Company: BKTI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437749-25-033457
Chunk: 43

Company: BK Technologies Corp
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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 shipments during the third quarter and nine months ended September 30, 2025, was our BKR series radios and related accessories. The BKR Series is envisioned as a comprehensive line of new products, which includes new models such as the BKR 9000, which achieved first sales in the second quarter of 2023.

We believe that the BKR Series products should increase our addressable market by expanding the number of Federal, state and local public safety customers that may purchase our products. However, the timing and size of orders from agencies at all levels can be unpredictable and subject to budgets, priorities, and other factors.

While the potential impacts of the current administration's tariff policies, the ongoing government shutdown, material shortages, lead-times, high inflation and ongoing geopolitical conflicts in Ukraine and the Middle East and other geopolitical events remain uncertain in the coming months and quarters, such effects have the potential to adversely impact our customers and our supply chain. Such negative effects on our customers and suppliers could adversely affect our future sales, gross profit margins, operations and financial results.

Cost of Products and Gross Profit Margin

Gross profit margins as a percentage of sales for the third quarter ended September 30, 2025, were approximately 49.9% compared with 38.8% for the same quarter of fiscal year 2024.  Gross profit margins as a percentage of sales for the nine months ended September 30, 2025, were approximately 48.2% compared with 36.9% for the same period of fiscal year 2024.  Our cost of products and gross profit margins are primarily derived from material, labor, and overhead costs, product mix, manufacturing volumes and pricing. The increase in gross profit margins for the three- and nine-months ended September 30, 2025, compared to the same periods of fiscal year 2024, generally reflect price increases related to tariffs, radio product and accessories sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC., during fiscal year 2024. 

We utilize a combination of internal manufacturing capabilities and contract manufacturing relationships for production efficiencies and to manage material and labor costs. During the year ended December 31, 2024, we completed the transfer of manufacturing most of our products and accessories to East West Manufacturing, LLC. We believe that our current manufacturing capabilities and contract relationships or comparable alternatives