Acorn Energy Announces Q1 2010 Results / Revenues down 7% but Gross Profit up 10%

MONTCHANIN, Del., May 13 /PRNewswire-FirstCall/ -- Acorn Energy, Inc. today announced its results for the first quarter ended March 31, 2010. Below are the highlights and lowlights for the first quarter.

Q1 2010 Highlights -- CoaLogix gross profit increased $0.1 million, or 4%, on increased margins (from 34% to 43%) -- Coreworx gross margins increased from 74% in 2009 to 77% in 2010 -- DSIT revenue increased $0.5 million, or 26%, and gross profit increased $0.4 million, or 54% Q1 2010 Lowlights -- Group revenue was down $0.6 million or 7% -- CoaLogix revenue was down $0.9 million or 17% due to delays in revenue recognition -- Coreworx revenues was down $0.3 million or 25% -- SG&A expenses increased $2.2 million Major Events -- Successful cash raise of $11.5 million -- Closure of EES lawsuit -- Acquisition of Decision Dynamics -- Acquisition of Gridsense -- CoaLogix alliance with FLSmidth

Revenues in the first quarter of 2010 decreased by $0.6 million, or 7%, from $8.5 million to $7.9 million compared to the first quarter of last year. CoaLogix revenues decreased by $0.9 million, or 17%, to $4.5 million. CoaLogix continues to run at full capacity regenerating catalyst for coal-fired electric utilities and preparing its own inventory for future regeneration orders. CoaLogix's decrease in revenue was due to delays in third party test results that have postponed some revenue recognition, and due to the utilization of a portion of its capacity for cleaning deactivated modules for its own inventory. The decrease was also attributable in part to the inclusion in the first quarter of 2009 of revenues that were deferred from December 2008.

Coreworx revenues decreased by $0.3 million to $0.8 million. DSIT revenues increased $0.5 million, or 26%, to $2.6 million, primarily due to the commencement of work on the $4.4 million AquaShield DDS order received at the end of 2009.

Gross profit in the first quarter of 2010 increased by $0.3 million, or 10%, despite the decrease in revenues. Gross profit at CoaLogix increased by $0.1 million, or 4%, despite the decrease in revenues. The increased gross profit at CoaLogix was attributable to the gross margin increasing to 43% from 34% as a result of improved operating efficiencies and a mix of higher margin projects. Coreworx gross profit decreased $0.2 million as a result of its reduced sales as its gross margin increased slightly from 74% in the first quarter of 2009 to 77% in the first quarter of 2010. DSIT's first quarter gross profit increased by $0.4 million, or 54%. The increase in gross profit was attributable to increased margins on projects and on DSIT's AquaShield DDS projects in particular.

Selling, general and administrative ("SG&A") expenses increased by $2.2 million. CoaLogix SG&A expense increased $0.6 million reflecting increased overhead costs and a provision for the EES lawsuit settlement. Coreworx SG&A expense increased $0.9 million primarily due to increased marketing and selling costs as it works to enter new markets as well as for the expenses incurred with respect to the recent acquisition of Decision Dynamics. DSIT's SG&A increased $0.2 million, primarily as a result of increased salary costs and non-recurring salary adjustments. Corporate SG&A increased $0.5 million due to $0.3 million of bonuses recorded in the quarter and increased administrative and salary costs.

The net loss for the first quarter was $3.1 million in 2010 versus $1.1 million last year. The increased loss was due primarily to increased losses at Coreworx (from $0.8 million in 2009 to $2.2 million in 2010) as well as increased corporate expenses (see "selling, general and administrative expenses" above). In addition, results for the first quarter 2009 included a gain of $0.4 million recorded on the sale of Comverge common stock.

John Moore, CEO of Acorn Energy stated, "The first quarter performance was in line with expectations. We are confirming our guidance for 2010 revenues of at least $48 million, a 54% increase over 2009 revenues of $31.3 million. The expected growth in revenue will be driven by the new CoaLogix plant which is expected to be operational in the second half of 2010, the addition of the revenues of Decision Dynamics which was acquired by Coreworx at the end of April combined with the expected increased revenues from Coreworx' own suite of software products, DSIT's continuing growth, and the inclusion of both GridSense and USSI in our consolidated results."

Conference Call Information

The Company will host an investor call on Friday, May 14, 2010 at 9:00am ET to discuss its first quarter 2010 results and developments at the Company.

To participate in the conference call, please dial [phone] or (412) 858- 4600 (Intl) (no pass code required). You may also access the call through the Internet at http://www.acornenergy.com/.

If you are unable to participate in the live call, a digital replay of the call will be available through 9:00 AM on May 29, 2010 by dialing [phone] or [phone] and entering access code # 440591.

About Acorn Energy, Inc.

