Analyst's Disclosure: I/we have a beneficial long position in the shares of BKTI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. BK Technologies ( BKTI ) it's a story of significant margin expansion thanks to its new BKR 9000 radios and the development of proprietary sof ...

Financial Data and Key Metrics Changes - Revenue for Q4 2024 increased by 9.9% to $17.9 million, with full-year revenue reaching $76.6 million, up from $74.1 million in 2023 [7][23] - Gross margin for Q4 2024 was 41.2%, compared to 35.1% in Q4 2023, and full-year gross margin improved to 37.9% from 30% in 2023 [23][25] - Fully diluted GAAP EPS for Q4 2024 was $0.93, significantly up from $0.08 in the prior year, while full-year GAAP EPS was $2.35 compared to a loss of $0.65 in 2023 [25][27] Business Line Data and Key Metrics Changes - The BKR 9000 product line showed strong order activity, with a backlog of $21.8 million at year-end, up $5.8 million from the previous year [12] - The shift in product mix towards the BKR 9000 contributed to improved gross margins, with expectations for continued momentum in 2025 [11][14] Market Data and Key Metrics Changes - The federal government is expected to contribute only 35% of revenue in 2025, down from 49% in 2023, indicating a shift towards state and local government markets [17] - Initial customer feedback on recent price increases of 5% to 10% has been supportive, with no observed demand changes [15] Company Strategy and Development Direction - The company aims for single-digit revenue growth in 2025, targeting a gross margin of at least 42% and GAAP diluted EPS exceeding $2.40 [31] - Investments in sales and marketing will be increased to accelerate the adoption of the BKR 9000, alongside R&D investments to enhance software capabilities [32][34] - The rebranding of the SaaS business unit to BK One Solutions aims to address interoperability challenges in public safety communications [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment, particularly regarding tariffs, and emphasized the importance of delivering quality products while maintaining profitability [14][17] - The company is optimistic about its growth trajectory and believes it is well-positioned to enhance shareholder value through 2025 and beyond [37] Other Important Information - The company reported a significant improvement in its balance sheet, with cash and cash equivalents of approximately $7.1 million and no debt as of December 31, 2024 [29] - Non-GAAP adjusted EBITDA for the full year 2024 was $10.4 million, a substantial increase from $1.5 million in 2023 [21][27] Q&A Session Summary Question: How has order activity been year to date? - Management indicated that first-quarter order volume is in line with expectations, with federal government funding expected to flow in the second quarter [40][42] Question: Where is the most interest for the BKR 9000? - Interest is primarily in the state and local markets, where the multiband capabilities of the BKR 9000 are particularly attractive [44][46] Question: What is the timeline for the software initiative to become a bigger part of the P&L? - Management is still assessing the market for the software solutions and expects to provide clarity on the potential size of the solutions business by the end of 2025 [48][52] Question: Can margin improvement continue even before the price increase? - Management expects healthy margins in Q1 but anticipates a drop in gross margin in Q2 due to tariffs, with expectations to stabilize in the second half of the year [82][84] Question: Will the software side become a revenue source? - While the software business is currently small, it is expected to grow, particularly with the addition of new products to the portfolio [92][94]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 increased by 9.9% to $17.9 million, with full year revenue reaching $76.6 million, up from $74.1 million in 2023 [7][23] - Gross margin for Q4 2024 was 41.2%, compared to 35.1% in Q4 2023, and full year gross margin improved to 37.9% from 30% in 2023 [23][25] - Fully diluted GAAP EPS for Q4 2024 was $0.93, significantly up from $0.08 in the prior year, while full year GAAP EPS was $2.35 compared to a net loss of $0.65 in 2023 [25][27] Business Line Data and Key Metrics Changes - The BKR 9000 product line showed strong momentum, contributing to increased order activity and a backlog of $21.8 million at year-end, up $5.8 million from the previous year [11][12] - Non-GAAP adjusted EPS for Q4 2024 was $0.61, a significant increase from $0.20 in Q4 2023, with full year non-GAAP adjusted EPS reaching $2.30 compared to breakeven in 2023 [10][27] Market Data and Key Metrics Changes - The federal government is expected to contribute only 35% of revenue in 2025, down from 49% in 2023, indicating a shift towards state and local government markets [17] - Initial customer feedback on recent price increases of 5% to 10% has been supportive, with no observed demand changes [15] Company Strategy and Development Direction - The company aims for single-digit revenue growth in 2025, targeting a gross margin of at least 42% and GAAP diluted EPS exceeding $2.40 [31] - Investments in sales and marketing will be increased to accelerate the adoption of the BKR 9000, alongside R&D investments to enhance software capabilities [32] - The rebranding of the SaaS business unit to BK One Solutions aims to address interoperability challenges in public safety communications [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment, particularly regarding tariffs, and emphasized the importance of delivering quality products while maintaining profitability [14][17] - The company is optimistic about its growth trajectory, believing it is well-positioned to enhance shareholder value through 2025 and beyond [38] Other Important Information - The company reported a significant improvement in its balance sheet, with cash and cash equivalents of approximately $7.1 million and no debt as of December 31, 2024 [29] - Non-GAAP adjusted EBITDA for Q4 2024 was $2.8 million, compared to $1.3 million in Q4 2023, with full year adjusted EBITDA of $10.4 million [27][21] Q&A Session Summary Question: How has order activity been year to date and are sales cycles lengthening? - Management indicated that first quarter order volume is in line with expectations, with federal government funding now available for the second quarter [40][42] Question: Where is the most interest for the BKR 9000? - Interest is primarily in the state and local markets, where the multiband capabilities of the BKR 9000 are particularly attractive [44][46] Question: What is the timeline for the software initiative becoming a bigger part of the P&L? - Management is still assessing the market for the software solutions, with hopes to provide clarity by the end of 2025 [48][52] Question: Can the company continue to show margin improvement despite backlog not including price increases? - Management expects healthy margins in Q1 but anticipates a drop in gross margin in Q2 due to tariffs, with a return to around 42% in the second half of the year [84][86] Question: Will the software solutions become a revenue source? - While currently small, the software solutions are expected to grow and could become a breakeven or profit center in the future [92][96]

NYSE American: BKTI Fourth Quarter & Full Year 2024 Earnings Results Thursday, March 27th, 2025 Safe Harbor Statement 2 This 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 s ...

Revenue Growth - Full year 2024 revenue increased to $76.6 million, up from $74.1 million in 2023, representing a growth of 3.4%[10] - Fourth quarter revenue of $17.9 million increased 9.9% compared to $16.3 million in the fourth quarter of 2023[4] - For the three months ended December 31, 2024, net sales increased to $17,927,000, a 9.9% increase from $16,309,000 for the same period in 2023[27] Earnings Performance - Full year GAAP diluted EPS of $2.25 exceeded the target of $1.65 per share, while non-GAAP adjusted EPS of $2.30 surpassed the target of $1.92 per share[4] - The company reported a basic net income per share of $2.35 for the twelve months ended December 31, 2024, compared to a loss of $0.65 for the same period in 2023[27] - Adjusted earnings per share (diluted) for the twelve months ended December 31, 2024, was $2.30, compared to $0.00 for the same period in 2023[31] Profitability and Margins - Fourth quarter gross margin improved to 41.2%, up from 35.1% in the same period last year, and full year gross margin was 37.9%, compared to 30.0% in 2023[4][10] - Full year 2024 operating income totaled $7.8 million, a significant improvement from an operating loss of $777,000 in 2023[12] - Operating income for the twelve months ended December 31, 2024, was $7,828,000, compared to a loss of $777,000 for the same period in 2023[27] - Net income for the three months ended December 31, 2024, was $3,657,000, significantly up from $290,000 in the same period of 2023, representing a 1,160.3% increase[27] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $10,390,000, compared to $1,473,000 for the same period in 2023, indicating a substantial growth[31] Financial Health - Order backlog at December 31, 2024, was $21.8 million, compared to $16.0 million at December 31, 2023, indicating strong demand[5] - Total assets increased to $51,499,000 as of December 31, 2024, up from $49,408,000 as of December 31, 2023[29] - Current liabilities decreased to $13,974,000 as of December 31, 2024, down from $20,418,000 as of December 31, 2023, reflecting improved financial health[29] - Cash and cash equivalents increased to $7,075,000 as of December 31, 2024, compared to $3,456,000 as of December 31, 2023, indicating improved liquidity[29] - The company’s accumulated deficit decreased to $(15,850,000) as of December 31, 2024, from $(24,209,000) as of December 31, 2023, showing progress in profitability[29] Future Outlook - The company expects full year 2025 GAAP EPS to exceed $2.40 per diluted share and non-GAAP adjusted EPS to exceed $2.80 per diluted share[5] - The company is expanding its offerings with new software and products in 2025, including the establishment of a Solutions business unit[5] Expenses Management - Selling, General & Administrative expenses decreased to $21.2 million in 2024, down from $23.0 million in 2023[11] EBITDA Performance - Non-GAAP adjusted EBITDA for the fourth quarter of 2024 was $2.8 million, compared to $1.3 million in the fourth quarter of 2023[9]

Financial Agreements - 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[23]. - The Company signed a Master Supply Agreement with East West Manufacturing for LMR products, resulting in the purchase of 77,520 shares of common stock valued at $1 million, and a warrant to purchase 135,300 shares at $15.00 each[24]. - The Company’s share repurchase program allows for the repurchase of up to $5 million of common stock, with no expiration date[26]. Sales and Revenue - Sales to government and public safety users represented substantially all of the Company's sales for 2024 and 2023[46]. - Sales to the U.S. Government accounted for approximately 38% and 49% of total sales for the years ended December 31, 2024 and 2023, respectively[55]. - Total sales of LMR products were $76.6 million in 2024, up from $74.1 million in 2023, with U.S. sales at $74.9 million and international sales at $1.7 million[67]. Manufacturing and Production - The Company completed the transition of its manufacturing production to East West Manufacturing in Q3 2024[24]. - Approximately 17.0% of the Company's material and product procurements in 2024 were sourced internationally, with 79.9% from seven suppliers[53]. - The backlog of unshipped customer orders was approximately $21.8 million and $16.0 million as of December 31, 2024 and 2023, respectively[56]. - The backlog changes are primarily attributed to the timing of orders and fulfillment, influenced by supply chain factors[56]. Research and Development - Engineering and development expenses for 2024 were approximately $7.8 million, down from $9.3 million in 2023, with $1.3 million capitalized for the development of the BKR9500 mobile radio[48]. - The first product in the new BKR Series, the all-band BKR9000 portable radio, was released in April 2023, with ongoing development for the BKR9500 mobile radio[47]. - The Company has one U.S. patent awarded and two pending U.S. patent applications for its SaaS services products[43]. Workforce and Compliance - The company has 113 employees as of December 31, 2024, with 39 in customer service and distribution, and 34 in engineering[64]. - The company is subject to U.S. Federal Government procurement regulations, which may include audits and compliance reviews[59]. - Compliance with environmental and worker health and safety laws did not have a material effect on capital expenditures, earnings, or competitive position in 2024[63]. Market Position and Competition - The company competes primarily in the North American market, with Motorola Solutions, Inc. as a dominant competitor[57]. - The company’s wireless communications products are subject to FCC regulations, which may require migration to more spectrum-efficient digital technology[60]. - The company emphasizes a customer-centric approach and continuous improvement as part of its mission and guiding principles[66].

