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Echelon Corporation (ELON) Message Board

  • dolphinooo dolphinooo May 2, 2013 4:24 AM Flag

    Q1/13 CC ... what I am looking for ...

    Analyst Estimates:

    - Revenue: 24.61 M
    - GAAP Loss: -$0.16

    ELON Guidance:

    - Revenues: $24m and $26m;
    - GAAP loss: $0.16 and $0.21, incl. ~$1m of stock-based compensation;
    - Non-GAAP loss: $0.06 and $0.11;
    - Non-GAAP gross margin: 45% to 46%

    IMO, as expected by analysts. They have $5m deferred revenues, which I assume will be consumed this Q for the most part.

    Fishy Expectations/Questions:

    1) Rev guidance between $20m to $23m, given that Duke/Ohio and Fortum/Finland are petering out; Slakey mentioned revs from these contracts to the tune of $5m to $10m in 2013, I suppose for each; would like to know about maintenance revs for these completed contracts as we move into 2014.

    2) I’ll be looking like a hawk for comments on a possible sale of the company or a wide-reaching restructuring effort, such as a merger or acquisition. In the later case, I'd expect a capital increase and therefore shareholder dilution. If not, a clear message that we shouldn't worry about dilution would be helpful.

    3) Update on their IPv6 program to "take advantage of the market transitions" as Mr. Sege put it. I understand it’s still early, but given Mr. Sege’s emphasis on IPv6 in Q4/12, we should hear a bit more about their plans.

    4) Comments related to the future of LonWorks. I'd hope that the analysts pin Mr. Sege down on this question, but I doubt they will.

    5) Indicators whether ELON can maintain their high-margin revenues in housing.

    6) What's the real potential of their street lighting business. Can we expect revs beyond $5m by 2015?

    7) More info about the "secretive" ELON-Holley JV would be nice; esp. on potential revs for ELON.

    9) Contract Info Update: Fortum/Norway 100K meters starting Aug. 13, China/JV, Wien-Energie, ELO, Germany, Russia, India, Japan/Tepco, Puerto Rico, Tajikistan, Switzerland, Middle-East, etc. Looking for an indicator of another promising contract potential of the size of Wien Energie's 1.5 million meter rollout.

    ...

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    • Looks like they missed by quite a bit but when you peel it back they settled a suit which cost them over 8 cents a share so they actually beat by at least .02.. They are clearing out the outstanding lawsuits whic means they may be looking at an acquisition. From the 10K a could of years ago regarding the litigation.

      Legal Actions. In April 2009, the Company received notice that the receiver for two companies that filed for the Italian law equivalent of bankruptcy protection in May 2004, Finmek Manufacturing SpA and Finmek Access SpA (collectively, the “Finmek Companies”), had filed a lawsuit under an Italian “claw back” law in Padua, Italy against Echelon, seeking the return of approximately $16.7 million in payments received by Echelon in the ordinary course of business for components we sold to the Finmek Companies prior to the bankruptcy filing. The Finmek Companies were among Enel’s third party meters manufacturers, and from time to time through January 2004, we sold components to the Finmek Companies that were incorporated into the electricity meters that were manufactured by the Finmek Companies and sold to Enel SpA for the Enel Project. We believe that the Italian claw back law is not applicable to our transactions with the Finmek Companies, and the claims of the Finmek Companies’ receiver are without merit and we are defending the lawsuit.

      From time to time, in the ordinary course of business, we are subject to 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, we make 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,

      • 1 Reply to lonworkcharlie
      • I agree. Could be worse ... so far, it's business as usual, no sale, no merger, no acquisition ... that takes out the excitement :)

        The Finmek lawsuit settlement comes to a surprise ... it's been going on for years but they were always bullish that this is kind of a bogus lawsuit ...

        - Rev guidance of $22.5m to $25m is at the upper end or beyond what I expected ... IMO, $22.5m is somewhat realistic, but anything beyond needs more explanation.

        - GAAP loss of $0.22 is a bummer but Non-GAAP loss of $0.04 is good.

        - Looking forward to hear about their "fleshed out plans" for the IoT. As said, IMO, that's where the real long-term turnaround for ELON lies ...

        "... During the quarter, we also fleshed out plans to reinvest in our foundational technology to broaden the applicability of our control networking platform into new markets created by the Internet of Things," continued Sege. ..."

        Can't find their presentation slides ?!

    • Looks like Tepco is going to let Toshiba run the show and while they own Landis & Gyr it appears no smart meter vendor has been selected. Also, Silver Springs has been running a pilot with a utility in Brazil and it appears a contract has been awarded, which is good news for Echelon and ELO as it appears momentum is accelerating for moving forward on contracts. Finally, Silver Springs admits that PLC is an important technology and I wouldn't be surprised if they look at acquisitions.

      • 2 Replies to lonworkcharlie
      • Lord would I love ELON to be acquired. I've been averaging down and down and down and I'm now out of money. This stock is the albatross around my portfolio's neck. I'm always afraid they load up on these press releases and pilot programs and announcements right around earnings time to cover up for the fact that they STILL CAN'T MAKE MONEY ON THEIR TECHNOLOGY. Sell it to someone who can.

      • "... Finally, Silver Springs admits that PLC is an important technology ..."

        I think that's a fair assessment of SSNI. PLC is here to stay. But as G3/G4 become ubiquitous, IMO wireless will become slightly more popular for meter communications, at least in metropolitan areas.

        From SSNI Q1/13 CC:

        Beb Kallo - Robert W. Baird

        Okay and the final one; so you guys think PLC should just be; it's not going to be a factor going forward or you are going to avoid areas where it is or how do you look at developing that technology or acquiring that technology?

        John Joyce
        You hear more about PLC and Southern Europe and you kind of every time we hear about PLC anywhere else right now. There are three competing standards in southern Europe on PLC. There has been always a long term effort by utilities to figure out how to use the power line to run communications on and it’s really a sub optimal way to do it and it’s typically always been used only meter reading, is the only of kind of technology that it could respond to with the kind of predictability and performance for just a monthly meter read.

        Anytime wireless spectrum is available, we’ve seen hands down that that technology is embraced. But having set that there is role for PLC in the long run. I do not see it’s for the overall solution for smart grid and being able to respond to the uniqueness of smart grid solutions which is why we bring it to the table. But we do not need PLC to compete and do well in Europe though was the other part of your question, I think.

 
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