BK Technologies(US:BKTI)2023-08-09 16:00Financial Performance - For the three months ended June 30, 2023, the net loss was approximately $1.3 million ($0.39 per share), an improvement from a net loss of approximately $4.3 million ($1.28 per share) for the same period last year [121]. - For the six months ended June 30, 2023, the net loss totaled approximately $2.6 million ($0.77 per share), compared to a net loss of approximately $8.3 million ($2.45 per share) for the same period last year [121]. - The pretax loss for the three months ended June 30, 2023, was approximately $1.3 million, compared to a pretax loss of approximately $4.3 million for the same period in the prior year [102]. - The company recognized a net loss of approximately $1.3 million for Q2 2023, an improvement from a net loss of approximately $4.3 million in Q2 2022 [126]. - The net loss for the second quarter of 2023 was 7.1%, significantly improved from 35.8% in the same quarter last year [157]. - The operating loss for the second quarter of 2023 was approximately $0.8 million, or 4.1% of sales, compared to $3.7 million, or 30.4% of sales, for the same quarter last year [164]. Sales and Revenue - Customer orders reached a record of approximately $70 million in 2022, with strong demand continuing through Q2 2023 [123]. - Net sales for Q2 2023 increased by 56.9% to approximately $19.0 million, compared to approximately $12.1 million in Q2 2022 [127]. - For the six months ended June 30, 2023, net sales totaled approximately $37.7 million, up from approximately $18.7 million in the same period last year, representing a 101.7% increase [127]. - The gross profit margin for Q2 2023 was approximately 27.4%, compared to 14.2% for the same period last year, reflecting improved production volumes and reduced material costs [145]. Operational Metrics - As of June 30, 2023, the backlog of unshipped customer orders was approximately $24.0 million, down from $27.0 million as of December 31, 2022 [101]. - The company fulfilled approximately 76% of the 13,000 radio units in backlog during the first half of 2023 [119]. - Approximately 76% of the backlog of 13,000 radio units as of December 31, 2022, was fulfilled during the first six months of 2023 [156]. - The BKR 5000 portable radio was the primary contributor to orders and shipments in Q2 2023, with new models like the BKR 9000 achieving FCC compliance [128]. Expenses and Costs - SG&A expenses for Q2 2023 were approximately $6.0 million (31.5% of sales), down from approximately $5.4 million (44.6% of sales) in Q2 2022 [132]. - Engineering and product development expenses for the second quarter of 2023 totaled approximately $2.6 million, representing 13.7% of sales, compared to $2.3 million or 12.1% of sales for the same quarter last year [162]. - Other general and administrative expenses for the second quarter of 2023 totaled approximately $1.9 million, or 9.8% of sales, compared to $2.0 million, or 10.5% of sales, for the same quarter last year [163]. - The company recognized other expenses, net totaling approximately $0.6 million for the three months ended June 30, 2023, primarily due to unrealized losses from investments [120]. Cash Flow and Financing - Cash provided by operating activities for the six months ended June 30, 2023, totaled approximately $1.5 million, compared to cash used of approximately $5.3 million in the same period last year [140]. - Outstanding borrowings under the credit facility were approximately $6.6 million, with receivables transferred under this facility amounting to $7.2 million [104]. - Cash used in investing activities for the six months ended June 30, 2023, totaled approximately $0.9 million, an increase from $0.7 million for the same period last year [169]. Future Outlook - The company anticipates ongoing challenges from material shortages and inflation, which could adversely impact future sales and gross profit margins [158]. - The company established a valuation allowance of $4.1 million for deferred tax assets as of June 30, 2023, due to insufficient taxable income generation [167]. - The company is increasing its utilization of U.S.-based resources to enhance production security and control [160]. Business Units - The company operates two business units: Radio and SaaS, focusing on public safety communications products [99]. - The SaaS business unit aims to deliver innovative smartphone applications for public safety, enhancing the functionality of the company's radio products [118].