Demand Response Energy Management Technology

EnergyConnect Group, Inc. (OTCBB: ECNG - News), a leading provider of smart grid demand response services and technologies,reported results for its first quarter ended April 2, 2011. 

First Quarter Financial Results
Revenue for the first quarter of 2011 was $5.8 million, compared to $7.0 million in the first quarter of 2010. Net loss for the first quarter of 2011 was $1.1 million, or $0.01 per share, compared to a net income of $2.1 million, or $0.02 per share, in the first quarter of 2010. Non-GAAP Adjusted EBITDA loss was $657,000 compared to Adjusted EBITDA income of $2.6 million in the first quarter of 2010. Total cash and cash equivalents at April 2, 2011 was $1.9 million.  There were 136,320,765 shares outstanding at the end of the first quarter of 2011.

Discussion of Non-GAAP Financial Measures
The company intends to utilize a number of different financial measures, both GAAP and Non-GAAP, in analyzing and assessing the overall business performance, for making operating decisions and for forecasting and planning future periods. The company considers the use of Non-GAAP financial measures helpful in assessing the current financial performance and prospects for the future. While the company intends to use Non-GAAP financial measures as a tool to enhance the understanding of certain aspects of the financial performance, the company does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Consistent with this approach, the company believes that disclosing Non-GAAP financial measures provides useful supplemental data that, while not a substitute for GAAP financial measures, allows for further transparency in the review of the financial and operational performance.

The company believes that Non-GAAP Adjusted EBITDA is used by investors and analysts as an alternative to GAAP measures when evaluating the performance in comparison to other companies. In order to fully assess the financial operating results, the company believes that Non-GAAP Adjusted EBITDA will be an appropriate measure of evaluating the operating performance, because it eliminates the effects of financing and accounting decisions. This measure is also significant to institutional lenders, and is considered an important internal benchmark of the performance.  The company intends to use Non-GAAP Adjusted EBITDA to measure the performance against internal performance targets, which are based on Non-GAAP Adjusted EBITDA. In addition, the company intends to further exclude stock-based compensation and other non-cash charges in calculating Non-GAAP Adjusted EBITDA. The company believes excluding stock-based compensation and other non-cash charges, allows for greater transparency in the review of the financial and operational performance.

For the full release click here

Forward-Looking Statements
This press release includes statements that may constitute “forward-looking” statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause or contribute to such differences that include, but are not limited to, competitive factors, the success of new products in the marketplace, dependence upon third party vendors, and the ability to obtain financing. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

About EnergyConnect
EnergyConnect delivers industry leading Demand Response technologies and services to commercial, institutional and industrial consumers enabling them to manage their use of electricity in response to market prices or regional power shortages. EnergyConnect’s GridConnect technology platform provides a scalable, cost-effective, clean technology to enhance the grid’s efficiency and reliability. For more information about this leading edge technology or about investor relations, visit http://www.energyconnectinc.com.

For More Information:

Amir Ameri, CFO
EnergyConnect, Inc.
408.963.5260
AAmeri@energyconnectinc.com

Timothy Dien
Lippert / Heilshorn & Associates, Inc.
415.433.3777
TDien@lhai.com