BK Technologies Announces Fourth Quarter and Year End 2023 Results
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Insights
The reported 45% increase in full-year revenue to $74.1 million for BK Technologies represents a significant growth trajectory for the company. This growth, coupled with the reported earnings per share (EPS) of $0.08 for the fourth quarter, signals a positive trend in profitability. The company's targeting of a full-year 2024 EPS in excess of $1.50 suggests a strong future outlook, which could potentially attract investor interest. However, it is crucial to analyze the sustainability of this growth, considering the broader economic context and the company's operational strategies, such as the shift to an asset-light model through outsourcing manufacturing.
The increase in radio shipments by 37% indicates a robust demand for BK Technologies' products. This demand is driven by lifecycle upgrades to portable communications technology, which is an essential component for various sectors including public safety, security and industrial operations. The expansion of the relationship with East West Manufacturing may streamline operations and improve gross margins over the long term. However, investors should closely monitor the execution of this transition to contract manufacturing, ensuring that the anticipated absence of meaningful interruptions in production is realized.
Transitioning to a contract manufacturing model and making East West Manufacturing the primary manufacturer for BK Technologies' radio product line is a strategic move that could lead to cost reductions and supply chain simplification. The investment from East West Manufacturing, involving both equity and warrants, provides capital that the company has allocated towards reducing liabilities. This financial maneuvering could improve the company's balance sheet and working capital position. However, the shift to an asset-light model requires careful management to avoid potential quality control issues and to maintain supply chain resilience, especially in a global market environment that has recently faced significant disruptions.
Fourth Quarter EPS of
Targeting Full Year 2024 EPS in Excess of
WEST MELBOURNE, FL / ACCESSWIRE / March 14, 2024 / BK Technologies Corporation (NYSE American:BKTI) (the "Company," "BK Technologies") today announced financial and operating results for the fourth quarter and year ended December 31, 2023. The Company will host a conference call today, March 14, 2024, at 9:00 a.m. Eastern Time.
John Suzuki, CEO of BK Technologies commented, "2023 was a strong year for BK Technologies, highlighted by both revenue growth and gross margin improvement. We shipped 34,500 radios in fiscal 2023, an increase of
"In the fourth quarter, we expanded our existing relationship with East West Manufacturing to make them the primary manufacturer of BK Technologies' radio product line," Mr. Suzuki continued. "We believe that outsourcing our manufacturing and transitioning to a more asset light model will improve our gross margins in the long term by simplifying our supply chain management and reducing production expenses and end-product costs. The transition to contract manufacturing is well underway and will take place in stages with no anticipation of meaningful interruptions in production or shipping. As previously stated, East West made a
Mr. Suzuki concluded, "We're optimistic about the upcoming year which should be characterized by expanding gross margins, lower operating costs, and significantly improved profitability. With our visibility today, we believe we are on track to exceed earnings per share of
Fourth Quarter 2023 Financial Review
Revenue decreased
Selling, General & Administrative expenses totaled
Operating income totaled
BK Technologies recorded net income of
Non-GAAP Adjusted EBITDA[1] for the fourth quarter of 2023 was
Full Year 2023 Financial Review
Revenue increased
Selling, General & Administrative expenses totaled
Operating loss totaled (
BK Technologies recorded a net loss of (
Non-GAAP Adjusted EBITDA[2] for the full year of 2023 was
Working capital totaled approximately
Conference Call and Webcast
BK Technologies will host a conference call and webcast for investors today, March 14, 2024, at 9:00 a.m. Eastern Time.
Shareholders and interested parties may participate in the conference call by dialing (888) 506-0062 and international participants should dial (973) 528-0011 and use access code: 188499. The call and the accompanying slide deck will also be webcast at: https://www.webcaster4.com/Webcast/Page/2208/49888
An online archive of the webcast will be available on the Company's website for thirty (30) days following the call at www.bktechnologies.com. A replay of the conference call will be available one hour after completion of the call until March 21, 2024, by dialing (877) 481-4010 and international participants should dial (919) 882-2331. All callers must use passcode 49888 to access the replay.
