BK Technologies Reports Third Quarter and Nine Months 2019 Results

WEST MELBOURNE, FL / ACCESSWIRE / November 6, 2019 / BK Technologies Corporation (NYSE American:BKTI) today announced financial and operating results for the third quarter and nine months ended September 30, 2019.

For the third quarter ended September 30, 2019, revenues totaled approximately $11.8 million, compared with approximately $13.3 million for the third quarter last year. Operating income for the third quarter 2019 totaled approximately $295,000, compared with operating income of approximately $878,000 for the third quarter last year. Net income for the third quarter of 2019 was approximately $238,000, or $0.02 per basic and diluted share, compared with net income of approximately $650,000, or $0.05 per basic and diluted share, for the same quarter last year.

Net income for the third quarter 2019 includes unrealized losses on investments in securities totaling approximately $258,000, compared with losses of approximately $191,000 for the same quarter last year.

The Company had approximately $17.1 million in working capital as of September 30, 2019, of which $11.7 million was comprised of cash, cash equivalents and trade receivables. This compares with working capital of approximately $21.0 million as of December 31, 2018, of which $17.0 million was comprised of cash, cash equivalents and trade receivables.

Tim Vitou, BK’s President, commented, “During the third quarter of 2019, sales to legacy federal customers showed strength, including a previously announced order for $3.4 million from the U.S. Forest Service. However, we experienced sluggish demand in the third quarter from public safety customers in state and international markets compared with the same quarter last year. Our gross profit margins continued their improvement from early in the year, exceeding 43% for the quarter. For the third quarter, although engineering and product development expenses increased from the same quarter last year, they declined by approximately 15.4% from the preceding quarter.”

Mr. Vitou continued, “The success of our key new product development initiatives is vital to BK’s future growth and success. Reflecting the importance of these programs, we recently announced the appointment of a new Chief Technology Officer, Dr. Branko Avanic, whose primary focus is to complete the development of our multiband product, with an emphasis on maximizing performance, functionality and quality. As a Ph.D. with over 30 years in land mobile radio product development, we are excited about Dr. Avanic’s addition to the executive team and believe he will make positive contributions that can be translated to new products and sales growth moving forward.”

For the nine months ended September 30, 2019, sales totaled approximately $32.7 million, compared with approximately $38.7 million for the same period last year. Operating loss for the nine-month period of 2019 totaled approximately $2.0 million, compared with operating income of approximately $3.0 million for the same period last year. Net loss for the nine months ended September 30, 2019 totaled approximately $1.3 million, or $0.10 per basic and diluted share, compared with net income of $1.2 million, or $0.09 per basic and diluted share, for the same period last year.

The financial results for the nine months ended September 30, 2019 include a gain on investment in securities totaling approximately $186,000, compared with losses of approximately $1.4 million for the nine-month period last year.

Conference Call and Webcast

The Company will host a conference call and webcast for investors at 9:00 a.m. Eastern Time, on Thursday, November 7, 2019. Shareholders and other interested parties may participate in the conference call by dialing 844-602-0380 (international/local participants dial 862-298-0970) and asking to be connected to the “BK Technologies Corporation Conference Call” a few minutes before 9:00 a.m. Eastern Time on November 7, 2019. The call will also be webcast at http://www.bktechnologies.com. An online archive of the webcast will be available on the Company’s website for 30 days following the call at http://www.bktechnologies.com.

A replay of the conference call will be available one hour after the completion of the call until November 18, 2019 by dialing 877-481-4010 PIN# 55679 (international/local participants dial 919-882-2331 PIN# 55679).

About BK Technologies

BK Technologies Corporation is an American holding company deeply rooted in the public safety communications industry, with its operating subsidiary manufacturing high-specification communications equipment of unsurpassed reliability and value for use by public safety professionals and government agencies. BK Technologies is honored to serve our public safety heroes with reliable equipment 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 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; successful introduction of new products and technologies; competition in the land mobile radio industry; general economic and business conditions, including federal, state and local government budget deficits and spending limitations and any impact from a prolonged shutdown of the U.S. Government; the availability, terms and deployment of capital; reliance on contract manufacturers and suppliers; heavy reliance on sales to agencies of the U.S. Government; 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 consummate, acquisition, disposition or investment transactions, and risks incumbent to being a noncontrolling interest stockholder in a corporation; impact of our capital allocation strategy; impact of government regulation; 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; acts of war or terrorism, natural disasters and other catastrophic events; 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; 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, 2018 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 statements.

