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TMCNet:  KonaTel Reports Third Quarter 2021 Financial Results

[November 10, 2021]

KonaTel Reports Third Quarter 2021 Financial Results

DALLAS, Nov. 10, 2021 /PRNewswire/ -- KonaTel, Inc. (OTCQB: KTEL) (www.konatel.com), a voice/data communications holding company, today announced financial results for third quarter and nine-month period ended September 30, 2021.

Third Quarter Financial Summary and Recent Business Highlights

  • Revenues of $3.6 million, up 43% compared to the third quarter last year.
  • Gross profit of $1.6 million, up 80% compared to the third quarter last year.
  • Operating income of $372,000 compared to an operating loss of $(56,000) in the third quarter last year.
  • Net income of $320,000 or $0.01 per share, compared to $20,000, or $0.00 per share, in the third quarter last year.
  • H.R. 3684 – Infrastructure Investment and Jobs Act ("Infrastructure Bill"), which includes additional provisions for a new government funded broadband program, was passed by the U.S. House of Representatives.

"Our momentum continued in the third quarter with sequential revenue growth of 24% driven by increases in each of our two business segments," stated KonaTel Chairman and CEO Sean McEwen. "In Hosted Services, expansion of our agent sales channel outreach and enhancements to our sales platform are enabling us to pursue and capture a larger share of market opportunities. We also added three new senior level executives to the management team who have successful track records in large telecom and bring a wealth of industry expertise to our organization. The sales teams are increasingly focused on diversifying our revenue mix and the sale of higher margin products, which is having a meaningful impact on our margins. Gross margin was up more than 900 basis points for the third quarter to 45.0% compared to 35.7% in the prior year quarter.

McEwen continued, "In our higher-margin Mobile Services business, which includes retail and wholesale cellular and IoT mobile device services, revenue is up 50.4% year-to-date on increased volumes driven by new agent distribution and recent approvals for participation in government subsidized cellular and broadband data distribution programs. Specifically, the Federal Communications Commission's (FCC) Emergency Broadband Benefit (EBB) program was opened for enrollment and as an approved provider of program services in several states, we have seen a marked uptick in the number of customers we serve under the program. In addition, expansion of our Lifeline mobile services into the state of California was approved earlier this year and accordingly, we expect distribution of essential voice and data services to California residents under our Infiniti Mobile brand to begin as planned later in the fourth quarter. According to the FCC, there are an estimated 3.6 million Lifeline eligible households in the state of California with nearly 2.4 million currently unserved. As one of only a handful of approved national wireless Lifeline providers to hold an FCC approved Compliance Plan, we are well positioned to provide basic cellular and wireless broadband data services to millions of eligible new customers. Furthermore, we recently contracted with two new master agencies with national distribution to further expand our channels and reach many more EBB and Lifeline eligible households across several states. Distribution through these new channels is on schedule to commence later this year."

"The Infrastructure Bill that was approved this past weekend provides for $65 billion1 in new investment for broadband internet to advance government efforts to ensure all U.S. residents have access to reliable, high-speed internet," continued McEwen. "If signed, this legislation will significantly increase our total addressable market and serve as an additional catalyst for future growth."

Year-to-Date Financial Detail (First Nine Months of 2021 vs. First Nine Months of 2020)

Revenues increased 32% to $8.9 million compared to $6.7 million, reflecting a 17.6% increase in Hosted Services revenues and a 50.4% increase in Mobile Services revenues.

Gross profit was $4.0 million, or 44.5% gross profit margin, compared to gross profit of $2.5 million, or 37.7% gross profit margin. 

Total operating expenses were $3.4 million, up 17% compared to $2.9 million. This increase was primarily a result of infrastructure expansion, primarily payroll, professional services, handset costs and application development costs to support sales channel growth.

Net income was $428,000, or $0.01 per diluted share (based on 43.6 million weighted average shares), inclusive of non-operating, other expense of $167,000 related to stock option expenses and interest, compared to net income of $263,000, or $0.01 per diluted share (based on 44.1 million weighted average shares), inclusive of non-operating, net other income of $601,000 primarily related to SBA loan proceeds.

Balance Sheet

The Company ended the quarter with $1.4 million in cash, compared to $715,000 in cash on December 31, 2020. Long term debt was $150,000 as of September 30, 2021, and December 31, 2020.