Use of Non-GAAP Measures
BK Technologies prepares its consolidated financial statements in accordance with United States generally accepted accounting principles ("GAAP"). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses non-GAAP financial measures. Management believes the non-GAAP financial measures discussed in this release are important to the reader of the Consolidated Financial Statements. The Company has provided the non-GAAP financial information presented in the press release, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.
Adjusted Earnings Before Interest Taxes Depreciation and Amortization (Adjusted EBITDA). Adjusted EBITDA is considered a non-GAAP financial measure under the SEC's rules because it excludes certain amounts included in net income provided in the statement of operations attributable to the Company calculated in accordance with GAAP, the most directly comparable financial measure calculated in accordance with GAAP. Management believes Adjusted EBITDA can help the investors better understand operational factors associated with the Company's financial performance because it excludes the following from consideration: interest, taxes, depreciation and amortization, and infrequent or unusual losses or gains (i.e., non-recurring and incremental restructuring charges that are not expected to be routinely incurred year over year because of the Company's strategy and operating experience. See Reconciliation to GAAP below for calculation methodology and details regarding Adjusted EBITDA.
Adjusted earnings per share (Adjusted EPS). Adjusted EPS is considered a non-GAAP financial measure under the SEC's rules because it excludes certain amounts included in the basic and diluted earnings per share attributable to the Company calculated in accordance with GAAP (EPS), the most directly comparable financial measure calculated in accordance with GAAP. Adjusted EPS is a non-GAAP financial measure that adjusts GAAP EPS for expense items that are typically strategic in nature or that management otherwise does not view as reflecting the operating performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. The Company has developed and introduced the BKR product line, that has resulted in one-time, non-cash adjustments to inventory and adjustments related to new product development raw materials for the BKR product line during the 4Q 2022. Management believes that these one-time charges do not reflect the operational profitability of the business for the 4Q and full year 2022. See Reconciliation to GAAP below for calculation methodology and details regarding Adjusted EPS.
About BK Technologies
BK Technologies Corporation, through its operating subsidiaries, manufactures high-specification, communications equipment of unsurpassed reliability and value for use by public safety professionals and government agencies. BK Technologies' SaaS business focuses on new, innovative public safety smartphone services that will make the first responders safer or more productive. BK Technologies is honored to serve these heroes when every moment counts. The Company's common stock trades on the NYSE American market under the symbol "BKTI". Maintaining its headquarters in West Melbourne, Florida, BK Technologies can be contacted through its web site at www.bktechnologies.com or directly at 1-800-821-2900.
Forward-Looking Statements
This press release contains certain forward-looking statements that are made pursuant to the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern the Company's operations, economic performance, and financial condition, including, but not limited to the Company's long-term strategic plan, and are based largely on the Company's beliefs and expectations. These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others, the following: changes or advances in technology; the success of our land mobile radio product line and SaaS business segment; disruption in the global supply chain creating delays, unavailability and adverse conditions; successful introduction of new products and technologies, including our ability to successfully develop and sell our new multiband product and other related products in the BKR Series product line and the Company's SaaS solutions; competition in the land mobile radio industry; general economic and business conditions, including higher inflation and its impacts, federal, state and local government budget deficits and spending limitations, any impact from a prolonged shutdown of the U.S. Government, the effects of natural disasters, changes in climate, severe weather events, geopolitical events, acts of war or terrorism, global health epidemics or pandemics (such as the COVID-19 pandemic) and catastrophic events, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments; the availability, terms and deployment of capital; reliance on contract manufacturers and suppliers; risks associated with fixed-price contracts; heavy reliance on sales to agencies of the U.S. Government and our ability to comply with the requirements of contracts, laws and regulations related to such sales; allocations by government agencies among multiple approved suppliers under existing agreements; our ability to comply with U.S. tax laws and utilize deferred tax assets; our ability to attract and retain executive officers, skilled workers and key personnel; our ability to manage our growth; our ability to identify potential candidates for, and to consummate, acquisition, disposition or investment transactions, and risks incumbent to being a noncontrolling interest stockholder in a corporation; impact of natural disasters, changes in climate, severe weather events, geopolitical events, acts of war or terrorism, global health epidemics or pandemics (such as the COVID-19 pandemic) and catastrophic events on the companies in which the Company holds investments; impact of our capital allocation strategy; risks related to maintaining our brand and reputation; impact of government regulation; impact of rising health care costs; our business with manufacturers located in other countries, including changes in the U.S. Government and foreign governments' trade and tariff policies; our inventory and debt levels; protection of our intellectual property rights; fluctuation in our operating results and stock price; any infringement claims; data security breaches, cyber-attacks and other factors impacting our technology systems; availability of adequate insurance coverage; maintenance of our NYSE American listing; risks related to being a holding company; and the effect on our stock price and ability to raise equity capital of future sales of shares of our common stock. Certain of these factors and risks, as well as other risks and uncertainties, are stated in more detail in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in the Company's subsequent filings with the SEC. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statement.
