Good morning ladies and gentlemen and welcome to the BK Technologies Corporation conference call for the second quarter of 2026. This call is being recorded. All participants have been placed on a listen-only mode. Following management's remarks, the call will be open 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, Paul. Good morning, and welcome to our conference call to discuss the BK Technology results for the second quarter of 2026. On the call today are John Suzuki, the Chief Executive Officer, and Scott Malmanger, the Chief Financial Officer. Before we begin, I would like to take a moment to read the Safe Harbor Statement. Statements made during this conference call are presented in this presentation that are not based on historical facts or 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 factors and risks. The company's actual results, performance, or achievements may differ materially from those expressed or implied by these forward-looking statements, and some other factors and risks that could cause or contribute to such material differences have been described in this morning's press release and BK's filings in 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 on our second 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 for our roadmap. We will conclude by opening the call for a brief Q&A. Our second quarter results continue to reflect successful execution of our Vision 2030 strategy and demonstrate the strength of the business model we are building. Through the first half of the year, We delivered double-digit revenue growth, generated another record cash balance, and are steadily marching towards our Vision 2030 objectives. Second quarter revenue grew 10.6% to $23.4 million, extending our trailing 12-month revenue growth to 15.7%, and gross margin expanded 445 basis points to 51.9%. That performance was driven by strong demand from state and local public safety agencies for our BKR series radios, particularly the BKR 9000 handheld multiband radio and growing adoption for our BK1 solutions. In tandem with our top line trajectory, we continue to prioritize targeted investments behind new products and solutions, leveraging the powerful combination of top line growth and favorable product mix Pre-tax income remains stable year-over-year at $4 million despite a $2.4 million year-over-year increase in operating expenses. Our net income for the quarter was $3.2 million or $0.79 per diluted share and compares with $3.7 million or $0.96 per diluted share in the second quarter of last year. The variation in our bottom line was driven almost entirely by a $560,000 year-over-year increase in our income tax provision and not by any softness in our underlying business. On a non-GAAP basis, adjusted EPS was $1.01 per diluted share. We closed the quarter with a record $29.9 million in cash and no debt. A significant increase from $22.8 million at the end of 2025 and up $1 million sequentially. This growing cash position provides us with balance sheet strength to keep investing in products and solutions our customers demand. Our trailing 12-month after-tax-free cash flow reached $19 million, up 49% year-over-year. and continuing to outpace revenue growth which underscores the operating leverage in our business model. Our growth continues to be driven by expanding BKR series footprint across public safety agencies and we continue to advance our position to address two structural market transitions that we believe define the industry in the years to come. The first is the shift from single band to multiband radios. With millions of public safety first responders operating across the US today, the majority are communicating on private single band LMR systems and cannot talk to neighboring or federal agencies directly without a multiband radio solution. That transition is still early, represents a multi-year tailwind for multiband BKR 9000, and now the BKR 9500 in-vehicle multiband radio. The second is the evolution from in-vehicle to on-person broadband. The vast majority of public safety vehicles are already connected via broadband. But the moment a first responder steps out of the vehicle, that connectivity has historically been lost. Our strategy to address this constraint is to tether the BKR series radio to the smartphone. Our purpose-built solution closes that connectivity gap and we believe represents a substantial growth runway to target within our Vision 2030 roadmap. Specifically to the 9500, our BKR 9500 multiband in-vehicle radio made its public debut in April to wide acclaim. Since the introduction, we have received purchase orders in excess of 200 radios from a variety of customers. This is especially exceptional since customers have placed these radio orders sight unseen. On the development side, we recently submitted the 9500 for FCC testing and expect to receive FCC approval in early 2027. In parallel, We will begin the transition from our lab to manufacturing and conduct both accelerated life and customer field testing. While I'm extremely pleased with achieving the FCC submission milestone, we still have a lot of work to do before we can ship customer radios. That being said, we remain highly confident that we will start customer deliveries in the first half of 2027. With BKR Play, our patent-pended tethering solution, we completed initial customer beta testing this quarter with positive feedback, particularly around the ease of switching between LMR and Interop One cellular communication modes and the reliability of the Bluetooth link. We will continue beta testing through the balance of the year with a broader set of customers and are targeting its general release for January of 2027. We will also continue to build out our software ecosystem. Our recently announced licensing agreement with Tango Tango extends our patented Interop One technology into one of the country's largest push-to-talk over cellular networks, expanding our reach to more than 1,500 public safety agencies and over 35,000 active users. This creates a pathway for reoccurring licensing fees over time while also promoting BKR Play and our BKR Series multiband platform to the TangoTango customer base. With that, I'll turn it over to Scott Malmanger, our CFO, to give a more detailed view of our second quarter financial performance. Go ahead, Scott.

