BK Technologies Corp - Quarter Report: 2014 September (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	o	Smaller reporting company	þ
(Do not check if a smaller reporting company)

 

 

 

 

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	September 30,				December 31,
	2014				2013
ASSETS
Current assets:
Cash and cash equivalents		$	10,906			$	7,945
Trade accounts receivable (net of allowance for doubtful accounts of $122 and $84 at September 30, 2014 and December 31, 2013, respectively)			4,547				2,844
Inventories, net			11,684				11,575
Deferred tax assets			2,862				3,836
Prepaid expenses and other current assets			2,128				1,920
Total current assets			32,127				28,120
Property, plant and equipment, net			1,189				1,045
Deferred tax assets, net			3,165				3,072
Capitalized software, net			887				1,478
Other assets			271				308
Total assets		$	37,639			$	34,023
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	1,848			$	950
Note payable			5				-
Accrued compensation and related taxes			1,306				779
Accrued warranty expense			352				292
Accrued other expenses and other current liabilities			173				154
Deferred revenue			291				281
Total current liabilities			3,975				2,456
Deferred revenue			244				147
Note payable			18				-
Total liabilities		$	4,237			$	2,603
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: 13,665,087 and 13,588,804 issued and outstanding shares at September 30, 2014 and December 31, 2013, respectively			8,199				8,153
Additional paid-in capital			24,806				24,672
Accumulated earnings (deficit)			397				(1,405	)
Total stockholders' equity			33,402				31,420
Total liabilities and stockholders' equity		$	37,639			$	34,023

 

 

 

		Three Months Ended								Nine months Ended
		September 30, 2014				September 30, 2013				September 30, 2014				September 30, 2013
Sales, net		$	8,670			$	7,600			$	25,552			$	20,864
Expenses
Cost of products			4,881				4,328				14,739				11,640
Selling, general and administrative			2,756				2,505				8,141				7,580
Total expenses			7,637				6,833				22,880				19,220
Operating income			1,033				767				2,672				1,644
Other income (expense):
Net interest income (expense)			0				0				1				0
Other income (expense)			3				0				(7	)			11
Total other income (expense)			3				0				(6	)			11
Income before income taxes			1,036				767				2,666				1,655
Income tax expense			(380	)			(253	)			(864	)			(539	)
Net income		$	656			$	514			$	1,802			$	1,116
Net earnings per share-basic:		$	0.05			$	0.04			$	0.13			$	0.08
Net earnings per share-diluted:		$	0.05			$	0.04			$	0.13			$	0.08
Weighted average shares outstanding-basic			13,655,988				13,580,471				13,641,520				13,563,486
Weighted average shares outstanding-diluted			13,781,534				13,648,570				13,741,750				13,619,676

RELM WIRELESS CORPORATION

 

		Nine months Ended
		September 30, 2014				September 30, 2013
Operating activities
Net income		$	1,802			$	1,116
Adjustments to reconcile net income to net cash provided by  operating activities:
Allowance for doubtful accounts			38				-
Inventories reserve			9				108
Deferred tax obligation			881				548
Depreciation and amortization			930				1,119
Shared-based compensation expense			36				36
Changes in operating assets and liabilities:
Accounts receivable			(1,741	)			(1,721	)
Inventories			(118	)			1,793
Prepaid expenses and other current assets			(208	)			(456	)
Other assets			37				7
Accounts payable			898				(194	)
Accrued compensation and related taxes			527				(611	)
Accrued warranty expense			60				14
Note payable			23				(18	)
Deferred revenue			107				(212	)
Accrued other expenses and other current liabilities			19				34
Net cash  provided by operating activities			3,300				1,563
Investing activities
Purchases of property, plant and equipment			(483	)			(208	)
Capitalized software			-				(340	)
Net cash used in investing activities			(483	)			(548	)
Financing activities
Proceeds from issuance of common stock			144				34
Cash provided by financing activities			144				34
Net change in cash and cash equivalents			2,961				1,049
Cash and cash equivalents, beginning of period			7,945				6,581
Cash and cash equivalents, end of period		$	10,906			$	7,630
Supplemental disclosure
Cash paid for interest		$	-			$	-
Income tax paid		$	-			$	-
Non-cash financing activity
Cashless exercise of stock options and related conversion of net shares to stockholders’ equity		$	2			$	9

