Attached files
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| 8-K - FORM 8-K - ECHELON CORP | d343791d8k.htm |
| Exhibit 99.1
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Investor Presentation
February 2017
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SAFE HARBOR
This presentation contains “forward-looking” statements within the meaning of Section 21A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created thereby. Forward looking statements include, without limitation, statements regarding our future financial and operating performance, including our guidance for the first quarter of 2017, opportunities for future growth, the size of prospective markets, and our business strategy, plans and objectives. Actual results could differ materially from those projected in our forward-looking statements as a result of a number of risks and uncertainties, including, but not limited to, risks associated with the continued development and growth of markets for Echelon’s products; failure to achieve revenue estimates or maintain expense controls; changes in our headcount growth or the fair market value of our common stock, either of which could impact our ability to estimate our future stock-based compensation expense; circumstances that may delay the time frame for achieving our business outlook; our ability to attract and retain talent; the risk of competition that may arise as the market develops or through consolidations in the industry; the timely development of our products and services and the ability of those products and services to perform as designed and meet customer expectations; the deployment and success of the pilot programs and proof of concepts, including the extent to which they result in follow-on orders; the risk that we do not meet expected or required shipment, delivery or acceptance schedules for our products, which could cause us to incur penalties or additional expenses or delay revenue recognition as a result; and other risks identified in the reports we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. The financial information presented in this presentation reflects estimates based on information that is available to us at this time. We undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, we have provided in this presentation certain measures that have not been prepared in accordance with GAAP. We use non-GAAP financial measures internally to analyze our financial results and trends, prepare and approve our annual budget, and develop short- and long-term operating plans. We believe these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing operating results and trends. However, it is important to note that these non-GAAP financial measures are not based on any standardized methodology and are not necessarily comparable to similar measures used by other companies. In addition, stock-based compensation expense and other excluded items may have a material impact on our reported financial results. As a result, non-GAAP financial measures should not be considered in isolation or as a substitute for comparable financial information prepared in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP financial measures has been provided in the financial statement tables posted on our website , and investors are encouraged to review the reconciliation.
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AGENDA
Introduction
Echelon Connected Lighting Platform
Shipping applications
Proof-of-concept applications
Echelon Embedded Platform
Recent Results
Summary
Agenda 2
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ECHELON: INNOVATING IN THE ‘INTERNET OF THINGS’
FOR 25 YEARS
Founded by Mike Markkula; CEO Apple Computer
Powering
110M+
EMBEDDED COMPONENTS ? IIOT PLATFORM
Introduction
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PLATFORM OPTIMIZED FOR IOT APPLICATIONS FROM DAY 1
Multi-application
Distributed processing
Large scale, low cost and low latency
Meshed RF, PLC, Cellular
Open interfaces
Cloud-based management and applications support tools
EMBEDDED
System on chip
Development tools
PLATFORMS
Controllers
Gateways
Management and mediation software
103 ISSUED AND APPLIED-FOR PATENTS
Introduction 4
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OUR RECENT TRANSITION – WE’VE BEEN BUSY…
2012: Began cash burn reductions
2014:
Sold smart meter division
Refreshed embedded platform line
Forward integrated with connected PLC-based lighting platform 2015: Integrated Lumewave RF mesh acquisition
2016:
Consolidated into one connected lighting platform
Invested in cloud software
Retooled the salesforce
2017:
Began introducing advanced applications to the market
Introduction 5
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LUMEWAVE BY ECHELON INTELLIGENT CONNECTED LIGHTING
