BKTI - Earnings call 1 2023 | BK Technologies Corporation

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Operator

Good morning, ladies and gentlemen, and welcome to the BKTI First Quarter 2023 Earnings Call. This call is being recorded. [Operator Instructions] Following management's remarks, the call will be open to questions. There is a slide presentation that accompanies today's remarks, which can be accessed via the webcast. At this time, it is my pleasure to turn the floor over to your host for today, Mr. Investor IMS of Nesbett Relations. John Please go ahead.

John Nesbett

Good to discuss you. of morning, the and call conference XXXX. our to BK quarter welcome first Thank Technologies for results

Malmanger, filings of Suzuki, may call differences are expressed these those forward-looking described achievements to have moment statements. not and presentation that call statements safe made be or are to of to, factors Executive from based material materially Such statements duty such in the goals and are undertake statements statements in and are the but the Commission. regarding Statements limited statements today, forward-looking known the Officer. are and John based morning's statement. this cause do profits. These believed On information are not release are Officer; forward-looking take and differ such that with Exchange on and include, projections by today read BK Scott that during update Chief harbor a could unknown presented risks. Financial I'll not company's and and results, factors facts that actual any to the the future understandings as on to Chief and conference and targets risks some and press been These of accurate this to contribute Securities and implied and historical U.S. revenue statements. company's The subject or the in performance

ahead, John. Executive over John Chief Go at turn Officer BK call now Technologies. the to I'll Okay. Suzuki,

John Suzuki

deeper of quarter, our and into by today. turn the our results. Chief conclude opening Thank over then for to Officer, up for financial I'll results financial you, the John. brief reviewing joining everyone, Q&A. a the Malmanger, some operations Scott you, for I'll Financial our dive call it We'll during a start of highlights Thank by

X. to Slide Turning

shipment XX,XXX gross X,XXX off volumes growth end to of improved with to million The previously ship on shipment quarter. a of XX,XXX radios, per strong our quarter is of the in to the top radios start $XX with XX%. revenue which approximately XXX% to margin the quarter of first is drove improved Our target announced

was demand. to BKR our improved us Our to activity which manufacturing production which the increased have primarily capabilities, shipment is expanded related ramp tremendous seeing and of XXXX, allowed

to launch of near continue our XXXX toward We is and through continued quarter, we that with understanding is receive expectation the our shortly progress the Compliance FCC certification thereafter. Radio. the Multi-Band the BKR testing will that make testing it complete,

seeing technology as to industry. late than communications safety IWCE. is of traveled March, event participate more sponsor We're As to professionals public an by From larger addressable we International Expo, or Vegas and a capabilities the a interest in a standpoint, in we've launching mentioned, we're market the new great whose this formally toward market multi-band open premier to up XXXX. in This Las industry, expected marketing Wireless deal the several are critical of attended our from verticals. a with looking BKR X,XXX important Communications

Over the offerings, all our highlight InteropONE SaaS BKR and XXXX event, technology. our the especially of service. our to demonstrate were X-day showcased and the We newest we course and excited products

X. Slide to Turning

in of the million orders Protection. backlog include and XX, XXXX. $XX.X their quarter During from and the $XXX,XXX $X.X ended The Forestry strong, Booking State the existing million and quarter, Natural we as expand of activity of Fire steady BKR and customers saw technology. recent for the California new portable a an XXXX remained communications order quarter strong as order upgrade a Department the from order activity and follow-on Washington our March with and we Resources Department of order

and their in technology customers, X equipment offerings and great these see. on supported our reliance previously have continued BK is We confidence and communications providing to portable

InteropONE large BKR from confident Washington purchase first the to safety for Following belt under top this order area $XXX,XXX service cellular the this there another over highlight more we offering orders for a received our be the the quarter, Oregon, excited of that moving the for also forward. X customer. located agency quarter, push-to-talk received in service metropolitan also that Bureau the first we a during order long-time our of first want one BK from a in XXXX I have close Land We're U.S. many will our public unique to and Management,

