Good morning, ladies and gentlemen, and welcome to the BK Technologies Corporation Conference Call for the First Quarter 2021. This call is being recorded. [Operator Instructions] Before turning the call over to our President, Mr. Timothy Vitou for opening remarks, I will provide the following safe harbor statement. Statements made during this conference call 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 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 of the factors and risks that could cause or contribute to such material differences have been described in yesterday's press release and in the 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. I will now turn the call over to Mr. Timothy Vitou, President of BK Technologies. Mr. Vitou, you may begin.

Thank you, Matthew, and thanks, everyone, for joining today. I'll arrange my comments as follows: first, I'll highlight our financial results. Next, I'll spend some time providing operational updates. Then I'll turn the call over to Executive Vice President and Chief Financial Officer, Bill Kelly, to dive deeper into the financial results. We'll conclude by opening the call for a brief Q&A. Beginning with our financial results. Q1 revenue came in at $8.6 million compared with $10.9 million in the first quarter of last year. Revenues in Q1 were below internal expectations, due in part to the timing of certain orders from our existing customers as well as some supply chain constraints. Like many enterprises, COVID-19 has disrupted the operations of some of our customers and supply chain partners, slowing their ordering and fulfillment processes, respectively. It is important to emphasize this is not a demand issue, but rather a timing issue. Some of these orders have now been booked or are in the final procurement stage, giving us confidence that the second quarter will show growth. Even with the short-term sales decrease, our gross margins were slightly above last year, reflecting efficiencies we have driven into our manufacturing operations that have improved our utilization and absorption of manufacturing and support expenses. We also realigned our sales and marketing teams and implemented other initiatives over the past year to optimize our expense structure, reflected in our 16% reduction in SG&A in Q1 versus Q1 of last year. In short, the company is well positioned to see margin growth as we continue to scale our business. It's important to stay focused on the big picture. Over the last 4 years, this business has been totally transformed. We brought in a new executive management team and a new Board of Directors, implemented…

Thanks, Tim. The following is a summary of our financial and operating results for the period ending March 31, 2021. Sales for the first quarter totaled approximately $8.6 million compared with $10.9 million for the first quarter last year. As Tim reported, revenues in the first quarter were below internal expectations due in part to the timing of certain customer orders and delays within our supply chain. Like many enterprises, COVID-19 has disrupted the operations of some of our customers and supplying chain partners, slowing their processes. As Tim mentioned, this relates to timing rather than demand. Several of these customer orders have now been booked or in the final procurement stage, giving us confidence that second quarter will yield growth. Gross profit margins has a percentage of sales for the first quarter were 36.2% compared with 35.8% for the first quarter last year. While gross profit margins for the first quarter of 2021 were materially consistent with the same quarter last year, they were adversely impacted by approximately 3.3% for onetime inventory reserves related to our legacy product line, the KNG series. Absent this impact, gross profit margins for the first quarter of 2021 would have been approximately 39.5%. Last year, we reduced manufacturing operations employment and other manufacturing-related expenses, and these reductions have improved our utilization and absorption of manufacturing and support expenses. Selling, general and administrative expenses, or SG&A, for the first quarter decreased approximately $770,000 or 16.2% to approximately $4 million, which was 46.4% of sales. This compares with $4.7 million or 43.6% of sales for the same quarter last year. In the second quarter last year -- excuse me, in the first quarter last year, consistent with the employment and expense reductions in our manufacturing operations, we reduced SG&A employment as well as other expenses…

[Operator Instructions] There are no questions in the queue at this time. Your first question is coming from Walter Ramsley.

Congratulations. I've got a couple of questions. The 9000 product line. Can you tell us when you expect that to officially hit the market?

Thanks for the question, Walter. This is Tim. The 9000 is still tracking for release this year. There are several stages as you know. When we released the 5000, for example, there's a considerable amount of customer approvals that are required, quite a bit of certification, of course, FCC approval. That's one level of release. The second is when we start beginning customer orders -- taking customer orders. I think you've seen, we've already announced, we've already accepted some preorders for that radio. I believe that we're still on track. It would be disingenuous to say a specific date like July 7, something like that. We're looking at it from just a pure standpoint of when the radio is going to be released from engineering to manufacturing for commercial release, and that is still gated for the second half of this year.