Core Viewpoint - BK Technologies Corporation (BKTI) has shown significant stock performance improvement, gaining 19% since its earnings report for Q3 2024, contrasting with the S&P 500's decline of 0.7% during the same period [1] Financial Performance Highlights - For Q3 2024, BK Technologies reported revenues of $20.2 million, a 0.5% increase from $20.1 million in the same quarter last year [2] - Gross margin improved to 38.8% from 31.9% year-over-year, attributed to a favorable sales mix and cost reductions [2] - Net income rose to $2.4 million, or $0.63 per diluted share, compared to $0.1 million, or $0.03 per share, in the prior year [2] - Operating income surged 339.6% to $2.6 million from $0.6 million, reflecting enhanced operational efficiency [2] Year-to-Date Performance - For the nine months ending September 30, 2024, revenue increased by 1.5% to $58.7 million from $57.8 million in the same period of 2023 [3] - Gross margin for the nine months was 36.9%, up from 28.6% in the previous year [3] - Year-to-date net income reached $4.7 million, or $1.30 per diluted share, compared to a loss of $2.5 million, or $0.74 per share, in the same period last year [3] Segment Performance - The BKR 5000 and BKR 9000 radios significantly contributed to revenues, driven by substantial orders from government and public safety agencies [4] Order Backlog and Management Commentary - The company's order backlog increased to $27 million as of September 30, 2024, up from $21.8 million a year earlier [5] - BK Technologies completed its manufacturing transition to East West, which is expected to enhance margins further [6] - CEO John Suzuki highlighted the commitment to advancing the BKR 9000 series and expanding the customer base in law enforcement and public safety markets [6] Factors Driving Results - The improvement in gross margin was driven by strategic outsourcing, cost optimization, and a favorable product mix, particularly with the BKR 9000 [7] - Selling, general, and administrative expenses decreased by 10.1% to $5.2 million in Q3 2024 from $5.8 million in the prior-year quarter due to effective cost controls [7] Guidance Update - BK Technologies raised its full-year GAAP EPS target to exceed $1.65 per share, up from $1.50, and its non-GAAP EPS target to exceed $1.92, up from $1.77 [8] - Revenues for 2024 are expected to remain consistent with 2023 levels, driven by margin improvements [8] Other Developments - During the quarter, BK Technologies secured a $3.3 million order from the Florida Forest Service for the BKR 9000 radio, demonstrating the product's versatility [9] - The company implemented a streamlined final assembly process for the BKR 9000, enabling production scalability [9] - BK Technologies reported no acquisitions or divestitures during the quarter, but improved working capital and a strengthened balance sheet with no outstanding debt as of quarter-end [10]

Financial Data and Key Metrics Changes - The company achieved GAAP earnings per share of $0.67 for Q3 2024, with year-to-date earnings per share of $1.33, marking the fifth consecutive quarter of profitability [8][22] - Revenue for Q3 totaled approximately $20.2 million, consistent with $20.1 million for the same quarter last year, indicating stable revenue performance [20] - Gross profit margin improved to 38.8% in Q3 2024, compared to 31.9% in Q3 2023, surpassing the target margin level of 35% for 2024 [21] - Non-GAAP adjusted net income was $2.7 million, or an adjusted EPS of $0.75 per basic share, compared to $1.1 million or $0.33 per basic share in Q3 2023 [23] Business Line Data and Key Metrics Changes - The backlog at the end of Q3 2024 was strong at $27 million, supported by solid order activity for the BKR5000 and BKR9000 radios [9][18] - Significant orders included a $3.3 million order from the Florida Forest Service for the BKR9000, highlighting strong demand from state and local agencies [11][12] Market Data and Key Metrics Changes - The company noted strong order activity for the BKR9000 from both new and existing customers, particularly from state and local agencies [16][17] - The total market for radios in the US is approximately $2.3 billion, with 85% of radios falling into categories relevant to law enforcement and structured fire services [43] Company Strategy and Development Direction - The company is focused on accelerating the adoption of the BKR9000 and expanding market share, with a vision to achieve $100 million in