[Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) This section provides an overview of the company's strong Q2 2025 performance, including CEO commentary and key financial highlights [CEO Commentary and Business Update](index=1&type=section&id=CEO%20Commentary%20and%20Business%20Update) The CEO highlighted strong Q2 2025 operational execution, achieving higher-than-expected gross margins and improved profitability - Delivered strong operational performance in Q2 2025, with gross margins reaching **47.4%**[3](index=3&type=chunk) - Federal order activity increased significantly after the quarter, highlighted by **$12.9 million** in purchase orders from the USDA Forest Service, suggesting a strong outlook for the second half of the year[3](index=3&type=chunk)[5](index=5&type=chunk) - Launched RelayONE, a new rapid deployment portable repeater kit, and received the first purchase order from the Latimer County Sheriff's Office in Colorado[3](index=3&type=chunk) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) BK Technologies reported strong Q2 2025 financial results, with revenue at **$21.2 million** and gross margin significantly improving to **47.4%** Q2 2025 Key Financial Metrics vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $21.2 million | $20.3 million | | Gross Margin | 47.4% | 37.3% | | GAAP Diluted EPS | $0.96 | $0.47 | | Non-GAAP Adj. Diluted EPS | $1.30 | $0.55 | [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) This section analyzes the company's Q2 and first-half 2025 financial performance, including balance sheet insights [Second Quarter 2025 Financial Review](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Review) Q2 2025 revenue increased **4.5%** to **$21.2 million**, with gross margin expanding to **47.4%** Q2 2025 vs. Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $21.2M | $20.3M | +4.5% | | Gross Margin | 47.4% | 37.3% | +10.1 p.p. | | Operating Income | $4.0M | $2.0M | +100% | | Net Income | $3.7M | $1.7M | +117.6% | - The improvement in gross margin was driven by a favorable product mix and ongoing cost savings from operational efficiencies and outsourced manufacturing[7](index=7&type=chunk) - Selling, General & Administrative (SG&A) expenses rose to **$6.0 million** from **$5.5 million** year-over-year, reflecting continued investments in sales, marketing, and engineering[8](index=8&type=chunk) [Six Months 2025 Financial Review](index=3&type=section&id=Six%20Months%202025%20Financial%20Review) First-half 2025 revenue grew **4.5%** to **$40.2 million**, with gross margin improving to **47.2%** First Half 2025 vs. First Half 2024 Performance | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $40.2M | $38.5M | +4.5% | | Gross Margin | 47.2% | 35.9% | +11.3 p.p. | | Operating Income | $6.9M | $3.0M | +130% | | Net Income | $5.9M | $2.3M | +157.4% | [Balance Sheet and Working Capital](index=3&type=section&id=Balance%20Sheet%20and%20Working%20Capital) As of June 30, 2025, working capital increased to **$28.9 million**, driven by higher cash and receivables - Working capital totaled approximately **$28.9 million** at June 30, 2025, an increase from **$23.0 million** at December 31, 2024[11](index=11&type=chunk) - Cash, cash equivalents, and trade receivables grew to **$23.4 million**, up from **$14.4 million** at the end of 2024[11](index=11&type=chunk) Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $11,853 | $7,075 | | Total current assets | $44,833 | $36,941 | | Total liabilities | $23,663 | $21,668 | | Total stockholders' equity | $36,763 | $29,831 | [Full Year 2025 Outlook](index=2&type=section&id=Full%20Year%202025%20Outlook) BK Technologies has raised its full-year 2025 financial guidance due to strong year-to-date performance and robust demand Updated Full Year 2025 Guidance | Metric | New Guidance | Prior Guidance | | :--- | :--- | :--- | | Revenue Growth | High single digits | Single-digit growth | | Gross Margin | > 47% | > 42% | | GAAP Diluted EPS | $3.15 | $2.40 | | Non-GAAP Adj. Diluted EPS | $3.80 | $2.80 | - The upward revision is attributed to strong demand, leverage in the business model, and confidence in sustaining higher performance levels[6](index=6&type=chunk) [Appendix](index=5&type=section&id=Appendix) This section provides supplementary information, including non-GAAP financial measures and detailed financial statements [Use of Non-GAAP Measures](index=5&type=section&id=Use%20of%20Non-GAAP%20Measures) The company uses non-GAAP financial measures to supplement GAAP statements, offering clearer insight into core operational performance - Adjusted EBITDA is used to help investors understand operational factors by excluding interest, taxes, depreciation, amortization, stock-based compensation, and other infrequent charges[21](index=21&type=chunk) - Adjusted EPS adjusts GAAP EPS for items that management does not see as reflective of core operating performance, such as stock-based compensation and one-time charges related to manufacturing transition and tax provisions[22](index=22&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) This section provides unaudited condensed consolidated financial statements for Q2 and H1 2025, including key financial statements and non-GAAP reconciliations [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 income statement shows net sales of **$21.2 million** and net income of **$3.7 million** Q2 & H1 2025 Income Statement Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales, net | $21,165 | $20,254 | $40,219 | $38,485 | | Operating income | $3,997 | $2,025 | $6,913 | $3,008 | | Net income | $3,741 | $1,664 | $5,873 | $2,345 | | Diluted EPS | $0.96 | $0.47 | $1.51 | $0.66 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the balance sheet indicates total assets of **$60.4 million** Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $44,833 | $36,941 | | Total assets | $60,426 | $51,499 | | Total liabilities | $23,663 | $21,668 | | Total stockholders' equity | $36,763 | $29,831 | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This table reconciles GAAP Net Income to non-GAAP Adjusted EBITDA and Adjusted Earnings for Q2 2025 Q2 2025 GAAP to Non-GAAP Reconciliation (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (GAAP) | $3,741 | $1,664 | | Adjusted EBITDA (Non-GAAP) | $4,417 | $2,489 | | Adjusted Earnings (Non-GAAP) | $5,055 | $1,974 | | Adjusted EPS - diluted (Non-GAAP) | $1.30 | $0.55 |

Core Viewpoint - The article discusses the volatile market conditions in 2025, highlighting the performance of top stock picks and the impact of tariffs and geopolitical events on market dynamics [7][9][19]. Market Overview - The US equity market experienced significant fluctuations due to tariff announcements, leading to a major correction in April 2025, with the S&P 500 dropping approximately 15% from its 52-week high [9][10]. - A barbell investment approach was recommended to diversify portfolios during market corrections, focusing on stocks with strong fundamentals and good dividend yields [10][13]. Stock Performance - The top 10 stocks recommended at the beginning of 2025 saw a performance swing from over 20% gains to below 20%, reflecting a nearly 40% change during the volatile period [15][16]. - By mid-2025, many of these stocks rebounded as fear subsided and investors returned to fundamentals [16]. Economic Indicators - Inflation rates showed a surprising decrease, with core CPI at 0.1% for May, and there is speculation about potential interest rate cuts by the Federal Reserve in September [22][23]. - The recession risk appears less severe than previously anticipated, with GDP growth projected to exceed 2% annualized after a decline in Q1 [23][31]. Top Stock Picks - **Barclays (NYSE: BCS)**: A diversified bank with a market cap of $62 billion, ranked 12 out of 691 in financial institutions, offering a dividend yield of 2.47% and a forward EPS growth rate of 28% [80][81]. - **Prudential (NYSE: PUK)**: Based in Hong Kong, this insurance company ranks 1 out of 19 in its industry, with a forward dividend yield of 1.89% and a long-term EPS growth rate of 17% [86][89]. - **FinVolution (NYSE: FINV)**: A fintech company with a market cap of $2.2 billion, ranking 7 out of 691 in financials, showing a 255% operating cash flow growth rate [93][94]. - **Power Solutions International (NASDAQ: PSIX)**: A small-cap company with a market cap of $1.23 billion, ranked number one in the industrials sector, with a one-year return of 835% [97][99]. - **New Gold (NYSE: NGD)**: Focused on gold, silver, and copper exploration, with an operating cash flow growth rate of 56% [107][110]. - **Gold Fields Limited (NYSE: GFI)**: A diversified mining company with a 37% EPS forward long-term growth rate, ranking 5 in the materials sector [111][113]. Investment Strategies - The article emphasizes a data-driven approach to stock selection, utilizing a GARP (Growth at a Reasonable Price) strategy that combines growth, value, profitability, and momentum metrics [40][42]. - The new PRO Quant Portfolio offers a higher frequency of stock ideas, designed for active investors, with a focus on global stocks across various market caps [59][64].