Company Contact:

BK Technologies Corporation
William Kelly, EVP & CFO
(321) 984-1414

(Financial Tables To Follow)

BK TECHNOLOGIES CORPORATION
Condensed Consolidated Statements of Operations

(In thousands, except share and per share data) (Unaudited)

             
 
  Three Months Ended     Nine Months Ended  
 
  September 30,
2019
    September 30,
2018
    September 30,
2019
    September 30,
2018
 
 
                       
Sales, net
  11,805     13,302     32,743     38,704  
Expenses
                               
Cost of products
    6,699       7,839       19,499       22,519  
Selling, general and administrative
    4,811       4,585       15,247       13,229  
Total expenses
    11,510       12,424       34,746       35,748  
 
                               
Operating income (loss)
    295       878       (2,003)       2,956  
 
                               
Other (expense) income:
                               
Net interest income
    33       28       134       63  
(Loss) gain on investment in securities
    (258)       (191 )     186       (1,392 )
Other expense
    (85)       (48 )     (98)       (274 )
Total other (expense) income
    (310)       (211 )     222       (1,603 )
 
                               
(Loss) income before income taxes
    (15)       667       (1,781)       1,353  
 
                               
Income tax benefit (expense)
    253       (17 )     454       (200 )
 
                               
Net income (loss)
  238     650     (1,327)     1,153  
 
                               
Net income (loss) per share-basic and diluted:
  0.02     0.05     (0.10)     0.09  
Weighted average shares outstanding-basic
    12,696,273       13,479,759       12,725,793       13,538,116  
Weighted average shares outstanding-diluted
    12,709,057       13,501,587       12,725,793       13,563,990  
                                 

BK TECHNOLOGIES CORPORATION
Condensed Consolidated Balance Sheets

(In thousands, except share data)

             
 
  September 30,
2019
   
December 31,
2018
 
 
  (Unaudited)        
ASSETS
           
 
           
Current assets:
           
Cash and cash equivalents
  $ 8,825     $ 11,268  
Trade accounts receivable, net
    2,871       5,721  
Inventories, net
    14,450       11,466  
Prepaid expenses and other current assets
    1,792       2,401  
Total current assets
    27,938       30,856  
 
               
Property, plant and equipment, net
    4,134       2,729  
Right-of-use (ROU) asset
    2,558        
Investment in securities
    2,105       1,919  
Deferred tax assets, net
    3,911       3,495  
Other assets
    223       192  
Total assets
  $ 40,869     $ 39,191  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY
           
 
           
Current liabilities:
           
Accounts payable
  $ 6,854     $ 5,595  
Accrued compensation and related taxes
    1,160       2,014  
Accrued warranty expense
    1,390       1,546  
Accrued other expenses and other current liabilities
    512       292  
Dividends payable
    253       256  
Short-term lease liability
    263        
Note payable-current portion
    77        
Deferred revenue
    281       180  
Total current liabilities
    10,790       9,883  
 
               
Note payable, net of current portion
    348        
Long-term lease liability
    2,295        
Deferred revenue
    2,419       1,596  
Total liabilities
    15,852       11,479  
Commitments and contingencies
               
Stockholders’ equity:
               
Preferred stock; $1.00 par value; 1,000,000 authorized shares;
none issued or outstanding
           
Common stock; $.60 par value; 20,000,000 authorized shares; 13,929,381
and 13,882,937 issued; and 12,672,056 and 12,817,829 outstanding shares at September
30, 2019 and December 31, 2018, respectively
    8,357       8,330  
Additional paid-in capital
    26,037       25,867  
Accumulated deficit
    (4,482)       (2,393 )
Treasury stock, at cost, 1,257,325 and 1,065,108 shares at September 30, 2019 and December 31, 2018, respectively
    (4,895)       (4,092 )
Total stockholders’ equity
    25,017       27,712  
Total liabilities and stockholders’ equity
  $ 40,869     $ 39,191  
                 

SOURCE: BK Technologies Corporation

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