BK Technologies (BKTI) 4 Mar 212020 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the BK Technologies Corporation Conference Call for the Fourth Quarter and Full Year 2020. This call is being recorded. [Operator Instructions] Before turning the call over to our President, Mr. Timothy Vitou for opening remarks, I will provide the following safe harbor statement.

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

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

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

you now to call over turn President Mr. will of the begin. Mr. may Vitou, I Vitou, Timothy BK Technologies.

and Bill and today. spend Thank I'll as financial thanks, my comments highlight joining updates; first, I'll Chief to over results; next, by everyone, operational arrange our call then Officer, for follows: providing a I'll We'll the results. our I'll opening the our dive turn brief President time you, up conclude call some Executive Kate, and deeper financial for into Financial Kelly, Q&A. Vice to

quarter. results. generated margins substantial Revenue fourth a had XX% and with a $XXX,XXX. grew compared improvement last we financial strong fourth were for to an Moving year's of We profit a operating quarter. Operating X.X%, XX.X% negative

new products, our and profit margins with key metrics growth continue combined gross and from and Our expense benefit the to restructuring reductions. related revenue

the just with strong generate that next that a substantial structure. to earnings reach we we achieve of significantly QX contract few planned on XXXX We're together, XXXX. The path sales launched band multi think our and XXXX launch growing ability XXXX complementing can of for relatively existing the BKR started offerings. increasing XXXX over to we new of compete goal all existing of our communications in million expense sales these BKR increase is we by BK should and new years, an results sizes remaining its newly for. $XXX our Moreover, to in feel preparing power We the performance focused up of profits. We the have midyear continue can and launch, revenue highlight technology the to forward products, to results. believe Taken looking getting BKR

of Turning existing sales products solutions. to update an and on

is and communications fourth for order our it's A XXXX. in mix that U.S. Mobiles the with accountability mantra XXXX, continued at BK the The deals and of our were we KNG technologies adoption see contract approximately Interior. PXX to new Department quarter a totaling of BK's as deals well related Thus, individual During was build include in products BKR we $X.X accessories. with Mobile million as KNG of Series Series portables that gratifying Digital awarded KNGX from integrity.

the that business won Series we in municipal In BKR from a fact, after quarter, KNG and included department both products. XXXX fire Virginia,

increasing our launching on products. Moving sales and from growth to next initiative, new

the first of we in new market portable technology, model Series. BKR of announced QX, ahead introduction XXXX Just the communication the BKR our

month to Tennessee. of quarter, since the of about had this We agency a were order, which excited $X.X we order announce from prior. the pleased an approximately the launched fourth During totaled are state only product our particularly million first we

BK the customer. Additionally, was State Agency time Tennessee the first

orders. multiple and regarding we a from a have comprehensive model line announcements will new was new XXXX shortly which communications BKR very extensive release of order such midyear, new is technology, scheduled customer multiband products XXXX just and the for encouraging. after the the securing product first an quarter a of The initial include launch for Momentum has into issued new continued XXXX,

to fully of BKR XXXX increase informed sure an our customer And parties announcements. for we make order Montana responders. from for we Recently, more first strategic new intend are our in a our rate and progress, their to interested of announced continued

We also order announced department in of an from fire the Texas. state a county

severe to great and state challenging provide electrical we weather in times with are the firefighters pleased disruptions, hero During of XXXXs. BKR of these Texas

this product, XXXX. emergency occur solutions safe which take in As keeping with we heroes our initiatives, next the multiband great increasing brings other launching can frequency, growth raging pride our our weather and trust, to the communities outfitting are BKR safety first us public communications with events that they

at XXXX price addresses to market progress We toward BKR with being continued the new force serving open years array XXXX much the significantly BKR driving complementing to make later the in a along solid the higher point launch The XXXX as believe able BKR for growth our XXXX have a and We opportunities. a greater year. force, primary several larger an expansion. this markets of contract next will exponentially customers and

vertical newly for BKR largely markets that a small, BK's BKR us products. were to gains through share new see launched Today, and market previously. us inaccessible than The market introduction is allow relatively XXXX new opportunity BKR huge these to less penetrate the -- We XXXX forthcoming X%. will of

initial billion. new market markets, is totaling announced is the significant year BK center focus this of of allows XXXX, which, so XXXX, the that innovation opportunity into BKR to technology BKR just located in $X.X the Florida. we with new new South a The completion expand the coupled an estimated view this We morning the primary center vertical