SOLUTIONS
Lumewave by Echelon Connected Lighting Platform 6
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FOCUSED ON THE GROWING CONNECTED OUTDOOR LIGHTING MARKET
CONNECTED LIGHTING: $2.5B MARKET BY 2022 WITH A 40% CAGR; PENETRATION WILL STILL ONLY BE 10% OF AVAILABLE LIGHTS*
*Source: Strategies Unlimited 2015
Lumewave by Echelon Connected Lighting Platform 7
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ECHELON OUTDOOR VERTICAL FOCUS
Municipality
Roadways, walkways, tunnels and area
45M install base $2.9B opportunity1
Project Wins: Cambridge MA Bellingham WA
Enterprise Campus
Parking, garage and building exterior
30M install base $2.2B opportunity1
Project Wins: Oracle Kimco Realty
Educational Campus
Walkways, area lights, parking and garage
19M install base $1.4B opportunity1
Project Wins: UC Davis U of Miami
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– North America opportunity size based on install base Source: US DOE 2015 |
Lumewave by Echelon Connected Lighting Platform 8
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LUMEWAVE BY ECHELON
CONNECTED LIGHTING PLATFORM
Lumewave by Echelon Connected Lighting Platform 9
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LEVERAGING OUR HERITAGE AS A MULTI-APPLICATION PLATFORM PROVIDER
“What mayors care about now” applications
Platform
Apps
Connectivity and application services platform
Network Options Edge Devices Universal Application
PLC RF IP Camera LC CB Sensor Gateway Management System
Lumewave by Echelon Connected Lighting Platform 10
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Connectivity
LUMEWAVE BY ECHELON APPLICATION-READY PLATFORM
Big data / AI
Power line Edge controller
Cost-effective medium bandwidth solution Unique PLC+RF hybrid solution
Fixture independent
Radio frequency Edge controller
Secure Power Line Communications connecting outdoor lighting in 135+ cities WW
Lumewave by Echelon Connected Lighting Platform 11
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CONNECTED LIGHTING APPLICATIONS (SHIPPING)
Lumewave by Echelon Connected Lighting Platform 12
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ON/OFF/DIMMING/MONITORING
CAMBRIDGE, MA
Energy Savings
Operational Efficiency
12+ zones with different on/off/dimming schedules
Zones dim to various levels depending on city requirements
Photocell enabled during the daytime period in case of dark skies during the day -storms, eclipse, etc.
Continuous monitoring for lamp failures, comms issues, etc
“First city-wide deployment of intelligent outdoor lighting controls that I know of.”
- Bob Parks, Executive Director, Smart Outdoor Lighting Alliance
Lumewave by Echelon Connected Lighting Platform 13
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Safety
SCHOOL ZONE FLASHER CONTROL
NORTHWEST US CITY
Provides remote scheduling and monitoring of school crossing beacons Allows multiple stakeholders to manage operations from School Administrator to Department of Traffic Eliminates need for 2G to 3G upgrade
Lumewave by Echelon Connected Lighting Platform 14
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Safety
DYNAMIC PREDICTIVE LIGHTING
FORTUNE 100 ENTERPRISE CAMPUS
Lights brighten in front of vehicle or pedestrian, dims behind Improves safety and comfort Maximizes energy savings (up to 90% reduction) Can be configured to aid first responders
Lumewave by Echelon Connected Lighting Platform 15
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Proof of Concept
CONNECTED LIGHTING ADVANCED
PROOF OF CONCEPT APPLICATIONS
Lumewave by Echelon Connected Lighting Platform 16
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Proof of Concept Comfort
DYNAMIC, ON-DEMAND WHITE TUNING
WHITE BEAR LAKE, MN
Cool White Lighting Ideal for:
Higher levels of activity
High risk areas (intersections, on/off ramps)
Emergency scenes and first responder
Warm White Lighting Ideal for:
Safe nighttime illumination
Historic sites and residential sites
Natural environments
Lumewave by Echelon Connected Lighting Platform
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Proof of Concept Safety
WEATHER ADAPTIVE LIGHTING Comfort
WHITE BEAR LAKE, MN
The Weather Company’s (TWC)
Weather Underground delivering up to 26 billion forecasts daily
Obtain weather prediction
Control lighting
Fog Snow Rain Poor visibility Dust storms
IBM Watson IoT Platform
Weather optimized safety, comfort and sustainability through lighting
Impact study on human behavior under adverse weather conditions through white tuning
Lumewave by Echelon Connected Lighting Platform 18
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Proof of Concept Safety
VISION-BASED TRAFFIC-DRIVEN LIGHT LEVELS
TBA — PACIFIC NORTHWEST
Image processing (traffic counting)
Installed cost can be a fraction of traditional systems.
