Company: BKTI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001437749-25-026668
Chunk: 40

Company: BK Technologies Corp
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 2024, generally reflected 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 will continue to be available to us. However, we may encounter new product costs and competitive pricing pressures in the future and the extent of their impact on gross margins, if any, is uncertain.

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Selling, General and Administrative Expenses

SG&A expenses consist of marketing, sales, commissions, engineering, product development, management information systems, accounting, headquarters, and non-cash share-based employee compensation expenses.

SG&A expenses for the quarter ended June 30, 2025, totaled approximately $6.0 million (28.5% of sales), compared with approximately $5.5 million (27.3% of sales) for the same quarter of fiscal year 2024.  For the six months ended June 30, 2025, SG&A expenses increased by $1.2 million, or 11.5%, to approximately $12.1 million (30.0% of sales), compared with approximately $10.8 million (28.1% of sales), for the six-month period last year.

Engineering and product development expenses for the second quarter of 2025 totaled approximately $2.3 million (10.9% of sales), compared with approximately $2.0 million (9.8% of sales) for the same quarter of fiscal year 2024.  For the six months ended June 30, 2025, engineering and product development expenses totaled approximately $5.0 million (12.5% of sales), compared with approximately $4.1 million (10.6% of sales) for the six-month period last year.  The increase in engineering expenses was attributed primarily to non-capitalizable development costs for the BKR multi-band mobile radio product and RSU issuance costs described above and in Note 8 (Non-Cash Share-Based Employee Compensation) to the condensed consolidated financial statements included in this report