 

 

 

 

 

 

 

 

 

		September 30, 2014				December 31, 2013
Finished goods		$	3,187			$	3,525
Work in process			5,421				5,702
Raw materials			3,076				2,348
		$	11,684			$	11,575

 

 

 

 

 

 

 

 

 

 

		Common Stock Shares				Common Stock Amount				Additional Paid-In Capital				Accumulated Earnings (Deficit)				Total
Balance at December 31, 2013			13,588,804			$	8,153			$	24,672			$	(1,405	)		$	31,420
Common stock option exercise and issued			76,283				46				98				−				144
Share-based compensation    expense			−				−				36				−				36
Net income			−				−				−				1,802				1,802
Balance at September 30, 2014			13,665,087			$	8,199			$	24,806			$	397			$	33,402

 

 

 

		Three Months Ended								Nine months Ended
		September 30, 2014				September 30, 2013				September 30, 2014				September 30, 2013
Numerator:
Net  income (numerator for basic and diluted earnings per share)		$	656			$	514			$	1,802			$	1,116
Denominator:
Denominator for basic earnings per share weighted average shares			13,655,988				13,580,471				13,641,520				13,563,486
Effect of dilutive securities:
Options			125,546				68,099				100,230				56,190
Denominator
Denominator for diluted earnings per share weighted average shares			13,781,534				13,648,570				13,741,750				13,619,676
Basic income per share		$	0.05			$	0.04			$	0.13			$	0.08
Diluted income per share		$	0.05			$	0.04			$	0.13			$	0.08

 

 

 

 

As of January 1, 2014		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			482,611				3.50				-				2.18				-
Vested			410,942				3.64				-				2.41				-
Nonvested			71,669				2.68				-				0.87				-
Period activity
Issued			35,000				3.40				-				0.08				-
Exercised			87,833				2.09				-				1.04				-
Forfeited			-				-				-				-				-
Expired			5,000				3.45				-				0.03				-
As of September 30, 2014
Outstanding			424,778				3.78				3.88				2.27				791,549
Vested			371,443				3.89				3.59				2.52				676,127
Nonvested			53,335				3.00				5.94				0.54				115,422

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●	changes or advances in technology;

 

●	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;

 

●	government regulation;

 

●	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 Nine months Ended
		September 30, 2014				September 30, 2013				September30, 2014				September 30, 2013
Sales			100.0	%			100.0	%			100.0	%			100.0	%
Cost of products			(56.3	)			(56.9	)			(57.7	)			(55.8	)
Gross margin			43.7				43.1				42.3				44.2
Selling, general and administrative expenses			(31.8	)			(33.0	)			(31.9	)			(36.3	)
Net interest expense			0.0				0.0				0.0				0.0
Other income (expense )			0.1				0.0				0.0				0.0
Pretax  income			12.0				10.1				10.4				7.9
Income tax expense			(4.4	)			(3.3	)			(3.4	)			(2.6	)
Net income			7.6	%			6.8	%			7.0	%			5.3	%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3(i)	Articles of Incorporation(1)
Exhibit 3(ii)	Certificate of Amendment to Articles of Incorporation(2)
Exhibit 3(iii)	Amended and Restated By-Laws(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)

 

 

 

 

 

 

 

 

 

Exhibit Number		Description
Exhibit 3(i)		Articles of Incorporation(1)
Exhibit 3(ii)		Certificate of Amendment to Articles of Incorporation(2)
Exhibit 3(iii)		Amended and Restated By-Laws(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)

 

 

 

 

 

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