KonaTel Reports Second Quarter 2021 Financial Results

Rhea-AI Summary

KonaTel, Inc. (OTCQB: KTEL) reported significant financial growth for Q2 2021. Revenues reached $2.9 million, a 29% increase year-over-year, while gross profit surged 64% to $1.4 million. The company achieved an operating income of $381,000, compared to a loss in the prior year, and net income of $341,000, equating to $0.01 per share. Year-to-date revenues rose to $5.3 million. Recent regulatory approvals will bolster growth opportunities in subsidized cellular services, enhancing revenue stability.

Positive

• Q2 revenue increased by 29% to $2.9 million.
• Gross profit rose by 64% to $1.4 million.
• Operating income flipped to $381,000 from a loss of $92,000 in Q2 2020.
• Net income of $341,000 compared to $142,000 in Q2 2020.
• Year-to-date revenue increased by 26% to $5.3 million.
• Approval for participation in federal and state subsidized cellular programs.

Negative

• Total operating expenses increased by 10.4% to $2.1 million, primarily due to growth-related costs.

DALLAS, Aug. 9, 2021 /PRNewswire/ -- KonaTel, Inc. (OTCQB: KTEL) (www.konatel.com), a voice/data communications holding company, today announced financial results for second quarter and six-month period ended June 30, 2021.

Second Quarter Financial Summary and Recent Business Highlights

• Revenues of $2.9 million, up 29% compared to the second quarter last year.
• Gross profit of $1.4 million, up 64% compared to the second quarter last year.
• Operating income of $381,000 compared to an operating loss of $(92,000) in the second quarter last year.
• Net income of $341,000 or $0.01 per share, compared to $142,000, inclusive of non-recurring, other income of $242,000, or $0.00 per share, in the second quarter last year.
• Approved as a provider of cellular services by the California Public Utilities Commission (CPUC) under the Federal Communications Commission's (FCC) LifeLine program.
• Approved to participate in the Federal Communications Commission's (FCC) new Emergency Broadband Benefit Program (EBB) (www.fcc.gov/broadbandbenefit) established by Congress to provide temporary broadband data service to low-income American households impacted by COVID.

"During the second quarter, we drove significant revenue growth of nearly 30% capturing a meaningful share of the increasing demand for telecommunications and data services and delivered positive net income of more than $340,000," stated KonaTel Chairman and CEO Sean McEwen. "Increasingly, we are emphasizing the importance of a sales-oriented approach towards the market with continued investment in our sales organization including the recent launch of our expanded agent platform to support our indirect channel."

McEwen continued, "At the same time, recent approvals for participation in federal and state subsidized cellular programs expands our opportunities and provides a natural revenue hedge against market volatility that can result from changing economic conditions. Most recently, we were unanimously approved as a provider of cellular services by the California Public Utilities Commission (CPUC) under the Federal Communications Commission's (FCC) LifeLine program. The CPUC approval process is rigorous, and approval has been granted to only a select number of providers with the most recent approval prior to KonaTel dating back to 2017. We are eager to serve eligible California families with essential voice and data services."

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

Revenues increased 26% to $5.3 million compared to $4.2 million, reflecting a 26.2% increase in Hosted Services revenues and a 25.7% increase in Mobile Services revenues.

Gross profit was $2.3 million, or 44.3% gross profit margin, compared to gross profit of $1.6 million, or 39.0% gross profit margin. 

Total operating expenses were $2.1 million, up 10.4% compared to $1.9 million. This increase was primarily a result of infrastructure expansion, primarily payroll, professional services and application development costs to support growth.

Net income was $108,000, or $0.00 per diluted share (based on 44.2 million weighted average shares) compared to $243,000, or $0.01 per diluted share (based on 44.1 million weighted average shares), inclusive of non-operating, other income of $543,000 related to expected forgiveness of its payroll protection and disaster loans from the Small Business Administration (SBA).

Balance Sheet

The Company ended the quarter with $788,000 in cash, compared to $715,000 in cash on December 31, 2020. Long term debt was $150,000 as of June 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.