BKR the with top we the illustrates coming X of end XX,XXX our Slide continued we're X. quarter, our units traction shipped In Slide quarterly target. XXXX. at seeing in shipment

as production are and well. And we XX,XXX shipment manufacturing radios through quarter. targeting we of operations are X,XXX XXXX, executing each move to the Our

to are XXXX. see our can you Slide Turning With production global customers. of supply our slide, and up our we this improved much chain driving impacted able to delivered as product to On how cadence higher-priced issues X. through lines margin ramped get shipment more and are negatively the study, margins we

creative an our our delivery and capabilities production to endeavor, components, secure were constrained expensive and efforts XXXX. and nimble much and While we were for parts in it of was

XXXX gross year improvement, our XX%. As reiterate through margin we we we full of XXXX, quarter-to-quarter and see anticipate that move gross target margin steady we

update on -- XXXX. sorry, BKR an provides of the X our launch X X. Slide Slide Slide

stayed FCC the nearing our is quarter, first testing and lab close the phase the was with ongoing. final Throughout is understanding test completion. the During in contact test that process, we

the the the orders. current to first deal shortly. is of months market a BKR Once interest be in expect There great manufacturing to to to XXXX dedicated and will from FCC certification production shipping. we and receive of the certification, turn the will receive we development we completing attention fulfilling So our transition backlog

line. planned, customers' as getting taking finish to keep into and the move While believe product we to closer it's to originally we bit we'll very you a than we're this longer hands close informed continue

you Malmanger, turn over to I'll through take it financials. Now CFO, Scott? to Scott the

Scott Malmanger

$XX.X summary million X, results a operating quarter with see totaled first million compared Slide the XX, John. last of same will for XXXX. you the and financial for the our $X.X you, approximately Sales for year. ending March period quarter Thank On

As expenses totaled the XX% with margin the John approximately SG&A or million. the as associated participation BKR for $X.X quarter we closed was of SG&A with with million well increased same Selling, at and the quarter the quarter XXXX our spending of and IWCE. first backlog as introduction quarter onetime XX% year. compared with $XX.X the ATM first with million compared administrative for the sponsorship profit $X.X last product quarter included costs last in Gross expenses, an first mentioned, in and order first general year. for

quarter the first quarter an of prior of totaled net for the last the in significantly recognized or period. last XXXX with quarter the a $X.X of $X.X First unrealized compared first year. an with basic unrealized a In the year We $X.XX of of share -- loss $X recorded operating net diluted compared the loss loss loss of in compared million we share $XXX,XXX XXXX, loss year. net $X.X of quarter and million in basic of reduced period per or diluted prior with first $XXX,XXX same and $X.XX per million on operating investments quarter loss our million

approximately sales our need availability by we we a under working of levels our March over generated sales finally, will business. improve cash XX, long-term believe turn that and expectation our million have as primarily only that call combined grow cash radio margin and as to It and to profitability position, standpoint, cash gross us strong of and provides see with I debt. is well. we current XXXX, credit $X.X that improvement, equivalents now $XXX,XXX continued should From borrowing the with And our in cash will the with anticipated performance we liquidity facility back John. capital

John Suzuki

Thank you, Scott.

our focused XXXX. X. X, Turning we on production out for remain lay to Slide efficiency. maximizing Slide focus On We

produce we the will our to XX,XXX quarter XX,XXX to full end our at radios per to a radios believe radios come of Based the full demand, with full high shipment and at activity per shipment in forecasted XXXX set is quarter of capacity $XX,XXX target. and for for backlog year the visibility targeting production year. on or to today, XX,XXX year. Our We're XX,XXX X,XXX up

focused margin XX% gross this reasons. were with for year higher cost The improvement full and believe replaced gross year. last the a are in and will lastly, for target XXXX. a to Second, elevated to start of increases year historical margin prevalent balance we parts driving more the we're product production purchased purchased with at We product be the improvements In to cost cost achieve on leverage. normal see more hard components the target several are XXXX is level. improved exhausted mix parts almost incremental expect our rates, operating we shipments. and during in throughout steady established And working XXXX achievable Price

