BK Technologies(US:BKTI)2022-03-17 16:24Financial 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]