Attached files
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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 Second Quarter 2020 Results
WEST
MELBOURNE, Florida – August 5, 2020 – BK Technologies
Corporation (NYSE American: BKTI) today announced financial and
operating results for the second quarter and six months ended June
30, 2020.
For the
second quarter ended June 30, 2020, revenues totaled approximately
$9.9 million, compared with approximately $13.3 million for the
second quarter last year. The operating loss for the second quarter
of 2020 totaled approximately $36,000, compared with operating
income of approximately $20,000 for the second quarter last year.
The net loss for the second quarter of 2020 was approximately
$302,000, or $0.02 per basic and diluted share, compared with a net
loss of approximately $247,000, or $0.02 per basic and diluted
share, for the second quarter last year.
The net
loss for the second quarter of 2020 included an unrealized loss on
investment in securities totaling approximately $200,000, compared
with an unrealized loss of approximately $148,000 for the second
quarter last year.
The
Company had approximately $13.4 million in working capital as of
June 30, 2020, of which $10.5 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. During the six-month period ended June 30, 2020,
the Company reduced inventory by approximately $4.0 million (29.5%)
and generated cash of approximately $2.3 million.
Tim
Vitou, BK’s President, commented, “Despite the
challenges and uncertainties in worldwide business and economic
conditions, our sales for the first half of 2020 were consistent
with last year’s first half, and we narrowed our operating
loss by over 60%. We are encouraged that our sales successes
included new markets and customers, such as our recently announced
contract with an agency of the U.S. Department of Energy. We have
also taken actions throughout the company to increase efficiencies
and effectiveness while reducing expenses, as evidenced by improved
gross profit margins and decreased selling, general and
administrative expenses relative to the same periods last year and
the preceding quarter of 2020. During the second quarter for 2020,
we reduced total operating expenses by almost 25%, a savings of
approximately $3.3 million. After our restructuring and the related
expense reductions, we believe we have significantly lowered the
threshold at which we can generate operating
profits.”
Mr.
Vitou continued, “We recently achieved an important milestone
with the design completion of the first model in our new BKR family
of products, which we anticipate will be available for sale during
the second half of 2020 and moving forward. Our plans are for the
BKR product line to serve as the foundation for our future growth,
and include multiband products, which we believe will open new
markets to us, and enable us to increase our overall market
share.”
Mr.
Vitou concluded, “In response to the COVID-19 pandemic we
have taken steps to safeguard our staff and address potential
changes in our business. A portion of our employees are working
remotely, and we have implemented extensive safety measures for
those continuing to work in our primary facilities. To-date, one
staff member has tested positive for COVID-19. This employee has
been quarantined in accordance with accepted safety practices and
is working remotely. Throughout the pandemic, as an essential
business supporting first responders, we have remained operational.
While some of our supply chain partners were temporarily closed in
the pandemic’s early stages, most have resumed normal
operations and we have been able to procure the materials necessary
for manufacturing products and fulfilling customer orders. The
outlook for the next several quarters is uncertain as the pandemic
progresses. However, our restructured operations and balance sheet
with liquidity and minimal debt, we believe, should allow us to
withstand current conditions and leave us well positioned once the
U.S. and global economies start to improve.”
For the
six months ended June 30, 2020, sales totaled approximately $20.8
million, compared with approximately $20.9 million for the same
period last year. The operating loss for the six months ended June
30, 2020 improved 61.5% to approximately $884,000, compared with
approximately $2.3 million for the six-month period last year. The
net loss for the six months ended June 30, 2020 totaled
approximately $1.5 million, or $0.12 per basic and diluted share,
compared with a net loss of approximately $1.6 million, or $0.12
per basic and diluted share, for the six-month period last year.
The financial results for the six months ended June 30, 2020
included an unrealized loss on investment in securities totaling
approximately $506,000, compared with an unrealized gain of
approximately $444,000 for the six-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, August 6, 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 August 6, 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 August 17, 2020 by dialing
877-481-4010 PIN# 36047 (international/local participants dial
919-882-2331 PIN# 36047).
