BK Technologies, Inc. EBITDA Margin surged on 13.3 pp from -6.5% to 6.8% in 2020 and Revenue jumped on 10.1%
03/03/2021 • About BK Technologies, Inc. (
$BKTI) • By InTwits
BK Technologies, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 6.8% in 2020, -6.5% in 2019, 6.8% in 2018, -10.4% in 2017, 10.3% in 2016
- BK Technologies, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $1m in 2020, $2m in 2019, $1m in 2018, $1m in 2017, $1m in 2016
- The company has potentially unprofitable business model: ROIC is 4.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
BK Technologies, Inc.'s Revenue surged on 10.1%. Revenue growth showed acceleration in 20Q4 - it increased 43.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 11.5 pp from -13.4% to -1.9% in 2020.
Gross Margin increased slightly on 1.9 pp from 39.0% to 41.0% in 2020. SG&A as a % of Revenue dropped on 11.4 pp from 50.0% to 38.6% in 2020.
Net Income margin increased on 7.1 pp from -6.6% to 0.56% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 2.1%. CAPEX/Revenue increased slightly on 0.55 pp from 1.6% in 2017 to 2.1% in 2020. Average CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at low ROIC (4.0%) and ROE (1.1%). ROIC jumped on 17.5 pp from -13.5% to 4.0% in 2020. ROE jumped on 11.4 pp from -10.3% to 1.1% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.1x and Debt / EBITDA is 1.2x. Debt increased on 5.2% while cash surged on 46.0%.
BK Technologies, Inc. has no short term refinancing risk: cash is higher than short term debt (1,124.5%).
Valuation and dividends
BK Technologies, Inc.'s trades at EV/EBITDA 20.6x and P/E 262.3x.
Financial and operational results
FY ended 12/31/2020
BK Technologies, Inc. ($BKTI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 50.689 | 39.395 | 49.380 | 40.100 | 44.139 | 10.1% |
| Gross Profit | 17.077 | 9.550 | 19.977 | 15.651 | 18.084 | 15.5% |
| SG&A | 12.792 | 14.577 | 17.552 | 20.036 | 17.036 | -15.0% |
| EBITDA | 5.227 | -4.085 | 3.346 | -2.593 | 3.002 | |
| Net Income | 2.689 | -3.626 | -0.195 | -2.636 | 0.248 | |
Balance Sheet
|
|---|
| Cash | 10.910 | 7.147 | 11.268 | 4.676 | 6.826 | 46.0% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.447 | 0.607 | 35.8% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 2.934 | 2.949 | 0.5% |
Cash flow
|
|---|
| Capex | 1.394 | 0.628 | 1.396 | 2.455 | 0.946 | -61.5% |
Ratios
|
|---|
| Revenue growth | 70.5% | -22.3% | 25.3% | -18.8% | 10.1% | |
| EBITDA growth | 123.0% | -178.2% | -181.9% | -177.5% | -215.8% | |
|
|---|
| Gross Margin | 33.7% | 24.2% | 40.5% | 39.0% | 41.0% | 1.9% |
| EBITDA Margin | 10.3% | -10.4% | 6.8% | -6.5% | 6.8% | 13.3% |
| SG&A, % of revenue | 25.2% | 37.0% | 35.5% | 50.0% | 38.6% | -11.4% |
| Net Income Margin | 5.3% | -9.2% | -0.4% | -6.6% | 0.6% | 7.1% |
| CAPEX, % of revenue | 2.8% | 1.6% | 2.8% | 6.1% | 2.1% | -4.0% |
|
|---|
| ROIC | 13.9% | -16.4% | 8.1% | -13.5% | 4.0% | 17.5% |
| ROE | 7.6% | -10.7% | -0.7% | -10.3% | 1.1% | 11.4% |
| Net Debt/EBITDA | -2.1x | | -3.4x | | -1.1x |
BK Technologies, Inc. ($BKTI) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 11 | 10 | 13 | 11 | | 42.5% | -25.3% | 8.1% | 43.4% |
| EBITDA | -0 | 0 | 2 | 1 | | - | -5.3% | 105.9% | - |
| Net Income | -1 | -0 | 1 | 1 | | - | - | 184.9% | - |
Balance Sheet
|
|---|
| Cash | 5 | 7 | 6 | 7 | | -34.4% | -6.4% | -27.7% | 46.0% |
| Short Term Debt | 0 | 1 | 1 | 1 | | 61.9% | 138.2% | 69.7% | 35.8% |
| Long Term Debt | 3 | 3 | 3 | 3 | | 14.9% | 13.8% | 17.2% | 0.5% |
Ratios
|
|---|
| Gross Margin | 35.8% | 43.6% | 40.8% | 44.2% | | 3.9% | 0.7% | -2.5% | 11.5% |
