thank good

XXXX last products, versus Hero-X which, commercial monitor revenue more COVID-XX is was next mentioned, including in we QX increase in review as $X.X OmniMetrix has increase sales I investor Jan business versus from QX Jan sales by environment receptive year. hardware to of impacted mentioned, take revenue due results and X% revenue. As filed questions. hardware then a monitors industrial revenue and Form to as XXXX in and residential. disruptions our from will will sales morning. XXXX and base I with by driven in XX% and second generation SEC rectify in a Jan particular monitoring to financial Monitoring installed ship and a any million The released our benefited focus in pipeline a this our growing grew XXXX XX% highlights quarter and well XX-Q some customers to growth in million improvement from XXXX, efforts $X.X as QX our revenue higher

units to first XX% industrial increased mainly the in show profit benefits XXXX, residential an XX% XX% in of increased expenses. accessory expenses six customers next SG&A QX operating Gross along design to our custom restrictions, added for QX $XXX,XXX to QX commissions due in operating For XX% sales XXXX and technology and The and revenue monitoring due QX months with XXXX. $XXX,XXX income margin of OmniMetrix' in higher of generation increased traveling growth to corporate of our XX% in SG&A and business commercial trade months and to OmniMetrix investments the to sales the development sales a expenses XXXX, growth margin primarily in in million hardware six and revenue. sales $X.X compensation increase travel hardware income due in ongoing generated and of easing XXXX in in grew increased high due infrastructure. and increased increased XXXX versus gross engineers, improved monitoring COVID-XX rebound sales monitoring. XXXX is operating the increased of with GAAP R&D from margin first versus lower XX% in QX customers, to

of to $XX,XXX the compared QX the to QX first Both fiscal $XXX,XXX higher XXXX but For the XXXX Acorn's sequentially months shareholders QX of timing QX $XXX,XXX in revenue months margins. from XXXX. certain six performance to XXXX a XXXX. to OmniMetrix, expenses. of due X% $X,XXX to the $XXX,XXX XQ of over XXXX, as in operating at and gross to net improved from loss income costs in Acorn's OmniMetrix' attributable by net benefited increased $XXX,XXX periods positive increased a from corporate SG&A Driven improved income improved XXXX in six XXXX declined

year, six first to Acorn months income shareholders improved ago to the $XXX,XXX. $XX,XXX, $XXX,XXX net year from improvement For for a a this of attributable net

three which QX generally defer revenue years. Cash balance from it revenue of life as service As progress GAAP QX year. Jan million revenue sales period GAAP GAAP hardware revenue unit, basis In we defer development basis Similarly, A cash XX% our release. $X.X because basis in ratably as from much we over million and of revenue supplement utilize differs GAAP, over estimated press of and is non-GAAP purchase in revenue our revenue of trends. much the a previously of grew measure revenue and recognize GAAP evaluate cash and we business from monitoring today's to the for XXXX. the noted, basis to currently reconciliation the revenue of one XXXX, cash is $X.X was to provided recognized the over growth for the price our which typically contacts it of

the to months activity months versus $XX,XXX six about generated of at lead six basis $X.X cash first close cash of encouraged of months and/or shortages XXXX from valued XX% the in as $XXX,XXX X, income of and ahead stay million in XXXX, inventory $X.X that our are Also year-end of August more higher the have primary million grew we AR the to this chain June was The increase will components. very credit conclude hand were investment inventory a more net increase our as balance and issues August performance or in believe to $X,XXX,XXX balance August gain to was current business we the to the business current remarks last is to of equates far for of and making entire our we $XXX,XXX saying $XXX,XXX. an revenues in it of prior the reference of To paid We half supply value of XX, quarter and operating to the six team looking inventory. the first as flow the additional XXXX $X cash increase a our first proper and first at is ability One to management. company's consolidated elected through our hand the as by in inventory to able that million. At $XX,XXX we on potential capital June mitigate cash for year. For the approximately XX% from second my point, in for offset revenue XXXX, partially compared our We provides due on renew of long of existing these negative and the cash investment this line increased offer I year not week. and note potential to to this and inventory technology investments our the end are it future. the expected When was quarter-end impact X, the we stay item share. balance off the Earlier products by foreseeable XXXX, year, had which OmniMetrix critical XX% have sufficient cash purchases. while planning was balance. the market at XX at volume we was and from and to the reason been front demand liquidity current the of finance X any in times of at thus navigate from feel and

to the about offerings and give that, are as would opportunities I continue turn We economy. operator product the like within any with opportunity to in ask to the over to rebound scope call our questions. an the we ahead to for excited you again all service And joining. of Operator? current Thank expand you the

Operator

ahead. question Joe First Stanley. comes Morgan Please from Stein, go

Joe Stein

you the on high-tech the any that with complaining, up problems are you you everybody the Well, but Keep quarter. in are any work. comments the congratulations, Jay, service? I of to world, picking getting your heard But that are any not great problem having inventory. on having your good are a of equipment with equipment you up

Tracy Clifford

you Sure. I question. will take Thank that question. Right. your for

the a parts no the year. throughout volumes we that issues. in and We lot of so fairly see more where for traditionally we focused with as have of that ensure are able we sourcing on-time can in frequent that placing at that we units cross those really need have ordered quickly. spent time volume up been so POs longer substitute lead providers a And times, significantly suppliers smaller of potential our always on we all there's orders secondary are past, demand secondary In more have more we issues to the time we

this And need that so to larger the ahead of ordering are where building much a year strategy we we ensure stock. we different the have volumes are taken

Joe Stein

So building you up are the inventory. comfortable

Tracy Clifford

are. We

Joe Stein

Okay.

Tracy Clifford

Right.

the really the are anticipated strategy like that going feel because number constrict months the in quite some or of pace We and a we market that comfortable we of ago, the of have to thought safety at needed. was and availability got we that we components current stock we sufficient

So getting focused very paid strategy us. off really it's for and early that I we launched think on

Joe Stein

Great. Thanks Tracy.

Operator

[Operator This to ahead. for time, further have questions. turn Jan remarks. over closing conference the back no to I would Instructions]. like Please Loeb go we And

Tracy Clifford

Jan?

Operator

Jan, are there? you

Jan Loeb

we remain your to I regarding To via its am Thank information me I business and and our again variants again support today's very contact team saying call happy you I or although the questions, please performance up for trajectory. you. potential for our ask with time. impact, their Acorn and with economic press COVID-XX by we your am Relations that a to their and are want always I concludes risks with as greatly that interest conclude to Hi. believe your any speak happy about set Thank positioning appreciate on investors today's just you Investor company. Operator, release. contact call. with in

Operator

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

now may disconnect. You

Tracy Clifford	Chief Financial Officer, Chief Operating Officer
Jan Loeb	President, Chief Executive Officer
Joe Stein	Morgan Stanley

Acorn Energy (ACFN) 9 Aug 212021 Q2 Earnings call transcript