BK Technologies Announces First Quarter 2025 Results

Revenue growth to $19.1 million; Achieves gross margin of 47.0%1Q25 GAAP diluted EPS of $0.55 compared with $0.19 in 1Q241Q25 non-GAAP diluted adjusted EPS1 of $0.68 compared with $0.30 in 1Q24Reiterating target full year 2025 GAAP EPS to exceed $2.40 per diluted share and non-GAAP adjusted EPS to exceed $2.80 per diluted share BK Technologies Corporation (NYSE American:BKTI) (the "Company," "BK Technologies") today announced financial and operating results for the first quarter ended March 31, 2025. The Company will host a conference call today, May 13, 2025, at 9:00 a.m. Eastern Time.First Quarter 2025 Financial and Operational UpdateFirst quarter revenue of $19.1 million increased 4.5% compared to $18.2 million in the first quarter of 2024First 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 contuing 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 opportunites 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 ReviewRevenue 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.Conference Call and WebcastBK Technologies will host a conference call and webcast for investors today, May 13, 2025, at 9:00 a.m. Eastern Time.Shareholders and interested parties may participate in the conference call by dialing (888) 506-0062 and international participants should dial (973) 528-0011 and use access code: 557964. The call and the accompanying slide deck will also be webcast at: https://www.webcaster4.com/Webcast/Page/2208/52304The conference call and slide deck may also be accessed via the Events page of the Company's website at www.bktechnologies.com. Please allow extra time prior to the call to visit the site.An online archive of the webcast will be available on the Company's website for thirty (30) days following the call at www.bktechnologies.com. A replay of the conference call will be available one hour after completion of the call until May 20, 2025, by dialing (877) 481-4010 and international participants should dial (919) 882-2331. All callers must use passcode 52304 to access the replay.Use of Non-GAAP MeasuresBK 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.About BK TechnologiesBK Technologies Corporation, through its operating subsidiaries, manufactures high-specification, communications equipment of unsurpassed reliability and value for use by public safety professionals and government agencies. BK Technologies' Solutions business focuses on new, innovative public safety smartphone services that will make the first responders safer or more productive. BK Technologies is honored to serve these heroes when every moment counts. The Company's common stock trades on the NYSE American market under the symbol "BKTI". Maintaining its headquarters in West Melbourne, Florida, BK Technologies can be contacted through its web site at www.bktechnologies.com or directly at 1-800-821-2900.Forward-Looking StatementsThis press release contains statements about future events and expectations which are "forward-looking statements" within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Exchange Act. These forward-looking statements concern the Company's operations, economic performance, and financial condition, including, but not limited to the Company's long-term strategic plan, and are based largely on the Company's beliefs and expectations. These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others, the following: changes or advances in technology; the success of our Solutions and Radio business lines and the products offered thereunder; successful introduction of new products and technologies, including our ability to successfully develop and sell our anticipated Solutions products, and our new multiband radio product and other related products in the BKR Series product line; competition in the land mobile radio industry; general economic and business conditions, including high inflation and its impacts, high interest rates, labor and supply shortages and disruptions; federal, state and local government budget deficits and spending limitations; any impact from a prolonged shutdown of the U.S. Government, the effects of natural disasters, changes in climate, severe weather events, geopolitical events, acts of war or terrorism, global health crises and other catastrophic events, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments; the availability, terms and deployment of capital;reliance on contract manufacturers and suppliers; risks associated with fixed-price contracts; heavy reliance on sales to agencies of the U.S. Government and our ability to comply with the requirements of contracts, laws and regulations related to such sales; allocations by government agencies among multiple approved suppliers under existing agreements; our ability to comply with U.S. tax laws and utilize deferred tax assets; our ability to attract and retain executive officers, skilled workers and key personnel; our ability to manage our growth; our ability to identify potential candidates for, and to consummate, acquisition, disposition or investment transactions; impact of our capital allocation strategy; risks related to maintaining our brand and reputation; impact of government regulation; impact of rising health care costs; our business with manufacturers located in other countries, including changes in the U.S. Government and foreign governments' trade and tariff