revenue and 50% gross margins by 2025 [29][38] - The transition to East West manufacturing is expected to enhance gross margins and allow for a focus on new product development [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revised financial targets, raising GAAP EPS expectations to exceed $1.65 per share and non-GAAP EPS to $1.92 per share for the full year of 2024 [15][28] - The company anticipates continued margin improvement through 2024 and 2025, aiming for gross margins of 50% [13][35] Other Important Information - The company has no debt and reported approximately $4.2 million in cash and cash equivalents as of September 30, 2024, with working capital improving to approximately $22.7 million [25][26] - A new streamlined build-to-order final assembly process for the BKR9000 was implemented, expected to produce up to 20,000 radios per year at full capacity [20] Q&A Session Summary Question: Was the $3.3 million order included in the quarter-end backlog? - Yes, it was included in the backlog [31] Question: What is the typical seasonality of the business? - Q2 and Q3 are the strongest quarters for orders and revenues, while Q4 tends to be weaker due to federal budget cycles [32][34] Question: What is the trajectory for gross margins going into Q4 and 2025? - The company is targeting gross margins of 50% and expects continued improvements [35] Question: What are the market segments where the company is most optimistic for the BKR9000? - The company sees strong opportunities in law enforcement and structured fire services, which represent a large market segment [43][44] Question: What is the status of the BKR9500 development? - The BKR9500 is expected to be brought to market by 2027, with development risks considered low [49][51] Question: What is the source of deferred revenue on the balance sheet? - Deferred revenue primarily comes from extended warranties and is recognized under GAAP until the warranty period is exercised [52][53]

DI Third Quarter 2024 Earnings Results Thursday, November 14th, 2024 NYSE American: BKTI | --- ...

Revenue Performance - Revenue for Q3 2024 was $20.2 million, consistent with Q3 2023 revenue[3] - Revenue for the first nine months of 2024 was $58.7 million, compared to $57.8 million in the same period of 2023[12] - For the three months ended September 30, 2024, net sales increased to $20,179,000 compared to $20,069,000 for the same period in 2023, representing a growth of 0.55%[23] Profitability Metrics - Gross margin improved to 38.8% from 31.9% in Q3 2023 and 37.3% in Q2 2024[3] - GAAP earnings per share (EPS) were $0.67 basic and $0.63 diluted, compared to $0.03 EPS in Q3 2023[10] - Non-GAAP adjusted EPS increased to $0.75 basic and $0.71 diluted from $0.33 in Q3 2023[10] - Operating income for Q3 2024 was $2.6 million, compared to $594,000 in Q3 2023[9] - Non-GAAP adjusted EBITDA for Q3 2024 was $3.1 million, up from $662,000 in Q3 2023[11] - Net income for the three months ended September 30, 2024, was $2,357,000, compared to a net income of $90,000 for the same period in 2023, reflecting a substantial increase of 2,519%[23] - The company reported a net income per share (diluted) of $0.63 for the three months ended September 30, 2024, compared to $0.03 for the same period in 2023, a significant increase of 2,000%[23] Guidance and Future Outlook - Full year 2024 GAAP EPS guidance raised to exceed $1.65 from $1.50, and non-GAAP EPS target increased to $1.92 from $1.77[3] Order and Backlog Information - Order backlog reached $27.0 million, up from $21.8 million in Q3 2023 and $26.9 million in Q2 2024[3] Asset and Liability Management - Total current assets decreased to $34,916,000 as of September 30, 2024, down from $37,202,000 at the end of 2023, a decline of 8.66%[24] - Total liabilities decreased to $20,417,000 as of September 30, 2024, compared to $28,097,000 at the end of 2023, a reduction of 27.49%[25] - The accumulated deficit improved to $(19,507,000) as of September 30, 2024, from $(24,209,000) at the end of 2023, reflecting a reduction of 19.67%[25] Shareholder Information - The weighted average common shares outstanding, basic, increased to 3,539,841 for the three months ended September 30, 2024, compared to 3,411,813 for the same period in 2023, an increase of 3.77%[26] Investment in Development - The company has capitalized product development costs of $751,000 as of September 30, 2024, indicating ongoing investment in new product development[24]