| EBITDA Margin | -3.5% | 4.5% | 12.1% | 13.2% | | 21.7% | 1.0% | 5.7% | 38.6% |
| Net Income Margin | -10.9% | -3.0% | 5.3% | 10.1% | | 6.3% | -1.2% | 3.3% | 27.9% |
Peers in Communications Equipment
Below we provide BK Technologies, Inc. benchmarking against other companies in Communications Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | - | 116.2% | -19.8% | 40.3% | 329.9% |
| Franklin Wireless Corp ($FKWL) | - | -18.8% | -38.1% | 21.3% | 105.9% |
| Ribbon Communications Inc. ($RBBN) | - | 30.6% | 75.2% | -2.6% | 49.8% |
| Inseego Corp. ($INSG) | - | -10.0% | -7.7% | 8.4% | 43.0% |
| Casa Systems, Inc. ($CASA) | - | 11.2% | -15.5% | -5.0% | 39.3% |
| |
|---|
| Median (35 companies) | 7.5% | 5.6% | 2.8% | 3.7% | 2.1% |
|---|
| BK Technologies, Inc. ($BKTI) | - | -22.3% | 25.3% | -18.8% | 10.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| F5 Networks, Inc. ($FFIV) | 83.1% | 83.1% | 83.3% | 84.1% | 82.6% |
| Radware Ltd. ($RDWR) | 81.8% | 81.3% | 82.2% | 82.1% | 82.0% |
| Radcom Ltd. ($RDCM) | 69.6% | 71.8% | 74.0% | 70.0% | 71.4% |
| AudioCodes Ltd. ($AUDC) | 60.7% | 62.4% | 62.8% | 47.4% | 67.9% |
| Arista Networks, Inc. ($ANET) | 64.0% | 64.5% | 63.8% | 64.1% | 63.9% |
| |
|---|
| Median (33 companies) | 43.9% | 41.7% | 41.2% | 44.3% | 46.8% |
|---|
| BK Technologies, Inc. ($BKTI) | 33.7% | 24.2% | 40.5% | 39.0% | 41.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| InterDigital, Inc. ($IDCC) | 73.6% | 67.3% | 41.9% | 37.5% | 39.5% |
| EchoStar Corporation ($SATS) | 40.3% | 38.1% | 37.4% | 36.4% | 35.0% |
| Arista Networks, Inc. ($ANET) | 23.3% | 29.8% | 14.0% | 35.7% | 33.1% |
| Motorola Solutions, Inc. ($MSI) | 22.2% | 25.5% | 22.0% | 26.7% | 25.9% |
| F5 Networks, Inc. ($FFIV) | 30.3% | 29.9% | 30.1% | 26.2% | 22.9% |
| |
|---|
| Median (32 companies) | 5.5% | 6.5% | 4.6% | 5.0% | 9.3% |
|---|
| BK Technologies, Inc. ($BKTI) | 10.3% | -10.4% | 6.8% | -6.5% | 6.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | 132.5% | 124.8% | 245.2% | 109.7% | 22.3% |
| EchoStar Corporation ($SATS) | 39.9% | 30.9% | 26.5% | 22.2% | 21.7% |
| KVH Industries, Inc. ($KVHI) | 3.2% | 8.0% | 9.3% | 7.9% | 8.9% |
| Harmonic Inc. ($HLIT) | 3.7% | 3.2% | 1.7% | 2.6% | 8.5% |
| Applied Optoelectronics, Inc. ($AAOI) | 19.0% | 17.5% | 26.9% | 15.1% | 6.7% |
| |
|---|
| Median (32 companies) | 1.9% | 1.9% | 1.6% | 2.4% | 2.1% |
|---|
| BK Technologies, Inc. ($BKTI) | 2.8% | 1.6% | 2.8% | 6.1% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Franklin Wireless Corp ($FKWL) | 12.2% | 4.7% | -14.9% | -13.0% | 37.5% |
| Motorola Solutions, Inc. ($MSI) | 26.4% | 39.5% | 35.3% | 34.0% | 26.4% |
| Arista Networks, Inc. ($ANET) | 25.7% | 33.9% | 14.5% | 33.3% | 23.5% |
| AudioCodes Ltd. ($AUDC) | 6.1% | 8.6% | 16.1% | -7.7% | 20.8% |
| F5 Networks, Inc. ($FFIV) | 43.1% | 46.9% | 47.9% | 34.1% | 16.5% |
| |
|---|
| Median (35 companies) | 2.2% | 2.2% | 0.3% | 1.2% | 1.9% |
|---|
| BK Technologies, Inc. ($BKTI) | 13.9% | -16.4% | 8.1% | -13.5% | 4.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inseego Corp. ($INSG) | - | - | 3.9x | 82.5x | 26.9x |
| CommScope Holding Company, Inc. ($COMM) | 4.3x | 4.6x | 4.4x | 27.0x | 10.5x |
| Harmonic Inc. ($HLIT) | - | - | 3.4x | 1.9x | 6.5x |
| Ribbon Communications Inc. ($RBBN) | -17.2x | - | - | - | 3.5x |
| Casa Systems, Inc. ($CASA) | -0.2x | 0.3x | 0.2x | 32.1x | 3.2x |
| |
|---|
| Median (24 companies) | -0.8x | -0.7x | 0.2x | -0.3x | -0.3x |
|---|
| BK Technologies, Inc. ($BKTI) | -2.1x | - | -3.4x | - | -1.1x |
