SAN JOSE, Calif., March 14 /PRNewswire-FirstCall/ -- eOn Communications Corporation(TM) , a leading provider of telecommunications solutions, today reported second quarter fiscal 2007 results.
Net loss for the quarter was $1,015,000, or ($0.07) per common share, compared to net income of $607,000, or $0.05 per common share in the quarter ended January 31, 2006. Net income in the quarter ended January 31, 2006 included income from continuing operations of $180,000, or $0.02 per common share and income from discontinued operations of $427,000, or $0.03 per common share. Revenue for the quarter was $1,487,000 (including related party revenue of $168,000) a decrease of 50% compared to $2,964,000 for the quarter ended January 31, 2006.
Net loss for the six months was $975,000 or ($0.07) per common share, compared to net income of $1,112,000 or $0.08 per common share for the six months ended January 31, 2006. Net income in the six months ended January 31, 2006 included income from continuing operations of $361,000 or $0.03 per common share, income from discontinued operations of $534,000 or $0.04 per common share and extraordinary gain of $217,000 or $0.01 per common share. Revenue for the six months was $4,195,000 (including related party revenue of $168,000) a decrease of 32% compared to $6,136,000 for the six months ended January 31, 2006.
During the six months ended January 31, 2007, the Company implemented Statement of Financial Accounting Standards No. 123R, which requires companies to estimate the cost of all forms of stock-based compensation and record a commensurate expense in the statement of operations. Pro forma loss from continuing operations, excluding stock-based compensation of $158,000, would have been $817,000 or $0.06 per common share for the six months ended January 31, 2007 compared to income from continuing operations of $361,000 or $0.03 per common share for the same period in the previous year. Cash, cash equivalents and short-term marketable securities decreased 1% to $6,604,000 from $6,684,000 as of July 31, 2006.
"Obviously we are disappointed with the results for the quarter. Revenue was significantly impacted by delays experienced in new product introductions, a continued slow ramp up in sales coming from our China initiatives and seasonal buying patterns of our large US government and education market segments," stated David Lee, eOn's chairman and chief executive officer. "We believe that these factors will not persist in the current quarter, and that our results will significantly improve from these levels."
"Our focus remains improving the Company's performance by leveraging both organic growth and strategic partnerships," added Lee.
Conference Call
The Company will host a conference call at 4:45 p.m. ET, March 14, 2007, to discuss first quarter results. To hear the call, dial 800-811-0667 or visit our investor relations website at investor.eoncc.com. A replay of the call will be posted to our investor relations website shortly following the call.
About eOn Communications(TM)
eOn Communications Corporation(TM) is a global provider of innovative communications solutions. Backed by over 20 years of telecommunications engineering expertise, our solutions enable our customers to easily leverage advanced technologies in order to communicate more effectively. To find out more information about eOn Communications and its solutions, visit the World Wide Web at http://www.eoncommunications.com/, or call 800-955-5321.
Note:
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including technical and competitive factors, which could cause the Company's results and the timing of certain events to differ materially from those discussed in the forward-looking statements. Such risks are detailed in eOn Communications Corporation's most recent Form 10-Q filing with the Securities and Exchange Commission.
eOn Communications Corporation, the mark eOn, and eQueue are trademarks of eOn Communications Corporation.
eOn Communications Corporation
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share data)
Unaudited
Three Months Six Months
Ended Ended
January 31, January 31,
2007 2006 2007 2006
REVENUE
Third party revenue $1,319 $2,964 $4,027 $6,136
Related party revenue 168 - 168 -
Net revenue $1,487 $2,964 $4,195 $6,136
COST OF REVENUE
Third party cost of revenue 514 1,024 1,457 2,084
Related party cost of revenue 156 - 156 -
Cost of revenue 670 1,024 1,613 2,084
Gross profit 817 1,940 2,582 4,052
OPERATING EXPENSE
Selling, general and administrative 1,120 1,176 2,177 2,446
Research and development 768 577 1,510 1,248
Other expense, net 24 40 30 64
Total operating expense 1,912 1,793 3,717 3,758
(Loss) income from continuing
operations (1,095) 147 (1,135) 294
Interest income 80 33 160 67
(Loss) income from continuing
operations before income taxes (1,015) 180 (975) 361
Income tax expense - - - -
(Loss) income from continuing
operations after income taxes (1,015) 180 (975) 361
DISCONTINUED OPERATIONS
Income from discontinued operations,
net of tax of
$162 and minority interest of $289,
respectively - 149 - 256
Gain on disposal of discontinued
operations, net of tax of $20 - 278 - 278
Income from discontinued operations - 427 - 534
(Loss) income before extraordinary
item (1,015) 607 (975) 895
EXTRAORDINARY ITEM
Extraordinary gain, net of income
taxes of $0 - - - 217
Net (loss) income $(1,015) $607 $(975) $1,112
COMPREHENSIVE (LOSS) INCOME
Net (loss) income $(1,015) $607 $(975) $1,112
Foreign currency translation
adjustment - - - 8
Comprehensive (loss) income $(1,015) $607 $(975) $1,120
Weighted average shares outstanding:
Basic 13,552 13,402 13,549 13,291
Diluted 13,552 13,469 13,549 13,356
Basic (loss) income per share:
From continuing operations after
income taxes $(0.07) $0.02 $(0.07) $0.03
From discontinued operations, net of
tax and minority interest - 0.03 - 0.04
From extraordinary gain, net of
income taxes - - - 0.01
Basic (loss) income per share $(0.07) $0.05 $(0.07) $0.08
Diluted (loss) income per share:
From continuing operations after
income taxes $(0.07) $0.02 $(0.07) $0.03
From discontinued operations, net of
tax and minority interest - 0.03 - 0.04
From extraordinary gain, net of
income taxes - - - 0.01
Diluted (loss) income per share $(0.07) $0.05 $(0.07) $0.08
eOn Communications Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
January 31, July 31,
2007 2006
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $1,404 $934
Marketable securities 5,200 5,750
Trade accounts receivable, net of
allowance of $660 and $372, respectively 752 1,639
Trade accounts receivable -
related party 100 27
Proceeds receivable from sale of
discontinued operations - 89
Inventories 2,326 2,167
Prepaid and other current assets 336 289
Total current assets 10,118 10,895
Property and equipment, net 275 338
Long-term receivable, net of
allowance of $232 - 153
Goodwill 418 418
Investments 301 301
Total assets $11,112 $12,105
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $383 $453
Trade accounts payable - related
party 288 72
Deferred acquisition payment 397 397
Accrued expenses and other 1,043 1,376
Total current liabilities 2,111 2,298
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value,
(10,000,000 shares authorized,
no shares issued and outstanding) - -
Common stock, $0.001 par value
(50,000,000 shares authorized,
14,139,051 and 14,128,922 shares
issued, respectively) 14 14
Additional paid-in capital 55,199 55,030
Treasury stock, at cost (676,900 shares) (1,502) (1,502)
Accumulated deficit (44,710) (43,735)
Total stockholders' equity 9,001 9,807
Total liabilities and
stockholders' equity $11,112 $12,105
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