TKOI - Earnings call transcript Q2 2019

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Operator

Good morning, and welcome to Telkonet's Second Quarter Earnings Conference Call.

As a reminder, today's conference is being recorded.

Before I turn the call over to Jason Tienor, Telkonet's Chief Executive Officer, I would like to read the following statement. Certain statements included in this conference call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand and the company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects and internal issues in the sponsoring client. X-K factors found affect statement in its on potential results company's and on Securities reports be the can the Form information that Commission. the could financial on and Further Exchange with filed company's registration obligation Telkonet discussed today update to is to items subsequent reflect under developments. no

Investor remind at that for link a replay call would Relations of be website will the Telkonet's section I Lastly, everyone recorded like www.telkonet.com. via available to this and available in made

to like Telkonet's would With the to call the Tienor, I that, Tienor, Jason to turn begin. President discuss over CEO, and you results. Mr. may

Jason Tienor

Thank you, Good to morning. this you everyone, and Operator. joining us for morning thank

Let morning, unable time-sensitive the available for website afternoon. I of that shift be the had me date to full we this anyone. for to from trip in complete on leaving event didn't on But Unfortunately, change this and the to due remember that cause inconvenience too we to begin our will reply. be time attend an I'd a by for said, our it of apologizing hope please that, the those our call normal much call operator as schedule.

our saying positive has shift by our in the ramp a begin ability energized to IoT the quarter capitalize we're successful of and year to straight fourth like I'd we're encountering. how quarter-over-quarter, and begun recognized we by growth the on completed and that that Having growth it. industry year-over-year commercial

of channel by the proof our and that continue and we as as momentum growth strategy. Our pipeline continues our of to build, the forward-looking strong and evidenced backlog to success carry partners

our utilizing tariffs evaluate to have while our continued to against our has resources, largest to shared products, One being to been that unfortunate to steps alternatives to partners continue review facilities, working removing this continue manufacturer half the a the tariffs the is the the due benefit some completed, current that recognize And pain performance first of the the in While for we of with impact. the current analysis and of negative in the including situation of counter leveled is our identify pressure to adverse work unable on manufacturing we of been manufacturing solution next the through taken time. repositioning thus year prolonged moment. this at alleviate event we've impact that positive of development of import unfortunate

global IoT is impact to a uncertainty economic environment. unease we've the or while from Additionally, each due has growing what in and trade automation dramatically for current created recognize how by seen a economic the wars. to in affecting the this continue we on years, watch arrest and appetite markets expanded XXXX the keeping our solutions financial of markets past overall constant We're

uncertainty current With a the see current return the we'd markets. and believe stable target to growth market the surge the of reduction our a we phase more in economy, beyond

year's growth once resulting our in of market excited of and we're over of recognition approximately growth history the our the today to quarter $X.X our of again quarter quarter prior quarter forward, the strength relationships. demonstrated XXXX the in our revenue second Moving and solutions, company, that XX% quarterly penetration year-to-date. largest Recognizing and channel the XX% growth million, announce

year's a our momentum be to by is shaping demonstrates In quarter XX% continued This XXXX XX% partners year generated overall. that channel prior revenue the addition, increased year-to-date. and quarter record over up

new channel year's XX% results success revenues. the these full of With continues in books, we've to The and sales year last drive and half of the growth recognized marketing of partner already our year efforts in heights. to our

see as one of several have markets, new afternoon Relationships strong and international most on largest of to be the their to our our penetration potential our health international market and year-to-date fueled channel. this sales XX% into this military, enormous expanded trip continue our growth I'll active note, customers solutions. for present and international growth. growth well to conferences, one integrated contributed Having of And seen leaving growth at in an to potential that is the side activity expansion of On as visit Telkonet's and like MDU/MTU. partners accompany, also performance, this has their these such current secondary a we as care

discussions initiatives capabilities expand ability distribution and ongoing to new significant The We also through to and with strategic well market provide as increase continue revenues additional minimal agreements integration, partners OEM with to expand opportunity our with the manufacturers. access costs.

