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8-K - CURRENT REPORT - BK Technologies Corp | bkti_8k.htm |
Exhibit 99.1
Company Contact:
BK Technologies Corporation
William Kelly, EVP & CFO
(321) 984-1414
BK Technologies Reports First Quarter 2020 Results
WEST
MELBOURNE, Florida – May 13, 2020 – BK Technologies
Corporation (NYSE American: BKTI) today announced financial and
operating results for the first quarter ended March 31,
2020.
For the
first quarter ended March 31, 2020, revenues increased 42.5% to
approximately $10.9 million, compared with approximately $7.6
million for the first quarter last year. The operating loss for the
first quarter 2020 totaled approximately $848,000, compared with
approximately $2.3 million for the first quarter last year. The net
loss for the first quarter of 2020 was approximately $1.2 million,
or $0.09 per basic and diluted share, compared with approximately
$1.3 million, or $0.10 per basic and diluted share, for the first
quarter last year.
The net
loss for the first quarter 2020 includes an unrealized loss on
investment in securities totaling approximately $306,000, compared
with an unrealized gain on investment of approximately $592,000 for
the first quarter last year.
The
Company had approximately $13.7 million in working capital as of
March 31, 2020, of which $9.5 million was comprised of cash, cash
equivalents and trade receivables. This compares with working
capital of approximately $14.5 million as of December 31, 2019, of
which $8.6 million was comprised of cash, cash equivalents and
trade receivables.
Tim
Vitou, BK’s President, commented, “With the outbreak of
COVID-19, the first quarter this year brought unforeseen and
unprecedented business conditions for BK, and companies worldwide.
As an essential business supporting first responders, we have
remained open. Although we encountered some challenges, supply
chain disruptions have been limited, and we have been able to
produce the products necessary to fulfill customer orders. During
the first quarter, customer demand, particularly from federal
agencies, was encouraging as evidenced by the increase in our sales
compared to last year’s first quarter. We have also been able
to continue our product development initiatives. The outlook for
the next several quarters is uncertain as the pandemic progresses
and large segments of the worldwide economy remain closed. We have
taken steps to safeguard our staff and address potential changes in
our business. While a large portion of our employees are working
from home, we have implemented extensive safety measures for those
continuing to work in our primary manufacturing facility.
Fortunately, to-date none of our staff have tested positive for
COVID-19. Additionally, we have implemented Company-wide
initiatives to reduce our workforce and expenses, helping to
mitigate the impact of a potential slowdown in our business. We
believe the Company’s balance sheet is well structured to
withstand these adverse conditions with liquid assets and minimal
debt. Accordingly, I believe the Company will be well positioned
once the U.S. and global economies start to open and
improve.”
Mr.
Vitou concluded, “On April 13, 2020 we received approval and
funding for an unsecured loan of approximately $2.2 million under
the Paycheck Protection Program (PPP). At the time of application,
we believed BK qualified to receive the funds pursuant to the PPP,
and it was intended that the loan proceeds would be used for
qualifying expenses in accordance with the terms of the program. On
April 23, 2020, new guidance was issued that created uncertainty
regarding the qualification requirements for a PPP loan. Therefore,
out of an abundance of caution, on April 24, 2020 we initiated
repayment of the full amount of the loan to the
lender.”
1
Conference Call and Webcast
The
Company will host a conference call and webcast for investors at
9:00 a.m. Eastern Time, on Thursday, May 14, 2020. 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 May 14, 2020. 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 May 25, 2020 by dialing 877-481-4010
PIN# 34470 (international/local participants dial 919-882-2331 PIN#
34470).
