eOn Communications Reports Profitability for the First Six Months of Fiscal 2010
SAN JOSE, Calif., March 16 /PRNewswire-FirstCall/ -- eOn Communications Corporation™ (Nasdaq: EONC) (the "Company"), a leading provider of telecommunications solutions, today reported second quarter fiscal results for the period ended January 31, 2010.
Second quarter revenue increased 169% to $3,516,000 from $1,307,000 in the second quarter of last year. Net income for the quarter excluding the impact of the imputed interest expense was $49,000 or $0.02 per common share. With imputed interest, the quarter has a net loss of $248,000 or $0.09 per common share compared to a net loss of $376,000 or $0.14 per common share in the quarter ended January 31, 2009. Included in net income for the quarter was $297,000 of imputed interest expense due to the amortization of the difference between the face value of the contingent obligation to the former Cortelco shareholders and the discounted present value of the note payable recorded on the balance sheet.
Despite the expected seasonal downturn in operating results for the second quarter, eOn's operating results for the first six months of fiscal 2010 remain positive. Net income for the six month period ended January 31, 2010 was $131,000 or $0.05 per common share compared to a net loss of $510,000 or $0.19 per common share for the same period last year. Included in net income for the six months ended January 31, 2010 was $350,000 of imputed interest expense as discussed above. Net income for the current six months excluding the impact of the imputed interest expense was $481,000 or $0.18 per common share.
Financial results include Cortelco Systems Holding Corp. net income of $238,000 for the current quarter and $680,000 for the six months ended January 31, 2010. Cortelco Systems Holding Corp. was acquired on April 1, 2009
Cash, cash equivalents and marketable securities increased 20% to $2,871,000 as of January 31, 2010 from $2,383,000 as of January 31, 2009 and decreased 5% from $3,010,000 as of July 31, 2009.
"We are pleased with our continuing efforts to improve the Company's performance. The second fiscal quarter has historically been seasonally effected and our results were better than expected," commented Mr. David S. Lee, Chairman of eOn's Board of Directors. "Our profitability in the last four quarters has resulted in earnings of $1,132,000 or $0.41 per common share before imputed interest expense. Despite adverse economic conditions, we continue to achieve positive results."
About eOn Communications™
eOn Communications Corporation™ 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 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 Ended Six Months Ended
January 31, January 31,
----------- -----------
2010 2009 2010 2009
---- ---- ---- ----
REVENUE
Net revenue $3,516 $1,307 $8,041 $3,091
------ ------ ------ ------
COST OF REVENUE
Cost of revenue 2,252 703 5,056 1,516
----- --- ----- -----
Gross profit 1,264 604 2,985 1,575
----- --- ----- -----
OPERATING EXPENSE
Selling, general and
administrative 1,133 688 2,288 1,455
Research and development 117 277 254 582
Other expense 13 17 32 61
--- --- --- ---
Total operating expense 1,263 982 2,574 2,098
----- --- ----- -----
Income (loss) from
operations 1 (378) 411 (523)
Interest (expense) income, net (297) 2 (350) 13
Equity in earnings of
unconsolidated investee 48 - 49 -
--- --- --- ---
(Loss) income before income
taxes (248) (376) 110 (510)
==== ==== === ====
Income tax benefit - - 21 -
--- --- --- ---
Net (loss) income $(248) $(376) $131 $(510)
===== ===== ==== =====
COMPREHENSIVE (LOSS) INCOME
Net (loss) income $(248) $(376) $131 $(510)
Unrealized gains on
available-for-sale securities - - 4 -
Foreign currency
translation adjustment - - - (1)
--- --- --- ---
Comprehensive (loss) income $(248) $(376) $135 $(511)
===== ===== ==== =====
Weighted average shares
outstanding
Basic 2,736 2,736 2,736 2,735
===== ===== ===== =====
Diluted 2,736 2,736 2,738 2,735
===== ===== ===== =====
Basic (loss) income per share $(0.09) $(0.14) $0.05 $(0.19)
====== ====== ===== ======
Diluted (loss) income per
share $(0.09) $(0.14) $0.05 $(0.19)
====== ====== ===== ======
eOn Communications Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
January 31, July 31,
2010 2009
---- ----
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $2,871 $3,010
Trade accounts receivable, net of allowance
of $299 and $332, respectively 2,050 2,943
Trade accounts receivable - related party 15 228
Inventories 4,933 5,032
Deferred income taxes 270 270
Prepaid and other current assets 262 242
--- ---
Total current assets 10,401 11,725
Property and equipment, net 164 209
Intangibles, net 656 410
Investments 1,141 1,136
Investment in unconsolidated equity investee 189 140
--- ---
Total assets $12,551 $13,620
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $1,082 $1,127
Trade accounts payable - related party 6 11
Notes payable, related party 742 1,157
Accrued expenses and other 1,144 1,628
----- -----
Total current liabilities 2,974 3,923
Note payable, related party, net of current
portion 3,633 3,891
----- -----
Total liabilities 6,607 7,814
----- -----
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, (10,000,000
shares authorized, no shares issued and
outstanding) - -
Common stock, $0.005 par value (10,000,000
shares authorized, 2,890,214 and 2,873,992
shares issued, respectively) 15 14
Additional paid-in capital 56,050 56,048
Treasury stock, at cost (139,580 shares) (1,503) (1,503)
Accumulated deficit (48,725) (48,856)
Accumulated other comprehensive income 107 103
--- ---
Total stockholders' equity 5,944 5,806
----- -----
Total liabilities and stockholders' equity $12,551 $13,620
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SOURCE eOn Communications Corporation
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