we highlights A few the housing phase the import largest the second performance, identification by quarter's the one able the the military the of partners, prior tariffs; with per increasing revenues revenue of employee include governmental strategic project ongoing of partnership per to compared in period; a of quarter. shatter of the of the first to domestic a XX% total our for impact high through long-term $XX,XXX at for previous employee to quarter our initiative X-month tremendously other to were completion revenues and of XX% the the when negative ESCO offset

stage lastly, of an of neared And our strongest full imminent new intelligent of partners, proper an a this products, one automation completed brand marking Marquee deployment rapid JCI. for of the the the we release innovative the market device. partnership also We've our end engineering the first with project property one in by EcoInput, of of extremely reaching newest prototype

this order necessary not due expectations to adjustments profitability we make make While reached has a number factors, to of our continue a reality. in to the

quarterly total has the debt, commercial additional an uncertainty impact losses; and economic totaling of of the noncash tariff quarter's markets. almost of the ongoing total quarter's and in reserve resulting included, the significant impacting battle, as impact The losses; target largest almost the mentioned, in $XX,XXX $XX,XXX a of X/X inventory the the that our in performance global impact factors on of our bad spending X/X

slow ongoing include: we address offset and alternative of efforts leverage markets campaigns SG&A moving designed to in secondary Several moving implement marketing resources increase existing market; increased recognition strength strain items sales campaigns and and limit assist measures channel continued opportunities. to of and of that the items; inventory performance, improved our spending volume; with their and to the tariffs; maximizing finally, ongoing precautionary to target in across partners ongoing the continue slow-moving bring inventory import research scale in inventory one alleviate our pipeline; these the line reducing continued while manufacturing to to placed adding operational to expanding turns of adjustments planning growth to channel and

manufactured performance adjust the of trends, this levied of operations variables, market been and significant one to products. that emerging the and to other While we continuingly on our review most impacts tariffs has structure import our year

believe expense quarter our full initially that while the range. this own see would a the we customers exercise and the catalog, product to burden impact initially beginning recognized to normalized we the in share third product expect tariff wore the of be return the we financials, and to enabling process tariffs in itself short-lived a of move partners a results quickly, to our we resolve situation margin has the the While on issue manner. us Thus, of Thus, through of this repricing and fully quarter. with our made evolved our second during decision

ongoing on discussions regards continue to several strategic we have industry Finally, to our with fronts. review,

continued when the in my value actually our hope performance discussions. evening of these these conversations performance impending value The this and and operational to we these second the a quarter of trip in strengthens is organization through growth. participating result discussions, solidify And

Mushrush. With like over Gene? hand Gene to call Officer, that, I'd Chief to Financial the Telkonet's

Richard Mushrush

Ladies Jason. and quarter and thank financial Today, for summarizing I'll joining year-to-date results. you XXX be second you, good Thank us. morning, gentlemen, our and

$X.X expenses, of product the year, a were revenues. of million, or the $X Telkonet a million for period tariffs, prior and X% XX% installation Recurring from to last obsolescence June the contributing revenues grew X% total in of instrumental in of growth. XX% the in decrease $XXX,XXX this million import use the cost million, prior recorded $X.X hospitality XX, quarter the by year. For were for same increase to profits $X.X a quarter governmental to inventory material revenues offset and as Gross Increases contractors inclusive logistical period year. compared same in ended XXXX, compared markets to down reserve, decreases percentage increases the

