BKTI - Earnings call transcript Q3 2024 | BK Technologies Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the BK Technologies Corporation Conference Call for the Third Quarter 2024. This call is being recorded. [Operator Instructions].

Following management's prepared remarks, the call will be opened for questions. There's a slide presentation that accompanies today's remarks, which can be accessed via the webcast. is host to Nesbett for Investor it over the of time, Relations. your to today's this my turn pleasure floor IMS At call, John ahead. go Please .

John Nesbett

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

today Suzuki, the Chief Officer; Malmanger, Chief and call On Officer. Executive Scott Financial are John

are include, facts in statements statements unknown statements. statements are and the to, based this of and conference during I'll moment future take not made not Such risks. These to a statements. are and forward-looking read the but presented limited Statements on company's projections goals are profits. regarding known that and or the historical subject to and safe harbor targets presentation factors revenue call

achievements or results, factors differ material any Commission. or with Exchange and actual those expressed forward-looking and BK's and the cause by the differences the some press been of in company's filings U.S. could from contribute performance implied Securities that this materially these morning's statements described release such in have risks may and The

statements of These do and information based statements. undertake are understandings such not update duty forward-looking today, any to we accurate be are believed to that on as and

to now John. Technologies. Executive Please I John go the Okay. call Officer turn over ahead, Chief Suzuki, of BK

John Suzuki

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

achieved our of $X.XX. $X.XX highlighted quarter of progress of by quarter with and and GAAP We execution XXXX share operational on fifth solid earnings year-to-date share per profitability of The per consecutive earnings was goals. our third

we this in progress the quarter, later in updates will presentation. financial our providing targets our be Given to

by upgrade looking solid BKR order XXXX $XX both customers million, fleets. and backlog radio BKR from strong remained supported radios to XXXX our their activity existing quarter Third at for and new

continued quarter shift also sales. combination include driven improvement margin product incremental reduction a Series more and mix gross in a the XX.X% BKR of to We of margins strategic initiatives our in of cost trend by with radio

we manufacturing During our East the project from products manufacturing quarter quarter, generated of East the completed our to majority West. West transition revenue by manufactured with third

and savings West Additionally, costs lower to forward we to product partnership. our East the continued improvement favorably as see of performance the gross transition full the related realize impacted margin moving margin expect we

BKR We order receive both for continue and strong activity customers our to quarter. the new Series existing radios in from

received the was interest encouraging. BKR been state highlight is and that One our and I'd Florida from customer activity BK. Forest Service, quarter like XXXX the from substantial a long-standing to order order receiving has the agencies, in of local Specifically,

For total the BKR value of $X.X million. XXXX at a

health. will well be used control including biodiversity research and branches wildland as and throughout radios facilitating management for to the ecosystem The land fighting burns and different for fire active fires as by improve several organization

example of among is local agencies. and increasing versatility varying state this seeing the the BKR demonstrates across and operations radio and order from of This an XXXX departments we're that demand the

largely East outsourcing of related Looking West. the radio the through at reduce continued margin, in ability to gross drove the improvement to expense we quarter, our manufacturing our to manufacturing

work through margins as continue and XXXX achieving We we towards XX%. of XXXX margins expect to improve gross to gross

XXXX. per $X.XX significantly this our As I share quarter consecutive with second mentioned earlier, since the profitability have earnings we we quarter improved fifth our and of of each quarter of achieved profitability quarter

and with third East while profile the profitability. the West manufacturing enhanced note transition quarter here fiscal revenues levels, consistent generated you'll to and margin were XXXX cost-saving What that is initiatives

have decided we Given better and our performance with our expected to in financial targets align results. to revise year-to-date, our quarter the

year per We targets earnings our earnings share per full the for raising share GAAP non-GAAP XXXX. of and are

