BK Technologies(US:BKTI)2022-08-14 01:22Financial 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]