Core Insights - BK Technologies is transitioning from a manufacturer of rugged two-way radios to a provider of full-spectrum communications ecosystems, positioning the company uniquely in the market [1] Company Overview - The company is based in Florida and trades on the NYSE under the ticker BKTI [1] - The focus is primarily on small- to mid-cap companies, which are often overlooked by investors, while also occasionally analyzing large-cap companies for broader market context [1]

Core Viewpoint - BK Technologies Corporation (BKTI) demonstrated strong financial performance in Q1 2025, with significant improvements in profitability and margins, although its stock performance lagged behind the S&P 500 index during the same period [1][2][4]. Financial Performance - Revenues increased by 4.5% year over year to $19.1 million from $18.2 million [2] - Diluted earnings per share (EPS) surged 189.5% to $0.55 from $0.19 [2] - Non-GAAP adjusted diluted EPS rose 126.7% to $0.68 from $0.30 [2] - Operating income increased to $2.9 million from $0.9 million [3] - Net income rose to $2.1 million from $0.7 million [3] - Adjusted EBITDA climbed 128.8% to $3.2 million from $1.4 million [4] Margin and Cost Structure - Gross margin expanded to 47% from 34.5%, attributed to a favorable product mix and transition to contract manufacturing [3][10] - Selling, general, and administrative expenses rose 13.7% to $6 million from $5.3 million, but this was offset by higher revenue [11] Business Metrics - The order backlog was $18.8 million at the end of March 2025, slightly down from $19 million a year ago [4] - Working capital increased to $24.6 million from $23 million at year-end 2024 [5] - Cash position grew to $8.9 million from $7.1 million at the end of December 2024 [5] - Total shareholders' equity rose from $29.8 million to $32.4 million [5] Product Performance - Revenue growth was driven by demand for the BKR Series radios, particularly the BKR 9000 multiband radio [6] - The BKR 9000's higher average selling price is expected to support future margin and revenue expansion [6] Management Insights - CEO John Suzuki highlighted operational and strategic progress, attributing gross margin improvement to a favorable sales mix and cost-reduction initiatives [7] - Management noted increased federal order activity following the resolution of a delayed continuing resolution [8] - Seasonal factors typically lead to softer performance in the first and fourth quarters [9] Future Guidance - BK Technologies reaffirmed full-year 2025 targets of GAAP diluted EPS exceeding $2.40 and non-GAAP adjusted diluted EPS above $2.80 [12] - The company expects single-digit revenue growth and aims for gross margins of at least 42% [12] - Plans to invest in sales and marketing to accelerate BKR 9000 adoption and enhance software capabilities through R&D [13] Other Developments - No acquisitions or major restructuring activities were reported, but the company emphasized a strengthened balance sheet [14] - BKTI ended the quarter with $24.6 million in working capital and reported no outstanding debt [14]

Financial Data and Key Metrics Changes - First quarter revenue was $19.1 million, representing a 4.5% increase year-over-year and a 6.3% sequential increase from $17.9 million in the fourth quarter of 2024 [14] - Gross profit margin improved to 47% from 34.5% in the first quarter of 2024 and increased from 41.2% in the fourth quarter of 2024 [14] - Net income for the first quarter was $2.1 million or $0.55 per diluted share, compared to $681,000 or $0.19 per diluted share in the same period last year [7][15] - Non-GAAP adjusted earnings were $2.6 million or $0.68 per diluted share, up from $1.1 million or $0.30 per diluted share in the first quarter of 2024 [7][15] - Backlog as of March 31, 2025, was $18.8 million, slightly down from $19 million at the end of the first quarter of 2024 [8] Business Line Data and Key Metrics Changes - The BKR 5000 single band radio maintained strong demand, while the BKR 9000 multiband radio is gaining traction in the market [12] - The company expects revenue and gross margin to expand as the BKR 9000 becomes a larger contributor to overall revenues [12] Market Data and Key Metrics Changes - Federal orders were light in the first quarter due to delays in passing the continuing resolution to fund the government [13] - The company noted that approximately 95% of product revenue comes from finished goods manufactured in the USA, Mexico, and Vietnam, with minimal exposure to China [9][10] Company Strategy and Development Direction - The company is focused on enhancing profitability through a shift to a higher margin product mix and cost reduction strategies [7][8] - The 2025 targets include single-digit full-year revenue growth and a gross margin of at least 42% [18] - Continued investment in sales and marketing efforts for