ECNG-EnergyConnect Group, Inc. Reports Second Quarter 2010 Results
Energyconnect Grp. (BB) (OTCBB:ECNG)
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Today : Wednesday 11 August 2010
EnergyConnect Group, Inc. (OTCBB:ECNG), a leading provider of smart grid demand response (DR) services and technologies, reported results for its second quarter and six-months ended July 3, 2010.
Kevin Evans, EnergyConnect’s president and CEO said, “We are pleased with our continuing progress and the performance of our capacity portfolio. In the second quarter of 2010, we generated revenue of $6.4 million, driving year-to-date revenue growth to 54%. We are also very encouraged by the positive response from PJM and our customers with GridConnect.”
Second Quarter Financial Results
Revenue for the second quarter of 2010 was $6.4 million, compared to $7.5 million in the second quarter of 2009, which included $3.3 million of capacity transactions. There were no capacity transactions in the second quarter of 2010. Net loss for the second quarter 2010 was $1.1 million, or $(0.01) per share, compared to net income of $601,000, or $0.01 per diluted share in the second quarter 2009. Non-GAAP Adjusted EBITDA loss was $559,000, compared to Non-GAAP Adjusted EBITDA income of $1.3 million in the second quarter 2009.
Six Months Ended June 30, 2010 Financial Results
For the first half of 2010, revenue was $13.5 million, which includes $6.6 million in capacity transactions, compared to $8.7 million for the first half of 2009, which included $4.1 million in capacity transactions. Net income for the first half of 2010 was $992,000, or $0.01 per diluted share, compared to net loss of $1.5 million, or $(0.02) per share in the first half of 2009. Non-GAAP Adjusted EBITDA income was $2.0 million, compared to Non-GAAP Adjusted EBITDA loss of $482,000 for the first half of 2009.
Andrew Warner, EnergyConnect’s CFO, said, “The business results for the first half were on track with our expectations. Given those results, combined with positive market conditions, we now expect annual revenue growth of between 40% and 45% over last year, up from prior guidance of between 35% and 40% growth. We remain confident in our goal to deliver positive Non-GAAP Adjusted EBITDA for 2010.”
Discussion of Non-GAAP Financial Measures
The company intends to utilize a number of different financial measures, both GAAP and Non-GAAP, in analyzing and assessing the overall business performance, for making operating decisions and for forecasting and planning future periods. The company considers the use of Non-GAAP financial measures helpful in assessing the current financial performance and prospects for the future. While the company intends to use Non-GAAP financial measures as a tool to enhance the understanding of certain aspects of the financial performance, the company does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Consistent with this approach, the company believes that disclosing Non-GAAP financial measures provides useful supplemental data that, while not a substitute for GAAP financial measures, allows for further transparency in the review of the financial and operational performance.
The company believes that Non-GAAP Adjusted EBITDA is used by investors and analysts as an alternative to GAAP measures when evaluating the performance in comparison to other companies. In order to fully assess the financial operating results, the company believes that Non-GAAP Adjusted EBITDA will be an appropriate measure of evaluating the operating performance, because it eliminates the effects of financing and accounting decisions. This measure is also significant to institutional lenders, and is considered an important internal benchmark of the performance. The company intends to use Non-GAAP Adjusted EBITDA to measure the performance against internal performance targets, which are based on Non-GAAP Adjusted EBITDA. In addition, the company intends to further exclude stock-based compensation and other non-cash charges in calculating Non-GAAP Adjusted EBITDA. The company believes excluding stock-based compensation and other non-cash charges, allows for greater transparency in the review of the financial and operational performance.