extensive our new designing technical will the serve Officer, is Dr. cornerstone highly BK's technology direct footprint of Branko addressable as technology of backgrounds Chief Leading a deep markets. a new Technology communications team with expand into along Avanic, experience They disciplines, array state-of-the-art solutions. skilled BK's initiatives, helping center with broad in technology the innovation technology and

up the moment Given significantly. present weather increases safety pandemic, public plays the the social disturbances, of evil and role

operating been benefiting million, year. the by XXXX's $X year-over-year, new technologies has in implications, from that tap grew communications And the performance improved expense are introduced results potential current and BKR XXXX our the about and to greater like of allows that with share reemphasize August into tremendous. QX launch rapidly. structure, to excited and We while confident prospects XX% us market our new I'd we're the revenue last BKR just

Our communications facilitate the existing, shareholder and forthcoming will highlight. creating of substantial solutions quarter as fourth value our new goal results

turn call financial concludes I'll Bill our who highlights. over my to the overview. Chief operating the now review and Kelly, This Financial Officer, will

you, Thank Tim.

Following is our operating and for periods results, a December XX, summary of XXXX. financial ending the

the operating the preceding results X% while XX% year compared of sales overall Our for financial margins percentage Sales profit a XXXX XXXX, XXXX year. grew increased markedly as for year-over-year. improved and from with over full gross

launched with products XX% to or million. XXXX. was for which Additionally, a in of first XXXX radio, planned reduction for models Tim our $X.X mentioned, additional million radio land a BKR approximately balance contributor a sheet significant strengthened with during inventory, as the and cash portable year flow positive $X new mobile year the we line Meanwhile, the the of

sales $XX.X attributed XX.X% to customers. state federal in were public Total safety prior agencies, XXXX and which million grew The of $XX.X increase some with compared was approximately the million to year. for new

BKR quarter also during We XXXX sales new realized the from third portable which of XXXX. introduced was our

of declined sales The of $X growth, or approximately combined cost or sales approximately compared profit XX% with improvement XXXX. the as compared in in over expenses of increase margin or XX% mix margin with gross impact product and reduced $X.X workforce. decrease broad-based XXXX reduction income for The year. sales sales, an $XX million was million XX% in administrative SG&A actions including XX.X% of result to to sales and the The costs. Selling, a to in approximately improved profit previous manufacturing expenses million XX% and prior of $XX operating operating was the of year. our of from for a improvement attributed XXXX million reduced general reduction primarily increased Gross percentage expenses in yielded

investment an from which recognized expenses from interest XXXX, year, We with last Holdings, in of primarily was to other loss This to XXXX gain variable attributed in FGI primarily $XXX,XXX PIH related a an investment approximately PIH. through income consolidated in other unrealized unrealized compares $XXX,XXX the entity. made our totaling

approximately $XXX,XXX for significant year. approximately from we recognized a For benefit income approximately expense prior We last with of improvement million. for compared $XXX,XXX XXXX, year's a $X.X income $X,XXX tax loss pretax pretax recognized the of of of XXXX,

and $X.X $X.XX million improved benefit deferred largely $XXX,XXX items. was income as year's approximately noncash diluted result last XXXX per and expense of for a loss tax diluted share of million basic from and Net of or income or $X.X Our share. net $X.XX per approximately basic

trade $XX.X working included capital cash of $XX.X of $X.X million equivalents of was compares year-end, This capital totaled As receivables. at million XXXX million, trade with approximately equivalents cash, which receivables. $XX.X comprised and of and million cash which cash, XXXX, XX, December of working approximately

XXX,XXX dividends additional the limit During our now return XXXX, And fulfilled approximately program common of shares our utilizing capital XX, the with program, X an cash stock, January of $XXX,XXX. XX paid repurchase of stock consecutive XXXX. on quarterly paid our repurchasing has last we

That provide quarterly not ready floor operating annual call. concludes we're the financial remarks. the on and We'll questions. to we for do of would move or Kate, my the to I question-and-answer portion everyone on remind now to that guidance a like basis. open

today question is Ramsley. Walter from [Operator Our Instructions] coming first

you semiconductors it supply industry have problems talk any issues had as year in electric there and The the there? for chain. are foresee Congratulations. to the your components. well. been like you to Great other do There's and year? in pressures looks getting I any Have ready current current with the that you're quarter, obtaining question has And anyway go cost of

in are on the constantly components lengthen hourly Well, Randy Walter. signals that that COO, Tim. is us our that starting monitors who pieces basis and thank certain of acquire you certain for are all there Willis, procuring to This lead is do their components we and is question, times. giving our charge

