Acorn Energy, Inc. · NASDAQ:ACFN
Acorn Energy — LD Micro Invitational 2018
18 slides from Acorn Energy's conference presentation, Jun 5, 2018
Slide 1: Global Monitoring + Control
GLOBAL MONITORING + CONTROL (ACORN OMNIiMETRIX OTCQB: ACFN High Margin, Recurring Revenue + Growth in Remote Monitoring & Control of Pipelines, Generators & Other Key Assets LD Micro Invitational June 6, 2018 www.acornenergy.com
Slide 2: Safe Harbor Statement
Safe Harbor Statement
Slide 3: Non-GAAP Financial Measures
(ACORN Non-GAAP Financial Measures This presentation includes both GAAP and Non-GAAAP financial and performance measures. The Company uses Cash Sales (or Cash Basis Sales) as a measure of current sales activity; itis calculated by adding the net increase in deferred revenue to the GAAP Revenues. The
Slide 4: Emerging from Two-Year Turnaround - Acorn's First Investor Conference Appearance
(ACORN Emerging from Two-Year Turnaround - this is Acorn’s First Investor Conference Appearance *« Acorn Now Focused on Remote Monitoring & Control Business OMNIMETRIX * OmniMetrix combines high margin, recurring monitoring service revenue with monitoring hardware sales * Focus on standby generators
Slide 5: Acorn Snapshot
(ACORN Acorn Snapshot OTCQB ACFN Recent Price $0.345 52-Week Range $0.15 - $0.45 Market Cap $10.2M Enterprise Value $8.4M 2018E Cash Basis Sales >$6.0M (+20%) EV / 2018E Cash Basis Sales ~1.4x Shares Outstanding 29.5M Insider Ownership ~3M shares or 10% FY 2017 revenue was $4.4M while cash-basis sal
Slide 6: OmniMetrix: Global Monitoring + Control
OMNIiMETRIX GLOBAL MONITORING + CONTROL Wireless, real-time remote monitoring § and control of industrial equipment eline Corrosion Protection Rectifier & Test Station Monitors OmniView * Monitoring extends pipeline lifetime Instant alarm notification via email or text messaging Eliminates manual da
Slide 7: OmniMetrix Remote Monitoring Value-Add
OMNiMETRIX Remote Monitoring Value-Add GLOBAL MONITORING + CONTROL * Cheaper, more effective than labor-intensive physical monitoring * Improves maintenance results and reduces downtime * Generator Monitoring Prevents 95% of “fail to start" events v Battery - Voltage - Fuel - Coolant - Oil Optional
Slide 8: Customers / Markets Served
OMNIMETRIX GLOGAL MONITORING * CONTROL 23 Fortune 500 companies across: oil & gas, utility, grocery, retail, aerospace & defense, industrial, healthcare, insurance, automotive, telecommunications, financial institutions, hospitality, chemicals Other Clients: 100+ banks Transportation Real estate Fed
Slide 9: OmniMetrix Growth Drivers
OMNiMETRIiX Growth Drivers GLOBAL MONITORING + CONTROL Management projects ~20% organic cash sales growth in 2018 Clear ROI from lower costs and improved asset monitoring & conirol Growing appreciation of loT benefits/investments Regulatory compliance and reporting: ¢ US EPA, Air Quality Management
Slide 10: OmniMetrix Product Innovation
OMNiIMETRIX Product Innovation GLOBAL MONITORING + CONTROL Introduced Next-Generation TrueGuard 2 Solution in 2017 * Residential monitoring hardware for backup generators * Enhanced, lower cost design with smaller footprint « Added features & data collection * Provides significantly higher gross mar
Slide 11: OmniMetrix Competitive Barriers
OMNiMETRIX Competitive Barriers GLOBAL MONITORING + CONTROL Strong Patent Portfolio: v #8763107: Cross-connected, server-based, IP-connected, point-to-point connectivity v #8078861: Remote processor reprogramming #6747368: Wireless control of power transfer switches for electrical load management #6
Slide 12: Balance Sheet
Balance Sheet (acorn March 31, 2018 Cash & Equivalents $2.4M Accounts Receivable $1.0M Total Current Assets $4.7M Total Assets $5.3M Current Deferred Revenue $2.8M Total Current Liabilities $4.8M Non-Current Deferred Revenue $0.8M Total Liabilities $5.7M Total Liabilities excluding Deferred Revenue
Slide 13: Acorn Financial Turnaround
(ACORN March 2018 Debt $ 0.5M Cash & Equivalents $2.4M Revenue (OmniMetrix) LTM $4.5M EBITDA* LTM ($1.9M) Net Loss LIM ($2.3M) Dec. 2015 $4.0M $0.2M $3.0M ($8.6M) ($10.8M) Acorn Financial Turnaround Improvement 3.5M 2.2M 14M +46% 6.7M 8.6M * EBITDA = Earnings before interest, taxes depreciation and
Slide 14: Corporate Cost Reductions
(ACORN Corporate Cost Reductions Acorn Management reduced overhead expense by $2.5 million or 70% over two years to $1.1M in 2017 from $3.6M in 2015. Annual Savings Legal & Professional Fees $1,260k Non-cash stock comp $560k Reduced Salaries / Personnel $226k Auditing; Directors; & IR Fees $222k Red
Slide 15: Management and Board
(ACORN Management and Board Jan Loeb - Acorn CEO and Director: 30+ years experience in investment banking, money management and public company management. He is President and Managing Member of Leap Tide Capital Management since 2007 and was President of Leap Tide's predecessor, Amtrust Capital Mana
Slide 16: Valuation Considerations
Valuation Considerations (ACORN For illustration purposes only; should NOT be relied upon for investment decisions. OmniMetrix: * Cash-basis sales are expected to be >$6m in 2018 and over $7m in 2019. * In 2015 Lindsay bought Elecsys (a larger OmniMetrix comp) for $70m or 2.5x sales * Today “loT* mu
Slide 17: Investment Summary
(ACORN Investment Summary Growing, high margin recurring business with large market opportunity Approaching cash flow breakeven within a year ~$8M enterprise value or ~1.4x Cash Sales ~$2M in net cash Technology, Product & Service Differentiation Large Customer Base including 23 Fortune 500 companie
Slide 18: Turnaround Recap
(ACORN Turnaround Recap New Leadership - CEO Jan Loeb - Appointed Early 2016 = Address urgent balance sheet / cash flow challenges; pursue ACFN turnaround with goal of creating viable operating company with realistic prospects for growth and profitability. Turnaround Initiatives = Partnered DSIT sub