BK Technologies Announces First Quarter 2025 Results

BK Technologies Corporation (NYSE American:BKTI) (the “Company,” “BK Technologies”) announced financial and operating results for the first quarter ended March 31, 2025. The Company hosted a conference yesterday.

First Quarter 2025 Financial and Operational Update

• First quarter revenue of $19.1 million increased 4.5% compared to $18.2 million in the first quarter of 2024
• First quarter gross margin of 47.0% improved significantly as compared to gross margin of 34.5% in the first quarter of 2024 and increased sequentially as compared to gross margin of 41.2% in the fourth quarter of 2024, reflecting the favorable product sales mix and impact of the Company’s manufacturing transition to East West Manufacturing.
• First quarter GAAP earnings of $0.60 per basic and $0.55 per diluted share; non-GAAP adjusted earnings1 of $0.74 per basic and $0.68 per diluted share.
  Order backlog was $18.8 million at March 31, 2025 compared to $19.0 million at March 31, 2024.
• BK products produced at the East West Manufacturing facility in Mexico in the first quarter remained tariff-free under the United States, Mexico, Canada trade Agreement (USMCA).

John Suzuki, CEO of BK Technologies, commented,

“Our first quarter performance delivered a strong start to 2025, with solid revenue growth to $19.1 million and significantly improved gross margin of 47.0%. The improved gross margin is a result of the product sales mix and impact of our expense reduction initiatives as well as the successful transition to a contract manufacturing model. During the quarter, we saw continued solid demand from the state and local government markets for our BKR Series radios. Federal orders were light in the first quarter of 2025 related to the delayed passing of a full-year continuing resolution by Congress. The continuing resolution to fund the government through 2025 is now signed and we are beginning to see increased order activity from federal customers.

“We are excited about the opportunities we’re seeing across our business and look forward to driving further revenue growth and value for our shareholders in 2025. We continue to expect full year 2025 GAAP EPS to exceed $2.40 per diluted share, and full year 2025 non-GAAP adjusted EPS to exceed $2.80 per diluted share,” Mr. Suzuki concluded.

First Quarter 2025 Financial Review
Revenue of $19.1 million increased 4.5% compared to revenue of $18.2 million in the first quarter of 2024.

Gross margin of 47.0% improved as compared to gross margin of 34.5% in the same period last year and improved sequentially as compared to gross margin of 41.2% in the fourth quarter of 2024.

Selling, General & Administrative expenses totaled $6.0 million, compared with $5.3 million for the first quarter of 2024.

Operating income totaled $2.9 million compared with operating income of $983,000 in the first quarter of 2024.

BK Technologies recorded net income of $2.1 million or $0.60 per basic and $0.55 per diluted share, compared with net income of $681,000 or $0.19 per basic and diluted share, for the first quarter of 2024. The Company reported non-GAAP adjusted earnings 1 of $2.6 million or $0.74 per basic and $0.68 per diluted share compared to non-GAAP adjusted earnings 1 of $1.1 million or $0.30 per basic and diluted share for the first quarter of 2024.

Non-GAAP adjusted EBITDA1for the first quarter of 2025 was $3.2 million, compared with non-GAAP adjusted EBITDA 1 of $1.4 millionin the first quarter of 2024.

Working capital totaled approximately $24.6 million at March 31, 2025, of which $19.1 million was comprised of cash, cash equivalents and trade receivables. This compares with working capital at December 31, 2024 of approximately $23.0 million, of which $14.4 million was comprised of cash, cash equivalents and trade receivables.

Use of Non-GAAP Measures
BK Technologies prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses non-GAAP financial measures. Management believes the non-GAAP financial measures discussed in this release are important to the reader of the Consolidated Financial Statements. The Company has provided the non-GAAP financial information presented in the press release, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.

Adjusted Earnings Before Interest Taxes Depreciation and Amortization (Adjusted EBITDA) . Adjusted EBITDA is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain amounts included in net income provided in the statement of operations attributable to the Company calculated in accordance with GAAP, the most directly comparable financial measure calculated in accordance with GAAP. Management believes Adjusted EBITDA can help the investors better understand operational factors associated with the Company’s financial performance because it excludes the following from consideration: interest, taxes, depreciation and amortization, non-cash stock-based compensation expense and infrequent or unusual losses or gains (i.e., non-recurring and incremental restructuring charges that are not expected to be routinely incurred year over year because of the Company’s strategy and operating experience). See Reconciliation to GAAP below for calculation methodology and details regarding Adjusted EBITDA.

Adjusted earnings per share (Adjusted EPS). Adjusted EPS is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain amounts included in the basic and diluted earnings per share attributable to the Company calculated in accordance with GAAP EPS, the most directly comparable financial measure calculated in accordance with GAAP. Adjusted EPS is a non-GAAP financial measure that adjusts GAAP EPS for expense items that are typically strategic in nature or that management otherwise does not view as reflecting the operating performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. The Company has non-cash charges for stock-based compensation and changes in investment value that do not reflect the operating performance of the LMR and Solutions businesses. The Company has also entered a master Service Agreement with EastWest Manufacturing, LLC for the manufacture of LMR radio products and accessories resulted in one-time adjustments related to the transition of production operations during the fiscal year 2024. The Company also recorded a one-time, non-cash income tax provision expense for NOL carryforwards during the first quarter of 2025. Management believes that these one-time charges do not reflect the operational profitability of the business for fiscal year 2024 and the first quarter of 2025 compared to prior periods. See Reconciliation to GAAP below for calculation methodology and details regarding Adjusted EPS. We do not provide reconciliations of forward-looking non-GAAP guidance due to the inherent difficulty in quantifying certain items necessary to provide such reconciliations as a result of their unknown effect, timing and potential significance.