eOn Communications Reports Second Quarter Results

SAN JOSE, Calif., March 17 /PRNewswire-FirstCall/ -- eOn Communications Corporation(TM) (NASDAQ:EONC), a leading provider of telecommunications solutions, today reported second quarter fiscal 2008 results.

Net loss for the quarter was $999,000, or ($0.07) per common share, compared to a net loss of $1,015,000, or $(0.07) per common share in the quarter ended January 31, 2007. The loss for this quarter included $59,000 from discontinued operations. Revenue for the quarter was $1,480,000 (including related party revenue of $88,000) compared to $1,487,000 (including related party revenue of $168,000) for the quarter ended January 31, 2007.

Net loss for the six months was $1,910,000 or ($0.14) per common share, compared to a net loss of $975,000 or ($0.07) per common share for the six months ended January 31, 2007. The net loss for the six months ended January 31, 2008 included a loss from discontinued operations of $577,000 or ($0.04) per common share. Revenue for the six months was $3,876,000 (including related party revenue of $216,000) a decrease of 8% compared to $4,195,000 (including related party revenue of $168,000) for the six months ended January 31, 2007.

Cash, cash equivalents and marketable securities decreased 50% to $2,826,000 from $5,656,000 as of July 31, 2007 primarily as a result of funding operating losses for the six month period and the $900,000 investment in the Symbio Group.

"We are very disappointed with these results and have begun restructuring to improve the Company's performance and return us to profitability," stated David Lee, eOn's chairman and chief executive officer. "We will be hosting a conference call in April to address Company operations, growth plans and the prospective merger with Cortelco."

About eOn Communications(TM)

eOn Communications Corporation(TM) 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,
2008 2007 2008 2007

REVENUE
Third party revenue $ 1,392 $ 1,319 $ 3,660 $ 4,027
Related party revenue 88 168 216 168
Net revenue 1,480 1,487 3,876 4,195

COST OF REVENUE
Third party cost of revenue 576 514 1,468 1,457
Related party cost of revenue 80 156 200 156
Cost of revenue 656 670 1,668 1,613
Gross profit 824 817 2,208 2,582

OPERATING EXPENSE
Selling, general and administrative 1,107 1,120 2,147 2,177
Research and development 680 768 1,437 1,510
Other expense 11 24 37 30
Total operating expense 1,798 1,912 3,621 3,717
Loss from continuing operations (974) (1,095) (1,413) (1,135)

Interest income 34 80 80 160
(Loss) income from continuing
operations before income taxes (940) (1,015) (1,333) (975)

Income tax expense - - - - (Loss) income from continuing
operations after income taxes (940) (1,015) (1,333) (975)

DISCONTINUED OPERATIONS
Loss from discontinued operations, net
of tax of $0 (59) - (577) - Loss from discontinued operations (59) - (577) - Net (loss) income $ (999) $(1,015) $(1,910) $ (975)

COMPREHENSIVE INCOME (LOSS)
Net (loss) income $ (999) $(1,015) $(1,910) $ (975)
Foreign currency translation
adjustment 27 - 65 - Comprehensive (loss) income $ (972) $(1,015) $(1,845) $ (975)

Weighted average shares outstanding - basic and diluted 13,588 13,552 13,584 13,549

Basic and diluted (loss) income per
share:
From continuing operations after
income taxes $(0.07) $ (0.07) $ (0.10) $ (0.07)
From discontinued operations, net of
tax - - (0.04) - Basic and diluted (loss) income
per share $(0.07) $ (0.07) $ (0.14) $ (0.07)

eOn Communications Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)

January 31, July 31,
2008 2007
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 926 $ 2,256
Marketable securities 1,900 3,400
Trade accounts receivable, net of
allowance of $667 and $694,
respectively 949 1,781
Trade accounts receivable - related party 83 117
Inventories 2,833 2,348
Prepaid and other current assets 310 118
Current assets of discontinued operations - 119
Total current assets 7,001 10,139

Property and equipment, net 339 298
Intangibles, net 293 334
Investments 1,200 300
Non-current assets of discontinued
operations 73 135
Total assets $ 8,906 $11,206

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 255 $ 432
Trade accounts payable - related party 94 337
Accrued expenses and other 1,006 1,205
Current liabilities of
discontinued operations 40 16
Total current liabilities 1,395 1,990

Commitments and contingencies

Stockholders' equity:
Preferred stock, $0.001 par value,
(10,000,000 shares authorized,
no shares issued and
outstanding) - - Common stock, $0.001 par value
(50,000,000 shares authorized,
14,343,194 and 14,247,029 shares
issued, respectively) 14 14
Additional paid-in capital 55,909 55,769
Treasury stock, at cost (676,900 shares) (1,502) (1,502)
Accumulated deficit (46,975) (45,065)
Accumulated other comprehensive
income 65 - Total stockholders' equity 7,511 9,216
Total liabilities and
stockholders' equity $ 8,906 $11,206

First Call Analyst:
FCMN Contact:

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Source: eOn Communications Corporation

CONTACT: Investor Relations, eOn Communications, +1-800-955-5321,
investorrelations@eoncc.com

Web site: http://www.eoncommunications.com/
http://www.eoncc.com/

2008-03-17 17:27:10 0314382 PRNEWSWIRE