This press release and related communications contain specifically identified non-GAAP financial measures, which supplement the results that are reported according to generally accepted accounting principles ("GAAP"). These non-GAAP financial measures may be useful to investors but should not be viewed in isolation from, or as a substitute for, GAAP results. Differences between non-GAAP financial measures and comparable GAAP financial measures are reconciled in the release.
Company Contact:
IMS Investor Relations
John Nesbett/Jennifer Belodeau
bktechnologies@imsinvestorrelations.com
(203) 972-9200
(Financial Tables to Follow)
BK TECHNOLOGIES CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share data) (unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 12/31/23 | 12/31/22 | 12/31/23 | 12/31/22 | |||||||||||||
Sales, net | $ | 16,309 | $ | 20,339 | $ | 74,094 | $ | 50,951 | ||||||||
Expenses: | ||||||||||||||||
Cost of products | 10,577 | 15,932 | 51,858 | 41,107 | ||||||||||||
Selling, general and administrative expenses | 5,332 | 5,973 | 23,013 | 20,925 | ||||||||||||
Total expenses | 15,909 | 21,905 | 74,872 | 62,032 | ||||||||||||
Operating income (loss) | 400 | (1,566 | ) | (777 | ) | (11,081 | ) | |||||||||
Other (expense) income: | ||||||||||||||||
Interest (expense) income | (146 | ) | (74 | ) | (575 | ) | (144 | ) | ||||||||
(Loss) gain on investment in securities | 91 | 708 | (740 | ) | (313 | ) | ||||||||||
Other expense | (1 | ) | (29 | ) | (84 | ) | (95 | ) | ||||||||
Income (loss) before income taxes | 344 | (961 | ) | (2,176 | ) | (11,633 | ) | |||||||||
Income tax (expense) benefit | (54 | ) | - | (54 | ) | - | ||||||||||
Net income (loss) | $ | 290 | $ | (961 | ) | $ | (2,230 | ) | $ | (11,633 | ) | |||||
Net income (loss) per share - basic and diluted | $ | 0.08 | $ | (0.28 | ) | $ | (0.65 | ) | $ | (3.44 | ) | |||||
Weighted average common shares outstanding, basic | 3,493 | 3,395 | 3,427 | 3,382 | ||||||||||||
Weighted average common shares outstanding, diluted | 3,500 | 3,395 | 3,427 | 3,382 | ||||||||||||
BK TECHNOLOGIES CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except share data) (unaudited)
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,456 | $ | 1,918 | ||||
Trade accounts receivable, net | 7,902 | 10,616 | ||||||
Inventories, net | 23,952 | 22,105 | ||||||
Prepaid expenses and other current assets | 1,892 | 1,578 | ||||||
Total current assets | 37,202 | 36,217 | ||||||
Property, plant and equipment, net | 5,366 | 4,884 | ||||||
Operating lease right-of-use (ROU) assets | 1,560 | 1,991 | ||||||
Investments | 742 | 1,481 | ||||||
Deferred tax assets, net | 4,116 | 4,116 | ||||||
Other assets | 422 | 143 | ||||||
Total assets | $ | 49,408 | $ | 48,832 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 9,822 | $ | 12,898 | ||||
Accrued compensation and related taxes | 1,302 | 1,143 | ||||||
Accrued warranty expense | 722 | 591 | ||||||
Accrued other expenses and other current liabilities | 363 | 700 | ||||||
Short-term operating lease liability | 525 | 485 | ||||||
Credit facility | 6,476 | 5,854 | ||||||
Notes payable-current portion | 71 | 277 | ||||||
Deferred revenue | 1,137 | 1,022 | ||||||
