BK Technologies(US:BKTI)2022-08-10 16:00Financial 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].