Good morning ladies and gentlemen and welcome to the BK Technologies Corporation conference call for the first quarter of 2026. This call is being recorded. All participants have been placed on a listen-only mode and following management's remarks the call will be opened for questions. There is a slide presentation that accompanies today's remarks which can be accessed via the webcast. At this time, it is my pleasure to turn the floor over to your host for today, Corbyn Woodhull of Hayden Investor Relations. Corbyn, please go ahead.

Thank you, Jenny. Good morning and welcome to our conference call to discuss BK Technologies results for the first quarter of 2026. On the call today are John Suzuki, Chief Executive Officer, and Scott Malmanger, Chief Financial Officer. Before we begin, I will take a moment to read the safe harbor statement. Statements made during this conference call and presented in this presentation that are not based on historical facts are forward-looking statements. Such statements include but are not limited to projections or statements of future goals and targets regarding the company's revenue and profits. These statements are subject to known and unknown risk factors. The company's actual results, performance, or achievements may differ materially from those expressed or implied by these forward-looking statements, and some of the factors and risks that could cause or contribute to such material differences have been described in this morning's press release and in BK's filings with the U.S. Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today, and we do not undertake any duty to update such forward-looking statements. With that, I will now turn the call over to John Suzuki, CEO of BK Technologies. John,

please go ahead. Thank you, Corbin. Good morning, everyone, and thank you for joining us for our first quarter of 2026 conference call. I'll start by reviewing our operational and financial performance and then turn it over to our Chief Financial Officer, Scott Malmanger, for a deeper dive into our financial results for the quarter. Following a discussion of the financial results, I will provide our fiscal year 2026 outlook and outline the strategic priorities of our roadmap. We will conclude by opening the call for a brief Q&A. Our first quarter performance represents a strong beginning to 2026 and a successful start to our Vision 2030 mission. Revenue growth, margin expansion, and a record cash balance all underscore the strength of our operating model and the benefits of the investments we have made in our products and solutions. We continue to experience robust demand for our BKR series radios, particularly our multi-band BKR 9000, with an increasing favorable product mix contributing to consistent margin expansion and stronger profitability. First quarter 2026 revenue increased 11.8% year-over-year to $21.3 million and expanded further by 14% on a trailing 12-month basis. This growth trajectory reflects the continued momentum across our core public safety communication business, especially federal, state, and local agency demand for our BKR series radios and growing adoption of our BK1 solutions. Leveraging the powerful combination of top-line growth, favorable product mix, and targeted investment behind new products and solutions, we delivered a 24% increase in adjusted EBITDA with a 180 basis point margin expansion to 18.7%. Our profit trajectory continues to advance, reaching non-GAAP fully diluted adjusted EPS of 88 cents, a healthy increase compared to the 62 cents in the year-ago quarter. Just as importantly, benefiting from the inherent operating leverage within our business model, after-tax, free cash flow outpaced revenue growth, increasing by 44% year-over-year to $4.1 million. This led to a record cash balance of $29 million at quarter end, which gives us the flexibility to continue investing for growth while maintaining disciplined capital allocation strategy. Our Vision 2030 roadmap is built around two important market transitions, the shift from single-band to multi-band and the evolution of in-vehicle to on-person broadband solutions. We have successfully designed our strategy around those two transitions and believe we are well positioned to capture a meaningful portion of these substantial opportunities through the expanding installer base of our BKR Series radios and BK1 Solutions platform. The BKR 5000 single band radio continues to play an instrumental role in developing a natural upgrade path to the BKR 9000 multi-band radio, positioning us to benefit from the replacement cycles. Having first entered into the market in late 2020, we have already shipped over 95,000 BKR 5000s. During Q1 2026, we were awarded a new order from the Minnesota Department of Natural Resources for 500 BKR 9000 radios, demonstrating the market's acceptance and accelerating customer adoption of our multiband radio. In April, we debuted the BKR 9500 multiband mobile radio at FDIC International in Indianapolis, The product received an overwhelmingly positive reception, generating strong customer engagement and meaningful interaction throughout the events. Additionally, in April, we booked our first BKR 9500 order from a large existing BK customer located in the Southwest. us. The public safety agency has been a long-term BK customer with a fleet of radios that include the BKR 5000, the BKR 9000, and the KNG single band mobile. The new order for the BKR 9500 multi-band mobile is the logical next step as the customer continues to modernize their fleet of radios. Dealer training and customer contract updates to reflect the BKR 9500 inclusion are ongoing as we remain on pace for FCC approval in the second half of 2026 with shipments in the first half of 2027. This early traction reinforces our belief that the BKR 9500 will be an important part of our long-term growth strategy. With that, I'll turn it over to Scott Melmanager, our CFO, to give more detailed overview of our first quarter financial performance.

