Echelon (ELON) Q3 2011 Earnings Call November 03, 2011 5:00 pm ET Executives Oliver R. Stanfield - Chief Financial Officer, Principal Accounting Officer and Executive Vice President of Finance Ronald A. Sege - Chairman, Chief Executive Officer, President and Member of Stock Option Committee Annie Leschin - IR Analysts Benjamin Schuman - Pacific Crest Securities, Inc., Research Division Craig E. Irwin - Wedbush Securities Inc., Research Division Sean K.F. Hannan - Needham & Company, LLC, Research Division Mark Sigal - Canaccord Genuity, Research Division Dale Pfau - Cantor Fitzgerald & Co., Research Division Patrick Sullivan Joseph A. Maxa - Dougherty & Company LLC, Research Division Colin W. Rusch - ThinkEquity LLC, Research Division Elaine Kwei - Jefferies & Company, Inc., Research Division Christopher M. Kovacs - Robert W. Baird & Co. Incorporated, Research Division Presentation Operator
And now, I'd like to turn the call over to Ron Sege. Ron?Ronald A. Sege Thank you, Annie. Good afternoon and thank you for joining us for our third quarter conference call. First, I would like to take a moment to acknowledge, Ken Oshman, the longtime Chairman and CEO of Echelon. As you know, Ken passed away in early August. A sad time for all but especially for those of us who had known and worked with Ken for so long. He was a brilliant, well-respected man and a visionary leader, we all miss him dearly. As you saw in our release earlier today, we announced an important development with our Edge Control Node project at Duke Energy. I will provide more detail on that later in my remarks, but first, I will go through the highlights of the quarter to provide some context. I'm pleased to report that we once again made progress towards our financial goals of growth and profitability this quarter. Strength in our utility markets grew 62% year-over-year growth in topline performance to $43.8 million and non-GAAP profitability of $0.04 per share. We were also cash flow positive for the quarter. We continue to ship products and volume to large utility customers, achieved a critical milestone in Brazil, built momentum with our partnership in China and achieved new wins in our street lighting vertical. Our recent European customer and partner event reinforced growing interest in our vision of a proven, open standard energy-control networking platform that runs metering and many other applications. It also reinforced our geographic targeting strategy, ranking attractiveness in terms of energy shortages, non-technical loss rates, political backing and distribution grid health. Overall, we remained confident in our outlook for a strong 2011 with annual revenue growth at the high-end of our previously guided range of 40% and our commitment to our goal of full year non-GAAP profitability for 2012.
Now let me turn to updates on our Utility business. Large scale deployments at Duke, Fortum, Landis and NRGi are ongoing. Our deployment with Fortum, Finland is exhilarating with Zigbee wireless and Echelon power line communication links, connecting the Fortum grid with home area networks to provide multi-application support. We are excited about our new power line connectivity option as we believe it will provide a highly reliable connection to customers' in-home displays and controllers. Our meters with home power line connections are currently shipping with hardware support to be followed early next year by the remotely upgradable enabling COS software. We have several other small wins this quarter including in Denmark, Russia and Switzerland. In general, political support for the Smart Grid remains strong in Europe where Smart Grid rollouts are deploying at a steady pace and pushing the envelope in terms of applications.Read the rest of this transcript for free on seekingalpha.com