plan strategic public but a throughout year. is state this as a There's for establish beachheads we lot these continue gross We want achieving still for our the safety year, Portable to BKR XXXX we In Multi-Band XXXX and XXXX, beachheads we're margins markets done establishing we local of to off to to work and goal. InteropONE. third growth good Radio in federal, in important that and believe the our to remain of the focus, improve will committed area start, be continued in and

by our last goal longer-term reaching our XXXX. million reiterate Slide revenue XX. On of slide, in we $XXX

investing drive the growth critical establish technology public profitable to as and safety a communications provider BK are We personal for markets. to vision premier the with communications

well likewise, BKR BKR once is a considerably expand launch Our appeal the will its existing launched, new to in success markets. proven target our Likewise, customers customers. as the -- to XXXX XXXX as

of new customers will about safety lives. for new and excited times, potentially We saving first we're InteropONE. many think improve will response believe Finally, what this be we responder our offering first securing

that, delivering the will As play over InteropONE presence gain as we revenue high-margin, a market service, a the role call time. operator to reoccurring for over With in SaaS anticipate turn I meaningful Operator? we questions. will

Operator

Thank very much. you

first Orin coming Hirschman questions. Partners. We [Operator are the from floor now from AIGH opening question is Instructions] Your for

Orin Hirschman

comes gross from order at it sounds get you're that away a gross back-of-the-envelope percentage to exceeds order you're run a that like by have issue the very half to I still gross year second the the order a number math margin. few want versus to go just have get quick efficiencies? component XX% in efficiency efficient in of to to margin, going from much Because that to additional to a in additional balance math, QX. on target points margin How back the Obviously, of side, to out rate. in the going

get So to XXs need get how you're to number to? to do going high that that you

John Suzuki

Orin, John it's Suzuki.

the that I consumed would it Let turn first thought, Scott of the a comments, right? you I'll huge -- would me forward, I tailwinds maybe to are was through say of of, quarter, over cost help in say, just and that couple the things. product there side mentioned a make thing purchased amount we The of first higher on the to expand right? that or XXXX. material the number So us pushing cost material was that a

quarter is at or much dwindling So go into material the as most all or material we're we of second lower and cost and is costs. beyond, now material that historical the that the purchasing

there Now But are much there's there. it's components on still always a -- some that improved. are out few mix,

So that's happening.

to older price we I had mean, had increases good a such the older bad we made had that last -- thing, second backlog. the year. which improvements thing, get actually big prices. our is first, price that We orders The And through we made

through so has is see which new, right, a the although can we as backlog, backlog, our first and from prices. have of most we that the quarter, get healthy still that higher you And pretty

we run in don't to product is leverage, at a more into the our continue go in we're in area, as higher I understate of shipping area. shipping The we QX about in production want in steady production deliver. the last a down quarters. price majority than we it's that as previous had our efficiency cost So building to to ability now which at this radio And efficiencies what beyond, and state, are the shipped then again,

in projects a had where XXXX products number just it. on the we of state But do. actually material a more that in ship there our can to and unfortunately, focus we were was So scheduled getting

BKR I as we is of a XXXX mix in the us versus improvement, some of margin through the QX start well product The projects so of these underway, improvements of QX. that's And product to mix, flow are the through and expect XXXX. primarily which balance with is more now say cost area seeing to last QX. in more of the early as those And going the terms selling hit would

of have full margins. In -- to material the the we gross said on this on we not to fourth our our that impact do positive I've expect will is some overall BKR that XXXX. that, quarter, year ship impact expect XXXXs And continue Although again, number year. it through some

don't Scott, I add more to on that, if know want So you that? to

Scott Malmanger

Thanks, John.

