BK Technologies Reports Quarterly and Annual Results
Friday, March 06, 2020 | Comments

BK Technologies announced financial and operating results for the fourth quarter and 12 months ended Dec. 31.

For the fourth quarter ended Dec. 31, revenues totaled about $7.4 million, compared with approximately $10.7 million for the fourth quarter last year. The operating loss for the fourth quarter 2019 totaled about $2.4 million, compared with $531,000 for the fourth quarter last year. The net loss for the fourth quarter of 2019 was about $1.3 million compared with approximately $1.3 million for the same quarter last year.

Net loss for the fourth quarter includes unrealized gains on investments in securities totaling about $530,000, compared with losses of about $1.3 million for the same quarter last year.

The company had approximately $14.5 million in working capital, of which $8.6 million was comprised of cash, cash equivalents and trade receivables, as of end-2019. This compares with working capital of about $21 million, of which $17 million was comprised of cash, cash equivalents and trade receivables, as of Dec. 31, 2018.

As of end-2019, net inventories totaled about $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.

"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,” said Tim Vitou, BK's president. “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.

"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 (CTO) 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 LMR 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 Dec. 31, sales totaled about $40.1 million, compared with approximately $49.4 million for the prior year. The operating loss for 2019 totaled $4.4 million, compared with operating income of about $2.4 million last year. The net loss for 2019 totaled about $2.6 million compared with $195,000 last year.

The financial results for the year ended Dec. 31 include unrealized gains on investment in securities totaling about $716,000, compared with realized and unrealized losses of approximately $2.7 million for the prior year.

BK also announced that its operating subsidiary received an order totaling about $2.1 million from the U.S. Forest Service (USFS) for its Project 25 (P25) mobile radios and related accessories. The order is expected to be fulfilled during the first and second quarters of 2020.

"This recent order for BK mobile radios follows last month's announced USFS orders primarily for portable radios and base station equipment,” said Vitou. “The USFS has relied upon BK products for decades."

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