Go ahead, Scott. Thank you, John. Sales for the first quarter totaled $21.3 million, an increase of 11.8% compared with $19.1 million in the first quarter of 2025. Growth in the quarter was attributable to broad-based gains across federal, state, and local agencies. Gross profit margin in the first quarter was 51.8% compared with 47% in the first quarter of 2025, reflecting favorable product mix and continued robust adoption of our higher margin BKR 9000. Selling general and administrative expenses for the first quarter increased to $7.7 million compared to $6.0 million in the same quarter last year. SG&A expense for the quarter includes non-cash stock-based compensation expense of approximately $400,000. This increase reflects higher engineering costs associated with new product and solution development, as well as continued investment and innovation, both of which align with our investment strategy to drive sustainable growth. Operating income was $3.3 million in the first quarter of 2026, with a stable year-over-year operating margin of 15.4%. We delivered gap net income of $2.8 million or GAAP EPS of $0.74 per basic and $0.69 per diluted share compared with net income of $2.1 million or $0.60 per basic and $0.55 per diluted share in the prior year period. The company's effective tax rate for the first quarter of 2026 was 20%. As we look forward to the remainder of 2026, our estimated tax rate of 26% compares with 16% for the full year of 2025, with the higher rate reflecting the normalization of our tax profile and profitability increases. The diluted EPS impact of a higher effective tax rate is estimated to be approximately $0.44 per share in 2026. Turning to slide 6, we have delivered noticeable improvement in our profit trajectory dating back to the first quarter of 2024. For the first quarter of 2026, we reported non-GAAP adjusted EBITDA of $4 million with an adjusted EBITDA margin of 18.7%, representing a material increase compared to the $3.2 million and 16.9% in the first quarter of 2025. Non-GAAP adjusted earnings, which adds back non-cash stock-based compensation expenses and non-cash income tax provision expense, was $3.5 million or $0.94 per basic and $0.88 per diluted share. This compares to adjusted earnings of $2.4 million or $0.67 per basic and $0.62 per diluted share in the first quarter of 2025. All in our profitability trend has been strong, and we anticipate this trajectory will continue as product mix shifts and the BKR series platform scales and the BK1 solutions ramp. Turning to cash generation and capital efficiency, we continued to deliver strong results. In the first quarter of 2026, we generated after-tax free cash flow of $4.1 million, underscoring the consistency and resilience of our cash engine even as we continue to invest for growth. That performance reflects the disciplined way we manage the business while still maintaining strong cash conversion. We also remain focused on capital efficiency, and that is reflected in our return on invested capital progression. After recovering meaningfully over the last several years, return on invested capital remained north of 20% in 2024 and 2025, reaching 24.7% in the first quarter of 2026 on a trailing 12-month basis. Turning to the balance sheet, we ended the first quarter of 2026 with another record cash balance and debt-free balance sheet, underscoring the strong cash-generating capability of the business. At March 31, 2026, we had $29 million in cash, a healthy improvement over the $22.8 million as of the end of 2025, as well as no debt. The company, as a part of its capital allocation plan, established a Rule 10b 5.1 non-discretionary stock repurchase program in September 2025. During the first quarter, the company repurchased approximately 3,000 shares of its common stock as per the conditions of the plan. Working capital improved to $41.3 million at March 31st, 2026, compared with $37.3 million at December 31st, 2025. Shareholders' equity increased to $47.7 million compared with $44.7 million at December 31, 2025. Taken together, our ability to consistently generate cash gives us important financial flexibility. It allows us to reinvest in the business, evaluate strategic opportunities, and return capital to shareholders when appropriate. I will now turn the call back over to John, who will provide our 2026 outlook and strategic priorities.

Thanks, Scott. We continue to believe our strategy is working, and this quarter reinforced that view. Accordingly, we are reiterating the following full-year 2026 guidance. Revenue of at least $90 million, full-year gross margin of 50% or greater, full-year gap EPS of $3.15 and full-year non-gap adjusted EPS of $3.55. These targets reflect our current expectations for continued revenue growth, further margin expansion, and operating leverage. Overall, we remain disciplined in balancing strategic investment with profitability and cash generation. A key point is that our capital deployment remains focused on the best long-term use of cash. In the near term, that means reinvesting in engineering, software, and product development to support the roadmap we outlined at Investor Day. We believe that this is the most effective way to create shareholder value, particularly as we accelerate the execution of our Vision 2030 goals. With that, we can now open the call for questions. Jenny?

thank you very much at this time we will be conducting our question and answer session if you would like to ask a question please press star 1 on your telephone keypad a confirmation tone will indicate that your line is in the queue you may press star 2 if you would like to remove your question from the queue and for anyone using speaker equipment it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Jason Schmidt of Lake Street. Jason,

your line is live. Hey guys, thanks for taking my questions. John, I know you don't like giving out kind of specific numbers on the 9,000 or any metrics around there, but just curious if you're primarily seeing momentum from existing customers expanding, or if this is coming from new customers?