policies; our inventory and debt levels; our ability to comply with the terms, including financial covenants, of our outstanding debt, including increasing fluctuating interest rates; protection of our intellectual property rights; fluctuation in our operating results and stock price; any infringement claims; data security breaches, cyber-attacks and other factors impacting our technology systems or third-party information technology systems upon which we rely; widespread outages, interruptions, or other failures of operational, communication, or other systems; availability of adequate insurance coverage; environmental, social and governance matters; maintenance of our NYSE American listing; risks related to being a holding company; our ability to remediate the material weakness in our internal control over financial reporting; and the effect on our stock price and ability to raise equity capital of future sales of shares of our common stock. Certain of these factors and risks, as well as other risks and uncertainties, are stated in more detail in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in the Company's subsequent filings with the SEC. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statement.This press release and related communications contain specifically identified non-GAAP financial measures, which supplement the results that are reported according to generally accepted accounting principles ("GAAP"). These non-GAAP financial measures may be useful to investors but should not be viewed in isolation from, or as a substitute for, GAAP results. Differences between non-GAAP financial measures and comparable GAAP financial measures are reconciled in the release. 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.Company Contact:IMS Investor RelationsJohn Nesbett/Jennifer Belodeau[email protected](203) 972-9200BK TECHNOLOGIES CORPORATIONCondensed Consolidated Statements of Operations( In thousands, except per share data ) (Unaudited)Three Months Ended(Unaudited)3/31/253/31/24Sales, net$19,054$18,231Expenses:Cost of products10,10411,943Selling, general and administrative expenses6,0345,305Total operating expenses16,13817,248Operating income2,916983Other (expense) income:Net interest (expense)3(174)Loss on investments-(91)Other (expense)(117)(16)Income before income taxes2,802702Income tax (expense)(670)(21)Net income$2,132$681Net income per share - basic$0.60$0.19Net income per share - diluted$0.55$0.19Weighted average common shares outstanding, basic3,5733,539Weighted average common shares outstanding, diluted3,8933,554BK TECHNOLOGIES CORPORATIONCondensed Consolidated Balance Sheets( In thousands, except share data) (Unaudited)March 31,December 31,20252024ASSETSCurrent assets:Cash and cash equivalents$8,920$7,075Trade accounts receivable, net10,1717,349Inventories, net16,23317,636Prepaid expenses and other current assets4,4794,881Total current assets39,80336,941Property, plant and equipment, net4,7524,911Operating lease right-of-use (ROU) assets1,0071,128Investments--Deferred tax assets, net8,3326,788Capitalized product development costs1,7611,321Other assets411410Total assets$56,066$51,499LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$7,111$6,327Accrued compensation and related taxes1,7552,289Accrued warranty expense9921,008Accrued other expenses and other current liabilities2,7121,894Short-term operating lease liabilities543571Credit facility--Deferred revenue2,1301,885Total current liabilities15,24313,974Long-term operating lease liabilities602714Long-term uncertain tax position liability1,419-Deferred revenue6,4336,980Total liabilities23,69721,668Commitments and contingenciesStockholders' equity:Preferred stock; $1.00 par value; 1,000,000 authorizedshares; none issued or outstanding--Common stock; $0.60 par value; 10,000,000 authorized shares;3,926,426 and 3,913,959 issued, and 3,584,346 and 3,571,879outstanding shares at March 31, 2025 and December 31, 2024, respectively2,3562,348Additional paid-in capital49,78449,386Accumulated deficit(13,718)(15,850)Treasury Stock, at cost, 342,080 shares at March 31, 2025 andDecember 31, 2024(6,053)(6,053)Total stockholders' equity32,36929,831Total liabilities and stockholders' equity$56,066$51,499BK TECHNOLOGIES CORPORATIONReconciliation of Non-GAAP Financial Measures( In thousands, except per share data) (Unaudited)Three Months Endednon-GAAP Adjusted EBITDA3/31/253/31/24Net Income/(Loss)$2,132$681Adjustments to reconcile net income/(loss) to EBITDAInterest (income) expense, net(3)174Income tax expense67021Depreciation and amortization427407EBITDA3,2261,283Severance-127Adjusted EBITDA$3,226$1,410Adjustments to reconcile net income to Adjusted EPS (non-GAAP)Net Income$2,132$681Net realized and unrealized loss on investments-91Stock-based compensation expense393175Income tax provision expense (benefit)125-Severance-127Adjusted Earnings (Non-GAAP)$2,650$1,074Adjusted earnings per share - basic$0.74$0.30Adjusted earnings per share - diluted$0.68$0.30Weighted average common shares outstanding, basic3,5733,539Weighted average common shares outstanding, diluted3,8933,5541 Represents a non-GAAP financial measure. Refer to the section entitled "Use of Non-GAAP Financial Measures" and Reconciliation to GAAP later in this press release.SOURCE: BK Technologies Corporation

BK Technologies Announces First Quarter 2025 Results

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