BK Technologies Corporation (NYSE:BKTI) Q3 2022 Earnings Conference Call November 3, 2022 9:00 AM ET Company Participants John Suzuki - CEO & Director John Nesbett - IMS Investor Relations Scott Malmanger - Interim CFO, Principal Accounting Officer & Company Secretary Conference Call Participants Brett Reiss - Janney Montgomery Scott Operator Good morning, ladies and gentlemen, and welcome to the BK Technologies Corporation Conference Call for the Third Quarter 2022. This call is being recorded. [Operator I ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended September 30, 2022, detailing balance sheets, statements of operations, and cash flows, reflecting key financial changes Condensed Consolidated Balance Sheet (Unaudited) | Account | Sep 30, 2022 ($ in thousands) | Dec 31, 2021 ($ in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | 4,034 | 10,580 | | Trade accounts receivable, net | 5,379 | 8,229 | | Inventories, net | 26,332 | 16,978 | | Total current assets | 37,456 | 37,421 | | Total assets | 49,038 | 50,385 | | **Liabilities & Equity** | | | | Accounts payable | 13,257 | 4,458 | | Total current liabilities | 22,824 | 12,234 | | Total liabilities | 28,045 | 17,767 | | Total stockholders' equity | 20,993 | 32,618 | | Total liabilities and stockholders' equity | 49,038 | 50,385 | Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended Sep 30, 2022 ($ in thousands) | Three Months Ended Sep 30, 2021 ($ in thousands) | Nine Months Ended Sep 30, 2022 ($ in thousands) | Nine Months Ended Sep 30, 2021 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | Sales, net | 11,917 | 12,626 | 30,612 | 32,526 | | Cost of products | 9,676 | 8,488 | 25,175 | 20,914 | | Operating loss | (2,391) | (370) | (9,515) | (1,422) | | Net loss | (2,402) | (2,566) | (10,672) | (1,398) | | Net loss per share-basic | (0.14) | (0.15) | (0.63) | (0.10) | Condensed Consolidated Statements of Cash Flows (Unaudited, Nine Months Ended) | Activity | Sep 30, 2022 ($ in thousands) | Sep 30, 2021 ($ in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (6,858) | (3,619) | | Net cash used in investing activities | (959) | (1,921) | | Net cash provided by financing activities | 1,271 | 12,801 | | Net change in cash and cash equivalents | (6,546) | 7,261 | | Cash and cash equivalents, end of period | 4,034 | 14,087 | - On October 27, 2022, the Company entered into a Letter of Intent for a new one-year Line of Credit of up to **$15 million** to replace the existing JPMorgan Chase facility and for working capital[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the 5.6% Q3 2022 revenue decline due to supply chain issues and Hurricane Ian, sharply reduced gross profit margins, increased SG&A, and a higher operating loss, while addressing liquidity management and credit facility negotiations - Customer demand and orders remained strong in Q3 2022, but supply chain constraints and Hurricane Ian limited product shipments, increasing backlog[126](index=126&type=chunk)[137](index=137&type=chunk) Q3 and Nine-Month 2022 Performance vs. 2021 | Metric | Q3 2022 | Q3 2021 | Change | Nine Months 2022 | Nine Months 2021 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales | $11.9M | $12.6M | -5.6% | $30.6M | $32.5M | -5.9% | | Gross Profit Margin | 18.8% | 32.8% | -14.0 p.p. | 17.8% | 35.7% | -17.9 p.p. | | SG&A Expenses | $4.6M | $4.5M | +2.8% | $15.0M | $13.0M | +14.7% | | Operating Loss | ($2.4M) | ($0.4M) | +500% | ($9.5M) | ($1.4M) | +578% | | Net Loss | ($2.4M) | ($2.6M) | -7.7% | ($10.7M) | ($1.4M) | +664% | - Gross profit margin declined due to increased material and freight costs, leading to suboptimal manufacturing overhead absorption[143](index=143&type=chunk) - Net cash used in operating activities for the nine months ended September 30, 2022, was **$6.9 million**, primarily due to net loss and a **$9.4 million** inventory increase to mitigate supply chain risks[160](index=160&type=chunk)[161](index=161&type=chunk) - The company manages liquidity with its **$5 million** JPMC credit facility, with **$4.46 million** outstanding as of September 30, 2022, expiring January 31, 2023[166](index=166&type=chunk)[170](index=170&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) The company is not required to provide disclosure under this item as it qualifies as a "smaller reporting company" according to Regulation S-K - As a "smaller reporting company" under Regulation S-K, the Company is not required to include market risk disclosures[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2022, with no material changes in internal control over financial reporting during the third quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the reporting period end[179](index=179&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the