the BKR 9000 is planned to increase market visibility [19] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the company's position for long-term profitable growth despite uncertainties in the macroeconomic environment [18] - The company is closely monitoring tariff situations that could impact gross margins [9][11] Other Important Information - The company reported a strong balance sheet with approximately $8.9 million in cash and cash equivalents and no debt as of March 31, 2025 [16] - SG&A expenses increased to approximately $6 million from $5.3 million in the same quarter last year, reflecting investments in marketing and new product development [14][15] Q&A Session Summary Question: Was Q1 impacted by any pull in orders? - Management indicated that Q1 was not impacted by pull-in orders, and federal orders were delayed due to the continuing resolution [23][24] Question: What are the expectations for gross margins in Q2? - Management expects gross margins to remain above 42%, despite some tariffs impacting costs [25][26] Question: Will revenue from the BKR 9000 increase sequentially? - Management confirmed that revenue from the BKR 9000 is expected to increase sequentially throughout the year [38][39] Question: How does the continuing resolution affect seasonality? - Management noted that while funding has been approved, there are delays due to personnel changes, making the timeline for orders uncertain [35][36] Question: What is the outlook for SG&A expenses? - Management indicated that SG&A costs are relatively fixed, but investments in marketing and new product development will lead to some incremental costs [46][47]

Financial Data and Key Metrics Changes - First quarter revenue was $19.1 million, representing a 4.5% increase year-over-year and a 6.3% increase sequentially [7][15] - Gross margin improved to 47% in Q1 2025, up from 34.5% in Q1 2024 and 41.2% in Q4 2024 [15][16] - Net income for Q1 2025 was $2.1 million or $0.55 per diluted share, compared to $681,000 or $0.19 per diluted share in Q1 2024 [7][16] - Non-GAAP adjusted earnings were $2.6 million or $0.68 per diluted share, compared to $1.1 million or $0.30 per diluted share in the same period last year [7][16] - Backlog as of March 31, 2025, was $18.8 million, slightly down from $19 million at the end of Q1 2024 [8] Business Line Data and Key Metrics Changes - The BKR 5000 single band radio maintained strong demand, while the BKR 9000 multiband radio is gaining traction in the market [13] - The company expects revenue and gross margin to expand as the BKR 9000 becomes a larger contributor to overall revenues [13] Market Data and Key Metrics Changes - Federal orders were light in Q1 due to delays in passing the continuing resolution, but increased orders are expected as funding has been approved [14][36] - Approximately 95% of product revenue comes from finished goods manufactured in the USA, Mexico, and Vietnam, with ongoing monitoring of tariff impacts [10][12] Company Strategy and Development Direction - The company is focused on enhancing profitability through a shift to higher margin products and a successful transition to a contract manufacturing model [7][8] - The 2025 targets include single-digit full-year revenue growth and a gross margin of at least 42% [19] - Continued investment in sales and marketing efforts for the BKR 9000 and R&D capabilities for BK1 offerings is planned [20][21] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the uncertain macroeconomic environment, particularly regarding tariffs, but remains confident in long-term profitable growth [19][20] - The company is well-positioned to capture new customers and address new market verticals [21] Other Important Information - The balance sheet remains strong with approximately $8.9 million in cash and cash equivalents and no debt as of March 31, 2025 [17] - SG&A expenses increased to approximately $6 million in Q1 2025 from $5.3 million in the same quarter last year [15][16] Q&A Session Summary Question: Was Q1 impacted by any pull in orders? - Management indicated that Q1 was not impacted by pull-in orders, and federal orders were delayed due to the continuing resolution [23][25] Question: What are the expectations for gross margins in Q2? - Management expects gross margins to remain above 42%, despite some tariffs impacting products from Vietnam [26][27] Question: Will revenue from the BKR 9000 increase sequentially in Q1? - Management confirmed that revenue from the BKR 9000 was up sequentially in Q1 [29] Question: How does the continuing resolution affect seasonality? - Management noted that the continuing resolution has allowed key customers to receive funding, but there are delays due to personnel changes [35][36] Question: What is the long-term target for SG&A as a percentage of revenue? - Management indicated that SG&A costs are relatively fixed, but investments in marketing and new product development will lead to some incremental costs [48][49]