About KonaTel

KonaTel provides a variety of retail and wholesale telecommunications services including mobile voice/text/data service supported by national U.S. mobile networks, mobile numbers, SMS/MMS services, IoT mobile data service, and a range of hosted cloud services. KonaTel's subsidiary, Apeiron Systems (www.apeiron.io), is a global cloud communications service provider employing a dynamic "as a service" (CPaaS/UCaaS/CCaaS/PaaS) platform. Apeiron provides voice, messaging, SD-WAN, and platform services using its national cloud network. All Apeiron's services can be accessed through legacy interfaces and rich communications APIs. KonaTel's other subsidiary, Infiniti Mobile (www.infinitimobile.com), is an FCC authorized wireless Lifeline carrier with an FCC approved wireless Lifeline Compliance Plan, authorized to provide government subsidized cellular service to low-income American families.  KonaTel is headquartered in Plano, Texas. 

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this press release. This press release should be considered in light of the disclosures contained in the filings of KonaTel and its "forward-looking statements" in such filings that are contained in the EDGAR Archives of the SEC at www.sec.gov.

_____________________________

1 https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/

 

-- Tables Follow –

 






KonaTel, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)



September 30, 2021


December 31, 2020

Assets






Current Assets






Cash and Cash Equivalents

$

1,358,722


$

715,195

Accounts Receivable, net


994,059



434,801

Inventory, Net


107,986



17,786

Prepaid Expenses


16,022



2,365

Other Current Asset


164



194

Total Current Assets


2,476,953



1,170,341







Property and Equipment, Net


40,663



79,571







Other Assets






Intangible Assets, Net


1,033,497



1,517,163

Other Assets


154,296



172,065

Investments


10,000



-

Total Other Assets


1,197,793



1,689,228

Total Assets

$

3,715,409


$

2,939,140







Liabilities and Stockholders' Equity






Current Liabilities






Accounts Payable and Accrued Expenses

$

1,138,451


$

1,042,567

Note Payable - current portion


1,312



94,339

Right of Use Operating Lease Obligation - current


66,882



66,323

Deferred Revenue


-



37,677

Total Current Liabilities


1,206,645



1,240,906







Long Term Liabilities






Right of Use Operating Lease Obligation - long term


145,796



15,399

Note Payable - long term


150,000



150,000

Total Long Term Liabilities


295,796



165,399

Total Liabilities


1,502,441



1,406,305

Commitments and contingencies






Stockholders' Equity






Common stock, $.001 par value, 50,000,000 shares authorized, 41,267,286 outstanding and issued at September 30, 2021 and 40,692,286 outstanding and issued at December 31, 2020


41,267



40,692

Additional Paid In Capital


7,711,992



7,460,632

Accumulated Deficit


(5,540,291)



(5,968,489)

Total Stockholders' Equity


2,212,968



1,532,835

Total Liabilities and Stockholders' Equity

$

3,715,409


$

2,939,140

 

 

KonaTel, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)



Three Months Ended September 30,


Nine Months Ended September 30,


2021


2020


2021


2020

Revenue

$

3,612,861


$

2,527,281


$

8,919,573


$

6,741,830

Cost of Revenue


1,988,624



1,625,481



4,946,786



4,196,528

Gross Profit


1,624,237



901,800



3,972,787



2,545,302













Operating Expenses












Payroll and Related Expenses


636,329



505,236



1,817,200



1,403,315

Operating and Maintenance


461



89,300



1,211



384,049

Bad Debt


-



39



427



1,729

Professional Services


77,335



72,350



206,671



198,300

Utilities and Facilities


39,726



8,438



110,523



24,928

Depreciation and Amortization


213,552



246,090



640,657



763,358

General and Administrative


32,668



17,641



93,994



44,777

Marketing and Advertising


37,350



5,534



50,073



7,350

Application Development Costs


179,427



-



396,715



-

Taxes and Insurance


35,784



13,595



60,479



55,720

Total Operating Expenses


1,252,632



958,223



3,377,950



2,883,526













Operating Income/(Loss)


371,605



(56,423)



594,837



(338,224)













Other Income and Expense












Other Income


-



81,070



-



624,518

Interest Expense


(2,573)



(4,694)



(12,328)



(23,459)

Other Expenses


(49,197)



-



(154,310)



-

Total Other Income and Expenses


(51,770)



76,376



(166,638)



601,059













Net Income

$

319,836


$

19,953


$

428,199


$

262,835













Earnings per Share












Basic

$

0.01


$

0.00


$

0.01


$

0.01

Diluted

$

0.01


$

0.00


$

0.01


$

0.01

Weighted Average Outstanding Shares












Basic


40,899,569



40,692,286



40,758,495



40,692,286

Diluted


43,565,835



44,092,286



43,434,761



44,092,286

 

 

Cision View original content:https://www.prnewswire.com/news-releases/konatel-reports-third-quarter-2021-financial-results-301420257.html

SOURCE KonaTel, Inc.


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