Telkonet, Inc. (Telkonet), a US-based provider of centrally managed solutions for integrated energy management, wired and wireless networking, has reported revenues of $3.9 million for the first quarter of 2009, down 21%, compared with the revenues of $5.0 million in the year-ago quarter. It has also reported a net loss of $1.1 million, or $0.01 per share, for the first quarter of 2009, compared with the net loss of $5.1 million or $0.07 per share, in the year-ago quarter.
The company’s first quarter results for 2009 were impacted by the challenges of the current economic environment, which significantly impacted Telkonet’s largest target market, the hospitality segment. Excluding revenue from its MST subsidiary, Telkonet’s revenues decreased by 29% to $2.9 million compared to $4.0 million for the quarter ended March 31, 2008.
Telkonet reported gross margins of 43% for the first quarter of 2009 compared to the prior year period of 23%, and 35% in the fourth quarter of 2008. Excluding gross margins from MST, Telkonet reported gross margins of 52% for the first quarter of 2009 compared to the prior year period of 28%, and 46% in the fourth quarter of 2008.
Selling, general and administrative expenses were $2.2 million, compared to $3.6 million in the 2008 first quarter. Excluding expenses from its MST subsidiary, Telkonet’s selling, general and administrative expenses were $1.6 million in the 2009 first quarter, compared to $2.5 million in the 2008 first quarter.
Telkonet (excluding the results of MST) had negative adjusted earnings before interest taxes, depreciation and stock-based compensation (EBITDA), a non-GAAP measure, in the first quarter of 2009 of $0.4 million compared to a negative adjusted EBITDA of $2.0 million in the 2008 first quarter.
Our financial results for the first quarter reflect the challenges that we have faced during this global economic downturn, but we remain focused on the goal of cash flow profitability over the remainder of 2009, said Jason Tienor, chief executive officer of Telkonet. In particular, we have seen some of our core customers reduce or delay their capital investments in an attempt to weather this economy. Other customers have been affected by the delayed availability of ‘green’ funding through programs that target energy conservation. However, we have begun to see an increase in demand for our Telkonet SmartEnergy(TM) products over the past several months. With the availability of new funding, combined with the emerging federal and state ‘green’ initiatives, businesses are looking to invest in products that promote energy efficiency and deliver significant cost savings providing a rapid return on their investment. We believe that with our current business opportunities, we are still on target to achieve cash flow profitability this year, and we remain focused on increasing our sales pipeline to enable us to achieve our long-term goals of sustainable growth and shareholder value.