X% tariffs During the imports gross our month, imposed profits. approximately quarter, last a by a note, on to supplementary on manufacturing On mid-XXXX. Chinese related informed of plants Vietnamese adverse the an facility operational resulted have supplier impact in Chinese

personnel-related to $X.X and in to a million, debt XX%, reserve were compared period professional increase same million expenses. expenses XX% Selling, the general in for increases expenses bad attributable and primarily XXXX. increased the $X.X Operating the administrative services, for quarter

compared XX, XX% and and expenses Despite $XXX,XXX a XXXX, for $XXX,XXX the operating of increase, We and the year. to for period of and for adjusted non-GAAP operating XXXX revenues respectively. to prior June same XX, negative as incurred quarters respectively. quarters XXXX the of XX% percentage the ended EBITDAs, $XXX,XXX reported June measure ended a We losses fell $XXX,XXX XXXX, monetary

Product compared million, of factors period. revenues revenues this hospitality represented compared to results, were $XXX,XXX. XX% Recurring and prior prior current year-to-date XX% partners from a increase and Total to year. were key $X.X markets distribution improvement. million the to revenues $X.X to quarter increase increases in governmental XX% the resellers of value-added an derived Similar in year increased

to contractors, decrease same Gross sales on Year-to-date adverse increases year. cost last contributors in tariffs net imposed on fell up efforts the increases to audit in Despite percentage use salary, as a were a and increase. fell $X.X of XX% compared inclusive logistical recruiting import to margins to this to profits operating commissions of compared changes a gross expenses, imports increase, period $X.X X% fell to resulted as Contributing XX% remain $X.X last expenses a in approximately X% in million the year-to-date of and revenues XX% revenues. year. by in XX% X% X% and as material million, gross of Year-to-date to percentage the legal when increase year. well services expenses an decrease Tariffs due profits. as product impact were to million, of operating Chinese offset prior from monetary installation

to outstanding a The days a difficulties as opposed collection June of outstanding million June of a XXXX borrowing this approximately reported an measured receivable to equivalents operations XX, used losses operating approximately We time respectively. from million June was assets $XXX,XXX balance available result the on surplus, current million current $X.X outstanding June X XX, XX% $X.X $X.X incurred XXXX as XX, of XXXX, million negative last both and adjusted capital cash $X.X capacity An and $X.X time this improvement We million of year. in days. to compared of months as increase million million $X.X to of of to first compared million We with in facility less at at during accounts and months EBITDAs our $X available period. XXXX the by million and compared the XX growth year. the respectively. reported timing $X.X last last $X.X ended of to Cash $X.X in XXXX, is million in evidenced year of year-over-year at X $X.X borrowing liabilities, approximately surplus $X.X XX, balance and million at compared $X.X an X year. We capacity was reported prior credit XXXX, million operations year-to-date XXXX, and at of with million approximately for working

dropped this ratio year. million million to Our from current last to $X.X compared time $X.X

cycle, a this business translates into opportunity greater days via time last less efficiency fund liquidity, company's means an capacity the XX leverage to cash increased assets XXX cycle more in managing year. liquidity, need and borrow, Our and working to spend an A capital from increased days which of at cash indicator discounts conversion to expansion. to shorter

driven disappointed are year-to-date option. percentage quarters is from a market by are growth the unchanged revenues, while while costs automatically for a year-to-date cheapest not adoption that revenue was the of the loss last encouraged the relatively concurrently year, we Although material improving being sign product consecutive as we by decreasing

Jason shareholders, for you continued Officer, thank back call In and to your I'll support. Tienor. closing, thank the to you Executive specifically, our President for Telkonet's interest, and now your turn Chief

Jason Tienor

might Thank the questions I'll the you, back that, any audience over With Operator? operator take the call turn Gene. that to have. to

Operator

Instructions]. [Operator

RBC Our first with question McPeters Wealth Doug of from Management. comes line the

Warren McPeters

really Jason, numbers with way and you're impressed I'm revenue those impressive are the growing.