Acorn Energy, Inc. is a publicly-traded holding company with equity interests in CoaLogix, Coreworx, DSIT, GridSense and US Sensor Systems, Inc. These companies leverage advanced technologies to transform and upgrade the energy infrastructure around the world. Acorn companies are focused on three problems in the energy sector: improving the efficiency of the energy grid, reducing the risk for owners of large energy assets, and reducing the environmental impact of the energy sector. Acorn's strategy is to take primarily controlling positions in companies led by great entrepreneurs. 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 the Company and its operating companies will be able to achieve the expected growth in revenues or meet the other expectations described or referred to above. 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 the Company's most recent Annual Report on Form 10-K as filed by the Company with the Securities and Exchange Commission.

Investor Contact: Paul Henning Cameron Associates [phone] [e-mail] ACORN ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) As of March As of December ASSETS 31, 31, 2010 2009 ---- ---- (unaudited) ----------- Current assets: Cash and cash equivalents $18,554 $11,208 Restricted deposits 876 1,627 Accounts receivable, net 5,165 3,541 Unbilled revenue and work-in-process 3,720 4,113 Inventory 2,439 1,848 Other current assets 2,269 2,317 ----- ----- Total current assets 33,023 24,654 ------ ------ Property and equipment, net 5,212 3,357 Other investments and loans to equity investees 2,808 2,796 Funds in respect of employee termination benefits 2,175 2,074 Restricted deposits 1,185 611 Intangible assets, net 10,647 8,194 Goodwill 8,174 6,679 Deferred taxes 238 227 Other assets 139 143 --- --- Total assets $63,601 $48,735 ======= ======= LIABILITIES AND EQUITY Current liabilities: Short-term bank credit and current maturities of long-term bank debt $463 $430 Accounts payable 2,068 1,607 Accrued payroll, payroll taxes and social benefits 1,340 1,409 Advances from customers 1,386 1,924 Other current liabilities 4,721 3,064 ----- ----- Total current liabilities 9,978 8,434 ----- ----- Long-term liabilities: Liability for employee termination benefits 3,312 3,129 Long-term debt 379 405 Other long-term liabilities 534 669 --- --- Total long-term liabilities 4,225 4,203 ----- ----- Equity: Acorn Energy, Inc. shareholders Common stock -$0.01 par value per share: 154 132 Authorized - 20,000,000 shares; Issued -13,248,813 and 15,494,229 shares at December 31, 2009 and March 31, 2010, respectively Additional paid-in capital 70,217 58,373 Warrants 274 290 Accumulated deficit (26,466) (23,343) Treasury stock, at cost -1,275,081 shares at December 31, 2009 and (4,827) (4,827) March 31, 2010, respectively Accumulated other comprehensive income 277 152 --- --- Total Acorn Energy, Inc. shareholders' equity 39,629 30,777 Non-controlling interests 9,769 5,321 ----- ----- Total equity 49,398 36,098 ------ ------ Total liabilities and equity $63,601 $48,735 ======= ======= ACORN ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (IN THOUSANDS, EXCEPT NET LOSS PER SHARE DATA) Three months ended ------------------ March 31, --------- 2010 2009 ---- ---- Revenues: SCR services $4,478 $5,390 Projects 2,507 1,966 Software license and services 770 1,027 Other 99 95 --- --- Total revenues 7,854 8,478 ----- ----- Cost of sales: SCR services 2,546 3,535 Projects 1,342 1,219 Software license and services 176 271 Other 82 74 --- --- Total cost of sales 4,146 5,099 ----- ----- Gross profit 3,708 3,379 Operating expenses: Research and development expenses 670 276 Selling, general and administrative expenses 6,321 4,108 Dividends received from EnerTech (135) -- Impairments -- 70 --- --- Total operating expenses 6,856 4,454 ----- ----- Operating loss (3,148) (1,075) Finance income (expense), net 50 (169) Gain on sale of shares in Comverge -- 417 Loss before taxes on income (3,098) (827) Income tax benefit (expense) (75) -- --- --- Loss from operations of the Company and its consolidated (3,173) (827) subsidiaries Share in losses of GridSense -- (129) Net loss (3,173) (956) Net loss (income) attributable to non- controlling interests 50 (107) --- ---- Net loss attributable to Acorn Energy, Inc. shareholders. ($3,123) ($1,063) ======= ======= Basic and diluted net loss per share attributable to Acorn ($0.25) ($0.09) Energy, Inc. shareholders ====== ====== Weighted average number of shares outstanding attributable to 12,498 11,535 Acorn Energy, Inc. shareholders - basic and diluted ====== ======

Acorn Energy

CONTACT: Paul Henning, Cameron Associates, [phone],
[e-mail]

Web Site: http://www.acornenergy.com/