third quarter of 2022[180](index=180&type=chunk) [PART II - OTHER INFORMATION](index=30&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20RISK%20FACTORS) The company reports no material changes to the Risk Factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - No material changes occurred to the Risk Factors disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[184](index=184&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's credit agreement limitations on dividends and a **$5 million** share repurchase program authorized in December 2021, under which no shares were repurchased in Q3 2022 - The Board authorized a share repurchase program on December 21, 2021, allowing purchases of up to **$5 million** of common shares[186](index=186&type=chunk) Issuer Purchases of Equity Securities (Q3 2022) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Still be Purchased ($) | | :--- | :--- | :--- | :--- | | July 1–31, 2022 | — | — | 5,000,000 | | August 1–31, 2022 | — | — | 5,000,000 | | September 1–30, 2022 | — | — | 5,000,000 | | **Quarter Ended Sep 30, 2022** | **—** | **$ —** | **$ 5,000,000** | [Item 6. Exhibits](index=31&type=section&id=Item%206.%20EXHIBITS) This section provides an index of exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes required exhibits such as CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906, and various XBRL documents[191](index=191&type=chunk)[192](index=192&type=chunk) [Signatures](index=32&type=section&id=SIGNATURES) - The report was duly signed and authorized on November 4, 2022, by John M. Suzuki, CEO, and Scott A. Malmanger, Interim CFO[196](index=196&type=chunk)

| --- | --- | --- | |--------------------------------------|-----------------|-----------------| | | | | | | | | | SECOND QUARTER 2022 EARNINGS RESULTS | BK TECHNOLOGIES | | | NYSE American: BKTI | | August 11, 2022 | DISCLOSURES 2 2 Forward-Looking Statements This presentation contains certain forward-looking statements that are made pursuant to the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern the Company's operations, economic p ...

Financial Data and Key Metrics Changes - The company reported revenues of just over $12 million for Q2 2022, an increase from $11.3 million in the same quarter last year [17] - Q2 bookings reached a record $19 million, with first half bookings increasing by 50% compared to the first half of 2021 [17][5] - Gross profit margins for Q2 were 14.2%, down from 38.4% in the same quarter last year, primarily due to component shortages and increased production costs [18] - The operating loss for Q2 totaled $3.7 million, compared to an operating loss of $200,000 in the same quarter last year [19] Business Line Data and Key Metrics Changes - The BKR 5000 radio saw strong traction, achieving record bookings of $19 million in Q2 2022 and $34 million in the first half of the year, representing a 50% increase compared to the first half of 2021 [7][5] - The company is making progress on the BKR 9000 multi-band device, with a targeted launch in Q4 2022 [12][5] - The new Software-as-a-Service (SaaS) business unit has launched, focusing on subscription-based solutions for responders [6] Market Data and Key Metrics Changes - The company added a second production line in its Melbourne, Florida facility to meet increased demand and fulfill a backlog of $26.8 million in orders [8] - The company anticipates delivering between 16,000 and 18,400 units in the second half of 2022, significantly increasing from just over 8,500 radios delivered in the first half [11] Company Strategy and Development Direction - The company aims to exceed $100 million in revenue by 2025, driven by the BKR 5000, the upcoming BKR 9000, and the SaaS business unit [21] - The BKR 9000 is expected to transform the addressable market by adding verticals such as police, structural fire, and emergency medical services [12] - The SaaS applications are positioned to leverage advancements in smartphone technology and the LTE 5G network to enhance public safety communications [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about margin improvement in the second half of 2022 as component availability increases and pricing pressures ease [10][18] - The company is actively raising prices where possible to address current pricing environments and is also focusing on cost reductions [28] Other Important Information - The company recognized an unrealized non-cash loss of approximately $600,000 on its investment in FG Financial Group for the quarter [20] - The company has filed for three patents related to Push-to-Talk-Over-Cellular and other cellular-based smartphone applications [16] Q&A Session Summary Question: Margin improvement expectations - Management indicated that component shortages have caused temporary pricing pressures, but they expect margins to improve in the back half of 2022 as these pressures ease [22][23] Question: Pricing strategy amidst inflation - Management confirmed that they are raising prices where possible, although long-term contracts with the federal government may limit flexibility [27][28] Question: Status of the BKR 9000 - Management confirmed that production setup is ongoing and they are confident in launching the BKR 9000 in Q4 2022 [30][33]

