BK Technologies(BKTI) - 2024 Q1 - Quarterly Results

BK Technologies First Quarter 2024 Results BK Technologies achieved a strong Q1 2024 with improved profitability, strategic operational shifts, and reaffirmed full-year EPS guidance Management Commentary and Business Outlook Management reported a solid Q1 2024, driven by improved profitability, successful production transition, new product, and reaffirmed full-year EPS target - The company achieved a strong start to 2024 with improved profitability and a growing backlog of $19 million, demonstrating continued strong demand for its radios[3] - Successfully transferred BKR 5000 production to East West Manufacturing in Mexico, ceasing Melbourne production activities, leading to long-term cost reductions and a $1.4 million inventory reduction[4] - Announced the development of the BKR 9500 multiband mobile radio, a companion to the BKR 9000 portable radio, with revenue contributions expected to begin in 2027[5] - Reaffirmed the full-year 2024 earnings target of $1.50 per share, citing ongoing manufacturing transition, BKR 9000 adoption, and historically stronger upcoming quarters[5] First Quarter 2024 Financial Review Q1 2024 revenue slightly decreased, but profitability significantly improved, marked by gross margin expansion and a turnaround to positive net income and Adjusted EBITDA Q1 2024 Key Financial Metrics vs. Q1 2023 | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $18.2 million | $18.7 million | -3% YoY | | Gross Profit Margin | 34.5% | 26.1% | +8.4 p.p. | | Operating Income (Loss) | $983,000 | ($987,000) | Turnaround | | Net Income (Loss) | $681,000 | ($1.3 million) | Turnaround | | EPS (basic and diluted) | $0.19 | ($0.37) | Turnaround | | Adjusted EBITDA | $1.4 million | ($696,000) | Turnaround | - Revenue increased 12% sequentially compared to the fourth quarter of 2023, indicating positive momentum entering the year[6] - Selling, General & Administrative (SG&A) expenses decreased to $5.3 million from $5.9 million in the prior-year quarter, contributing to improved operating income[7] - Working capital increased to $18.4 million at March 31, 2024, from $16.8 million at December 31, 2023, with cash, cash equivalents, and trade receivables comprising $14.8 million of the total[10][11] Financial Statements The condensed consolidated financial statements reflect a return to profitability in Q1 2024, with improved net income and a strengthened balance sheet Condensed Consolidated Statements of Operations The Q1 2024 Statement of Operations shows net sales of $18.2 million and a net income of $681,000, a significant turnaround from the prior year's loss Q1 2024 vs Q1 2023 Statement of Operations (in thousands, except per share data) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Sales, net | $18,231 | $18,721 | | Total operating expenses | $17,248 | $19,708 | | Operating income (loss) | $983 | ($987) | | Net income (loss) | $681 | ($1,270) | | Net income (loss) per share - diluted | $0.19 | ($0.37) | Condensed Consolidated Balance Sheets The March 31, 2024 Balance Sheet reports total assets of $50.6 million and stockholders' equity of $21.5 million, with reduced inventories and increased receivables Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,296 | $3,456 | | Trade accounts receivable, net | $11,467 | $7,902 | | Inventories, net | $22,543 | $23,952 | | Total current assets | $39,297 | $37,202 | | Total assets | $50,579 | $49,408 | | Liabilities & Equity | | | | Total current liabilities | $20,950 | $20,418 | | Total liabilities | $29,062 | $28,097 | | Total stockholders' equity | $21,517 | $21,311 | Non-GAAP Financial Measures Non-GAAP measures, including Adjusted EBITDA and Adjusted EPS, provide insights into core operating performance, showing significant Q1 2024 improvements Definitions of Non-GAAP Measures Adjusted EBITDA and Adjusted EPS are non-GAAP measures used to clarify core operational performance by excluding non-recurring and non-cash items - Adjusted EBITDA is used to better understand operational factors by excluding interest, taxes, depreciation, amortization, and non-recurring charges[20] - Adjusted EPS is used to better understand the operating performance of core businesses by adjusting for non-cash charges like stock-based compensation, changes in investment value, and one-time transition costs[15] Reconciliation of Non-GAAP to GAAP Measures Detailed reconciliations show Q1 2024 Net Income of $681,000 adjusted to $1,410,000 Adjusted EBITDA and $0.30 Adjusted EPS Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income (Loss) | $681 | ($1,270) | | Interest expense, net | $174 | $144 | | Income tax provision | $21 | $0 | | Depreciation and amortization | $407 | $378 | | EBITDA | $1,283 | ($748) | | Severance | $127 | $52 | | Adjusted EBITDA | $1,410 | ($696) | Reconciliation of Net Income (Loss) to Adjusted EPS (in thousands, except per share) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income (Loss) | $681 | ($1,270) | | Net realized/unrealized loss on investments | $91 | $113 | | Stock-based compensation expense | $175 | $127 | | Severance | $127 | $52 | | Adjusted Earnings (Loss) (Non-GAAP) | $1,074 | ($978) | | Adjusted EPS - diluted | $0.30 | ($0.29) | Forward-Looking Statements This section outlines forward-looking statements, cautioning that future results are subject to various risks including supply chain, competition, and economic conditions - The press release includes forward-looking statements concerning the Company's operations, performance, and financial condition, based on current beliefs and expectations[17] - Actual results may differ materially due to known and unknown risks, including supply chain disruptions, competition, reliance on government sales, and general economic conditions[17]