So or lead X, X X-week a maybe X typical it having lead times. time, or X, a instead of X

inventory adjust So the some that to product flow. continue order have to potentially maybe us in causes to levels

the answer a has inventory is job we're constantly our product. sure that That His driving believe, to the I team, flow, prepared the of make requirements protect customer shipping control. said, keeping done fantastic on under always mantra

substantially inventory his into are As Bill we year the remarks, mentioned levels in what with. earlier went than lower our

So But gotten point, right on issues. supply that some believe we've major There we now, got do components basis. any tightening that certain source a haven't all we there's it's that need. we act. in or cost is issues global balancing we But this at signals a on the products eyes

sounds X other that just good. question. Well, And

the to selling still potential get field out at the As able coronavirus far it you point? face? abating, as your face is operation of meet more into to a remote more and have this Or been the cycle with customers

and When a Another ladies it in do and on their have federal rooms we deal up of us the to It's straight their the city the kind X boys one-on-one level come we X thing. allowing depending Walter. scale. see XX states, ability governments. conversation. actually state, it and It's at the city, if to a facilities. not varies We're very great level. on pretty -- X has the of question, small the sales packing on get presentations the been mixed The people kind on It's opened to county, They're into that. Again, used of usually armed of usually bag. at at of Fed state kind at or county and a full people. a all The the

presentations, a what remote other I is or there's Skype seen but say. do some via vast some technology opening, or still we have should majority off-site for of Zoom presentations, We

it's contact trying to believe that of I'm a sales of opening level guys our So activity. exactly little I all monitor constant up in with bit.

but Or once really have will a financial cycle? sales shorten it it up, think make So will impact? won't you easier, does they it just do that the open

product, effect anywhere the And I in as standpoint. a customer to -- it. product it the falls from in, them and love a that wants a the for us look procurement agrees what's I mobile XX-month It's X we budget still their you industry the buy don't the go we well, to present to could and think see we our between or Typically, buy into by time well-known quite the if from with the takes to budget a at see customer sales before in cycle land cycle. PO. product cycle fact radio get a -- while the

with the talk XXXX. very, at keep to been seeing customers least we've we've as able been very remotely, So on able interest. keen the They're to our

cycle out shortens. don't remotely, as the so well. I the the product sales see So the we're gear, sending lot a yet. of demand we can gear demo I it they that know and and an them walk XXXX enormous through and haven't there's backup themselves for it seen

Fed year a is city, products. get But allow bit just county, demand land matter the I in think radio to some We see the a constraints mobile had state setting it's we sales them. there and throughout of and our a backup were year. department COVID. of our sales showed, of with to individual for as us agency the best bookings even second last But records and year in ever,

very our to move So ability excited needle. this I'm year very, and about the

coming Our Alan ] today Instructions] is from next question [ [Operator Lyons.

your the Tim, to Bill, slowly getting exciting efforts -- off what in in and opportunities international under pay the and in the company -- congratulations with really opportunities. on you control, about question XXXX? engineering, put A that do have COVID-XX reengineering look see start with to you revamping

internally on and for I markets. Thanks question, the thinking talking and strategizing international Alan. love

a company. while the around As with for you you've know, been

North We organization. America have kind a of centric historically been

had of markets a Philippines, Latin in have like We markets America. couple certain Indonesia, in success Australia,

our with little international as business, see our think XXXX. expand marketplace, better. upcoming service. The becomes question do We we bit old international BKR to the and We we as support though, age some well start to BKR ability markets service can a how on especially address XXXX

is we're that That's that with business in careful customer. can basically international and if key very that our we that chasing, infrastructure opportunities, our win a model. country support our living very a we're quite very, to we level support us going helps post-sales of some which be bit to So It's what are, customers. of our business there's

So believe grow of 'XX business. to start do our some I will international

in Series line, really we can those product to marketplace. do of so very itself I the a the do the I lends But think controlled it the we'll effort that international support terrific sales. new BKR think

no have questions at we further time. queue in appears It this

'XX look Kate, to all the in to and and in with thank today. have you talking you, of day All forward again report QX right. results for you, We when May. all we All today's you participating Well, thank call. our great a best

today's Thank conclude event. you. Ladies and gentlemen, does this

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