Financial Performance - For the second quarter of 2022, sales increased by 6.8% to approximately $12.1 million compared to approximately $11.3 million for the same quarter last year [125]. - For the six months ended June 30, 2022, sales totaled approximately $18.7 million, compared to approximately $19.9 million for the same period last year, reflecting a decline [125]. - For Q2 2022, the company reported a net loss of approximately $4.3 million ($0.26 per share), compared to a net income of approximately $1.8 million ($0.14 per share) in Q2 2021 [130]. - For the first six months of 2022, the company reported a net loss of approximately $8.3 million, compared to a net income of approximately $1.2 million for the same period last year [159]. Profitability Metrics - Gross profit margins for the second quarter of 2022 were approximately 14.2%, down from 38.4% for the same quarter last year [126]. - Gross profit margin for Q2 2022 was approximately 14.2%, a significant decrease from 38.4% in Q2 2021 [139]. - The company recognized an operating loss of approximately $3.7 million for the second quarter of 2022, compared to an operating loss of approximately $0.2 million for the same quarter last year [128]. - The operating loss for Q2 2022 was approximately $3.7 million (30.4% of sales), compared to an operating loss of approximately $0.2 million (1.8% of sales) in Q2 2021 [149]. Expenses - SG&A expenses for the second quarter of 2022 totaled approximately $5.4 million, an increase from approximately $4.6 million for the same quarter last year [127]. - SG&A expenses for the six-month period ended June 30, 2022, increased by 21.1% to approximately $10.3 million compared to approximately $8.5 million for the same period last year [127]. - SG&A expenses for Q2 2022 totaled approximately $5.4 million (44.6% of sales), up from approximately $4.6 million (40.2% of sales) in Q2 2021 [144]. - Engineering and product development expenses for Q2 2022 were approximately $2.3 million (18.9% of sales), consistent with the same amount in Q2 2021 [145]. Supply Chain and Operational Challenges - Supply chain constraints limited the ability to manufacture the quantities needed to fulfill all customer orders, resulting in a backlog [123]. - Customer demand remained strong, but supply chain constraints limited the ability to convert orders into shipments and sales revenue [135]. - The company anticipates fulfilling many of the backlog orders in subsequent quarters, despite ongoing supply chain challenges [135]. - The company faced increased costs and inventory levels for certain components due to worldwide shortages, particularly in semiconductors and integrated circuits [120]. - The ongoing geopolitical conflicts and related sanctions may continue to adversely impact the company's business and financial results [120]. Balance Sheet and Cash Flow - As of June 30, 2022, working capital was approximately $17.4 million, down from approximately $25.2 million as of December 31, 2021 [131]. - Cash used in investing activities totaled approximately $0.7 million for the six months ended June 30, 2022, down from approximately $1.5 million for the same period last year [160]. - Cash provided by financing activities was approximately $1.3 million for the six months ended June 30, 2022, compared to approximately $13.2 million for the same period last year [161]. - The company had an outstanding balance of $3,958 under the Credit Agreement as of June 30, 2022, with a net balance availability of $1,042 [167]. - The company’s cash and cash equivalents balance at June 30, 2022, was approximately $5.9 million, which is expected to meet working capital requirements for the foreseeable future [169]. - The company is in compliance with all covenants under the Credit Agreement as of June 30, 2022 [167]. Investments and Unrealized Gains/Losses - The company recognized an unrealized loss of approximately $0.6 million on its investment in FG Financial for Q2 2022, compared to an unrealized gain of approximately $2.3 million in Q2 2021 [151]. - The company experienced an unrealized loss on securities totaling approximately $1.1 million for the six months ended June 30, 2022, compared to an unrealized gain of approximately $2.5 million for the same period last year [159].

