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Acorn Energy, Inc. (ACFN) SEC Filing 10-K Annual report for the fiscal year ending Thursday, December 31, 2015

Acorn Energy, Inc.

CIK: 880984 Ticker: ACFN

 

 

 

ACORN ENERGY ANNOUNCES YEAR END 2015 RESULTS

 

Wilmington, DE – March 30, 2016 –

Acorn Energy, Inc. (OTCQB: ACFN), today announced its results for the fiscal year ended December 31, 2015.

 

For 2015, revenue from continuing operations was $19.1 million compared to $19.6 million in 2014. The net loss for 2015 was $10.6 million, or $0.40 per share, compared to a net loss of $27.1 million, or $1.19 per share, in 2014. Results for the 2015 year include non-cash charges of $1.6 million for impairments of goodwill and other intangibles in continuing operations. Results for the 2014 year include non-cash charges of $10.4 million for impairments of inventory, fixed assets, goodwill and other intangibles which are included in loss from discontinued operations of $19.1 million. Results for 2014 also include a non-cash goodwill impairment charge of $1.8 million and $0.3 million for restructuring charges in continuing operations.

 

On January 28, 2016, Acorn announced the sale of a 50% strategic interest in its DSIT Solutions, Ltd. business to Rafael Advanced Defense Systems, a major Israeli defense company. Acorn expects to receive gross proceeds of approximately $4.9 million before escrow (approximately $0.6 million), fees and taxes. Acorn is also eligible to receive its pro-rata share of a $1.0 million earn-out over a three-year period. In addition to customary closing conditions, the DSIT Transaction requires the approval of the Israeli Ministry of Defense and the Israeli Anti-Trust Authority. Both approvals have already been received. Acorn expects that the DSIT Transaction will close in the first two weeks of April 2016. Following the sale, Acorn will own approximately 41.2% of DSIT.

 

Jan Loeb, President and CEO of Acorn, stated “2015 did not turn out as we expected. The Board has taken decisive action by raising the capital necessary to keep our businesses operating, selling a portion of our interests in DSIT to Rafael which we believe can be a strategic partner for DSIT and further reducing overhead costs. We are beginning to see the benefits of those actions. Our goal for 2016 is to focus our efforts on the exciting opportunities of our growing businesses and developing those businesses and to provide them with the capital they need to execute their business plan. In the process we plan to continue to streamline our cost structure and work to improve our balance sheet.”

 

Portfolio Companies

 

DSIT

 

DSIT Solutions Ltd., based in Israel, develops and produces advanced underwater sonar detection systems to protect ships and critical harbor installations against attack. Primary customers for its systems are navies, homeland security agencies, oil and gas (O&G) companies, nuclear power facilities and port authorities.

 

DSIT’s fiscal year 2015 revenue was $13.5 million vs. $12.3 million in 2014. The increase in revenue was primarily due to a $15.4 million order received in early 2015 for four Hull Mounted Sonar (HMS) systems and an anti-Submarine Warfare (ASW) trainer for an undisclosed navy. DSIT’s backlog at the end of 2015 was $20.6 million as compared to $12.0 million at the end of 2014.

 

 
 

 

 

 

GridSense

 

GridSense develops and markets remote monitoring systems for electric utility companies. The systems are used for outage management, power quality measurement, systems planning, trouble-shooting and maintenance. The company’s focus is on the early detection of problems on power lines and transformers and the prevention of power outages. Its unique solution is applicable to hundreds of thousands of underground and vault transformers, most of which are approaching or past their life expectancies. Compared to manual inspections, the use of remote monitoring can save time and money and alert management to problems and possible failures. Also closer monitoring and maintenance can help extend the usable lives of transformers, whose replacement costs are prohibitive. GridSense’s low-cost and effective monitoring system is one answer to a growing problem.

 

Fiscal year 2015 revenue was $2.5 million compared to $4.5 million in 2014. The decrease in revenues was due to lower backlog entering 2015 combined with a reduced sales force in place in the U.S. in the beginning of 2015. R&D expenses were $0.5 million compared to $1.1 million in 2014 (a reduction of 54%) while SG&A expenses for 2015 decreased $0.9 million, or 32% compared to 2014. The decrease in expenses were primarily due to the elimination of GridSense’s Australian operations and the downsizing of its U.S. operations following GridSense’s restructuring which began in mid-2013.

 

GridSense’s management has realigned its sales and engineering efforts and is focusing on more standardized opportunities which seem most likely to result in commercial-scale orders. Specifically, GridSense plans to focus sales efforts in 2016 only on those products that have already shown the most traction in the marketplace such as the Transformer IQ® and the Line IQ®.

 

OmniMetrix

 

OmniMetrix has developed what it believes are the most advanced systems available for wirelessly and remotely monitoring back-up generators and other equipment, like oil corrosion protection systems on pipelines, to prevent failures. The system collects key data continuously and alerts the responsible manager to signs of trouble. With the emergence of applications that aggregate multiple sensors and monitors into a simplified customer dashboard interface, OmniMetrix, which monitors all major brands of critical equipment, believes it can play a key role in this new market.