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; the
impact of the COVID-19 pandemic on the companies in which we hold
investments; 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, its Quarterly Report on Form
10-Q for the quarter ended March 31, 2020 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)
BK TECHNOLOGIES CORPORATION
Condensed Consolidated Statements of Operations
(In
thousands, except per share data) (Unaudited)
|
|
Three Months
Ended
|
Six Months
Ended
|
||
|
June 30,
2020
|
June 30,
2019
|
June 30,
2020
|
June 30,
2019
|
|
|
|
|
|
|
|
|
Sales,
net
|
$9,937
|
$13,294
|
$20,826
|
$20,938
|
|
Expenses
|
|
|
|
|
|
Cost of
products
|
5,609
|
7,593
|
12,603
|
12,800
|
|
Selling, general
and administrative
|
4,364
|
5,681
|
9,107
|
10,436
|
|
Total
expenses
|
9,973
|
13,274
|
21,710
|
23,236
|
|
|
|
|
|
|
|
Operating (loss)
income
|
(36)
|
20
|
(884)
|
(2,298)
|
|
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
|
|
Net interest
(expense) income
|
(6)
|
46
|
3
|
101
|
|
(Loss) gain on
investment in securities
|
(200)
|
(148)
|
(506)
|
444
|
|
Other
expense
|
(32)
|
(11)
|
(79)
|
(13)
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(274)
|
(93)
|
(1,466)
|
(1,766)
|
|
|
|
|
|
|
|
Income tax
(expense) benefit
|
(28)
|
(154)
|
(28)
|
201
|
|
|
|
|
|
|
|
Net
loss
|
$(302)
|
$(247)
|
$(1,494)
|
$(1,565)
|
|
|
|
|
|
|
|
Net loss per
share-basic:
|
$(0.02)
|
$(0.02)
|
$(0.12)
|
$(0.12)
|
|
Net loss per
share-diluted:
|
$(0.02)
|
$(0.02)
|
$(0.12)
|
$(0.12)
|
|
Weighted average
shares outstanding-basic
|
12,496
|
12,720
|
12,525
|
12,741
|
|
Weighted average
shares outstanding-diluted
|
12,496
|
12,720
|
12,525
|
12,741
|
BK TECHNOLOGIES CORPORATION
Condensed Consolidated Balance Sheets
(In
thousands, except share data)
|
|
June 30,
2020
|
December 31,
2019
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$6,939
|
$4,676
|
|
Trade accounts
receivable, net
|
3,583
|
3,964
|
|
Inventories,
net
|
9,527
|
13,513
|
|
Prepaid expenses
and other current assets
|
1,408
|
1,733
|
|
Total current
assets
|
21,457
|
23,886
|
|
|
|
|
|
Property, plant and
equipment, net
|
3,828
|
3,964
|
|
Right-of-use (ROU)
asset
|
2,709
|
2,885
|
|
Investment in
securities
|
2,129
|
2,635
|
|
Deferred tax
assets, net
|
4,344
|
4,373
|
|
Other
assets
|
143
|
197
|
|
Total
assets
|
$34,610
|
$37,940
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$4,472
|
$5,310
|
|
Accrued
compensation and related taxes
|
940
|
1,271
|
|
Accrued warranty
expense
|
911
|
1,248
|
|
Accrued other
expenses and other current liabilities
|
385
|
479
|
|
Dividends
payable
|
250
|
252
|
|
Short-term lease
liability
|
417
|
369
|
|
Note
payable-current portion
|
80
|
78
|
|
Deferred
revenue
|
556
|
369
|
|
Total current
liabilities
|
8,011
|
9,376
|
|
|
|
|
|
Note payable, net
of current portion
|
289
|
328
|
|
Long-term lease
liability
|
2,426
|
2,606
|
|
Deferred
revenue
|
2,724
|
2,354
|
|
Total
liabilities
|
13,450
|
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; 13,943,820 and 13,929,381
issued and 12,493,420 and 12,596,923 outstanding shares at June 30,
2020 and December 31, 2019, respectively
|
8,366
|
8,357
|
|
Additional paid-in
capital
|
26,235
|
26,095
|
|
Accumulated
deficit
|
(8,039)
|
(6,043)
|
|
Treasury stock, at
cost, 1,450,400 and 1,332,458 shares at June 30, 2020 and December
31, 2019, respectively
|
(5,402)
|
(5,133)
|
|
Total
stockholders’ equity
|
21,160
|
23,276
|
|
Total liabilities
and stockholders’ equity
|
$34,610
|
$37,940
|