Telkonet Reports Strong Revenue Growth for Q2 - Expecting Profitability by Year End

10.08.2007 14:06
Telkonet, (Nachrichten) Inc. (AMEX:TKO), the leader in providing in-building broadband access over existing electrical wiring and innovative energy management systems, today announced significant revenue increases for the second quarter ended June 30, 2007.

Revenues for the second quarter of 2007 were $3.7 million, which is in the upper range of previously stated guidance, as compared to $1.2 million during the second quarter of 2006 and $1.25 million in the first quarter of 2007. During the second quarter of 2007, the company experienced significant revenue growth from several areas including energy management and federal government operations. Net income was a negative $4.6 million for a loss of $(0.07) per share. This compares to a net loss of $7.6 million, or $(0.16) per share for the second quarter of 2006 and a net loss of $5.4 million, or $(0.09) per share for the first quarter of 2007.

Ronald W. Pickett, president and chief executive officer of Telkonet, commented, “We are very pleased to report to our stakeholders that revenues at Telkonet have seen sharp increases over the past few months as several of our major initiatives have begun to produce meaningful revenue streams. We are particularly excited about growth in our energy management and federal government-related businesses with several major projects getting under way late in the second quarter. Additionally, we also experienced strong results from our recently acquired EthoStream business, which has developed into one of the largest high-speed wireless Internet access providers for the hospitality industry.“

Mr. Pickett, continued, “While strong revenue growth was seen in the June quarter, we also made important strides in reducing overall costs. During the quarter, we finalized consolidation of the recently acquired Smart Systems, Inc. and EthoStream businesses-reducing staffs were redundancies occurred. We also implemented a program to perform nearly all of our installs in-house, virtually eliminating the need for outside contractors, resulting in higher margins and meaningful cost savings.“

“During the second half of 2007 and into 2008 we are expecting further acceleration of our revenue growth. We expect our energy management business to flourish over the coming quarters as both electric utilities and building owners seek additional ways to conserve energy. After lengthy delays, several of our federal government-related programs are now well underway and are accelerating and our hospitality business is winning important contracts. We believe these events will allow the Company to further significantly reduce its cash burn during the September quarter and to achieve positive cash flow and profitability on a monthly run-rate basis by year end.“