 

OmniMetrix is marketing its products to end-users as well as to select dealers identified as possessing both a substantial maintenance customer base and a willingness to provide value-added services. OmniMetrix also provides corrosion monitoring and control of gas pipelines.

 

OmniMetrix revenue increased 11% from $2.8 million in 2014 to $3.0 million in 2015. The increase in revenue was driven by increased monitoring revenue. Gross margins for fiscal year 2015 were 59% compared to 58% in 2014. As monitoring revenue continues to grow, OmniMetrix’s margins are expected to increase as well, as monitoring revenues generate significantly higher margins than hardware sales.

 

Conference Call

 

Acorn Energy will host a conference call to discuss fourth quarter and year-end 2015 results and corporate developments shortly after the closing of the sale of a portion of its holdings in DSIT which is expected in April 2016.

 

 
 

 

 

About Acorn Energy, Inc.

 

Acorn Energy, Inc. is a holding company whose three portfolio companies help their customers achieve greater productivity, reliability, security, and efficiency — factors which can lead to greater profitability. GridSense® provides monitoring for all critical points along the electricity delivery system. OmniMetrix™ remotely monitors emergency back-up power generation systems to increase their reliability. DSIT provides security solutions from underwater threats to naval and marine based energy assets. For more information visit: http://www.acornenergy.com.

 

Safe Harbor Statement

 

This press release includes forward-looking statements, which are subject to risks and uncertainties. There is no assurance that Acorn Energy, Inc. will be successful in maximizing the value of or its operating companies and other assets. A complete discussion of the risks and uncertainties which may affect Acorn Energy’s business generally and the businesses of its subsidiaries is included in “Risk Factors” in Acorn’s Form 10-K filed with the Securities and Exchange Commission.

 

Contact:

Jan Loeb

(302) 656-1708

 

-Financial Tables to Follow-

 

 
 

 

ACORN ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

 

   As of 
   December 31, 
   2015   2014 
ASSETS          
Current assets:          
Cash and cash equivalents  $172   $4,821 
Restricted deposits   2,172    467 
Escrow deposit   100     
Accounts receivable, net   6,680    4,902 
Unbilled revenue   3,849    7,890 
Inventory   1,002    1,374 
Other current assets   1,877    1,813 
Current assets – discontinued operations       143 
Total current assets   15,852    21,410 
Property and equipment, net   977    1,080 
Severance assets   3,558    3,256 
Restricted deposits   2,951    650 
Intangible assets, net       1,211 
Goodwill   516    1,031 
Other assets   476    905 
Total assets  $24,330   $29,543 
           
LIABILITIES AND EQUITY          
Current liabilities:          
Short-term bank credit and current maturities of long-term debt  $2,054   $4,419 
Leap Tide loan payable, net of discount   1,900     
Accounts payable   3,296    2,187 
Accrued payroll, payroll taxes and social benefits   1,506    1,584 
Deferred revenue   5,268    1,634 
Other current liabilities   2,796    3,028 
Current liabilities – discontinued operations       4,693 
Total current liabilities   16,820    17,545 
Long-term liabilities:          
Accrued severance   4,984    4,594 
Other long-term liabilities   868    1,011 
Total long-term liabilities   5,852    5,605 
Commitments and contingencies          
Equity:          
Acorn Energy, Inc. shareholders          
Common stock - $0.01 par value per share:   281    272 
Authorized – 42,000,000 shares; Issued – 28,127,511 and 27,277,511 shares at December 31, 2015 and 2014, respectively          
Additional paid-in capital   98,977    97,607 
Warrants   1,597    1,641 
Accumulated deficit   (97,191)   (86,592)
Treasury stock, at cost – 801,920 shares at December 31, 2015 and 2014   (3,036)   (3,036)
Accumulated other comprehensive loss   (262)   (212)
Total Acorn Energy, Inc. shareholders’ equity   366    9,680 
Non-controlling interests   1,292    (3,287)
Total equity   1,658    6,393 
Total liabilities and equity  $24,330   $29,543 

 

 
 

 

ACORN ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT NET LOSS PER SHARE DATA)

 

   Year ended December 31, 
   2015   2014 
Revenues:          
Projects  $13,205   $11,970 
Products   3,555    5,682 
Services   2,295    1,908 
Total revenues   19,055    19,560 
Cost of sales:          
Projects   8,918    8,352 
Products   3,457    4,099 
Services   493    471 
Total cost of sales   12,868    12,922 
Gross profit   6,187    6,638 
Operating expenses:          
Research and development expenses, net   2,205    2,714 
Selling, general and administrative expenses   11,508    12,023 
Impairments of goodwill and intangibles   1,562    1,773 
Restructuring and related charges       294 
Total operating expenses   15,275    16,804 
Operating loss   (9,088)   (10,166)
Finance expense, net   (330)   (129)
Loss before taxes on income   (9,418)   (10,295)
Income tax expense   211    164 
Net loss from continuing operations   (9,629)   (10,459)
Loss from discontinued operations, net of income taxes   (1,173)   (19,140)
Net loss   (10,802)   (29,599)
Non-controlling interest share of loss – continuing operations   105    47 
Non-controlling interest share of loss - discontinued operations   98    2,407 
Net loss attributable to Acorn Energy, Inc. shareholders.  $(10,599)  $(27,145)
           
