BK Technologies Corporation

Good morning, ladies and gentlemen, and welcome to the BK Technologies Corporation conference call for third quarter 2023. This call is being recorded. All participants have been placed on a listen-only mode. Following management's remarks, the call will be open for questions. There is a slide presentation that accompanies today's remarks that can be accessed via the webcast. At this time, it is now my pleasure to turn the floor over to your host for today, Jen Belladeau. Please go ahead.

Thank you. Good morning, and welcome to our conference call to discuss BK Technologies' results for the third quarter of 2023. On the call today are John Suzuki, Chief Executive Officer, and Scott Malminger, Chief Financial Officer. I will take a moment to read the Safe Harbor Statements. Statements made during this conference call and presented in the presentation that are not based on historical facts are forward-looking statements. Such statements include, but are not limited to, projections or statements of future goals and targets regarding the company's revenue and profits. These statements are subject to known and unknown factors and risks. The company's actual results, performance, or achievements may differ materially from those expressed or implied by these forward-looking statements. Some of the factors and risks that could cause or contribute to such material differences have been described in this morning's press release and in BK's filings with the U.S. Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today, and we do not undertake any duty to update such forward-looking statements. Okay, with that out of the way, I'll turn the call over to John Suzuki, CEO of BK Technologies. Go ahead, John.

Thank you, Jen. Thank you, everyone, for joining today. I'll start by reviewing some of the highlights of our operations and financial results during the quarter. Then I'll turn it over to our Chief Financial Officer, Scott Malmanger, for a deeper dive into our financial results. We'll conclude by opening up the call for a brief Q&A. Turning to slide three. We delivered strong third quarter results, which included a 68 percent increase in revenue to 20.1 million, improved gross margins, and a return to profitability. During the quarter, we shipped 9,310 radios, bringing our shipment total to 28,249 for the first nine months of 2023. And we remain on track to achieve our target range a shipping between 32 and 36,000 radios for the full year. With our visibility today, we believe we have a very good chance to achieve the high end of our radio delivery guidance. In the third quarter, we continued to ship not just the BKR-5000, but also our BKR-9000 multiband radio. In fact, in September, we received an emergency order for the BKR-9000 from the state of Hawaii as they contended with the aftermath of the devastating wildfires in Maui County. We mobilized quickly to get a shipment out to this new customer, and we're pleased to have had the opportunity to assist during a difficult time and to launch what we hope will be an ongoing relationship with the state. We continue to see great deal of market interest in the BKR 9000, which with its enhanced multi-band capabilities and cost-effective price point is an attractive offering in the portable communication space. The BKR9000 has completed field tests on more than 19 P25 trunk systems, and there are 30-plus additional system tests underway. BK has years of experience acquiring system approval for our legacy P25 radios, And this history is helping to expedite the individual approval process. As we move forward, we expect the success of these field tests will serve as further verification of the radio's multiband capabilities and reliability, opening up opportunities for us to address a larger and more diverse market vertical. Turning to slide four. We saw significant order activity during the third quarter. In addition to the BKR 9000 order from the state of Hawaii that I just mentioned, we also received an order from Sandoval County, New Mexico, valued at $963,000. I highlight Sandoval County because they are a good example of what we define as a Tier 3 county in terms of population density. There is an estimated 750 Tier 3 suburban to rural counties in the U.S. that we're targeting for the BKR 9000 because we believe the radio is a great fit, not just in its multiband capabilities, but its cost-effective price point, positioning us to gain market share. For the BKR 5000, there continues to be strong demand. As demonstrated by a $3.4 million order we received from the National Interagency Incident Communications Division, and a $2.1 million order from the Bureau of Land Management, which also included some BKR 9000 radios for test and evaluation. So it's been a very busy quarter in terms of order activity, and we ended the quarter with an order backlog of $21.8 million as of September 30, 2023. Slide five. Slide 5 illustrates the continued traction we're seeing with our radios. As I mentioned a moment ago, in the third quarter, we shipped 9,310 units, bringing us to a total of 28,249 radios shipped year-to-date. And I will repeat my point from a moment ago that we believe we'll close the year out on the high end of our targeted range of 32,000 to 36,000 shipments for the full year, 2023. Turning to slide six. Our gross margin performance continues to make progress and we are seeing the positive impact of our cost reduction initiatives and higher revenue. Our gross margin improvement in the third quarter represents our fifth consecutive quarter of sequential margin improvement with the continuation of our initiatives to reduce product costs coupled with the addition of the higher margin BKR 9000 multiband radio to our product mix we expect to see gross margin continue to improve through the fourth quarter and into 2024. Now, I'll turn it over to Scott Malmanger, CFO, to take you through the financials. Scott?