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News Release
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MEDIA CONTACTS:
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Telkonet Investor Relations
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414.721.7988
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ir@telkonet.com
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News Release
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Completing the second consecutive quarter with both positive EBITDA and Net Income for the first time in company history
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Closing of a $1.3 million Series B preferred equity financing positioning the company for growth through 2011 and beyond
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Significant activity in Energy Service Company (ESCO) relationships for Telkonet’s EcoSmart platform
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New membership in industry-leading organizations, including the Zigbee Alliance and HTNG, driving product and standards innovation and strategic development
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Traffic on Telkonet’s EthoStream Hospitality Network has grown more 25% in the second quarter to pass 4.3 million users monthly
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Telkonet’s EthoStream Hospitality Network has added more than 130 properties and 20,000 rooms in the second quarter
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Awarding of the first ever awarded Authorization to Operate (ATO) orders for wireless/plc networking solution designated to transport sensitive information in partnership with Naval Sea Logistics
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News Release
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Gain (Loss) on Derivative Liability. The Company has historically recorded non-cash gains and losses on the fair value of its derivative liabilities which arose from the sale of the Convertible Debentures in May and July 2008. These Debentures have embedded derivatives and the accounting treatment of derivative financial instruments requires that the Company record all derivatives and related warrants, and classify all other non-employee stock options and warrants as derivative liabilities and mark them to market at each reporting date. The Company considers this a financing transaction, and it is not an indication of current or future operating performance. Therefore, the Company does not consider the inclusion of this transaction helpful in assessing its current financial performance compared to previous periods as well as prospects for the future.
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Stock-Based Compensation. The Company believes that because of the variety of equity awards used by companies, varying methodologies for determining stock-based compensation and the assumptions and estimates involved in those determinations, the exclusion of non-cash stock-based compensation enhances the ability of management and investors to understand the impact of non-cash stock-based compensation on our operating results. Further, the Company believes that excluding stock-based compensation expense allows for a more transparent comparison of its financial results to previous periods.
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Gain (Loss) on Disposal of Fixed Assets: In the first quarter of 2011, the Company recorded the disposal of a company vehicle. The Company considered this a one time transaction, and it is not an indication of current or future operating performance. Therefore, the Company does not consider the inclusion of this transaction helpful in assessing its current financial performance compared to previous periods as well as prospects for the future.
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Gain on Sale of Assets: In the first quarter of 2011, the Company sold its Series 5 Power Line Carrier product line and related business assets. The Company considered this a one time transaction, and it is not an indication of current or future operating performance. Therefore, the Company does not consider the inclusion of this transaction helpful in assessing its current financial performance compared to previous periods as well as prospects for the future.
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News Release
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Three Months Ended
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Six Months Ended
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June 30, 2011
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June 30, 2010
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June 30, 2011
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June 30, 2010
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Net income (loss) from continuing operations
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113,189 | 483,566 | 1,095,667 | (188,301 | ) | |||||||||||
Financing expense, net
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10,986 | 155,547 | 190,406 | 324,293 | ||||||||||||
Depreciation and amortization
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86,235 | 77,790 | 165,180 | 158,200 | ||||||||||||
EBITDA attributed to Telkonet segment
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210,410 | 716,903 | 1,451,253 | 294,192 | ||||||||||||
Adjustments:
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(Gain) loss on disposal of fixed assets
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- | - | (2,165 | ) | - | |||||||||||
(Gain) loss on derivative liability
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(172,477 | ) | ||||||||||||||
(Gain) loss on asset sale
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(541,326 | ) | (829,296 | ) | (696,793 | ) | ||||||||||
Stock based compensation
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63,994 | 41,401 | 96,488 | 88,181 | ||||||||||||
Adjusted EBITDA
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$ | 274,404 | $ | 216,978 | $ | 543,803 | $ | (314,420 | ) |
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News Release
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For The Three Months Ended June 30,
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For The Six Months Ended June 30,
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2011
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2010
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2011
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2010
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Revenues, net
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Product
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$
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1,776,888
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$
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1,970,286
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$
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3,127,960
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$
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3,536,737
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Recurring
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1,151,048
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1,213,115
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2,282,675
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2,230,704
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Total Revenue
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2,927,936
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3,183,401
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5,410,635
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5,767,441
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Cost of Sales:
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Product
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1,017,894
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1,012,124
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1,726,164
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1,911,907
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Recurring
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291,247
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326,062
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555,116
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631,907
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Total Cost of Sales
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1,309,141
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1,338,186
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2,281,280
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2,543,814
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Gross Profit
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1,618,795
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1,845,215
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3,129,355
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3,223,627
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Operating Expenses:
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Research and Development
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184,207
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264,049
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371,318
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529,900
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Selling, General and Administrative
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1,224,178
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1,304,845
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2,310,722
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2,995,584
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Depreciation and Amortization
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86,235
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77,790
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165,180
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158,200
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Total Operating Expense
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1,494,620
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1,646,684
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2,847,220
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3,683,684
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Income (Loss) from Operations
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124,175
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198,531
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282,135
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(460,057)
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Other Income (Expenses):
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Financing Expense, net
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(10,986
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)
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(155,547
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)
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(190,406
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)
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(324,293)
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Gain on Derivative Liability
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-
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541,326
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172,477
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696,793
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Gain on Sale of Asset
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-
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-
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829,296
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-
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(Loss) on Disposal of Fixed Asset
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-
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(100,744
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)
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2,165
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(100,744)
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Total Other Income
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(10,986
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)
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285,035
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813,532
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271,756
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Income (Loss) Before Provision for Income Taxes
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113,189
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483,566
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1,095,667
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(188,301)
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Provision for Income Taxes
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-
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-
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-
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-
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Net Income (Loss)
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$
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113,189
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$
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483,566
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$
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1,095,667
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$
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(188,301)
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Accretion of preferred dividends and discount
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(170,800)
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(39,347)
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(313,867
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)
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(78,460)
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Net income (loss) attributable to common stockholders ststockholders shareholders
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$
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(57,611
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)
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$
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444,219
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$
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781,800
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$
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(266,761)
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Net Income (Loss) per share:
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Net Income (Loss) per share-basic
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$
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0.00
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$
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0.00
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$
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0.01
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$
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0.00
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Net Income (Loss) per share-diluted
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$
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0.00
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$
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0.00
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$
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0.01
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$
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0.00
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Weighted Average Common Shares Outstanding - basic
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102,878,097
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96,916,357
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101,475,906
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96,714,804
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Weighted Average Common Shares Outstanding - diluted
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104,404,580
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97,140,595
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103,002,389
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96,714,804
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