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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
                                                        =======    =======

SOURCE eOn Communications Corporation

Copyright 2009 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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