I initiatives explained at it have the well. on think do for reductions a of specific you products. We looking that we're number cost

achieve those to the quarter in expect second here. We

incremental So quarter-over-quarter of we'll improvement the have the through rest year.

Orin Hirschman

I mean other just a random Okay. couple questions.

So or any being business additive has publicly is years level stated cannibalistic? ever been the you since never production and and we Do took the you've see a the as should the reasonable you above the question about we've XXXX, nicely for I've margins known XXXX XXXX be on superior. asked -- up position. each I know other at X probably gross that This

John Suzuki

majority XXX% be the some chase willing fire, not who our there because Multi-Band Radio. pay money customers would will to current as in I much additive, for for say are example, wildland battalion of twice

be we new verticals market historically XXXX view not there'll but additive. sold that overlap, It's So we to. as totally being have some the

Orin Hirschman

to well it's of Xx it's in to number really? for Could obviously base percent a Can percent with not you same gross at on as some as getting if margin or to customer multi-bands because percentage see you a base the that positive, you material you. speak customer wanting price Europe radios one they're the Xx your basis, becomes on your buying mentioned, better a of you cannibalistic, migrate

John Suzuki

question, good That's a Orin.

think can down budgets. it comes Ultimately, you it I argue ways. multiple to their

buying bands. huge in belongs State ours, FIRE in the department California. that fire of of of Radios the on for the all have CAL strongest operates of Multi-Band think I a client customer we base is makes that frequency state The is CAL case California. the California to every state FIRE X

home out these a up because their using and is competitor's carrying when firefighters, their mission, they BK They're go most them back wildland of technology. system, they when go not a a pick so technology they're compatible, And the right? respond radios. will different When fire radio on on

says, have my on So as That can a just when think my don't I there is when radio that why a mission fire. Multi-Band for that for Radio. that as way, replace an wildland I on I XXXX I system, home buy argument well just one my system radios I'm operate BK home

certainly I that's at those state the So other us, they say, have -- centers, frequency right? argument us. the a in that in a which TBD, would good for it's so upsell a migrating in We of city departments there's the basically XXXX, BKR may the that frequency strongly consider It's strong bands, larger an says XXX% to argument for thing a are think just good I is in higher the to see, that but right? California least there's that bands, fire

Orin Hirschman

yet? quarter or just The do that see more? customer quickie. we'll quarter or X InteropONE, question, deployed you last this first And number think customer year And is X Okay. next a

John Suzuki

Yes.

now been first on the X it that we've from or very, And positive. customer the about using So customer has the for has They've X. very deployed. been gotten month mission feedback

of the terms several and at level. had field state local new In trials federal, other we've orders,

they time And No a in it's much every present marketplace pretty pricing else of unique the capability. we will we like customer, the get two, a feature. feedback is is One the model the offers things novel One, I one of say InteropONE this and pay-as-you-go. to common.

have they on similar to our phone every cell of cell but cost competitors, responder lot it it because have agency put member first looked people their on prohibitive from or So found within at services a every they these phone. their

at cost start the it looking And amongst end can day, when hundreds prohibitive So you only at becomes subscriptions. of talk of the they themselves.

your the only subscription you maybe on need is pretty at need most, you then it's I the but of time model, So handful only team our is have that's -- leaders, at at just and it of end a the you mean, subscriptions one need subscription, of look When the they which can at and be limited with and -- a day, handful that inviting the really And price. start when guest start you users. only has pretty really subscription end paying it it. time using the a minimal you -- And when costly.

little need pay itself bit incident of but the you when So will pay usually a have yes, you to that that for service for it, time. at money,

Operator

into the Capital. have popped We in Semco [Operator questions from to further Weis Instructions] Okay. appear just queue Scott don't queue. has any

Scott Weis

Congratulations quick like in past per looks indicated device quarter, in on expect rest $X,XXX between conversations, comment number the good of X have Can investment device. per of expect it our go you what you And were? And revenue One, those you on to my $X,XXX. Can a balance you quarter. losses year? came second now around where you I questions. that around on the sheet. then on comment is and the question investments it to and this the

John Suzuki

address and the me first then Scott. question, the question I'll let So pass to second

Scott, revenue very up So metrics picking and of that you're we one per watch radio. say would that's closely, those I

Just of includes per revenue cost the radio call, inclusive everyone to the radio. in also the for surround the that is itself, that and all context on accessories radio but services put it that

and radio speaker a when XXXX, ship battery, So with like a antenna, we'll itself we a ship ship with then it a BKR we charger radio it the microphone.

