Acorn's Q2'24 EPS Improves to $0.11 vs. $0.04 on Revenue Increase in Remote Monitoring and Control Solutions for Backup Power Generators

WILMINGTON, Del., Aug. 08, 2024 (GLOBE NEWSWIRE) -- Acorn Energy, Inc. ( ACFN) (Acorn), a provider of remote monitoring and control solutions for backup power generators, gas pipelines, air compressors and other mission critical assets, announced results for its second quarter ended June 30, 2024 (Q2’24) and will hold an investor call today at 11am ET (see call details below).

CEO Commentary
Jan Loeb, Acorn’s CEO, commented, “Our Q2 and first half results reflect increases in hardware revenue, which supports future growth in recurring, high-margin, monitoring revenue. Building on this trend in June, we secured a contract valued at approximately $5M with a leading wireless telecom provider to provide remote monitoring and control services for between 5-10 thousand cell tower backup generators in the U.S. We expect to deploy the monitoring units and services over a two-year period. We have already received purchase orders for approximately $2 million and expect to commence hardware shipments in August and to book related revenue upon customer acceptance late in Q3’24 and continuing in subsequent periods.

“This contract, the largest in OmniMetrix history, puts us on a solid path to achieve or exceed our annual revenue growth target of 20% this year and next. The contract was secured through a competitive selection process which we believe confirms the value and compelling characteristics of OmniMetrix’s industry-leading solutions, technology and customer service. We are working to ensure that the project’s successful completion serves as powerful case study for other large commercial and industrial deployment opportunities.

“Importantly, demand for backup generators and 24/7 monitoring and control continues to increase as a result of various tragic weather events and wildfires that have disrupted the electric grid. After hurricane Beryl hit Houston on July 8^th, 2.6 million Texas households and businesses were left in the dark, some reportedly for up to 2 weeks. Significant, prolonged events such as this boost demand for backup generators, and we are already experiencing increased demand in Texas for OmniMetrix solutions as a result of the storm.

“We also expect increased demand for generators and monitoring in the wake of wildfires in the U.S. as well as Canada, where we are working to expand our sales and marketing reach. In addition to causing power outages, wildfires also negatively impact air quality. Our new user interface, OmniView 2, provides a range of new features, including Air Quality Index (AQI) data to support customer compliance with air quality regulations that vary by location and regulator. Under these regulations, businesses can be fined for operating generators on bad air quality days; OmniMetrix solutions provide customers with the data they need to assure regulatory compliance.

“Overall, we have made significant progress to date in 2024 and expect our positive momentum to build in the second half of the year as we work to advance a range of growth opportunities.”

Financial Review
Q2’24 revenue rose 15.3% to $2,275,000 over Q2’23 revenue of $1,973,000, including a 28.3% increase in hardware revenue and a 4.2% increase in monitoring revenue. As in recent quarters, the Q2’24 hardware revenue increase is primarily attributable to the recognition of revenue from new hardware product versions that are capable of being distinct and separable from the company’s monitoring services. Revenue increases were attributable to increased revenue recognized from TrueGuard (TG) Pro and TG2 products in the company’s generator monitoring segment, partially offset by a decline in Hero2 revenue recognized in its cathodic pipeline segment. Sales of new hardware are generally recognized as revenue upon the shipment of product, whereas monitoring revenue is deferred and amortized over the term of the monitoring contract, typically one year. For the six-month period ended June 30, 2024, revenue grew 18.4% compared to the prior-year period, primarily attributable to the increase in revenue recognized in the generator monitoring segment.

Driven by revenue increases, gross profit grew 11.7% to $1,665,000 in Q2’24, reflecting a gross margin of 73.2%, as compared to gross profit of $1,490,000 and gross margin of 75.5% in Q2’23. The decrease in gross margin was primarily attributable to a higher proportion of hardware in the revenue mix, as hardware carries a lower gross margin than monitoring. Gross profit grew 16.0% in the first six months of 2024 compared to the prior-year period, and gross margin was 73.9% vs. 75.4%, also reflecting a higher concentration of hardware in the revenue mix.

Total operating expenses were flat at $1,407,000 in Q2’24 and Q2’23, as lower SG&A costs offset increased R&D expense. Lower SG&A primarily reflects a structural change in our sales organization in Q2’24 and decreases in various other operating expense categories including business taxes, depreciation expense, and travel expenses. For the six-month period ended June 30, 2024, total operating expenses increased by $102,000 or 3.6%, including R&D increasing $62,000 (15.4%) and SG&A increasing $40,000 (1.7%). The increase in R&D expense is primarily related to increased salaries of engineering staff and continued investment in innovation of the OmniMetrix product line.

Net income attributable to Acorn stockholders improved to $271,000, or $0.11 per diluted share, in Q2’24 from $96,000, or $0.04 per diluted share, in Q2’23. Revenue and gross profit increases, and level operating expenses, drove the improved profitability. For the six-months ended June 30, 2024, net income increased to $336,000, or $0.13 per diluted share, as compared to $11,000, or $0.00 per diluted share, in the year-ago period.

Per-share amounts have been adjusted to reflect stock options and the 1-for-16 reverse stock split executed in September 2023.

Liquidity and Cash Flow
Excluding deferred revenue of $3,590,000 and deferred cost of goods sold of $608,000, which have no impact on future cash flow, net working capital was $2,559,000 at June 30, 2024, as compared to $2,654,000 at December 31, 2023. Net working capital included cash and cash equivalents of $1,463,000 at June 30, 2024, and $1,449,000 at year-end 2023, with no debt outstanding in either period.

In the first six months of 2024, Acorn generated $41,000 from operating activities; $40,000 was used in investing activities, and $13,000 was received from the exercise of stock options.

Investor Call Details

About Acorn (www.acornenergy.com) and OmniMetrix™(www.omnimetrix.net)
Acorn Energy, Inc. owns a 99% equity stake in OmniMetrix, a pioneer and leader in Internet of Things (IoT) wireless remote monitoring and control solutions for stand-by power generators, gas pipelines, air compressors and other industrial equipment. OmniMetrix serves tens of thousands of commercial and residential customers, including over 25 Fortune/Global 500 companies, supporting cell towers, manufacturing plants, medical facilities, data centers, retail stores, public transportation systems, energy distribution and federal, state and municipal government facilities and residential backup generators.

OmniMetrix’s proven, cost-effective solutions make critical systems more reliable and also enable automated “demand response” electric grid support via enrolled backup generators.

Safe Harbor Statement
This press release includes forward-looking statements, which are subject to risks and uncertainties. There are no assurances that Acorn will be successful in growing its business, increasing its revenue, increasing profitability, or maximizing the value of its operating company and other assets. A complete discussion of the risks and uncertainties that may affect Acorn Energy’s business, including the business of its subsidiary, is included in “Risk Factors” in the Company’s most recent Annual Report on Form 10-K as filed by the Company with the Securities and Exchange Commission.

Investor Relations Contacts
Catalyst IR
William Jones, 267-987-2082
David Collins, 212-924-9800
[email protected]