Milwaukee-based Telkonet Inc. today reported a second quarter net loss, driven by the cost of fighting an activist shareholder’s successful attempt to nominate three new directors to its board.
The company’s net loss was $671,626, or 0 cents per share, in the quarter, compared with net income of $523,511, or 0 cents per share, in the second quarter of 2015.
Telkonet’s operating loss was $606,684 in the second quarter, compared with operating income of $589,297 in the same period a year ago.
Revenue totaled $4.3 million in the second quarter, down from $4.8 million in the second quarter of 2015.
The total cost of sales increased to $2.1 million, up from $1.9 million in the same period a year ago. Selling, general and administrative expenses also increased, from $1.8 million in the second quarter of 2015 to $2.3 million in the second quarter of 2016.
Telkonet makes intelligent automation solutions that are part of the Internet of Things. It serves commercial markets worldwide.
In June, three new directors were elected to Telkonet’s board after a campaign by an activist shareholder.
“While we experienced a significant increase in costs during our fiscal 2016 second quarter, the majority of these were attributable to the contested proxy contest that was completed at our annual shareholder meeting on June 27. With this conclusion, we’ve assuaged the concerns of our customers and partners and normalized our expenses to traditional levels,” said Jason Tienor, chief executive officer of Telkonet. “With the new board members actively working with our management team, we look forward to continuing the growth rate demonstrated thus far through 2016 and moving the company toward profitability.”