Effective on November 11, 2009, Echelon Corporation entered into an agreement with Frits Bruggink, a named executive officer of the company employed, though the company’s wholly owned subsidiary, Echelon B.V., as Senior Vice President for the NES Service Provider Group, pursuant to which Mr. Bruggink and the company mutually agreed to terminate his employment in order to allow Mr. Bruggink to pursue other interests. Prior to his departure, Mr. Bruggink will assist Michael Anderson, the company’s Senior Vice President responsible for smart grid sales and go-to-market strategies to utilities, transition into his new role. Further to the Agreement between the company and Mr. Bruggink with respect to his departure from the company, Mr. Bruggink has agreed to remain with the company for a transition period ending on May 31, 2010, at which time he will receive a severance payment in the amount of €430,000 in addition to customary payments for any accrued vacation.

Echelon Corporation announced that M. Kenneth Oshman the company's Chairman and Chief Executive Officer, has been diagnosed with lung cancer. Indications are that the cancer is both treatable and curable. Mr. Oshman is working with medical advisors to assess the appropriate treatment program going forward and plans to begin treatment as soon as possible. Mr. Oshman has decided to step down as CEO of Echelon to insure that there is dedicated full-time leadership at the company and to provide him with time to focus on his recovery. Mr. Oshman intends to remain an active Executive Chairman of the company and intends to continue to be involved with Echelon as much as possible. The company also announced that its Board of Directors has appointed Robert R. Maxfield, a current member of the Board, to serve as Chief Executive Officer effective November 5, 2009, while the company launches a search for a new CEO. The Board feels enormously fortunate that Mr. Maxfield has agreed to serve in this capacity. Mr. Maxfield provided outstanding leadership to the company during 2008 while the company carried out a search for a Senior Vice President, Products; he has served as an advisor to Mr. Oshman since that time. He is intimately familiar with the company, its products and its business, and he will be able to be immediately effective in this role. Mr. Maxfield will continue to serve on the company's Board of Directors; however, he will no longer serve on the Compensation Committee. In addition, the Board has appointed current director Betsy Rafael to replace Mr. Maxfield on the Compensation Committee.

Echelon Corporation reported unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2009. Revenues for the quarter ended September 30, 2009 were $23.7 million compared to $29.5 million for the third quarter of 2008. The GAAP net loss for the third quarter was $8.2 million, or $0.20 cents per basic and diluted share, compared to a net loss of $5.4 million, or $0.13 cents per basic and diluted share, for the third quarter of 2008. The non-GAAP net loss for the quarter excluding stock-based compensation expenses was $4.6 million, or $0.11 cents per diluted share, compared to a non-GAAP net loss of $1.7 million, or $0.04 cents per diluted share, for the third quarter of 2008. The company reported loss before provision for income taxes of $8.062 million and loss from operations of $7.556 million compared to loss before provision for income taxes of $5.228 million and loss from operations of $5.934 million for the same period of last year. For the nine months, the company reported net loss of $28.306 million or $0.70 per basic and diluted share on revenues of $64.504 million compared to net loss of $19.579 million or $0.48 per basic and diluted share on revenues of $97.252 million for the same period of last year. The company reported loss before provision for income taxes of $28.275 million and loss from operations of $26.858 million compared to loss before provision for income taxes of $19.349 million and loss from operations of $20.694 million for the same period of last year. The company reported non-GAAP net loss of $17.557 million or $0.43 per diluted share compared to non-GAAP net loss of $8.843 million or $0.22 per diluted share for the same period of last year. The company reported net cash used in operating activities of $10.983 million and CapEx of $1.291 million compared to net cash provided by operating activities of $2.037 million and CapEx of $3.474 million for the same period of last year. For the fourth quarter of 2009, total revenue to be approximately $33.0 million to $35.0 million, with NES revenue accounting for 50%, LonWorks revenue 32%, and Enel project revenue 18%. Non-GAAP loss per share to be $0.06 to $0.10, based on a fully diluted weighted average shares outstanding of 40.8 million. The company reported that its GAAP loss per share of between $0.15 and $0.19 for the quarter.