BK Technologies Corp - Quarter Report: 2013 June (Form 10-Q)

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Nevada	59-3486297
State or other jurisdiction of	(I.R.S. Employer
Incorporation or organization	Identification No.)

 

 

 

 

 

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	þ	Smaller reporting company	o
(Do not check if a smaller reporting company)

 

 

 

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(In thousands, except share data) (Unaudited)

 

		Three Months Ended								Six Months Ended
		June 30, 2013				June 30, 2012				June 30, 2013				June 30, 2012
Sales, net		$	6,191			$	9,327			$	13,264			$	13,696
Expenses
Cost of products			3,474				4,687				7,312				7,389
Selling, general and administrative			2,339				2,624				5,075				4,964
Total expenses			5,813				7,311				12,387				12,353
Operating income			378				2,016				877				1,343
Other income (expense):
Net interest expense			(0	)			(3	)			(0	)			(3	)
Other income (expense)			31				(2	)			11				(7	)
Total other income (expense)			31				(5	)			11				(10	)
Income before income taxes			409				2,011				888				1,333
Income tax expense			(212	)			(765	)			(286	)			(488	)
Net income		$	197			$	1,246			$	602			$	845
Net earnings per share-basic:		$	0.01			$	0.09			$	0.04			$	0.06
Net earnings per share-diluted:		$	0.01			$	0.09			$	0.04			$	0.06
Weighted average shares outstanding-basic			13,564,119				13,544,273				13,554,852				13,539,111
Weighted average shares outstanding-diluted			13,653,703				13,545,141				13,579,970				13,540,851

 

 

		Six Months Ended
		June 30, 2013				June 30, 2012
Operating activities
Net income		$	602			$	845
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Allowance for doubtful accounts			-				(5	)
Inventories reserve			36				(21	)
Deferred tax obligation			285				492
Depreciation and amortization			740				641
Shared-based compensation expense			33				18
Changes in operating assets and liabilities:
Accounts receivable			(1,466	)			(1,391	)
Inventories			436				914
Prepaid expenses and other current assets			(87	)			(456	)
Other assets			17				18
Accounts payable			(194	)			406
Accrued compensation and related taxes			(672	)			397
Accrued warranty expense			6				(4	)
Note payable			(18	)			53
Deferred revenue			(143	)			41
Accrued other expenses and other current liabilities			(9	)			(123	)
Net cash (used in) provided by operating activities			(434	)			1,825
Investing activities
Purchases of property, plant and equipment			(88	)			(138	)
Capitalized software			(289	)			-
Net cash used in investing activities			(377	)			(138	)
Financing activities
Proceeds from issuance of common stock			34				22
Cash provided by financing activities			34				22
Net change in cash and cash equivalents			(777	)			1,709
Cash and cash equivalents, beginning of period			6,581				2,693
Cash and cash equivalents, end of period		$	5,804			$	4,402
Supplemental disclosure
Cash paid for interest		$	-			$	3
Income tax paid		$	-			$	62
Non-cash financing activity
Cashless exercise of stock options and related conversion of net shares to stockholders’ equity		$	9			$	4

 

 

 

 

 

 

 

 

		June 30, 2013				December 31, 2012
Finished goods		$	4,349			$	4,316
Work in process			5,894				6,278
Raw materials			2,630				2,751
		$	12,873			$	13,345

 

 

 

 

 

 

The Company accounts for the costs of software within its products in accordance with ASC Topic 985-20 “Costs of Software to be Sold, Leased or Marketed”, under which certain software costs incurred subsequent to the establishment of technological feasibility are capitalized and amortized over the estimated lives of the related products. The Company determines technological feasibility to be established upon the internal release of a detailed program design as specified by Topic 985-20. Upon the general release of the product to customers, development costs for that product are amortized over periods not exceeding five years, based on current and future revenue of the product. For the three and six months ended June 30, 2013, the Company recorded capitalized software of $139 and $289, respectively.  For the three and six months ended June 30, 2013, the Company’s amortization cost was approximately $272 and $544, respectively, compared with $220 and $440 for the same periods last year.  Net capitalized software costs totaled $1,952 and $2,207 as of June 30, 2013 and December 31, 2012, respectively.