Okay. So the product is still being developed?

We're in the pretty much of a lockdown mode at this point, Walter. There's, again, so many levels of development. I could get into some crazy detail, if you'd like, on what level of the development it is. We're in the stages of the -- engineering team is doing their very advanced testing on the product. Again, when we look at when we release a radio, it's when we plan on taking orders, and then when Randy, our COO, is prepared to commercially release that product to the customer. So the development process is still developing. You noticed, I mentioned in my portion of the conversation this morning that we've had extensive feedback from our customers, which is -- it's like music to our ears to get that level of concern and interest in helping us develop this product. So we are taking our time, making sure that we're absorbing all of this input we're getting from our customers and the feedback so that we can include it to make sure that this radio is an absolute product that delivers what the customers are looking for.

Okay. That sounds good. And then as far as the current product line goes, the 5000 and the older KNGs, what percentage of the orders now are the 5000 compared to the -- which I guess you would call the legacy stuff?

Our legacy equipment still dominates, for sure. We are accepting, and we've released quite a few press releases, as you all noticed, in the last 6 months on very strategic customers already migrating to the 5000. I'm not sure that I'm prepared to give an exact 20%, 40% percentage number. But what's encouraging, Walter, is that the sales level that I monitor on a very daily basis, our quoting and our RFP and RFQ responses have been substantially geared toward the 5000 going forward. We still have some very long-standing customers that are die-hard KNG fans and are continuing to still purchase that product. So I think it's a very fluid percentage that's going to be obviously growing much, much quicker and much deeper into the 5000 as we go forward.

Okay. And I don't know if anybody else is in the queue. But if not, just if you could comment on supply problems, getting the parts from overseas, I guess. You indicated that was a problem. And also the customers themselves that they were virtual. Have they gone back to real life, so to speak, and business as usual? Or are you still battling it out with the Zoom calls and all that stuff?

Two-part question. Supply chain and then the access to customers due to COVID as I listened to your question, Walter.

Right. That's correct.

The supply chain, we are seeing extended lead times. And difficulty or the challenge in Randy and his team from the procurement office is trying to make sure that we're staying ahead of the curve. We are shipping right now. We can deliver to all of our customers the requirements they need, just on a pretty much an extended basis. We used to have a book-to-ship ratio that was literally in days. It's now turning more into weeks. Nothing that's preventing us from -- or causing any customer concern. It's just giving them the guidance that, "Hey, we're not going to take an order Monday and ship it Friday. We're going to take an order Monday and it may ship in a couple of weeks." And they're perfectly okay with that. It's hard to tell really how the supply chain will unfold, but we're monitoring it extremely closely. The second half of your question was about customer access, and it's an interesting dynamic. We are seeing some access to customers. Years ago, we go into a meeting with a customer group, and they'd have 10 people on their side of the table to 1 or 2 of us, and we'd be presenting to the masses. When we kind of shifted into a Zoom remote mode, we still had that dynamic where we'd be 1 or 2 people on the call and they'd have their 8 or 9 or 10 on their side on the Zoom call. What's happening now is they're allowing us to come in, but it's one-on-one. It's kind of interesting. I'd prefer it to be the Zoom, where we can talk to more people at one time. So as some of these government agencies, which is all we deal with city, county, state and feds, as they open their doors and we're allowed in, they're still giving us a little bit of a straight arm on face-to-face. But I believe that the kind of world has kind of shifted, Walter, into kind of a Zoom-oriented kind of world. And I think that our sales guys are becoming very, very efficient at presenting and talking and selling over the tool. Last year was our second highest sales number on record. I don't see that changes a whole lot. Maybe in the next couple of quarters with the vaccine and as people are opening up more and more governments are opening up, we'll be allowed into bigger sales events. I noticed the industry shows are starting to fire up again later this summer in August and September. So that's always a good sign as well.

[Operator Instructions] There are no further questions in the queue at this time. I will now turn the floor back to our hosts.

Thank you, Matthew, and thanks, everyone, for participating today. We look forward to speaking with you again when we report our Q2 2021 earnings results in August. All the best to all of you, and have a great day today.

Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.