BK Technologies Corporation (AMEX:BKTI) Q2 2023 Earnings Call Transcript

John Suzuki: Yes, if I could put an escalation point on that, Matt, I would say that we’re confident that we can get there. The issue is the timing and the when, and like I said, we’re aggressively moving towards that. And certainly some of the cost initiatives we’ll start seeing in Q3.

Scott Malmanger: Yes.

Matt Williams: Got it. All right, couple more quick things. So on your OpEx, flattish to up sequentially, I thought there were some cost cutting programs. Just wondered if you could share if that OpEx level is the appropriate run rate going forward or if we should expect any changes over the next couple of quarters?

Scott Malmanger: I would say on the OpEx side once again, we are launching the BKR 9000. So we have incremental costs associated with market awareness and some of the costs for production increases and that sort of thing. So, I think we’re going to — we’re continually managing our cost structure to the best of our ability and our focus for the remainder of the year is definitely going to be on our gross margin improvement initiatives. So I think, that is about as good as I can nail that down.

Matt Williams: Okay. Got it. Last thing for me is any data points milestones on InteropOne that you can share with us or even anecdotals in terms of what you’re seeing with regard to market interest?

John Suzuki: Yes. No, thanks for that question. I appreciate it. So we have a number of trials going on and we’re getting some excellent feedback from these customers. I actually plan to do a more extensive presentation on InteropOne next quarter. So, if it’s okay with you, I’d like to punt this for next quarter. What I wanted to do was really focus this call on the 9000. I mean, it’s been such a long time in coming and we’re very excited about this particular product. But in terms of InteropONE, we continue to get more field trials. And like I said, the feedback from the clients are extremely good. In fact, we’re actually about to release a second version of Interop like an enhancements based on all the feedback that we’re getting. We’ll have that released in the next month or so. So development continues and feedback continues to be strong.

Matt Williams: Thanks, guys.

Operator: Our next question is Aaron Martin with AIGH Investment Partners.

Aaron Martin: Hi, good morning, John. Good morning, Scott. I want to focus on the 9000. So let’s go there. Congratulations on the FCC certification. It’s great. It’s a long time coming. What should we expect in terms of the mixed shift towards the 9000 over the coming quarters and into 2024? And then, obviously as that ties into ASPs and then ultimately gross margin?

John Suzuki: So Aaron, what we’ve said is for this year, right, we’re shipping 32,000 to 36,000 radios. That’s going to be inclusive of some big year 9000s. On the total number for the year, it’s not going to be a material number, but it will be much more material in the fourth quarter, because that’s when we’re going to start ramping production. Beyond that, I’m not providing guidance or targets on the mix between our revenue or radio sold. It’s a very competitive situation, especially on the 9000. And I think that just keeping it at a total number of radio shift is the approach that we’re going to take. Now that being said, as we ship more 9000s, clearly the revenue per radio is much higher on the 9000 and the margin is much better. And so, as we ship more 9000s, you’ll see those two numbers grow over time, especially as we go into 2024 where the mix will be more prevalent.