 

 

 

		Common Stock Shares				Common Stock Amount				Additional Paid-In Capital				Accumulated Deficit				Total
Balance at December 31, 2012			13,545,482			$	8,127			$	24,604			$	(2,547	)		$	30,184
Common stock option exercise and issued			34,989				21				13								34
Share-based compensation    expense			−				−				33				−				33
Net income			−				−				−				602				602
Balance at June 30, 2013			13,580,471			$	8,148			$	24,650			$	(1,945	)		$	30,853

 

 

 

 

		Three Months Ended								Six Months Ended
		June 30, 2013				June 30, 2012				June 30, 2013				June 30, 2012
Numerator:
Net  income (numerator for basic and diluted earnings per share)		$	197			$	1,246			$	602			$	845
Denominator:
Denominator for basic earnings per share weighted average shares			13,564,119				13,544,273				13,554,852				13,539,111
Effect of dilutive securities:
Options			89,584				868				25,118				1,740
Denominator
Denominator for diluted earnings per share weighted average shares			13,653,703				13,545,141				13,579,970				13,540,851
Basic income per share		$	0.01			$	0.09			$	0.04			$	0.06
Diluted income per share		$	0.01			$	0.09			$	0.04			$	0.06

 

 

 

 

 

 

As of January 1, 2013		Stock Options				Wgt. Avg. Exercise Price ($) Per Share				Wgt. Avg. Remaining Contractual Life (Years)				Wgt. Avg. Grant Date Fair Value($) Per Share				Aggregate Intrinsic Value ($)
Outstanding			460,944				3.47				-				2.29				-
Vested			435,944				3.55				-				2.38				-
Nonvested			25,000				2.03				-				0.68				-
Period activity
Issued			80,000				2.61				-				0.98				-
Exercised			55,000				1.90				-				1.15				-
Forfeited			-				-				-				-				-
Expired			5,000				4.50				-				2.68				-
As of June 30, 2013
Outstanding			480,944				3.50				4.71				2.20				248,310
Vested			419,275				3.61				4.26				2.39				220,075
Nonvested			61,669				2.72				7.75				0.85				28,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●	the success of our LMR product line;

●	competition in the land mobile radio industry;

●	general economic and business conditions, including federal, state and local government budget deficits and spending limitations;

●	the availability, terms and deployment of capital;

●	reliance on contract manufacturers and suppliers;

●	heavy reliance on sales to agencies of the United States government;

●	our ability to utilize deferred tax assets;

●	retention of executive officers and key personnel;

●	our ability to manage our growth;

 

●	our business with manufacturers located in other countries;

●	our inventory and debt levels;

●	protection of our intellectual property rights;

●	fluctuation in our operating results;

●	acts of war or terrorism;

●	any infringement claims;

●	provisions in our charter documents and under Nevada law that may discourage a potential takeover;

●	maintenance of our NYSE MKT listing; and

●	the effect on our stock price and ability to raise equity capital of future sales of shares of our common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		Percentage of Sales Three Months Ended								Percentage of Sales Six Months Ended
		June 30, 2013				June 30, 2012				June 30, 2013				June 30, 2012
Sales			100.0	%			100.0	%			100.0	%			100.0	%
Cost of products			(56.1	)			(50.3	)			(55.1	)			(54.0	)
Gross margin			43.9				49.7				44.9				46.0
Selling, general and administrative expenses			(37.8	)			(28.1	)			(38.2	)			(36.2	)
Net interest expense			(0.0	)			(0.0	)			(0.0	)			(0.0	)
Other income (expense )			0.5				(0.0	)			0.1				(0.1	)
Pretax  income			6.6				21.6				6.8				9.7
Income tax expense			(3.4	)			(8.2	)			(2.2	)			(3.6	)
Net (loss) income			3.2	%			13.4	%			4.6	%			6.2	%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2013 and the date of this report, there were no borrowings outstanding under the revolving credit facility.  As of June 30, 2013 and the date of this report, there was approximately $3.028 million and $3.041 million, respectively, of borrowing available under the revolving credit facility.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period		Total Number of Shares Purchased		Average  Price Paid Per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Approximate  Dollar Value of  Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs
04/01/13 - 04/30/13		—			—		—			2,500,000
05/01/13 - 05/31/13		—			—		—			2,500,000
06/01/13 - 06/30/13		—			—		—			2,500,000
Total		—		$	—		—		$	2,500,000

 

Exhibit 3(i)		Articles of Incorporation(1)
Exhibit 3(ii)		Certificate of Amendment to Articles of Incorporation(2)
Exhibit 3(iii)		Amended and Restated Bylaws(3)
Exhibit 31.1		Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2		Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation S-K).
Exhibit 32.2		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation S-K).
Exhibit 101.INS		XBRL Instance Document*
Exhibit 101.SCH		XBRL Taxonomy Extension Schema Document*
Exhibit 101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document*
Exhibit 101.LAB		XBRL Taxonomy Extension Label Linkbase Document*
Exhibit 101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document*
Exhibit 101.DEF		XBRL Taxonomy Definition Linkbase Document*

*	Furnished herewith (not filed)

 

(1)	Incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1997.

 

(2)	Incorporated by reference from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.

 

(3)	Incorporated by reference to the Company's Current Report on Form 8-K filed May 29, 2013.

 

 

 

 

 

 

 

(1)	Incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1997.

 

(2)	Incorporated by reference from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.

 

(3)	Incorporated by reference to the Company's Current Report on Form 8-K filed May 29, 2013.

 

 

 

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