Along with its Q2 results, Echelon (NASDAQ:ELON) has announced it plans to seek shareholder approval for a reverse split (expected to be 1:10) to regain Nasdaq minimum bid compliance. No word yet on the split date.
The industrial automation hardware/software provider also says it plans to "consider a wide range of available options, including, among other things, partnerships, strategic business model alternatives, recapitalization, disposition of one or more corporate assets, or a possible business combination or sale of the Company, in addition to continued pursuit of the Company as a stand-alone entity." Goldman has been hired to advise.
Q3 guidance is for revenue of $9.5M-$10.3M and EPS of -$0.02 to -$0.04, favorable to a consensus of $9.5M and -$0.06. Echelon notes it saw strong demand for its networked lighting control offerings in Q2, and had a "meaningful design win" for its building automation business.
Echelon ended Q2 with $26.5M in cash/short-term investments, and no debt.
Echelon (ELON +1.9%) is making a $10M up-front cash payment and $900K worth of 2015 lease payments to rid itself of $21.4M worth of lease obligations for its 150K-sq. foot San Jose HQ. (PR)
The terminated leases lasted through 2020. Echelon expects the deal to yield $400K-$600K/quarter in facilities-related savings for the rest of 2015, and produce $1.5M/quarter in depreciation expenses for the rest of the year.
The industrial automation hardware/software provider had $38.2M in cash/short-term investments at the end of Q1, and no debt. 2014 free cash flow was -$11.7M.