of target $X.XX targeting of our our per previous several for We customer an activity EPS strong, and million BKR now existing especially and of from radio their are quarter, the Order Minnesota third wildland purchase $X.XX. the multi-band non-GAAP earlier, from XXXX the I in share XXXX Sheriff's Resources full of representing Natural X We demand interest Service, from Resources year BKR GAAP Gallatin Department operations operations, Tier agency a is per a encouraged $X.XX the county. the per wildland share, in share, we're to $X.X which has $X.XX fire fire for X,XXX by for the Forestry Florida EPS we're Montana, wildland their order increase our target including for enforcement seeing discussed fire been orders a Department Missouri and previous base. as of the County the from exceed over for Natural Department in increased law received

which third of among customers. anticipate quarter supported and XXXX the in by million, fourth the the of backlog most XXXX, existing closed of and that with this was of be of adoption XXXX will a the backlog and in BKR quarter $XX first We the We quarter XXXX. new large delivered

efficiencies. quarter, a production We reductions already that's cost West the program in transition with move completed manufacturing East delivering and the

in specialty as of Florida well closely We our West while the As of assembly smaller, XXXX production to allowing final is continued gross -- enhanced expected BKR production the facility before, new of and as a for some support test on the also small move of to retained low-volume in products. margins team East the our to product small we mentioned focus more us to provide development.

the process XX,XXX expected to to for and full able build-to-order produce to new capacity. up A XXXX is be final per at BKR was assembly year streamlined radios implemented

call I Malmanger will Scott? to financial now the our for to results quarter. turn Scott over Chief Officer, the go Financial our over

Scott Malmanger

will our last consistent Sales XXXX with year, which John. million quarter $XX.X is million, same quarter $XX.X revenue essentially with the the with for Thanks, in results. third approximately XXXX that line be totaled consistent for expectation

in our of level Gross second was profit XX% third XXXX, to for compared quarter XXXX. XX.X% margin XX.X%, the as in target the which quarter of margin surpasses

expect year per $X.XX basic to in or and we third for in the of Selling, million of $X.X million with net $XXX,XXX quarter million share diluted and SG&A recorded or as of the We reduction prior general of $X.X share in diluted the income net $X.X compared third our quarter XXXX income or approximately per third last million drive per to XXXX. We compared quarter and achieve to initiatives. same quarter cost Operating $X.XX $X.XX $XX,XXX basic $X.X with compared of totaled for margin period. income the administrative the totaled operating improvement an expenses, income year. continue

investments, loss per $X.XX share or was with net Non-GAAP XXXX. third adjusted adjusted income, basic net per adds $X.X and severance expenses $X.XX compared diluted net of realized per stock-based EPS and share million and quarter unrealized million expenses in compensation back the diluted income or $X.X per or of and an which gain on $X.XX $X.XX adjusted basic

compared of $X.XX target of of in EBITDA We $X.X third third of We and $XXX,XXX as profitability target GAAP and expect improve with quarter adjusted of are $X.XX of margins EPS continue reported exceeding year an the EBITDA our EPS enhanced XXXX we our and the revised million full to in adjusted year costs confident full reduce gross adjusted per XXXX. share. quarter in

Turning our sheet period. the now the significantly to balance strengthened We in liquidity. year-to-date company's

million September December XXXX, of million have As cash equivalents at compared September and $XX.X we $XX.X improved debt. XX, cash no XX, approximately $X.X approximately with to XX, and of capital XXXX, at Working XXXX. million

transitioned radio Driven enhanced by December with demonstrating increases we've West. offset accounts in reductions the Shareholders' lines as manufacturing $XX to year-to-date. East that value equity achieved also was to has million somewhat compared XX, receivables by increased million at XXXX, we $XX.X inventory

primarily by the business. working I'll to turn today, balance our credit borrowing under our we sheet to believe our we anticipated With well with are we over cash visibility with that combined continue positioned need to grow cash of capital and now our generated positioning, back provides the call radio XXXX our facility balance through current that the sales improving and us John. availability

John Suzuki

Thank you, Scott.