BK Technologies Corporation (NYSE:BKTI) Q1 2022 Earnings Conference Call May 12, 2022 9:00 AM ET Company Participants John Suzuki - CEO Bill Kelly - EVP and CFO Conference Call Participants Aaron Martin - AIGH Investment Partners Orin Hirschman - AIGH Investment Partners Operator Good morning, ladies and gentlemen, and welcome to the BK Technologies Corporation Conference Call for the First Quarter 2022. This call is being recorded. All participants have been placed on a listen-only mode. Following the mana ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Nevada 83-4064262 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered Common Stock, par value $.60 per share BKTI NYSE American Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated Filer ☒ Smaller reporting company ☒ Emerging growth company ☐ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) ...

Financial Data and Key Metrics Changes - Sales for Q4 2021 totaled approximately $12.8 million, compared to $10.6 million for the same quarter last year, reflecting a year-over-year increase [14] - Gross profit margins as a percentage of sales in Q4 2021 were 36.2%, down from 44.2% in the same quarter last year, primarily due to increased material and freight costs [14] - The net loss for Q4 2021 was approximately $303,000, or $0.02 per share, compared to a net income of approximately $1.1 million, or $0.08 per share, for the same quarter last year [15] Business Line Data and Key Metrics Changes - The company achieved record bookings of $55.5 million and a backlog of $13 million by the end of 2021, indicating strong demand for its products [6] - The BKR 5000 product has gained significant traction in the marketplace, contributing to the strong order activity [6][10] Market Data and Key Metrics Changes - The company is experiencing strong demand in the wildland fire management sector, which is a core market, and is looking to expand into military, law enforcement, and emergency medical response sectors [10] - The increased use of public networks by first responders presents a significant opportunity for the company, leading to the launch of a dedicated business unit for software-as-a-service solutions [11] Company Strategy and Development Direction - The company is focusing on optimizing its supply chain to mitigate the impact of supply chain challenges on gross margins and product availability [8] - A new business unit has been launched to deliver software-as-a-service solutions, which is expected to be a higher margin and recurring revenue stream [11][25] - The company is positioning itself to tether first responders' radios to smartphones, expanding its addressable market [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong customer demand and bookings at the start of 2022, despite ongoing supply chain constraints [9][27] - The company anticipates increasing production in March and April 2022, while addressing supply chain issues [9] - Management is excited about the progress made on the BKR 9000 and expects to start field engineering tests in Q2 2022 [12][33] Other Important Information - The company reported a working capital of approximately $25.2 million as of December 31, 2021, an increase from $16.2 million at the end of 2020 [16] - The company has a history of paying dividends, with the most recent increase to $0.03 per share reflecting confidence in its financial strength [16] Q&A Session Summary Question: Can the extra costs from supply chain issues be shifted onto customers? - Management confirmed that they have been increasing pricing on products where possible, despite some long-term fixed-price contracts [20] Question: What needs to happen for the $55 million in bookings to become a firm backlog number? - Management explained that the business operates on a book-and-ship model, and supply chain availability is crucial for converting bookings into backlog [21] Question: How big can the SaaS solutions business grow? - Management indicated that the SaaS business is expected to be a higher margin and recurring revenue stream, with significant growth opportunities as public safety embraces cellular technology [23][25] Question: How has backlog been trending in the first quarter? - Management reported that backlog has grown due to strong customer demand in early 2022, despite ongoing supply chain challenges [27] Question: What percentage of the business in 2021 was from new customers versus existing contracts? - Management noted that securing new customers in 2021 was better than historical performance, largely attributed to the introduction of the BKR 5000 [29] Question: Is the company in a position to implement the new buyback program? - Management clarified that the buyback program would be implemented after the filing of the first quarter 10-Q, expected in May [30]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: 0 ...

BK Technologies Corporation (NYSE:BKTI) Q3 2021 Earnings Conference Call November 11, 2021 9:00 AM ET Company Participants Timothy Vitou - President John Suzuki - CEO William Kelly - CFO Conference Call Participants Orin Hirschman - AIGH Investment Partners LP Operator Good morning, ladies and gentlemen, and welcome to the BK Technologies Corporation Conference Call for the Third Quarter 2021. This call is being recorded. All participants have been placed in a listen-only mode. Following, management’s remar ...