Total current liabilities | 20,418 | 22,970 | ||||||
Note payable, net of current portion | - | 329 | ||||||
Long-term operating lease liability | 1,260 | 1,785 | ||||||
Deferred revenue | 6,419 | 3,613 | ||||||
Total liabilities | 28,097 | 28,697 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock; | ||||||||
shares; none issued or outstanding | - | - | ||||||
Common stock; | ||||||||
3,867,082 and 3,686,939 issued, and 3,577,002 and 3,396,859 outstanding shares | ||||||||
at December 31, 2023 and December 31, 2022, respectively | 2,320 | 11,061 | ||||||
Additional paid-in capital | 48,602 | 36,455 | ||||||
Accumulated deficit | (24,209 | ) | (21,979 | ) | ||||
Treasury Stock, at cost, 290,080 shares at December 31, 2023 and | ||||||||
December 31, 2022 | (5,402 | ) | (5,402 | ) | ||||
Total stockholders' equity | 21,311 | 20,135 | ||||||
Total liabilities and stockholders' equity | $ | 49,408 | $ | 48,832 | ||||
BK TECHNOLOGIES CORPORATION
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share data) (unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
non-GAAP Adjusted EBITDA | 12/31/23 | 12/31/22 | 12/31/23 | 12/31/22 | ||||||||||||
Net Income/(Loss) | $ | 290 | $ | (961 | ) | $ | (2,230 | ) | $ | (11,633 | ) | |||||
Adjustments to reconcile net income/(loss) to EBITDA | ||||||||||||||||
Interest expense, net | 146 | 74 | 575 | 144 | ||||||||||||
Income tax provision (benefit) | 54 | - | 54 | - | ||||||||||||
Depreciation and amortization | 358 | 362 | 1,635 | 1,423 | ||||||||||||
EBITDA | 848 | (525 | ) | 34 | (10,066 | ) | ||||||||||
Severance | 44 | 61 | 96 | 114 | ||||||||||||
Inventory write-off - New Product Introduction | - | 900 | - | 900 | ||||||||||||
Adjusted EBITDA | $ | 892 | $ | 436 | $ | 130 | $ | (9,052 | ) | |||||||
Adjustments to reconcile net income (loss) to Adjusted EPS (non-GAAP) | ||||||||||||||||
Net Income/(Loss) | $ | 290 | $ | (961 | ) | $ | (2,230 | ) | $ | (11,633 | ) | |||||
Net realized and unrealized (gain) loss on investments | (91 | ) | (708 | ) | 740 | 313 | ||||||||||
Stock-based compensation expense | 407 | 105 | 1,343 | 675 | ||||||||||||
Severance | 44 | 61 | 96 | 114 | ||||||||||||
Inventory write-off - New Product Introduction | - | 900 | - | 900 | ||||||||||||
Adjusted Earnings (Loss) (non-GAAP) | $ | 650 | $ | (603 | ) | $ | (52 | ) | $ | (9,631 | ) | |||||
Adjusted earnings (loss) per share - basic | $ | 0.19 | $ | (0.18 | ) | $ | (0.02 | ) | $ | (2.85 | ) | |||||
Adjusted earnings (loss) per share - diluted | $ | .0.19 | $ | (0.18 | ) | $ | (0.02 | ) | $ | (2.85 | ) | |||||
Weighted average common shares outstanding, basic | 3,493 | 3,395 | 3,427 | 3,382 | ||||||||||||
Weighted average common shares outstanding, diluted | 3,500 | 3,395 | 3,427 | 3,382 | ||||||||||||
[1] Represents a non-GAAP financial measure. Refer to the section entitled "Use of Non-GAAP Financial Measures" and Reconciliation to GAAP later in this press release.
[2] Represents a non-GAAP financial measure. Refer to the section entitled "Use of Non-GAAP Financial Measures" and Reconciliation to GAAP later in this press release.
SOURCE: BK Technologies Corporation
View the original press release on accesswire.com
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