our quarter the say With we XXXX. now track am for on third pleased and targets to to operational closed, that exceed I are financial

ability per EPS exceed non-GAAP $X.XX per we're achieve to of $X.XX share, from confident today, our share, and up GAAP to $X.XX $X.XX. from visibility Our full EPS year up in

better We have new our performance made is targets and solid reflect year-to-date, these heading where the business progress throughout and XXXX believe forward. going

remain winning our As adoption we we out and market year, XXXX growing BKR focused close on the share. new accelerating the customers rate

the open now questions. can we call for Kelly? that, With

Operator

question first is Partners. Investment Aaron Your Instructions] coming AIGH Martin with [Operator from

Aaron Martin

And leverage increased on the Congratulations obviously, quarter. through. shining really the operating

congratulations that. So on

it of backlog after order, the a was that the included quarter? question you of Just in because million end the announced technical the quarter-end $X.X

John Suzuki

for Thank the Yes. Aaron. question, you

Aaron Martin

year into on us remind seasonality and you can we the of -- you towards going -- are next look then QX then the of And Okay. business. the as typical the

John Suzuki

for This Aaron. the is Yes. Thank question, you John. again

strongest revenues So our for is quarters orders QX and and QX.

quarter year represent fiscal our government XX% fact weakest of that's for order they business Federal quarter of from the the as new XX% about Our the primarily that And driven the QX. is for business. end and still third or

their So as their just you go budgets fiscal is not which are first quarter, year, sat. quarter their fourth of into the

an a as through And they resolution. just you election. we through And went know, went continuing just

customers. continue So our talk we to to

in I year, typically -- understanding not they're their quarter. this be. they to what But start fourth be We just have orders purchase position a placing in to believe an going of will again, budget and think the

lower. be tends a lot that So to

into because calendar tends their the to then we're fiscal now quarter that's quarter second year. The second their stronger and third And first of of be year. quarter in

Aaron Martin

the not target. you've great even And a on about continually margin, and Got always you're it. there, your though past talked you've gross obviously, -- stopping number,

the can trajectory us again what's you QX tell So XXXX? what in about into -- there

John Suzuki

Yes.

targeting we've to the right? both that believe through is best downs way transition the and achievable we're of transfer that X,XXX. we've characterize the cost And the done think is done, XX%, that the Aaron, that that, we I that

that we So believe margin see improvements. continued you'll gross

back, bring. because forward track of take to quarters we as on get two closer just But definitely we they step and the that. we different Now are XX%, steps may . achieve to one what

Aaron Martin

it. Got

And QX I again into about $XXX guess XXXX up as target of we that the gross a of around go margins. then Vision that And Okay. of thoughts any past talked sort brings seasonality. and XXXX million XX% the revenue

John Suzuki

Sure.

the around July business started our set to remains business is So vision That in when was 'XX. with that of be the Vision what and continues I achieving. XXXX focused

to we fourth of want I XXXX, is and what talking to will the our to be myself, terms at certainly March XXXX. call, during think be quarter looking in which I don't get in ahead going of Street of In be we'll

be that what will . our Vision the XXXX. we But and So is exists, targets for nevertheless, that's at point, you right, driving will business what provide XXXX towards.

Aaron Martin

us given number the shipped you've number past, the quarter. for What or in QX of the Actually, was radios progress. months? a X the the on Congratulations Okay. in for first

John Suzuki

And that Because actually again, that So didn't we information and call. that approaching actually competitors. competitive Aaron, to we the any practice, X,XXX starts on communicated the just nature to of was their provide for our on the reason X,XXX stopped really customer we to and the additional want a base.

so -- for decided that disclose of not we And numbers reason, to so sold. units

Aaron Martin

progress leverage. on Okay. the operating Congratulations again

John Suzuki

Thank . you, Aaron.