Basic and diluted net loss per share attributable to Acorn Energy, Inc. shareholders:          
From continuing operations  $(0.36)  $(0.46)
From discontinued operations   (0.04)   (0.73)
Basic and diluted net loss per share attributable to Acorn Energy, Inc. shareholders  $(0.40)  $(1.19)
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders – basic and diluted   26,803    22,844 

 

 
 

 


The following information was filed by Acorn Energy, Inc. (ACFN) on Wednesday, March 30, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Changes In Equity
Consolidated Statements Of Changes In Equity (parenthetical)
Consolidated Statements Of Comprehensive Loss
Consolidated Statements Of Operations
Accrued Severance, Severance Assets And Retirement Plans
Accrued Severance, Severance Assets And Retirement Plans (details Narrative)
Accrued Severance, Severance Assets And Retirement Plans (tables)
Accrued Severance, Severance Assets And Retirement Plans - Breakdown Of Company's Severance Liability And Severance Assets (details)
Bank Debt And Other Debt
Bank Debt And Other Debt (details Narrative)
Bank Debt And Other Debt (tables)
Bank Debt And Other Debt - Summary Of Bank Debt And Other Debt (details)
Commitments And Contingencies
Commitments And Contingencies (details Narrative)
Commitments And Contingencies (tables)
Commitments And Contingencies - Future Minimum Lease Payments On Non-cancelable Operating Leases (details)
Discontinued Operations
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Discontinued Operations - Schedule Of Assets And Liabilities Related To Discontinued Operations (details)
Discontinued Operations - Schedule Of Financial Information (details)
Equity
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Equity - Schedule Of Fair Value Assumptions Estimated Using Black-scholes Pricing Model (details)
Equity - Stock-based Compensation Expense Included In Statements Of Operations (details)
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Equity - Summary Information Regarding To Dsit Stock Option Plan Outstanding And Exercisable (details) (parenthetical)
Equity - Summary Of Option Exercises Between Cashless Net Exercises And Cash Exercises (details)
Equity - Summary Of Stock Option Plans (details)
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Equity - Summary Status Of Dsit Plan (details)
Fair Value Measurements
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Finance Income (expense), Net
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Financial Instruments
Goodwill And Intagible Assets - Schedule Of Changes In Carrying Amounts And Accumulated Amortization Of Intangible Assets (details)
Goodwill And Intangible Assets
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Goodwill And Intangible Assets (tables)
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Income Taxes
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Income Taxes - Components Of Income Tax Expense (benefit) (details)
Income Taxes - Composition Of Loss From Continuing Operations Before Income Taxes (details)
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Income Taxes - Summary Of Reconcilation Between Federal Tax Rate (details)
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Inventory
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Investments In Subsidiaries
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Leap Tide Financing Transaction
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Nature Of Operations
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Other Current Assets
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Other Current Assets - Schedule Of Other Current Assets (details)
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Property And Equipment, Net
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Related Party Balances And Transactions
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Segment Reporting And Geographic Information
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Segment Reporting And Geographic Information - Reconciliation Of Segment Assets - Other Significant Items (details)
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Segment Reporting And Geographic Information - Reconciliation Of Segment Data To Consolidated Statement Balance Sheet (details) (parenthetical)
Segment Reporting And Geographic Information - Revenues From Major Customers (details)
Segment Reporting And Geographic Information - Schedule Of Long Lived Assets (details)
Segment Reporting And Geographic Information - Schedule Of Reconciliation Of Segment Data To Consolidated Statement Of Operations (details)
Segment Reporting And Geographic Information - Schedule Of Reconciliation Of Segment Data To Consolidated Statement Of Operations (details) (parenthetical)
Segment Reporting And Geographic Information - Schedule Of Revenue From External Customers By Geographical Areas (details)
Segment Reporting And Geographic Information - Summary Of Segmented Data (details)
Subsequent Events
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Summary Of Significant Accounting Policies
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Summary Of Significant Accounting Policies - Schedule Of Effect On Net Income And Weighted Average Number Of Shares (details)
Ticker: ACFN
CIK: 880984
Form Type: 10-K Annual Report
Accession Number: 0001493152-16-008442
Submitted to the SEC: Wed Mar 30 2016 4:59:57 PM EST
Accepted by the SEC: Wed Mar 30 2016
Period: Thursday, December 31, 2015
Industry: Engineering Services

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