Bk Technologies (NYSEAMERICAN:BKTI) reported higher third-quarter revenue and net income, but lowered its 2026 revenue outlook after a roof collapse disrupted production at its West Melbourne, Florida, headquarters.
The public safety communications company now expects full-year revenue of $85 million, which CEO John Suzuki described as a slight downward revision. He said lower fourth-quarter shipments of BKR 9000 radios were behind the change, and that affected orders had been deferred rather than lost.
Revenue for the third quarter rose 3.6% to $25.3 million from $24.4 million a year earlier, driven by federal orders. Net income increased to $3.7 million, or $0.93 per diluted share, from $3.4 million, or $0.87 per share.
Federal demand supports sales
More than 60% of quarterly revenue came from the U.S. government, Suzuki said. The U.S. Forest Service was the largest federal customer, placing significant orders for BKR 5000 handheld radios and KNG mobile radios.
BK shipped 3,000 orange BKR 5000 radios to the Forest Service during the quarter. Suzuki said the agency requested a distinctive color to help identify radios that had been misplaced or mixed with those of other agencies during fire incidents. The orange version is reserved for the Forest Service and is now its standard radio, he said.
Gross margin increased to 50.7% from 49.9% a year earlier, reflecting favorable product mix and adoption of the BKR 5000 and higher-margin BKR 9000, CFO Scott Malmanger said. Selling, general and administrative expenses rose to $8.4 million from $7.3 million, reflecting hardware and software development spending.
Operating income was $4.4 million, with an operating margin of 17.5%, down from 19.8% a year earlier. Adjusted EBITDA slipped to $5.2 million from $5.3 million, while adjusted earnings declined to $1.16 per diluted share from $1.24.
Roof collapse affects outlook
Suzuki said a severe thunderstorm caused a partial roof collapse on Oct. 8, after business hours, with no employees injured. The collapse occurred above the IT server room and took down key business systems. Basic systems, including customer phone support, were restored within 24 hours, he said.
Customer service repair and the BKR 9000 production line were moved to an adjacent distribution building and are operating again. Suzuki said the company expects to return those operations to headquarters by mid-January and restore BKR 9000 output to pre-collapse levels during the first quarter of 2027.
In response to a question from Lake Street Capital analyst Jaeson Schmidt, Suzuki said the sales team was rescheduling affected orders and had received no cancellations to date. He also said the company does not expect the incident to materially affect anticipated 2027 financial performance.
For 2026, BK expects gross margin of at least 50%, GAAP earnings of $2.40 per diluted share and adjusted earnings of $3.15 per diluted share. The earnings outlook excludes potential business interruption insurance recoveries and tariff refunds, whose amounts and timing remain uncertain. Malmanger said remediation and roof costs were not backed out of the earnings guidance, but the company could not yet estimate them.
Investment and product plans
BK ended the quarter with $29.2 million in cash and no debt. On Nov. 11, its board increased the existing share repurchase authorization by $5 million to $10 million. Approximately $8.4 million remained available for future repurchases, including $3.4 million reserved for the company’s Rule 10b5-1 plan, Malmanger said.
During the quarter, BK invested $3 million in mission-critical communications software provider Tango Tango through a five-year convertible note bearing 12.5% annual payment-in-kind interest. Suzuki said the partnership could expand BK’s software capabilities and provide a sales channel for its radios through Tango Tango’s public safety customers.
Development of the multiband BKR 9500 remains on track despite the disruption, Suzuki said. The company expects FCC certification by year-end and plans to begin mass production by March 2027.
About Bk Technologies (NYSEAMERICAN:BKTI)
BK Technologies Corporation designs and manufactures wireless communications equipment for public safety and government users. Its products include portable and mobile two-way radios and related accessories, marketed under the BK Radio and BKR brands. The company’s land mobile radio products serve law enforcement, fire and emergency response organizations, and federal, state and local government agencies. Its offerings include radios that support Project 25 (P25) digital communications. Headquartered in West Melbourne, Florida, BK Technologies serves customers in the United States and select international markets.