Operator

[Operator question Instructions] from Askeladden coming Capital. have Patel Samir a with You

Unknown Analyst

So have questions. I three

about sell maybe most the first can where talked you efforts the segments optimistic. market to to talk you of about is, XXXX, you -- maybe the ramp about could The talk you're those continuing some

kind that noticed customer. I in of Florida example, that's more to a traditional For the win addition

the with a which you Department assume win know recently. new is a highlighted in at You and maybe IACP I were customer, Sheriff's I Montana,

some about you're sales. optimistic able focus you're So to to being those on kind continuing where segments just thoughts maybe where of drive

John Suzuki

question. good a that's Yes,

the we fire, felt structured for have an departments with for in and So so local been what radio, enforcement past that, the the that was because band law best fire services. our what we we and X,XXX ambulance radio communicating it's market all positioned call

And So these them urban are we operate typically, the that very segments haven't market in in past. large to environments. sold

whole was new market. a it So

categories. into fall of market U.S., about the look which types you total of radios XX% is billion, of those at $X.X those the radios If in

And program certainly X,XXX, as that view our we when we market the so largest started opportunity. on the

are us As VHF. we've These operate people product, fire. conscious. One in just launched band, is the the very the typically what cost that the They're most adoption surprised within wildland

for, radio. not twice well, these over our say, the guys a thought as true last be that And multiband much found year paying for so would money What we is, U.S. that's was

our customer. Forestry one largest of Federal

XXX operate They're lot megahertz. band, the we need in still radio state what agencies, they have different say, communicate a buying on which out typically of found those X,XXX. systems, a was the A state-wide to real

they're radio fire making on be business I to pay just more with it's "Hey, got radios statewide so the I wireland BK. Why a little get can a And bit I for other the services -- that case need I don't to inter-operate my forestry and system says, agencies." that can the money all use and

again, And as funded requirement so surprise. biggest the that they are these enforcement, state that but on a was agencies need. law that are Typically, as probably well our based not funding getting and

that's from positive. very And our actually so a perspective, strong

Unknown Analyst

Boulder I mean, I of that. an of County guess, is the order example kind

John Suzuki

Yes. at You departments. had is a exactly, at XX level, Boulder exactly County but a fire county right? county level, that,

for All wildland fire, had brand BK them of operations. had different structure but for also a radio radios they their fire

they new they're radio sense BK fire then buy the all of to a could fire When a XXXX. in the town for radio So missions. city, both respond radio. decision they And or their And radio, they're their was to when just it both radios, the they them that have buy for made missions. services for competitor's the on operations in BKR made course, typically, to using not using to all one covering

Unknown Analyst

as big likes market. like portable it My good. portion unlocked of of in a didn't people, get to mention and the kind the anything second market seems radios about That's to you the that talking done you a once and significant research Okay. And a XXXX. seems of . mobile that it I've like you there's question, for that's the to purchase bundle, kind

talk faster? could could of process of you how chance relative earnings development with maybe is and market and to flow, little product heavy lift reinvest a developing is accelerate your getting going, that about to the you is that that how of maybe to kind XXXX kind there bit cash So any more a increased

John Suzuki

in which the mobile. were to that Excellent XXXX, That's question, bring Samir. we a say did that the the is for starting in did market announce We expected past. multiband what said we've we We program that XXXX.

the the they terms the will of and common architecture XXXX lot mobile. multiband risk, development the of X,XXX, what In use a portable, the be between

the core between doing be not the So similar, same technology radios. will if very the of multiband

a well think I Now low that's industry, that there are a the between handheld new in some in to out. our that's But device and lines engineering, mechanics worked of more mobile needs differences risk. that's understood on relatively device and be it's

line time Now does takes all line on is as this, the looking as long because it time the why at you're new mechanics.

there's going And then and then designs, you through process X to the there's and months. through so when mechanical produce time you're several the design to go tooling, then the which X you the tooling, product do be and iterations. could

to -- but Unfortunately, just And function, a hard of takes it's not really time. lot there's high-risk time. it's really compress a that

that's a so by And that we have why XXXX. we'd stated product out

Unknown Analyst

item sort obvious what it's question, then revenue of not modeling and at line and sort other really than Okay. your to any it looking on of boring was might final deferred just I the the sheet, But around not there's me disclosure that InteropONE, thing. be. Understood. And a balance

deferred clarify So of could source the of you revenue? just kind the

Scott Malmanger

Yes. It's product our part of offering.