Telkonet, have leading we'll a And since you've profit? been we However, a ever expect profit? make made ever we do

Jason Tienor

Two We Telkonet's Telkonet years. to yes. with EthoStream, divestiture profited prior of

Warren McPeters

bank. like No, when I in more put are the money than mean revenues expenses, you

Jason Tienor

in -- profited have role that two Yes, Telkonet with years. this here we Correct. I've for years. time, since since been XXXX. Since X

Warren McPeters

ever the a profit And in we'll future? make Okay. expect do we

Jason Tienor

us, this approaching the full losses in bulk company for it, if significant hurdles here and way make that. we quarter, team Doug. do, point significantly year, organization, of the is be the that tariffs that the an as we thrown we the are that's Unfortunately, recognized, the is have us market reached absolutely that I profit allows of for We in you've industry front just now of continue believe those from to remove not equation, this to why closer in are the see to the to all inflection year, -- as we my as able core its believe a is purpose myself the do we're seen such moving, to the an would but entirety.

hope to direction. we're we continue strive to and that in moving goal, that So we that achieve

Warren McPeters

to And Telkonet anybody share? especially a price Does exists, more that Street? know do with we at have exposure the Wall $X.XX any

Jason Tienor

try And question considerations and try that few are technology we general. are and as as economy, bring we or like continue not If existing ideas company investors to as that can. you'd pursue, That's to this a shareholders, a that Unfortunately, here. hard for well the this in number current we're to But to for it's continue as very into we're a fact most you're the we the our condition, company technology, in answer. new there as people audience, customers, monitor the the battling to current for. to stock in microcap that partners a both to space externally all the stock investors the attractive any business, looking well -- of publicize and

Operator

[Operator Instructions].

Our a next from line comes Craig Private Boost Investor. question the [ph], of

Unidentified Analyst

that further last to of So I go guess off a little call.

listed to reverse far listed? what get plans some about that maybe as do and exposure, gaining so As our get a split future could we

Jason Tienor

proxy Craig. you, on reverse gives appropriate question listing at annual The so us to the to the the ability Thank with regards do time.

as timing as should that the and a So of should larger company, we plans feel, have take activity a do it that definitive the place We when larger part transaction the don't undertakes. as of that be. company

around conversations be have how and utilized. to it continue We that might best

we an something that always can't share I it Craig. that discussing proxy their and with continuously it But definitive are on So you have annual timing, it, Board on has understand because is because we consideration. the

Unidentified Analyst

one question. Okay. last And guess I

you part started on year? this elaborate just a more and least, could initiatives tariffs the the this, If at if be first plan those coming the if Or manufacturer could be if year, of reduce coming do in -- little of they to to earlier? first that it'll for part how the

Jason Tienor

RFPs manufacturer, different cost we impact the that market We've significantly operations reviewing current current absolutely. is which the alternative were how Unfortunately, our this our the started in than our number into the No, Yes. actually manufacturer. on of tariffs down we based by could path first of higher of outside a China. of manufacturers put

step whether much of or discussions products could, them and receive other and existing pricing. next alongside our better ours, and existing through work with working scale cooperatively, facilities parallel products larger with their to whether increased us might begin for manufacturers of determining So better we partners was

one of back couple exercise and our with vendors work that our that we're still We're from. that partners through that a we numbers of moving waiting found actually largest

last, decrease are place So China. that there we more will begin the moving with place cost what they're those impact have that the Mainland through have are already of put existing themselves. might facilities vendor, outside a the in other of vendors tariff that tariffs to currently of because of enabling facilities avenue purview have doing avenues outside take currently short-term that we pursuing we're is and to our existing that production year them China conducting is next our the outside The

running that would through those Unfortunately, how to to sooner, regards move production if, their they love So have with and we to facilities case. moving can that's question, and for hands up entirely quickly them occur lines. have that if those our we further and your in be the could

Unidentified Analyst

would first you was to will I year, part didn't be be You make that temporary? me just that early for it initiative more know resolve It of doesn't the and kind if further just itself? something the was situation permanent this Or that if would any next of were maybe that you could than something tariff part seemed to indicating that the go year. see it of

