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News Release |
MEDIA CONTACTS: | Telkonet Investor Relations |
414.721.7988 | |
ir@telkonet.com |
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For the three months ended September 30, 2012, revenue increased to $3.3 million from $2.8 million or 18%, when compared to the same period 2011.
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For the nine months ended September 30, 2012, revenue increased to $8.7 million from $8.2 million or 6%, when compared to the same period 2011.
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Gross margins of 56%, an increase of 2% as compared to 54% for the quarter ended September 30, 2011.
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Net income for the quarter ended September 30, 2012 was $0.5 million compared to a net income of $0.01 million for the quarter ended September 30, 2011.
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Adjusted EBITDA of $0.6 million for the quarter ended September 30, 2012, a $0.5 million increase when compared to the prior year period.
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Cash and cash equivalents increased over 43% to $1.1 million as of September 30, 2012 as compared to $0.7 million on June 30, 2012.
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Working capital deficit (current liabilities in excess of current assets) decreased by $0.7 million from $0.8 million at December 31, 2011 to a working capital deficit of $0.1 million at September 30, 2012.
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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 that arose from the sale of the Convertible Debentures in May and July 2008. These Debentures had 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 on disposal of property and equipment: 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 product line: In the first quarter of 2011, the Company sold its Series 5 Power Line Carrier product line and related business assets under an Asset Purchase Agreement (“APA”). Per the APA, the Company signed an unsecured Promissory Note due to the Purchaser. The note contains certain earn-out provisions that encompass both the Company’s and the Purchaser’s revenue volumes. In the second quarter 2012, the Company recorded a gain associated with the earn-out provision. The Company does not consider these ongoing transactions, and it is not an indication of current or future operating performance. Therefore, the Company does not consider the inclusion of these transactions helpful in assessing its current financial performance compared to previous periods as well as prospects for the future.
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Three Months
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Nine Months | |||||||||||||||
2012
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2011
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2012 | 2011 | |||||||||||||
Net income (loss)
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$ | 513,210 | $ | 9,336 | $ | (58,430 | ) | $ | 1,112,428 | |||||||
Interest expense (income), net
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(7,712 | ) | 23,428 | 57,611 | 237,402 | |||||||||||
Depreciation and amortization
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63,265 | 72,463 | 197,341 | 202,809 | ||||||||||||
EBITDA
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568,763 | 105,227 | 196,522 | 1,552,639 | ||||||||||||
Adjustments:
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||||||||||||||||
Gain on disposal of property and equipment
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- | - | - | (2,165 | ) | |||||||||||
Gain on derivative liability
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- | - | - | (172,476 | ) | |||||||||||
Gain on sale of product line
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- | - | (15,408 | ) | (829,296 | ) | ||||||||||
Stock-based compensation
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45,259 | 36,154 | 219,928 | 132,643 | ||||||||||||
Adjusted EBITDA
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$ | 614,022 | $ | 141,381 | $ | 401,042 | $ | 681,345 |
For The Three Months Ended
September 30,
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For The Nine Months Ended
September 30,
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2012
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2011
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2012
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2011
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Revenues, net:
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||||||||||||||||
Product
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$
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2,161,753
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$
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1,632,160
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$
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5,481,365
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$
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4,760,120
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||||||||
Recurring
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1,127,025
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1,162,559
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3,197,925
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3,445,234
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||||||||||||
Total Net Revenue
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3,288,778
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2,794,719
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8,679,290
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8,205,354
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Cost of Sales:
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Product
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1,166,848
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1,002,816
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2,969,512
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2,728,980
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||||||||||||
Recurring
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292,264
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294,846
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858,988
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849,962
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Total Cost of Sales
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1,459,112
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1,297,662
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3,828,500
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3,578,942
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Gross Profit
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1,829,666
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1,497,057
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4,850,790
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4,626,412
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Operating Expenses:
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Research and development
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251,089
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197,674
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732,154
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588,908
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Selling, general and administrative
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1,009,814
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1,194,156
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3,937,522
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3,488,802
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Depreciation and amortization
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63,265
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72,463
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197,341
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202,809
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Total Operating Expenses
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1,324,168
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1,464,293
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4,867,017
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4,280,519
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Income (Loss) from Operations
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505,498
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32,764
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(16,227
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)
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345,893
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Other Income (Expenses):
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Interest (expense) income, net
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7,712
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(23,428
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)
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(57,611
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)
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(237,402
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)
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Gain on derivative liability
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-
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-
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-
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172,476
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Gain on disposal of property and equipment
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-
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-
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-
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829,296
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Gain on sale of product line
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-
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-
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15,408
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2,165
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Total Other Income (Expense)
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7,712
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(23,428
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)
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(42,203
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)
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766,535
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Income (Loss) Before Provision for Income Taxes
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513,210
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9,336
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(58,430
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)
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1,112,428
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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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513,210
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9,336
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(58,430
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)
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1,112,428
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Accretion of preferred dividends and discount
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(308,386
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)
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(194,324
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)
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(723,252
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)
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(508,191
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)
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Net income (loss) attributable to common stockholders
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$
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204,824
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$
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(184,988
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)
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$
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(781,682
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)
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$
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604,237
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Net income (loss) per common share:
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Income (loss) per common 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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0.00
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$
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0.01
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Income (loss) per common 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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0.00
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$
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0.01
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Weighted Average Common Shares Outstanding – basic
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106,153,192
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102,970,585
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105,011,687
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102,033,143
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Weighted Average Common Shares Outstanding - diluted
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107,611,189
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104,399,613
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106,469,685
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103,462,171
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