Financial Performance - Revenue increased to $19.1 million, driven by strong demand for BKR Series radios[7] - Gross margins significantly enhanced to 47.0%[7], surpassing the target margin level of 35%[9] - Fully diluted EPS reached $0.55, and non-GAAP adjusted EPS was $0.68[7] - Adjusted EBITDA was $3.226 million[14] - Adjusted Net Income was $2.650 million[14] Growth Drivers and Future Outlook - Strong demand for BKR 5000 single band radio and BKR 9000 multiband radio[13] - The company expects single-digit revenue growth in FY25 with a target gross margin of at least 42%[31] - Development of BKR 9500 mobile radio is underway, with revenue recognition expected to begin in 2027[31] Financial Position - Working capital increased from $23.0 million to $24.6 million[25] - Shareholders' equity increased from $29.8 million to $32.4 million[26]

BK Technologies First Quarter 2025 Results [Financial & Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20and%20Operational%20Update) BK Technologies started 2025 strongly with 4.5% revenue growth, significant gross margin improvement, and substantial EPS growth, reiterating full-year guidance Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $19.1 million | $18.2 million | +4.5% | | Gross Margin | 47.0% | 34.5% | +12.5 p.p. | | GAAP Diluted EPS | $0.55 | $0.19 | +189.5% | | Non-GAAP Adjusted Diluted EPS | $0.68 | $0.30 | +126.7% | - The company reiterated its full-year 2025 guidance, targeting GAAP EPS to exceed **$2.40** per diluted share and non-GAAP adjusted EPS to exceed **$2.80** per diluted share[5](index=5&type=chunk)[7](index=7&type=chunk) - The order backlog stood at **$18.8 million** as of March 31, 2025, slightly down from **$19.0 million** a year prior[5](index=5&type=chunk) - The significant improvement in gross margin was attributed to a favorable product sales mix and the successful manufacturing transition to East West Manufacturing, whose production in Mexico remains tariff-free under the USMCA[5](index=5&type=chunk)[6](index=6&type=chunk) [Management Commentary & Outlook](index=2&type=section&id=Management%20Commentary%20%26%20Outlook) Management attributes strong Q1 performance to improved gross margin and manufacturing transition, with solid state/local demand and emerging federal orders post-budget, reaffirming full-year outlook - Continued solid demand was observed from state and local government markets for the BKR Series radios[6](index=6&type=chunk) - Federal orders were light in Q1 2025 due to the delayed passing of a full-year continuing resolution by Congress. With the resolution now signed, increased order activity from federal customers is beginning to emerge[6](index=6&type=chunk) - The company reaffirmed its full-year 2025 guidance for GAAP EPS to exceed **$2.40** and non-GAAP adjusted EPS to exceed **$2.80** per diluted share[7](index=7&type=chunk) [Detailed Financial Review](index=2&type=section&id=First%20Quarter%202025%20Financial%20Review) Q1 2025 saw operating income surge to $2.9 million and net income more than triple, driven by higher revenue and gross margin expansion, with working capital increasing to $24.6 million Q1 2025 Income Statement Highlights (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $19.1 million | $18.2 million | | Gross Margin | 47.0% | 34.5% | | SG&A Expenses | $6.0 million | $5.3 million | | Operating Income | $2.9 million | $983,000 | | Net Income | $2.1 million | $681,000 | - Non-GAAP adjusted EBITDA more than doubled to **$3.2 million** in Q1 2025, compared to **$1.4 million** in Q1 2024[12](index=12&type=chunk) - Working capital increased to **$24.6 million** at March 31, 2025, from **$23.0 million** at December 31, 2024. The cash, cash equivalents, and trade receivables portion of working capital grew to **$19.1 million** from **$14.4 million**[12](index=12&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents detailed financial statements, including the Statement of Operations, Balance Sheets, and Reconciliation of Non-GAAP Measures, highlighting performance and financial position [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Line Item | Q1 2025 (3/31/25) | Q1 2024 (3/31/24) | | :--- | :--- | :--- | | Sales, net | $19,054 | $18,231 | | Operating income | $2,916 | $983 | | Income before income taxes | $2,802 | $702 | | Net income | $2,132 | $681 | | Diluted EPS | $0.55 | $0.19 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $8,920 | $7,075 | | Total current assets | $39,803 | $36,941 | | Total assets | $56,066 | $51,499 | | Total current liabilities | $15,243 | $13,974 | | Total liabilities | $23,697 | $21,668 | | Total stockholders' equity | $32,369 | $29,831 | [Reconciliation of Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 (3/31/25) | Q1 2024 (3/31/24) | | :--- | :--- | :--- | | Net Income | $2,132 | $681 | | Adjustments (Interest, Tax, D&A) | $1,094 | $602 | | EBITDA | $3,226 | $1,283 | | Severance | - | $127 | | **Adjusted EBITDA** | **$3,226** | **$1,410** | Reconciliation to Adjusted Earnings (Non-GAAP) (in thousands) | Line Item | Q1 2025 (3/31/25) | Q1 2024 (3/31/24) | | :--- | :--- | :--- | | Net Income | $2,132 | $681 | | Adjustments (Investments, Stock Comp, etc.) | $518 | $393 | | **Adjusted Earnings (Non-GAAP)** | **$2,650** | **$1,074** | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) This section provides standard disclosures, including investor call details, explanations of non-GAAP measures, business description, and forward-looking statements with associated risks - The company uses non-GAAP measures such as **Adjusted EBITDA** and **Adjusted EPS** to provide investors with a better understanding of operational performance by excluding items like non-cash stock compensation and other one-time charges[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) - The press release contains forward-looking statements concerning the company's operations and financial condition, which are subject to various risks and uncertainties detailed in the company's SEC filings[20](index=20&type=chunk) - A conference call and webcast for investors was scheduled for May 13, 2025, at 9:00 a.m. Eastern Time to discuss the results[13](index=13&type=chunk)

Financial Performance - The net income for the three months ended March 31, 2025, was $2,132, leading to a basic income per share of $0.60 and diluted income per share of $0.55[57]. - The Company recorded an income tax expense of $670 for the three months ended March 31, 2025, resulting in an effective tax rate of 24.8%[47]. - Non-cash share-based employee compensation expense was $118 for the three months ended March 31, 2025, compared to $55 for the same period last year[58]. - The Company recorded non-cash share-based employee compensation expense of $275 for the three months ended March 31, 2025, compared to $121 for the same period last year, reflecting a significant increase of approximately 127%[61]. - The total lease cost for the three months ended March 31, 2025, was $169, slightly up from $168 for the same period last year[76]. Inventory and Receivables - Inventories as of March 31, 2025, totaled $16,233, a decrease from $17,636 as of December 31, 2024, with allowances for slow-moving inventory at approximately $1,624[46]. - The allowance for credit losses on trade receivables was approximately $50 on gross trade receivables of $10,221 as of March 31, 2025[45]. - The Company had purchase commitments for inventory totaling approximately $11,835 as of March 31, 2025[63]. Manufacturing and Operations - The Company transitioned its manufacturing activities to East West Manufacturing, which will exclusively manufacture the Company's radio product line under a three-year agreement[42]. - East West purchased 77,520 shares of the Company's common stock for $1,000, at a price per share of $12.90, based on the average closing price over the previous 30 trading days[42]. - The Company issued 89,248 shares of Common Stock to East West Manufacturing, LLC as a result of a cashless exercise of a warrant on May 2, 2025[78]. Liabilities and Legal Matters - The Company assessed its liabilities and contingencies related to legal matters, stating that no pending material claims or legal matters were present as of March 31, 2025[62]. - The Company recorded a decrease in the valuation allowance of approximately $3.6 million for deferred tax assets as of December 31, 2024[49]. Market Conditions - Geopolitical tensions have led to market volatility, which could impact the Company's operations and financial performance[65]. - Sales to United States government agencies represented approximately $2,078 (10.9%) of the Company's net total sales for the three months ended March 31, 2025, a decrease from $9,830 (53.9%) in the same period last year[64]. Credit Facilities - The Company entered into a new credit facility with Fifth Third Bank, providing a one-year revolving line of credit with a maximum commitment of $6 million, expandable to $10 million under certain conditions[41]. - The Company has not utilized funding under the $6 million Revolving Loan Commitment as of March 31, 2025, with no outstanding borrowings[66][70]. Capital Expenditures - Capitalized product development costs increased to $440 for the three months ended March 31, 2025, compared to $147 for the same period in 2024[52]. - As of March 31, 2025, the Company had outstanding stock options totaling 320,168, with a weighted average exercise price of $16.25 and an aggregate intrinsic value of $7,354,353[60]. Lease Information - The weighted average remaining lease term as of March 31, 2025, was 2.14 years, with a weighted average discount rate of 5.50%[77].