-- Tables Follow –

 

KonaTel, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
	June 30, 2021		December 31, 2020
Assets
Current Assets
Cash and Cash Equivalents	$                  788,243		$             715,195
Accounts Receivable, net	743,678		434,801
Inventory, Net	94,634		17,786
Prepaid Expenses	6,239		2,365
Other Current Asset	164		194
Total Current Assets	1,632,958		1,170,341
Property and Equipment, Net	53,632		79,571
Other Assets
Intangible Assets, Net	1,265,128		1,517,163
Other Assets	154,296		172,065
Total Other Assets	1,419,424		1,689,228
Total Assets	$               3,106,014		$          2,939,140
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable and Accrued Expenses	$                   977,038		$          1,042,567
Note Payable - current portion	17,308		94,339
Right of Use Operating Lease Obligation - current	85,532		66,323
Deferred Revenue	-		37,677
Total Current Liabilities	1,079,878		1,240,906
Long Term Liabilities
Right of Use Operating Lease Obligation - long term	155,880		15,399
Note Payable - long term	150,000		150,000
Total Long Term Liabilities	305,880		165,399
Total Liabilities	1,385,758		1,406,305
Commitments and contingencies
Stockholders' Equity
Common stock, $.001 par value, 50,000,000 shares authorized, 40,692,286 outstanding and issued at June 30, 2021 and December 31, 2020	40,692		40,692
Additional Paid In Capital	7,539,690		7,460,632
Accumulated Deficit	(5,860,126)		(5,968,489)
Total Stockholders' Equity	1,720,256		1,532,835
Total Liabilities and Stockholders' Equity	$               3,106,014		$           2,939,140

 

 

KonaTel, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue	$       2,913,873		$       2,257,193		$       5,306,711		$       4,214,548
Cost of Revenue	1,476,485		1,378,868		2,958,162		2,571,045
Gross Profit	1,437,388		878,325		2,348,549		1,643,503
Operating Expenses
Payroll and Related Expenses	588,328		449,931		1,180,871		898,080
Operating and Maintenance	-		228,678		-		420,700
Bad Debt	-		190		-		1,690
Professional Services	59,602		-		143,725		-
Utilities and Facilities	18,995		22,994		70,797		47,232
Depreciation and Amortization	213,552		231,597		427,105		486,526
General and Administrative	37,616		12,568		145,661		27,135
Marketing and Advertising	1,637		872		12,723		1,816
Application Development Costs	119,740		-		119,740		-
Taxes and Insurance	16,850		23,312		24,695		42,126
Total Operating Expenses	1,056,320		970,142		2,125,317		1,925,305
Operating Income	381,068		(91,817)		223,232		(281,802)
Other Income and Expense
Other Income	-		242,080		-		543,449
Interest Expense	(7,514)		(8,214)		(9,756)		(18,765)
Other Non-Operating Expenses	(32,469)		-		(105,113)		-
Total Other Income and Expenses	(39,983)		233,866		(114,869)		524,684
Net Income	$          341,085		$          142,049		$          108,363		$          242,882
Net Income per Share
Basic	$                0.01		$                0.00		$                0.00		$                0.01
Diluted	$                0.01		$                0.00		$                0.00		$                0.01
Weighted Average Outstanding Shares
Basic	40,692,286		40,692,286		40,692,286		40,692,286
Diluted	44,217,286		44,092,286		44,217,286		44,092,286

 

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SOURCE KonaTel, Inc.

FAQ

What were KonaTel's Q2 2021 financial results?

KonaTel reported Q2 2021 revenues of $2.9 million, a 29% increase, with a gross profit of $1.4 million and a net income of $341,000.

How did KonaTel perform in the first half of 2021?

For the first half of 2021, KonaTel's revenues were $5.3 million, reflecting a 26% increase compared to the same period in 2020.

What significant approvals did KonaTel receive recently?

KonaTel was approved by the California Public Utilities Commission to provide services under the FCC's LifeLine program, enhancing growth potential.

What is KonaTel's net income for Q2 2021?

KonaTel reported a net income of $341,000 for Q2 2021, representing an improvement from $142,000 in the same quarter last year.

What are the operating expenses reported by KonaTel for Q2 2021?

KonaTel reported operating expenses of $1.06 million for Q2 2021, a 9% increase year-over-year.