Jason Tienor

We would be our facilities them. permanent, open, expect to continue remain production will [indiscernible] it a as facilities, running those Craig, because we and as the opening facilities long through more they're

Unidentified Analyst

bit. guess, question. cash to it to our quite me through to a be seems went close was reserve we I as through resolved seem down just that burning yours has? wondering, pretty Is It had is half it? don't can Okay. burn to reserve get of wondering, we whereas been year a cash just continue one ago. maybe something I'm as last cash concern we it that a what I'm of much that the

Jason Tienor

It's or going is increasing which burning We The having observation, cannot year year our spending And it Craig. and have its concern through strength cannot with sell products obviously, a increasing understandably, without a and be more rate cannot astute grow because We without of where inventory. were significant obviously, more in we between and without dropped. difference, and a where a for our inventory. more the concern. very that, more displaying are business, is we this the is business cash. install collectibles though, Cash is to cash us, last the

$X.X $X.X quarter, the time. where which we the year to, think, or the accounts want XX% of were inventory, the is roughly we $X.X last say in end the million before. I quarter, higher the receivables, is, which of again, I where at were were we $X end look than of At were million at million same in you year million, if to double So we closer carrying

So accounted cash the and number actual are the that quarter, the ongoing projects, beyond large extend while for be as $X.X than inventory held the also they during which a being quarter receivables in we significant order. not as quickly, projects more thus the a of had the second accounted and cash in have and first million during accounts taking and We current projects consumed in are those aren't quarter may for of well boundaries quarterly revenues. place

seems that being cash actually that, consumed make, that of while the far at concern in monitoring growing decision So quickly, understand and to line fairly we this quickly it's at conversation or point be it where end as it you're secure. that constant is more and because be consumed well. spend, Board Having this every we're consideration in a we moderate make you constant closely time that sure at at the to level very of will you grow said

Richard Mushrush

I over year. prior has last was And to witnessed the what that want burn the that months, is rate X point in compared to slowed well cash just as

Unidentified Analyst

Okay.

So to, increase like it our it Do to as a such reserves, sounds plans really rights is offering? need have any to, better. possibly you we if cash getting

Jason Tienor

strategic review advisement that to and as taken the all conversation business. consideration, Board alternatives the the another we available That's under review investment consistently Craig, bank, industry of with the part has the

value. is The available maximize well. shareholder other are as So that to thing opportunities want to cash-based we there one do us

is equity the than we're expense to to going profitability achieve inflection sure such or want as So that to pursuing this an that taking too on at undue quickly, able company rather activity not point. if be that investments point we make

Operator

Christie comes line the [ph], Joe Investor. Private Our next a question from of

Unidentified Analyst

just cash on to the it's Gene, burn want you up question. slowing. just I it on said and follow touch And

course? do an the how or Where with quarterly burn the we quarter And long can with June $X SG&A think and loss do got? maybe $XXX,XXX whatever For worth that forward the we've you is I -- ended see going same XX, the, or continue million on the try you monthly backlog to cash. guess, to cash

Richard Mushrush

a things, Well, else realistic in mathematics. nothing if it's activity think which to all basically flows I Cash cash. changes, is the approach, simple a if compare don't used

of are had to through cash late Jason in million burn from million, As that's mentioned, factor, averaging 'XX. this you coming going have probably be I 'XX AR $X.X XX/XX we a give month. To April over of of in approximately $XXX,XXX $X.X X

literally, XX through what, months, X but From bit So XX months. for a X/XX, little January $XXX,XXX. that's over not now

reduced As will revenues in or improve, opinion. burn continue to as are well that my drop, cost as mitigated,

Unidentified Analyst

We've $X.X million the on well? left as got facility credit what

Richard Mushrush

that's asset-based my to tied And balance. predominantly that's AR Correct.

Unidentified Analyst

you. Got

Okay.

