Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
week Acorn Energy,
reported a net loss of $$2.8 million or $0.11 per share on total sales of $4.6
million in the quarter ending March 2015.Shareholders were not surprised.Acorn has been fighting against losses for months as it juggles the energy
and environmental operations in its holding company portfolio.
March 2015 quarter included losses from the discontinued operations of US Seismic
Systems (USSI), a provider of seismologically-generated geological
information for oil and gas well developers. Acorn had previously announced that operations
at USSI had been suspended and its assets would be put on the auction
block.The rapid decline in oil prices
has led to an equally rapid decrease in well drilling activity and demand for
USSI services.Unfortunately, neither
USSI nor its majority owner Acorn Energy had the financial resources to support
operations until well drilling activity resumes.The most recent quarter included a loss of
$1.2 million at USSI.Acorn had already
taken substantial charges totaling $9.3 million in the fourth quarter 2014, to
record the write-off of USSI inventory, fixed, goodwill, and intangible assets.
upside of this tale of losses is that even as USSI fell victim to the oil patch
malaise, other operations in Acorn’s portfolio have prospered.GridSense provides remote
monitoring systems for utility companies, contributing $963,000 in sales to the
mix.Owners of gas pipelines get help
which deploys a wireless system for remotely monitoring pipe corrosion.OmniMetrix delivered 5% year-over-year growth
in sales in the most recently reported quarter on demand for additional
monitoring units as well as higher selling prices.
big story for Acorn Energy is in its third portfolio operation, DSIT Solutions.
Based in Israel, DSIT provides sensor detection systems to owners of underwater
assets, such as offshore drilling rigs, ships, harbor infrastructure and
others.Worldwide there is a need for
enhanced security capability and DSIT provides solutions that are not easily
procured elsewhere.Acorn announced that
DSIT had received over $19.0 million in new orders in recent months, bringing
backlog to $26.4 million, more than twice the base of business a year ago.Things are going so well at DSIT that it has
enough cash to make a $5.0 million loan to the Acorn parent.
expect to see more shutters snapped shut on oil patch service provides like
DSIT Solutions.Authorities in Saudi
Arabia have recently voiced the view that oil prices will never get to $100 per
barrel again and could lay stagnant in the $40s for a decade until the current
glut of oil in storage is run out. Perhaps that is simply a tactic to scare
decision makers in the U.S.If so, it
certainly worked at Acorn Energy.