BK Technologies Announces Third Quarter 2023 Results

BK Technologies Corporation (NYSE American: BKTI) (the “Company,” “BK Technologies”) today announced financial and operating results for the third quarter and nine months ended September 30, 2023. The Company will host a conference call today, November 9, 2023 at 9:00 a.m. Eastern Time.

Third Quarter 2023 Financial and Operational Update

• 68% increase in third quarter revenue to $20.1 million driven by increased shipments, strong demand for the BKR 5000 and introduction of the BKR 9000 radios
• Gross margin improved to 32%, as compared to the 19% in third quarter 2022 and representing the fourth consecutive quarter of sequential quarter over quarter margin improvement
• Company achieved earnings per share of $0.03
• Order backlog was $21.8 million at September 30, 2023
• Shipped 9,000 radios during the quarter
• Subsequent to close of the quarter, the Company announced plans to shift to an asset-light model and signed a transformational agreement to outsource its manufacturing to East West Manufacturing

John Suzuki, CEO of BK Technologies commented, “Our third quarter results reflect continued growth in demand and market recognition for our products, as evidenced by a 68% increase in revenue, improved margin performance and a return to profitability.   We continue to see strong demand for our BKR 5000 as our customers conduct lifecycle upgrades to their portable communications technology and order activity for our recently introduced BKR 9000 multiband radio continues to grow.  During the quarter we received two purchase orders totaling $3.4 million for the BKR 5000 from the National Interagency Incident Communications Division and we received a $2.1 million order from the Bureau of Land Management which included BKR 5000 radios for upgrade purposes as well as a quantity of BKR 9000 radios for testing and evaluation.  As we’ve previously stated, we believe the BKR 9000 has tremendous market potential for public safety agencies in secondary demographic market areas, because it provides a reliable multiband capability at a cost-effective price point.

“Recently we announced our plans to expand our existing manufacturing relationship with East West, a proven, longtime partner who has provided reliable and efficient support to our in-house manufacturing operations for many years.  After careful evaluation, we believe that outsourcing the manufacturing of our products will simplify our supply chain management, which has been a challenging part of our operations in recent years and will enable us to continue reducing our product costs.  Additionally, by shifting to an asset-light model we can more intently focus on our core competencies — the development and marketing of land mobile radio communications technology.  Our transition to East West will be undertaken in stages and we don’t anticipate any meaningful interruptions in production or shipping.”

“We’re energized by our performance to date in 2023 and by the continued strength in our backlog which is driving revenue growth and improved margin performance.  Our radios enjoy a solid reputation in the marketplace for their capabilities and dependability in complex environments and we’re encouraged by the opportunities we’re seeing to increase our market share and grow our customer base.”

Third Quarter 2023 Financial Review

Revenue increased 68% to $20.1 million, compared with $11.9 million for the third quarter of last year driven by increased radio shipments and demand for the BKR 5000 radio.  Gross profit margin was 32% compared to 19% for the same quarter of last year, reflecting higher production volumes and improved product costs related to raw materials and freight.

Selling, General & Administrative expenses totaled $5.8 million, compared with $4.6 million for the third quarter of last year.

Operating income totaled $594,000 compared with operating loss of ($2.4 million) for the third quarter of last year.

BK Technologies recorded net income of $90,000 or $0.03 per basic and diluted share, compared with a net loss of ($2.4 million) or ($0.71) per basic and diluted share, for the third quarter of last year.

First Nine Months 2023 Financial Review

Revenue increased 89% to $57.8 million, compared with $30.6 million for the first nine months of last year. Gross profit margin was 29% compared to 18% for the first nine months of last year, reflecting higher production volumes and improved costs related to raw materials and freight during the first nine months of 2023.

Selling, General & Administrative expenses totaled $17.7 million, compared with $15.0 million for the first nine months of 2022.

Operating loss totaled ($1.2 million) compared with operating loss of ($9.5 million) for the first nine months of last year.

BK Technologies recorded a net loss of ($2.5 million) or ($0.74) per basic and diluted share, compared with a net loss of ($10.7 million) or ($3.16) per basic and diluted share for the first nine months of last year. In the first nine months of 2023, the Company recognized an unrealized loss of ($831,000) on its investment in FG Financial Holdings, LLC, compared to a loss on investments of ($1.0) million in the first nine months of last year.

Working capital totaled approximately $13.8 million, primarily comprised of cash, cash equivalents, and trade receivables. This compares with the working capital at year-end of 2022 of approximately $13.2 million, of which $12.5 million was comprised of cash, cash equivalents, and trade receivables.