2/3 of institutions have reported. Essentially, all institutions of significance maintained, or slightly increased, their exposure to ELON.
Can't post link to Nasdaq's site anymore.
That's the first positive NEWS with material impact that came out from Echelon in awhile.
My target OPEX model was $28 M (currently at $7.422 M * 4 = $29.688 M yearly; some execs already left during Q1/15). If I were to read the following comment of Sege as: "yearly costs decrease by $3.2 M due to lease/building-related actions only," that would change the picture ... at least for now.
Sege says: "... Once the company moves to a new, right-sized headquarters in Q1 2016, both GAAP and non-GAAP savings are estimated to improve by approximately $800,000 per quarter. ..."
If I assign those $3.2 M to OPEX, and leave the gross margin at 55% (I suppose, in reality, building depreciation is allocated to both OPEX and COGS ???), the resulting cost base would be $24.8 M. That'll be a Non-GAAP break even of ($24.8 M / 0.55) = $45.1 M. With ~$ 800K of stock-based compensation a quarter, the GAAP break-even would be ($24.8 M + $3.2 M) / 0.55 = $50.9 M.
I suppose that's the VERY best we could EVER hope for with ELON's current business structure. But even if we add a few $M's, this shrinks the break-even gap to a range that can be filled with an acquisition that Sege can still afford. It also makes the company a bit more attractive for being acquired. Hopes still alive ...
If they were close to break-even, I'd agree. Unfortunately, "debatable improvement" is meaningless at this point. ELON is $20 M short of revenues to break-even, that's more than 50% of existing revenues.
Sege did not point to any idea how to stop his runaway train before entering BK Terminal. The big bummer of this CC was his whining about delays of decision makers for "multi-protocol" support, exactly the same as a few years ago about decision makers in the Grid space ... and that after being more than two years into their legacy migration program. It's not that we expect Echelon to become the market leader in this space with $10's of millions of new revenues, just $2 M from the FT multi-protocol / Bacnet support chip business per quarter would be enough ... his argument is bankrupt from the start.
What happened with the Marvell pump, btw? No mention about it anymore. Gone?
Lighting? Last Q, Sege talked about possible $1 M RFP. Gone? They would need one of those "every" Q for that business to start making sense, I mean just to help close the break-even gap by a miniscule 25%, but they can't even show up with "one" after close to 1 year into the Lumewave acquisition. Let's hope they get one or two soon, which may generate a nice PUMP, but $2 M won't stop the train.
The only thing that could move the needle sustainably is an acquisition. Unfortunately, again, Sege can't seem to find a fitting organization he could restructure to feed ELON's bottom line. Meanwhile, his cash is running low for a meaningful acquisition.
Have you noticed Sege's reference to nearly 100 "IzoT EVK's sold" .... LOL .... 2 quarters ago, he was talking about 250 "FT6000 EVK's shipped" .... very subtle .... like the 100 pilots in Germany.
1) Higher interest payments, and lower stock-based compensation costs contributed to the "in line" results ....
Interest and other income (expense), net ............ 838 .... 11
Stock-based compensation .............................. 157 .... 685
2) He was just talking about "multi-protocol" support won't cut it either, and they're gonna refocus their investments .... sigh .... new strategy seems to be on lighting ....
3) Continued focus on reducing OPEX
4) No stated break-even plan / idea
- Quarter was OK because of increased higher-margin revenues from Enel in comparison to Q4/14
- Outlook does not show any indication of higher IIoT revenues that could close the $20 M break-even gap
Echelon Corporation (ELON) today announced financial results for the first quarter ended March 31, 2015.
Q1 Revenues: $9.9 million
Q1 GAAP Net Loss: $1.4 million; GAAP Net Loss per Share: $0.03
Q1 Non-GAAP Net Loss: $1.3 million; Non-GAAP Net Loss per Share: $0.03
Revenues, which consist of IIoT revenues only, were $9.9 million in the first quarter, up from $9.6 million in the previous quarter, and down from $10.9 million a year ago, including $788,000 of sales to Enel in the quarter compared with $1.5 million in the same period last year.
Echelon’s guidance for the second quarter of 2015 are as follows:
Total revenues are expected to be $8.5 million to $9.5 million.
Non-GAAP gross margin is expected to be in a range of 54% to 56% of revenue.
Operating expenses are expected to be in a range of $7.0 to $7.5 million.
Non-GAAP loss per share is expected to be between $0.05 to $0.08, based on 44.1 million fully diluted weighted average shares outstanding.
GAAP loss per share is expected to be between $0.07 to $0.10.
While I small "pump" all over the place, I certainly appreciate this PPS movement to $1.2 for a split second on 35K of trading, accompanied with some decent trading over the past few days. I take it as a sign that there are still folks behind the scene that lurk for action.
If Sege could further feed this action next week with some half-credible comments as to how they plan to address the $20 M revenue gap to break even, the stock will move back quickly to $1.5 .... if it's half -credible I am out again .... if there is substance to it, I'll wait for $2 .... but investors need _much_ more $$$ related meat than this Mickey Mouse talk about new products.
Looks like those who can temporarily pump up this stock are still trying ..... unfortunately, these product "news" are too miniscule to sustain a pump for longer than a week.
Since both the CEO and the CTO travelled to New York, let's hope/pray they make a meaningful acquisition deal on the sidelines .... I fear only that could mitigate another "in line with expectations" QE in two weeks.
Echelon executives will participate in the following panels at LFI:
Transformation of the Lighting Industry to an Integrated Electronic Platform (Session #L15SM04)
Wednesday, May 6, 8:30 a.m. – 9:30 a.m.