We extended warranties. have

to And until a the warranty period that's so according revenue GAAP, is extended exercised. deferred

So that's primarily the all deferred of revenue.

John Suzuki

is InteropONE that . Well,

Scott Malmanger

InteropONE. the Yes,

Operator

Your Vertical. question with Mission [ Wass is Eric next coming from ]

Unknown Analyst

us kind think take X good us a Congratulations of of through a year? capital kind the you that to year on progresses Can great months a and with here. quarter the over working and you help or next how

Scott Malmanger

new of as the off we've Basically, the paid debt, capital of improved line margins basically, October established on the remarks, a I including of improvement. gross working in our XX. credit credit, all generating mentioned and line Sure. And the are we

the capital got sales. necessary would of $XXX product basically business to be the that our to basically, we've And target of grow working So million revenue. by generated

Unknown Analyst

Okay.

So working for this this the is capital point? level right at

Scott Malmanger

Yes.

Unknown Analyst

there quarters? improvement gross then And how seasonality can to business? about of seasonality couple of we the fantastic. Is Or next kind margins think the just over that's about of you should of talk gross Okay. because the of progression forward been the going the margin

John Suzuki

it's Yes. John. Eric,

impacting many so got factors that we you've gross margin go forward. as So are the

seasonality just there QX, of of the in shipped. let and because the hit a orders most those primarily also -- lot volume. guess, In I strongest give come the So right? lowest on quarters, ones, There the they are aggressive because They're me radios some price get our most QX, Federal us are are, right?

of to tends gross And lower the on in the margin more average price be selling QX, so because of radios. QX those pressure

that because even savings our shipped and through If we on in then getting you you West. of through higher And more going that cost X,XXX had then we're margin is was out, cost top forward, wouldn't past, East the it look and more a see now chart go which as we've in by overachieved profile. the initiatives the it,

-- a next the in. versus you when would radios radios the can over out when improvements of ship when when based say, kick on X,XXX Federal versus So couple ship, we different the scenarios we some map happening of we year, it we when cost the see

so I it's Federal it's But that by QX, to for and of to on like. say pressure, going hard driven the radios. in look mainly really that's And definitely QX, me mix, is guess, terms price what

Operator

coming with Samir You have Capital. Askeladden follow-up question a from Patel

Unknown Analyst

Yes.

terms update sales Sorry things was that XXXX-tethering on that with of of excited one able being InteropONE. drive InteropONE, if of I I were kind missed in any the this, of but you to BKR because know capability about

John Suzuki

Yes.

that into that But to they're that putting some believe we're do development on the has but not last that to working track point. our first hand. solutions get The at still on we're made the strides that, we've this So we the team in been for point comfortable year. responder's tethering great approach

calls making again, and in the a resilience, able things, change connection. making -- do about do of the and intact all knobs Bluetooth right? just have not crazy not to be that the So whole bunch you on stays It's radio, about connection cases. to It's

And Bluetooth get distorted. And so was or would scenarios what that's not would few the a were acceptable. we drop where the audio there just found

And so -- it's a this field before new market. into trials I for edge approach because we're say would cases with we a trying very to weed it's those out customers go

want has the last sour markets as about this. And is the turn The because reliable technology that everyone said very a want on to preconception we they're do of excited thing them Bluetooth a in the whatever even technology. make hands that first test there we to these rock environment is of a just sure today. and put And not yet responders in we we're solid,

Operator

This does to over conclude our to question-and-answer remarks. the closing now like John turn back I Suzuki session. floor for would

John Suzuki

Kelly. participating All all you, and speaking best . our Thank Thank we We for to a the day. forward call. year's full great you again today's report you look results. to when in have with you,

Operator

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

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

BK Technologies (BKTI) 14 Nov 242024 Q3 Earnings call transcript