So these are accessories. all

on depending use. filled although is themselves thing may X radio X replaced in accessories the the about X years, XX get to years, that be The interesting to accessories every

radio the of I'll And the life accessories radio may that in I field. for so but once, sell sell the

-- we came at radio around and and per if for more were unit. XXXX and XXXX XXXX, look you unit per the shipment $X,XXX. and we But in into our example, revenue I in you QX, revenue around deeply about in look $X,XXX XXXX, QX, were $X,XXX sorry, in If think

And most -- And is of the QX. some the unit. so you radio accessories which sold definitely that revenue on can QX seasonality and primarily season, during with company, per see in fire while our season are there's fire

$X,XXX expect average, would QX quarters on again, per radio what So for is per radio been in 'XX, higher shipped. revenue and versus we those to and But it's QX. 'XX least shipments at see

we said, a being that shipped. see all that of we in closely will Now for -- us to of looking if number units terms And year this be for XXXX historical are tracks this number are year. $X,XXX very

can't again, for close And in volume sure, high is say side that on increase just XX% I in it Scott, to the we're be units shipped because XXXX. our increase whether is projecting range, to a projecting. which we're of the of

do So during expect we think and but out, quarters I ship just upcoming how have more to that the on quarters. we wait to see fall accessories the

defer going my question, second The I'm here. to Scott friend, to

Scott Malmanger

an Basically, if the to but quarter. something to ago, investment on number made a a that's and constantly XXXX, investment position back that that see be so monitor review the now that books years good of would we every that or to continue investment was not, in we exit is or time

at with kind that's the where of So we're investments.

unrealized are those losses. So

where see we from there. So we'll go

Scott Weis

to Okay. John, one answer. your follow-up

of correct? assume higher last is XXXX revenue point per seen higher it, would the will and ASP that Is I than be the what that, months, next, end in at X, Assuming the that given the your few back the over year X device the quarters. launched certified over we've some on call

John Suzuki

number looking want are In right, reiterate fourth shipping lock because because the XXXXs. be the the think XXXXs going statement, radios to a and Yes. to and to set -- statement. at general I going XXXXs right, to think we're clearly, the just right? shipped, of quarter, XXXX, mix the quarter, we're radios to the and Well, rollout again, to general, revenue per the other don't I that more just slow myself on radio of forward, on going of up. go is I the as just going is of as heavy into becomes a product mix in That's think, fourth expectations, roll the true I

issued. quarter, raised few it's of the radios quarter, in months, next that next be in to the be be it's going first So finite going it's and number are to And to going a we we're that solid there get do good want customers address feedback able And very ensure issues from and raised. we to that to are our quickly. any that them if to that immediately

it's all deploying to certainly on it lights, case, as seems those will The increase be are quickly we things see green to be And the deploy well. On production need is and that But we demand lights there. to rates. we'll how green things more like a cautious And continue is. it what we product. ideal ensure great we're going these

Operator

you much. closing the to hand That session. question-and-answer back will our be Thank remarks. now for I very of to end appears management

John Suzuki

all QX. great Thank you participating forward best our a in have we report for you with the when all We call to of and look you, today. to day. All again speaking the

Operator

you, conference Thank does conclude This call. everybody. today's

your at wonderful your day. time, may disconnect and lines Thank have for participation. a you You this

BK Technologies (BKTI) 4 May 232023 Q1 Earnings call transcript