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,
some of which have been, and may further be, exacerbated by the
COVID-19 pandemic, 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, including our ability to successfully develop and
sell our anticipated new multiband product and other related
products in the planned new BKR Series product line; competition in
the land mobile radio industry; general economic and business
conditions, including federal, state and local government budget
deficits and spending limitations, any impact from a prolonged
shutdown of the U.S. Government, and the ongoing effects of the
COVID-19 pandemic; 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 consummate, acquisition,
disposition or investment transactions, and risks incumbent to
being a noncontrolling interest stockholder in a corporation;
impact of our capital allocation strategy; risks related to
maintaining our brand and reputation; impact of government
regulation; 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, as well as any further impact resulting from the COVID-19
pandemic; our inventory and debt levels; protection of our
intellectual property rights; fluctuation in our operating results
and stock price; acts of war or terrorism, natural disasters and
other catastrophic events, such as the COVID-19 pandemic; 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, 2019 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.
# #
#
(Financial Tables to Follow)
2
BK TECHNOLOGIES CORPORATION
Condensed Consolidated Statements of Operations
(In
thousands, except per share data) (Unaudited)
|
Three Months
Ended
|
|
|
March
31,
2020
|
March
31,
2019
|
Sales,
net
|
$10,889
|
$7,644
|
Expenses
|
|
|
Cost of
products
|
6,994
|
5,207
|
Selling, general
and administrative
|
4,743
|
4,755
|
Total
expenses
|
11,737
|
9,962
|
|
|
|
Operating
loss
|
(848)
|
(2,318)
|
|
|
|
Other (expense)
income:
|
|
|
Net interest
income
|
9
|
55
|
(Loss) gain on
investment in securities
|
(306)
|
592
|
Other
expense
|
(47)
|
(2)
|
|
|
|
Loss before income
taxes
|
(1,192)
|
(1,673)
|
|
|
|
Income tax
benefit
|
—
|
355
|
|
|
|
Net
loss
|
$(1,192)
|
$(1,318)
|
|
|
|
Net loss per
share-basic
|
$(0.09)
|
$(0.10)
|
Net loss per
share-diluted
|
$(0.09)
|
$(0.10)
|
Weighted average
shares outstanding-basic
|
12,555
|
12,762
|
Weighted average
shares outstanding-diluted
|
12,555
|
12,762
|
3
BK TECHNOLOGIES CORPORATION
Condensed Consolidated Balance Sheets
(In
thousands, except share data)
|
March
31,
2020
|
December
31,
2019
|
|
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$4,946
|
$4,676
|
Trade accounts
receivable, net
|
4,590
|
3,964
|
Inventories,
net
|
10,937
|
13,513
|
Prepaid expenses
and other current assets
|
1,802
|
1,733
|
Total current
assets
|
22,275
|
23,886
|
|
|
|
Property, plant and
equipment, net
|
3,775
|
3,964
|
Right-of-use (ROU)
asset
|
2,791
|
2,885
|
Investment in
securities
|
2,329
|
2,635
|
Deferred tax
assets, net
|
4,373
|
4,373
|
Other
assets
|
169
|
197
|
Total
assets
|
$35,712
|
$37,940
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$4,836
|
$5,310
|
Accrued
compensation and related taxes
|
1,045
|
1,271
|
Accrued warranty
expense
|
1,099
|
1,248
|
Accrued other
expenses and other current liabilities
|
402
|
479
|
Dividends
payable
|
250
|
252
|
Short-term lease
liability
|
393
|
369
|
Note
payable-current portion
|
78
|
78
|
Deferred
revenue
|
462
|
369
|
Total current
liabilities
|
8,565
|
9,376
|
|
|
|
Note payable, net
of current portion
|
309
|
328
|
Long-term lease
liability
|
2,511
|
2,606
|
Deferred
revenue
|
2,685
|
2,354
|
Total
liabilities
|
14,070
|
14,664
|
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 issued and
12,495,110 and 12,596,923 outstanding shares at March 31, 2020 and
December 31, 2019, respectively
|
8,357
|
8,357
|
Additional paid-in
capital
|
26,146
|
26,095
|
Accumulated
deficit
|
(7,485)
|
(6,043)
|
Treasury stock, at
cost, 1,434,271 and 1,332,458 shares at March 31, 2020 and December
31, 2019, respectively
|
(5,376)
|
(5,133)
|
Total
stockholders’ equity
|
21,642
|
23,276
|
Total liabilities
and stockholders’ equity
|
$35,712
|
$37,940
|
4