Thank you, John. Sales for the second quarter totaled $23.4 million, an increase of 10.6% compared to $21.2 million in the second quarter of 2025. Growth in the quarter was attributable to broad-based gains across state and local agencies. Gross profit margin in the second quarter was 51.9% compared with 47.4%. in the second quarter of 2025, reflecting favorable product mix and continued robust adoption of our higher margin BKR 9000. Selling general and administrative expenses for the second quarter increased to 8.3 million compared to 6 million in the same quarter last year. The increase in SG&A reflects higher engineering costs associated with new product and solution development to accelerate growth, which is in alignment with our Vision 2030 investment strategy. SG&A expense for the quarter also includes non-cash stock-based compensation expense of approximately $512,000. Operating income was $3.8 million in the second quarter of 2026, with operating margin of 16.4%, expanding sequentially from 15.4%, although declining from 18.9% in the prior year second quarter on higher research and development investments. We delivered GAAP net income of 3.2 million, or GAAP EPS of 79 cents per diluted share, compared with net income of 3.7 million or 96 cents per diluted share in the prior year period. Income tax provisions increased by $560,000 versus the year ago quarter, which impacted diluted EPS by about 14 cents per share, while our pre-tax income remained stable at $4 million. The company's effective tax rate for the second quarter of 2026 was about 21%. As we look forward to 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 from a higher estimated effective tax rate is forecasted to be approximately 42 cents per share in 2026 compared with the fiscal year 2025 rate. Turning to slide six, our profit trajectory dates back 12 quarters to the third quarter of 2024. For the second quarter of 2026, We reported non-GAAP adjusted EBITDA of $4.5 million with an adjusted EBITDA margin of 19.4%, which is somewhat lower than the 20.9% rate on $4.4 million of adjusted EBITDA for the second quarter of 2025. Non-GAAP adjusted earnings, which adds back non-cash stock-based compensation expenses and non-cash income tax provision expense, was $4.1 million or $1.01 per diluted share. This compares to adjusted earnings of $5.1 million or $1.30 per diluted share in the second quarter of 2025. Taking together, our profitability trend has been strong, and we anticipate this trajectory will remain on course as product mix shift favorably, the BKR series platform scales, and BK1 gains broader adoption. Turning to cash generation and capital efficiency, we continue to deliver strong results. In the second quarter of 2026, we generated after-tax free cash flow of $4.6 million, and on a trailing 12-month basis, after-tax free cash flow reached $19 million, outpacing revenue growth with a 49% year-over-year increase. After-tax free cash flow is a non-GAAP measure that we believe provides useful insight into the company's ability to generate cash after accounting for taxes. This performance underscores the consistency and resilience of our cash engine even as we continue to invest for growth. Consistent with prior quarters, we maintain a disciplined approach in the way we manage the business while still maintaining strong cash conversions. We also remain focused on capital efficiency and that is reflected in our return on invested capital. After recovering meaningfully over the last several years, return on invested capital improved to more than 30% in 2024 and 2025 and maintained above 45% in the second quarter of 2026 on a trailing 12-month basis. Turning to the balance sheet, we ended the second quarter of 2026 with another record cash balance and debt-free balance sheet, underscoring the strong cash generating capability of the business. On June 30, 2026, we had $29.9 million in cash, a healthy improvement over $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 10.5b1 non-discretionary stock repurchase program in September of 2025. During the second quarter of 2026, the company completed no repurchases of its common stock as per the conditions of the non-discretionary plan. Working capital improved to $46.1 million as of June 30, 2026, compared with $37.3 million at December 31, 2025. Shareholders' equity increased to $52 million, compared with $44.7 million on December 31, 2025. All in our strong and consistent cash generation provides us with substantial financial flexibility to invest in the business, capitalize on strategic opportunities, and return capital to shareholders over time. I will now turn the call back over to John, who will provide our 2026 outlook and strategic priorities.