Richard Mushrush

pure it's that means So capacity not improved, as my on which better improving, revenue far line borrowing AR I that's relying my necessarily as that means is reserves. on have cash

Unidentified Analyst

And to that's away in of in flow, build available. cash I understand the to, at at the just the more Right. obviously, it's decrease eke obviously, loss -- day, net about completely going the AR, continue end cash a total the

projection of I So as what loss being that's -- whittle theme the to out, forward? the going net calls able I'm guess figure too, trying a of do is terms see you to month per what these down in what's

Richard Mushrush

needs restructuring. the Well, a increased combination well I be to of both point. cost going revenues as to that's as it mean, key some be

Unidentified Analyst

Got you.

Jason Tienor

half our of approximately half tariffs. of the to first quarters are this attributable year, If the of our -- look losses two you at are losses

as results, quickly can works we where the Gene strategic the in of So might the sooner profitability. associated to those meantime, the situation regardless and that line the expenses our of be out, goal we mentioned, do outside affect cross situation we with of that tariff there continuously itself tariffs, the review at. we how But achieve more operations everything can

Unidentified Analyst

everything. that it of something second being the be the I to But product prices, quarter to product new at will X, of acquisitions of the to and that acquire terms the the without on -- product those from and understood, facility are -- see -- saying able so get tariffs, being in kind new at tariff able running the I or in about XXXX? you guess, So really any factory January obviously, that the Vietnam going X January up of is don't you --

Jason Tienor

business much The to full to and I plans line venture be product that Does in no, because interruption would in Obviously, season line. the that us entire be well. afford by their preliminary to is risks is just they done either going the very else, held say to But stages is construction we moving it like Obviously, the that be product needs face like operational have mean they we're that. our it's anyone also phases. to can been schedule as can't delay things what manufactured facility? weather will a at communicated bad construction, mid-XXXX.

So us my given best to what mid-XXXX, scenario. want opinion is pretty clear here, case they've I in as be

Unidentified Analyst

you. Got

Jason Tienor

But should X, widget is expectations out overpromising delivering, XXXX. our February may and coming be But we manufacture of possibly. be don't I Every Vietnam. now under think that

Unidentified Analyst

like, to I operations. a the Yes, continue get drop-dead expenses keep as can longer, I kind we to Okay. guess for last see or to down, can revenue just it just cutting mean, have it. grow of is, just have when date to back again, feel I start cash we looks you But the and as guess trying when long

grow, As revenues help out. should as that to long continue us

Operator

Brian investor. question next from of a comes Nelson, line Our the private

Unidentified Analyst

compared question Vietnam to things job move. Great was labor Chinese making and Last... working labor. My hard

Jason Tienor

manufacturing looking loss. reposition the whether existing the impact that should our What shouldn't going of completed to analysis not pricing when for manufacturer their much they it resources current was recognize impact our a much significantly. for customers. pricing gain their least to a We're where recognize they Honestly, of or

Operator

the from David comes with of line question Wells next Our Belport Fargo.

David Belport

upon Listen, debt expand second? for you two questions. could expense, bad the a One, that

Richard Mushrush

not is your an of general XX debt X at component applied based bad if approach least component, We Yes. that's our last The X reserves AR months balance. the with upon X. activity against

June, as for grown, general end actually, the At can customers of greater second component reserved. the reserved you reserve has strictly have that have upon be, of will three than mathematical as will apiece. balances customers, imagine, so $XX,XXX specific all based percentages. And my AR I I So have that

David Belport

Okay.

curious worked. It pretty as Okay. standard. sounds I was that just how to just

own Roth the away one and needles of whether stock, Roth in Street kind if its you it's of the this are your someone all away, there's out I'm or Second through value shareholder there question, just tariffs, for Jason, minds. going I on, -- taking the probably continue engagement? obviously, people's is that -- 'XX. the the most a the in guys way, some expand earnings moving done in Could push going just a and wondering, upon a But going that, or know to out happened pressure. you Capital to connection. seeing I'm just merger just smoke once July who kind what's The the of I'm engagement you get or put it's move something over, a and anything clears, on Capital you're trying wondering needle stock continue can't if there could to basically profitability said upon but because can that wondering are expand is and just that here on you