“Integrated”
Camera
Edge based AI enables a low cost alternative to cloud enabled analytics for Smart Cities A huge savings over a broadband deployment
Lumewave by Echelon Connected Lighting Platform 19
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Proof of Concept Operational Efficiency
VISION-BASED PARKING MANAGEMENT
Integrates lighting controls with parking management to create
very flexible parking management system at very minimal cost
Lumewave by Echelon Connected Lighting Platform
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Proof of Concept Safety
EMERGENCY SCENE ASSIST
Integrate with any existing emergency call box systems Immediate lighting sequence of operations to deter crime Heightened level of illumination for first responders
Lumewave by Echelon Connected Lighting Platform 21
Power
EMB901 Pack
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ECHELON EMBEDDED PLATFORM
Echelon Embedded Platform 22
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POWERING A HUGE RANGE OF PRODUCTS FROM A BROAD CUSTOMER BASE
HVAC controls
Lighting and sunblind controls Emergency lighting controls Elevator and escalator controls Access controls Security system controls Semiconductor fab equipment monitoring Quick service restaurant automation Retail store automation Renewable energy management Electrical energy meters and sub-meters Demand response and energy management Runway lighting control Backup power generation control Industrial automation Transportation automation Train braking control Agricultural equipment automation Dairy farm automation Sound system controls
Echelon Embedded Platform 23
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LEGACY OPERATIONAL TECHNOLOGIES SLOWLY EVOLVING TO IOT TO CONVERGE LEGACY SYSTEMS
Commercial Building Automation Revenue (US$ in billions)
$100
$83 $85 $86
$80 $76 $77 $79 $81
$73
$68
$59 $60
$60
$40
$20
$0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Middle East & Africa Latin America Asia Pacific Europe North America
35+ legacy protocols Wired and wireless connectivity
RS485 is still king!
Source: Navigant Research
Echelon Embedded Platform 24
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EMBEDDED PLATFORM OFFERINGS
Echelon Embedded Platform 25
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THE EMBEDDED CONVERGENCE PLATFORM FOR IIOT
MULTI-PROTOCOL, WIRED AND WIRELESS, DOWN TO THE END POINT
Multi-protocol platform for Industrial IoT solutions
Chips & Controllers Router Cloud
Management
IzoT Chips, Stacks, Modules
IzoT Routers
IzoT Management Software and Commissioning Tools
Protocol Support
LonWorks BACNet IP WiFi MSTP
Free Topology PLC Ethernet
Fewer model numbers Fast time-to-market Converged applications
Benefits
Echelon Embedded Platform
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RECENT RESULTS
Recent Results
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2016 FINANCIAL HIGHLIGHTS
Revenues: $32.4M
Revenue from lighting increased for 4 consecutive quarters
Gross Margin: 56%
Non-GAAP OPEX $22.1M; GAAP OPEX $22.8M
Reaches 10-year low
Non-GAAP Net Loss/share $0.77; GAAP Net Loss/share: $0.93
Cash and investments of $23.0M
Recent Results 28
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OTHER HIGHLIGHTS OF TRANSITION LAST ~2 YEARS
Exit of long-term lease
Reduced overall lease obligations of $21.4M for <$0.50 on the $
Significantly reduced ongoing facilities expenses
Management of cash burn
Annual cash burn of $14.1M in 2014 reduced to $3.0M in 2016
With the exception of one year, lowest annual burn since 2006
Adopted a Tax Benefit Preservation Plan
Intended to protect $329M of federal and state tax NOLs and $26M of federal and state tax credits
Recent Results 29
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SUMMARY
Echelon has “IoT in our DNA”
Multi-year progression to systems solutions in a “hot market”
With cash preservation
Application-driven, end-point independent platform
Supporting a growing number of interesting, ‘value add now’ applications for outdoor lighting in munis and enterprises
Summary 30