Thanks, Scott. We remain confident in our strategy, and our performance through the first half of 2026 provides evidence of the strength of our approach. Accordingly, we are reiterating our 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. Our capital deployment continues to be focused on The best long-term use of cash and in the near term that means reinvesting in engineering, software and product development to support the roadmap we outlined at Investor Day. Every dollar of engineering and software investment we are making is aimed at strengthening our competitive positioning and creating shareholder value. Our commitment to serving first responders with mission-critical products and services is reflected in our continued investment in growth as we expect the BKR series radio platform and advanced innovative software solutions through our BK1 platform. These investments are central to our strategy and position us to capture emerging opportunities across the public safety communications market. At this time, we will begin polling for questions.

Thank you. At this time, we will begin a 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 your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, it's Star 1 if you wish to ask your question today. And please hold while we poll for questions. And the first question today is coming from Luke Fingerson from Lake Street Capital Markets. Luke, your line is live.

Hey, guys. Luke Fingerson on for Jason Schmidt here. You mentioned traction with the BKR 9000. Are you able to elaborate on what you're seeing driving the traction with that product?

Thanks for the question, Luke. I think the key thing that's driving the traction is we're shipping more radios into the field, and those radios are performing well. As customers deploy these radios, they're buying additional radios for their fleet, but not only that, they're introducing the BKR9000 to other agencies in their surrounding area. And we can see that in our year-over-year growth and both are orders and sales of the BKR 9000.

Gotcha. And then any updates on customer feedback on the 9500?

The feedback continues to be very positive. We recently participated in an exhibit called APCO, the Association of Public Safety Communications Officers. They were The conference was well attended. We had our BKR 9500 on display. We actually had it taken apart so that customers could see the inside of the actual radio. And the general comments that we received were highly positive and stated how they just couldn't believe how well this radio was built and put together. So overall, very good comments so far.

Well, congrats on the good quarter. Thanks for taking my questions.

Thank you, Luke.

Thank you. And once again, it will be star one on your phone at this time if you wish to ask a question today. The next question is coming from Robert Van Voorhis from Vanita Capital Management. Robert, your line is live.

Hey, good morning, guys. Good quarter. Just a quick question, John, for you. Can you just speak to the relevancy of backlog to this business? I mean, I know a lot of the orders are sort of just in time, and we don't really tend to hold a lot of backlog. And I know it's been declining, but it appears that it's really not that relevant anymore as a metric for predicting revenue. Can you just talk about that a little bit?

Well, thanks for the question, Robert. And I think your comments are on point. One thing I will say is, All the challenges of the supply chain that we saw in 22 and 23 and, of course, moving to our contract manufacturing east-west in 24, a lot of that has paid off. We have a very efficient supply chain now so that when orders come in, we can turn them around fairly quickly. So that obviously is good news for our customers and good news for cash generation. In terms of the size of the backlog, because we are basically a device company, as orders come in, as long as the supply chain is performing against our forecast and that the sales team is forecasting relatively accurately, we can maintain stock and ship these devices out, and therefore the orders don't stay in our backlog very, very long. Now, that being said, Robert, we do get very large orders from time to time. Typically from, for example, the U.S. Forestry, we're expecting orders coming in as our third quarter or their end of their fiscal year. And those orders tend to be very large and typically are not, will typically take a few months to a couple quarters to deliver. And so you'll see spikes in our backlog when we start seeing some of these large orders.

Got it. Yeah, that's helpful. Thanks. That's it for me.

Thank you. There are no further questions at this time. John and Scott, would you like to make any closing remarks?

Thank you, Paul. I want to thank the team for their execution this quarter and thank our public safety customers for the trust they continue to place in us every day. We believe BK Technologies is well positioned with a strengthening balance sheet and expanding software and services opportunity and a product roadmap built directly around where the market is heading. We look forward to speaking with you again on our next quarterly earnings call. Thank you. Thank you.

This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.