Jason Tienor

Sure.

we've a with had how markets the joint is, venture, one partner the of we reasons cooperatively discussions lines together, which those we've along the number simply that and might lines of their partners only course of might had year with, very revenues that of lines point, organizations the be M&A, this see deal honest, of complementary the the how we of all not work with conversations, we but import conversations, through last parallel to other ours. at that So in service our along along of well channel or service and with product you a numerous lines Through the grow.

a and a surge to entity this on I this that of been simply as and new conversations very trip, begun going due is sharing to partners trip, So started us we've as have the through this significant that within it's that earlier, the international which significantly, They mentioned We've X seen us, line integrations one current relationship. serious I'm working business months, through regions conversations we've those of markets do. -- lot the larger with an feels largely because lot why, in brought enormous one of international met the a new And through work. last those having brought conversations. business internationally our much how product we their our with in of

how foster that watch grow we're to have regional these the trying And and dealing they to ongoing. this and we're company's continues distributions with it. party particular So performance well

waiting talked ongoing, the hoping ongoing see with what Unfortunately, tariffs and conversations services. it, continue IoT to planning off, I I is mentioned or in there as A are the call on what of not. this the were products external about for U.S. instituting to second but call, these just their growing impacts, waiting They're saw of appetite December. were as some trend quarter our that starting an our been industry on basis. like, whether earlier, So as number were has that items they we we here placed delayed and throughout to until results September is we're the on on determine current of hold, conversations the kind

David Belport

Yes, I just hear morning. it this

Jason Tienor

pick expect of some change, for that a as see those uncertainties steam. a be these us. sign will might up Dave, bit it Yes, great of conversations we begin we to But

term, us. I share time. to and continue for near this more bring that's you, at to without the during moment have to certainty can opportunities continue about all We them they in having new But

David Belport

third know and know first guys that continues asking and a out? and and so that like third your since anything and and, not response do. is Obviously, and question, numbers quarter quarter. I'm you that Typically, far how this historically, year, again, does not your pan this you certainly, If public. obviously, quarter quarters, terrific to fourth the way, Last I your Okay. not the second it fourth

Just, in quarter historically, fourth to second? and how does first and compare third

Jason Tienor

There's typically a the a slight fourth. between off drop quarter, and second the third but from leveling

as worst for fourth, we of leveling ramp well secondary what third which for down us. hospitality, back happen the to off We And the in other just tail a off-season quarter a all and because their first as during bit the they is in typically shift people year quarter, in second So the then is the with the the third start educational in closing is as the universities. up the budgets. They see we're dramatic off quarter drips deployments. markets a quarter

the the we of that but growth significant mentioned which have expect a year-over-year, to that funding questions, to really results, right now. So full is year in between share, flow have we're difference But as want to maintaining rapid we response we see safety a level of as we the seeing, the we what certain one to the bank. cash increase manage during we're

So while this it's growth possibly year, would a during we in than more could see what conscious Dave. we see the time, point effort at

David Belport

something and trip guys. to be guys. will hopefully right to be. quarter. going this you All Good significant, good is Hopefully, But luck

Jason Tienor

Thank you.

great a have afternoon. You

Operator

questions to in no back are hand I'd the closing further There like for queue. to management comments. the call

Jason Tienor

Thank you very everybody call. much, today's joining for for us you to operator. Thank

great ir@telkonet.com. morning. If wish out We you questions, everybody hesitate us a please have any to to further at reach don't

Operator

you Ladies and for does gentlemen, teleconference. conclude Thank this your participation. today's

lines disconnect may have your this time, You wonderful day. and a at

Telkonet (TKOI) 13 Aug 192019 Q2 Earnings call transcript