Core Insights - BK Technologies Corporation (BKTI) has experienced a significant stock price increase of 33.9% since its earnings report for the quarter ended December 31, 2024, outperforming the S&P 500 Index, which declined by 1.9% during the same period [1] Financial Performance - For Q4 2024, BK Technologies reported revenues of $17.9 million, a 9.9% increase from $16.3 million in the same quarter last year [2] - The diluted GAAP earnings per share (EPS) surged to $0.93 from $0.08, aided by a one-time, non-cash income tax benefit of $0.37 [2] - Non-GAAP adjusted diluted EPS rose to $0.61 from $0.20, marking a 205% year-over-year increase [2] - Full-year revenues reached $76.6 million, up 3.4% from $74.1 million in 2023 [3] - Full-year diluted GAAP EPS was $2.25 compared to a loss of $0.65 in the previous year, while non-GAAP adjusted EPS increased to $2.30 from break-even in 2023 [3] - Operating income for Q4 rose to $2.2 million from $0.4 million in the prior-year quarter, with full-year operating income at $7.8 million against an operating loss of $0.8 million in the previous year [3] Margins and Operational Metrics - Gross margins improved to 41.2% in Q4 from 35.1%, with a full-year gross margin of 37.9% compared to 30% in 2023 [4] - Non-GAAP adjusted EBITDA for Q4 was $2.8 million, up 116.9% from $1.3 million a year ago, while full-year adjusted EBITDA rose to $10.4 million from $1.5 million [5] - SG&A expenses for Q4 were $5.2 million, down 3% from $5.3 million in the same period last year [5] - The company ended 2024 with a backlog of $21.8 million, up from $16 million at the end of 2023, indicating strong future demand [5] Balance Sheet and Working Capital - Working capital improved to $23 million from $16.8 million a year earlier, with a strengthened balance sheet showing $7.1 million in cash and no long-term debt [6] - Shareholders' equity increased to $29.8 million from $21.3 million at the end of 2023 [6] Management Commentary - CEO John Suzuki highlighted Q4 as a period of exceptional execution, with revenue growth, margin expansion, and profitability exceeding expectations [7] - The success was attributed to strong market adoption of the BKR 9000 multiband radio, expanding sales beyond traditional segments [7] - Management noted a decrease in revenue expected from federal agencies, projecting only 35% of 2025 revenue from this source, down from 49% in 2023, indicating broader market penetration [7] Pricing and Future Outlook - The company implemented price increases of 5–10% on radios and accessories in early 2025, which are expected to be margin-accretive [8] - For fiscal 2025, BKTI targets single-digit revenue growth with gross margins of at least 42% and expects GAAP diluted EPS to exceed $2.40 and non-GAAP adjusted EPS to surpass $2.80 [11] New Developments - In March 2025, BK Technologies announced the rebranding and expansion of its SaaS business under the BK ONE Solutions unit, which includes new offerings aimed at enhancing first-responder communications [12] - Development is underway for the BKR 9500 mobile radio, expected to enter the market in 2027 [13]