All non-GAAP estimates exclude the impact of any stock-basedcompensation charges. We expect: ? Total revenue to be approximately $21.0 million to $23.0 million, with NESrevenue accounting for 43%, LonWorks revenue 50%, and Enel project revenue 7% ? Non-GAAP gross margin to be in the range of 39.0% to 41.0%. ? Non-GAAP operating expenses to be approximately $16.0 million to $16.5million. ? Stock-based compensation expenses to be approximately $4.3 million. ? Our provision for income taxes is expected to be approximately $140,000. ? Non-GAAP loss per share to be $0.18 to $0.22, based on a fully dilutedweighted average shares outstanding of 40,500,000. ? GAAP loss per share of between $0.28 and $0.32 for the quarter.
For those interested in further discussion regarding this release, Echelon'smanagement will participate in a conference call today at 2:00 p.m Pacific/5:00p.m Eastern Time. To access the call, dial 866-362-5158 and enter passcode:17771990 (callers outside the US please use 617-597-5397). An archived replay ofthe webcast will be available approximately two hours following the end of thecall. Use of Non-GAAP Financial InformationEchelon continues to provide all information required in accordance with GAAP,but believes that an investor`s evaluation of our ongoing operating results maynot be as useful if an investor is limited to reviewing only GAAP financialmeasures. Accordingly, we provide non-GAAP net income and non-GAAP net incomeper share data as additional information relating to Echelon`s operatingresults.
Echelon presents these non-GAAP financial measures to provide investorswith an additional tool for evaluating Echelon`s operating results in a mannerthat focuses on what Echelon believes to be its ongoing business operations. Thepresentation of this additional information is not meant to be considered inisolation or as a substitute for net income or net income per share prepared inaccordance with GAAP. Echelon`s management uses certain non-GAAP financial information, namelyoperating results excluding the impact of stock-based compensation charges madein accordance with SFAS 123R, to evaluate its ongoing operations and forinternal planning and forecasting purposes. Accordingly, we believe it is usefulfor Echelon`s investors to review, as applicable, information that both includesand excludes stock-based compensation (and the related tax impact) in order toassess the performance of Echelon`s business and for planning and forecasting infuture periods. Whenever Echelon reports such non-GAAP financial measures, acomplete reconciliation of the non-GAAP financial measure to the most closelyapplicable GAAP financial measure is provided. Investors are encouraged toreview these reconciliations to ensure they have a thorough understanding of thereported non-GAAP financial measures and their most directly comparable GAAPfinancial measures. About Echelon CorporationEchelon Corporation (NASDAQ: ELON) is leading the worldwide transformation ofthe electricity grid into a smart, communicating energy network, connectingutilities to their customers, and providing customers with energy aware homesand businesses that react to conditions on the grid.
Echelon's NES System - the backbone for the smart grid - is used by utilities toreplace existing stand-alone electricity meters with a network infrastructurethat is open, inexpensive, reliable, and proven. The NES System helps utilitiescompete more effectively, reduce operating costs, provide expanded services andhelp energy users manage and reduce overall energy use. Echelon's LonWorksInfrastructure products extend the smart grid, powering tens of millions ofenergy aware, everyday devices made by thousands of companies - connecting themto each other and the grid. LonWorks based products work together to monitor andsave energy; lower costs; improve productivity; and enhance service, quality,safety, and convenience in utility, municipal, building, industrial,transportation, and home area networks. More information about Echelon can be found at http:// Echelon, LonWorks and the Echelon logo are registered trademarks of EchelonCorporation registered in the United States and other countries. Other productor service names mentioned herein are the trademarks of their respective owners.Risk Factors Regarding Forward Looking StatementsThis press release may contain statements relating to future plans, events orperformance, including statements regarding Echelon`s anticipated performancefor the second quarter of 2009 and thereafter; the effect of global economicconditions on business in Echelon`s NES and LWI product lines; and the effect ofmarket imperatives to manage and conserve energy.