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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 Fourth Quarter and Twelve Months 2019
Results
WEST
MELBOURNE, Florida – March 4, 2020 – BK Technologies
Corporation (NYSE American: BKTI) today announced financial and
operating results for the fourth quarter and twelve months ended
December 31, 2019.
For the
fourth quarter ended December 31, 2019, revenues totaled
approximately $7.4 million, compared with approximately $10.7
million for the fourth quarter last year. The operating loss for
the fourth quarter 2019 totaled approximately $2.4 million,
compared with approximately $531,000 for the fourth quarter last
year. The net loss for the fourth quarter of 2019 was approximately
$1.3 million, or $0.10 per basic and diluted share, compared with
approximately $1.3 million, or $0.10 per basic and diluted share,
for the same quarter last year.
Net
loss for the fourth quarter 2019 includes unrealized gains on
investments in securities totaling approximately $530,000, compared
with losses of approximately $1.3 million for the same quarter last
year.
The
Company had approximately $14.5 million in working capital as of
December 31, 2019, of which $8.6 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. As of December 31, 2019 net inventories totaled
approximately $13.5 million, compared with approximately $11.5
million at the end of 2018. The increase was attributed primarily
to finished goods and work-in-process inventories as sales
decreased from the preceding year. With improved sales and adjusted
manufacturing volumes, inventories have been reduced during the
first two months of 2020.
Tim
Vitou, BK’s President, commented, “We encountered a
challenging sales landscape during the fourth quarter of 2019, as
some of our established federal customers were slow executing
orders for new equipment, several of which were received, and
announced, after year-end in January 2020. Late in the fourth quarter, however,
we received an order from a new California-based customer, which
was also previously announced. For the full year, sales were
impacted by the deferral until 2020 of anticipated orders from
certain state and international customers, as well as the U.S.
federal government shutdown in the first quarter of
2019.”
Mr.
Vitou continued, “Looking beyond last year, we believe our
future is promising. Product development initiatives have made
strides under the guidance of BK’s new Chief Technology
Officer, Dr. Branko Avanic, and we are excited about the initial
growth of our new internal engineering team with extensive and
proven experience in the development of successful land mobile
radio products. These new products are envisioned to have features
and functionality that we believe should increase our addressable
markets and drive sales growth. While these development efforts
have taken longer than originally anticipated, we believe the
initial product model will be complete during the first half of
this year with others to follow later.”
For the
year ended December 31, 2019, sales totaled approximately $40.1
million, compared with approximately $49.4 million for the prior
year. The operating loss for 2019 totaled approximately $4.4
million, compared with operating income of approximately $2.4
million last year. The net loss for the year ended December 31,
2019 totaled approximately $2.6 million, or $0.21 per basic and
diluted share, compared with $195,000, or $0.01 per basic and
diluted share last year.
1
The
financial results for the year ended December 31, 2019 include
unrealized gains on investment in securities totaling approximately
$716,000, compared with realized and unrealized losses of
approximately $2.7 million for the prior 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, March 5, 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 March 5, 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 March 16, 2020 by dialing 877-481-4010
PIN# 58804 (international/local participants dial 919-882-2331 PIN#
58804).
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, including
our ability to successfully develop and sell our anticipated new
multiband product and other related products in the planned BKR
Series; 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; risks associated with fixed-price
contacts; 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; 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; 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
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
Three
Months Ended
December
31,
|
Years
Ended December 31,
|
||
|
2019
(Unaudited)
|
2018
(Unaudited)
|
2019
|
2018
|
Sales,
net
|
$7,357
|
$10,676
|
$40,100
|
$49,380
|
Expenses
|
|
|
|
|
Cost of
products
|
4,950
|
6,884
|
24,449
|
29,403
|
Selling, general
and administrative
|
4,789
|
4,323
|
20,036
|
17,552
|
Total
expenses
|
9,739
|
11,207
|
44,485
|
46,955
|
Operating (loss)
income
|
(2,382)
|
(531)
|
(4,385)
|
2,425
|
Other income
(expense):
|
|
|
|
|
Interest
income
|
16
|
39
|
150
|
102
|
Gain (loss) on
investment in securities
|
530
|
(1,279)
|
716
|
(2,671)
|
Other
expense
|
(6)
|
(54)
|
(104)
|
(328)
|
|
|
|
|
|
Loss before income
taxes
|
(1,842)
|
(1,825)
|
(3,623)
|
(472)
|
Income tax
benefit
|
533
|
477
|
987
|
277
|
Net
loss
|
$(1,309)
|
$(1,348)
|
$(2,636)
|
$(195)
|
Net loss per
share-basic
|
$(0.10)
|
$(0.10)
|
$(0.21)
|
$(0.01)
|
Net loss per
share-diluted
|
$(0.10)
|
$(0.10)
|
$(0.21)
|
$(0.01)
|
Weighted average
shares outstanding-basic
|
12,645
|
13,243
|
12,705
|
13,464
|
Weighted average
shares outstanding-diluted
|
12,645
|
13,243
|
12,705
|
13,464
|
3
BK TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
|
December
31,
|
|
|
2019
|
2018
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$4,676
|
$11,268
|
Trade accounts
receivable, net
|
3,964
|
5,721
|
Inventories,
net
|
13,513
|
11,466
|
Prepaid expenses
and other current assets
|
1,733
|
2,401
|
Total current
assets
|
23,886
|
30,856
|
|
|
|
Property, plant and
equipment, net
|
3,964
|
2,729
|
Right-of-use (ROU)
asset
|
2,885
|
—
|
Investment in
securities
|
2,635
|
1,919
|
Deferred tax
assets, net
|
4,373
|
3,495
|
Other
assets
|
197
|
192
|
Total
assets
|
$37,940
|
$39,191
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$5,310
|
$5,595
|
Accrued
compensation and related taxes
|
1,271
|
2,014
|
Accrued warranty
expense
|
1,248
|
1,546
|
Accrued other
expenses and other current liabilities
|
479
|
292
|
Dividends
payable
|
252
|
256
|
Short-term lease
liability
|
369
|
—
|
Note
payable-current portion
|
78
|
—
|
Deferred
revenue
|
369
|
180
|
Total current
liabilities
|
9,376
|
9,883
|
|
|
|
Note payable, net
of current portion
|
328
|
—
|
Long-term lease
liability
|
2,606
|
—
|
Deferred
revenue
|
2,354
|
1,596
|
Total
liabilities
|
14,664
|
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 12,596,923 and 12,817,829 outstanding shares at December
31, 2019 and 2018, respectively
|
8,357
|
8,330
|
Additional paid-in
capital
|
26,095
|
25,867
|
Accumulated
deficit
|
(6,043)
|
(2,393)
|
Treasury stock, at
cost, 1,332,458 and 1,065,108 shares at December 31, 2019 and 2018,
respectively
|
(5,133)
|
(4,092)
|
Total
stockholders’ equity
|
23,276
|
27,712
|
Total liabilities
and stockholders’ equity
|
$37,940
|
$39,191
|
4