Jason, thanks for the question, and good morning to you, sir. It's really coming from both, right? So, you know, the example that I used with Minnesota, they're an existing customer. They purchased the BKR 5000 initially when it first came out, and now they've made a pretty substantial volume order for the 9,000. That's what we're seeing across the board for our existing customers. They will start off with the 5,000. They'll test up the 9,000, and a large number of them seem to be moving, at least on the state agencies, are moving to the multiband radio, which allows them to use the radio not only for their wildland fire emission, but also to interoperate on their statewide radio systems, which is a different frequency band. In terms of new customers, I would say the volume is lower because they're still in that test and evaluation phase for the 9,000. But we see that as those radios are deployed, as they prove themselves in the field, we are seeing larger add-on volume orders from these new customers. So I would say it's definitely from both.

okay that's helpful and then just curious if you can expand more on sort of the 9500 reception and just thinking about kind of what that customer engagement pipeline or conversation uh pipeline is currently and how you expect that to progress throughout the year well i expect that the

adoption rate will be faster than the 9000 because the customers who bought the 9000 are also interested in the $9,500. We've already received orders for the $9,500, so we just launched it. We started to receive orders. Our forecast out for the year is on track with what our expectations were when we set the program. The customer reception on that is very positive. They're very excited about the new product, and I think that activity is going to continue on pace as expected through the balance of the year. Again, I believe the adoption rate will be actually faster than what we saw in the 9,000. Okay, that's helpful. And last one for me,

and I'll pass the mic. A really strong gross margin. Obviously, Mix was a large driver there. Should we think that you can build upon this level throughout the year?

I'm not going to comment beyond my guidance, Jason. I don't think that's appropriate at this point. Our goal is to be 50% plus. Clearly, we surpassed that in the first quarter. Our long-term goal is to hit the 60%. The path to get there is not going to be as linear as the last five years, just because we're talking about a 10% increase over the next few years. But our expectation is that we are going to be above 50% again for the full year.

Okay. Understood. Thanks a lot, guys.

Thank you, Jason. And our next question is coming from Robert Van Voorhees of Van Atock Capital Management. Robert, your line is live.

Hey, good morning, guys. Thanks for taking my question. My question is really just on expenses, and maybe it's more appropriate for Scott. I know we talked about shifting some of the 9,500 development expenses to being expensed on the income statement now. Any idea how much those were in Q1? I think for the full year we're expecting $2 million or something like that. Is that roughly right?

I would explain it this way. I think you are correct that our increases in SG&A reflects our deliberate strategic investment in engineering and product development. The exact amounts vary from quarter to quarter because the development cycle for prototypes and other expenses vary, and we've got to get FCC approval and those sorts of things. So those costs aren't really linear. They're based on when the event occurs, so that's the way I would describe it. But I would say, yes, overall, you are correct that it's going to – the increases are primarily for our product and software development, software engineering development. Got it.

So I suppose maybe just to follow on, and maybe this is too much detail and you guys don't really want to comment, but is the right way to think about this year just sort of annualizing Q1 SG&A? or is that maybe that's just too much detail to ask for?

It's a little bit more detail than I'm comfortable to give at this point. But, you know, we are focused on the correct investments for long-term strategic, you know, growth. So I would describe it that way. But the software element is the area that we're going to see, you know, more consistent costs, where the hardware and product development is going to be a little bit more lumpy. That's the way I would describe it. Got it. Okay, thanks. That's it for me.

Thank you very much. Just a reminder there, if there are any remaining questions, you can still join the queue by pressing star 1 on your phone keypad now. I am not seeing any further questions in the queue at this time. John and Scott, would you like to make any closing remarks?

Thank you, Jenny. Thank you all for participating in today's call. In closing, we remain intensely focused on building a scalable communications platform capable of delivering sustained revenue growth, expanding earnings, and strong free cash flow generation while supporting the mission critical needs of our first responders nationwide. We appreciate your support and are confident in our strategy, our team, and our ability to successfully deliver on our objectives aimed at creating long-term value for our shareholders. We look forward to speaking to you again on our next quarterly earnings call. All the best to all of you, and have a great day.

Thank you very much. This concludes today's call. You may now disconnect.