**** Ron Sege, CEO and chairman, Echelon Corp.
Menko Deroos, CEO and co-founder, Xicato
Lighting, Building Automation and IIoT Convergence: Perils and Promise (Session #L15C04)
Wednesday, May 6, 2:00 p.m. – 3:30 p.m.
**** Sohrab Modi, CTO, Echelon Corp.
John Curcio, P.E., LEED AP, chief commercial officer, Cupertino Electric
Jerry Mix, CEO, Finelite Inc.
Noah Goldstein, research director, Navigant Research
Finocchio has not left our sinking boat though ... rumor has it he won't leave his CEO brother Ron Pinocchio, whose nose has grown to a sizable length over the years
Time to do something for Echelon, Mr. Finocchio, where you've been director since 1997.
Nuance Communications, Inc. is a provider of voice and language solutions for businesses and consumers across the world. The Company's solutions are used in healthcare, mobile, consumer, enterprise customer service, and imaging markets. The Company offers accuracy, natural language understanding capability, domain knowledge and implementation capabilities. The Company's solutions are based on the Company's voice and language platform and are used by businesses for tasks and services, such as requesting information from a phone-based self-service solution, dictating medical records, searching the mobile Web by voice, entering a destination into a navigation system, or working with portable document format (PDF) documents. The Company offers its solutions to its customers in a range of ways, including through products, hosting, professional services and maintenance and support. The Company operates in four segments: Healthcare, Mobile and Consumer, Enterprise, and Imaging.
Moley's gone, but I am sure happy about Marszewski's salary increase to $340 K per year .... that's 1% of company revenues :o)
(b) On April 29, 2015, Richard M. Moley resigned from the board of directors (the "Board") of Echelon Corporation (the "Company"). Mr. Moley was a member of the Compensation Committee and the Nominating and Corporate Governance Committee of the Board at the time of his resignation. There are no disagreements between the Company and Mr. Moley that caused or contributed to Mr. Moley's resignation. Mr. Moley has served on the Board since 1997.
(e) On April 29, 2015, the Board approved an increase in the cash compensation for Michael Marszewski, who became our Chief Financial Officer as of April 24, 2015. Effective May 1, 2015, Mr. Marszewski's base salary will be $270,000 per year and his target bonus payment under the existing management bonus plan is $70,000, for a combined aggregate target amount of $340,000 per year.
At least we can conclude from this Echelon's staff hasn't dropped dead in Q1/15. ....
Echelon will showcase its Lumewave by Echelon wireless outdoor lighting control products, aimed primarily at the North American market.
• In the Avnet lighting booth (#666) and the Cree booth (#1657), the Echelon outdoor lighting control demo will feature LED lighting, a Lumewave by Echelon TOP900-TLX wireless lighting controller, and LumeStar software for commissioning and managing the system. Attendees will see dimming and energy management as well as how easily the system is deployed.
• In the Echelon booth (#3373), there will be an indoor lighting proof-of-concept demo showing how building owners can leverage the same Power Line wiring that already exists in a building to control color tuning in LED indoor lighting. This demo features Echelon’s networking control technology and SmartServer smart energy manager, controlled using a low-cost tablet computer.
• Also in the Echelon booth (#3373), attendees will see an outdoor lighting demo using lights from Leotek controlled by the TOP900-TLX controller
With Slakey having left our sinking ship, the chance that Sege will bum out with a meaningful announcement (other than a reverse split to satify Nasdaq) is slimmmmmm.
toolongelonby10 • Dec 6, 2014 1:21 AM Flag
$8 by XMAS. Most likely SWIR bit also could be Camp or CSCO or my old favorite APPL. Huge push behind IOT in next two weeks culminating in ELON take over for somewhere around 320 million--about $8 per share right around XMAS. You heard it here first....
"Sierra Monitor where Axelson and Nagaraj have went would actually be a good fit with Echelon,"
I agree. I posted similar half a year ago. Sierra's market cap is ~$16 M, they have about ~$20 M of earnings, of which go ~$9 M into OPEX, and they make a little profit. To make a meaningful contribution to close Echelon's equity bleed, Sege would need to cut related OPEX toward $5 M, by removing Sierra's management layers, or better by replacing Echelon's management layers with Sierra's, and by consolidating sales and engineering staff.
The problem is, with every quarter of Mr. Sege starring at his feet, Echelon's cash reserves slowly come down to a level where this option moves outside their financial possibilities. It's pretty clear by now that Echelon won't be able to grow their own business organically. So, to close the gap to GAAP break-even, OPEX cutting plus an acquisition seems the only option left for Echelon to break even. If we won't hear about an acquisition soon, a book value sale becomes more and more likely, which unfortunately continues to decline at 5 to 8 cents a quarter ...
"One less person on the payroll."
LOL. I wish I had your capacity of positive thinking :)
- In February, the Chief Operating Officer, Harris, left.
- In March, their marketing lady, Toth, left. Since Axelson and Nagaraj already left about a year ago, it looks like Sege eradicated Echelon's marketing for good.
- Now in April, the Chief Financial Officer, Slakey, left. When a CFO leaves a run-down company right before their "plans" were supposed to come to fruition, it's always been a sign for much worse to come; It likely also means that negotiations to sell the company in the short-term failed; otherwise, Slakey would have waited it out, just to add a line to his resume that he successfully negotiated the sale of Echelon.
Essentially, we can forget about the idea that Echelon has a "business" plan to lead the company _as is_ to break even. It's surprising given the massive LonWorks legacy market they have access to, but that's the way it looks like.
So, what's left of my own positive thinking ... I think it's reduced to Sege continuing his downsizing success story until another company picks up their legacy market for a fire sale price.