EX-99.1 2 rwc_ex991.htm PRESS RELEASE RELM Wireless


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EXHIBIT 99.1

 

 

Company Contact:

Investor Relations Contact:

RELM Wireless Corporation

R J Falkner & Company, Inc.

William Kelly, EVP & CFO

R Jerry Falkner, CFA

(321) 984-1414

(800) 377-9893



RELM Wireless Reports Third Quarter and Year-To-Date Results

-Sales and Profits Increase Significantly From Prior Year Periods-


WEST MELBOURNE, Florida -- November 10, 2009 -- RELM Wireless Corporation (NYSE: Amex - RWC) today announced its financial and operating results for the quarter and nine months ended September 30, 2009.


For the quarter ended September 30, 2009, sales increased $2.5 million (43.2%) to approximately $8.3 million, compared with $5.8 million for the same quarter last year.  Pretax income for the quarter increased 265.0%, or $1.1 million, to $1.5 million compared with $0.4 million for the same quarter last year.  Net income for the third quarter 2009 approximated $0.9 million, or $0.07 per diluted share, compared with $0.3 million, or $0.02 per share, for the prior year’s third quarter.


Gross profit margin for the third quarter 2009 was improved to 51.1% of sales, versus 50.7% of sales for the same quarter last year.  Selling, general and administrative expenses were $2.7 million (32.8% of sales) in the third quarter 2009, compared with $2.6 million (44.1% of sales) in the third quarter 2008.


The Company had approximately $16.2 million in working capital as of September 30, 2009.  Cash and trade receivables increased almost 70% ($5.1 million) to-date in 2009 to $12.3 million compared with $7.2 million at the start of the year.  During the nine months ended September 30, 2009, the Company reduced net inventories by approximately $3.6 million (37.1%), and repaid in its entirety the $1.5 million balance that was outstanding at the start of the year on its revolving credit facility.

 

RELM President and Chief Executive Officer David Storey commented, “Following our record results for the second quarter, we are encouraged with the continued strength in sales and profits relative to the same periods last year.  We were particularly pleased with the sales of our P25 digital products and new KNG products, which comprised almost 60% of our total sales.  This is a positive indicator for the KNG line and its acceptance among new customers.  Success in aggressively pursuing more sales gains with KNG products is key to our strategy for profitable growth.  Meanwhile, we are being cautious in maintaining operating expenses at the reduced levels established late last year, as business conditions gradually improve.”





For the nine months ended September 30, 2009, sales increased approximately $6.5 million (41.9%) to $22.1 million, compared with $15.6 million for the same period last year.  Pretax income for the nine months ended September 30, 2009 increased $4.9 million to approximately $2.9 million, compared with a pretax loss of $2.0 million for the same period last year.  Net income for the nine months ended September 30, 2009 totaled approximately $2.0 million, or $0.15 per diluted share, compared with a net loss of $1.3 million, or $0.10 per share, for the same period last year.

Gross profit margin for the nine months ended September 30, 2009 was 48.5% of sales, versus 48.2% of sales for the same period last year.  Selling, general and administrative expenses for the nine months ended September 30, 2009 declined $1.9 million (19.4%) to approximately $7.8 million (35.2% of sales), compared with $9.7 million (62.0% of sales) for the same period last year.

Conference Call and Webcast

The Company will host a conference call and webcast for investors at 9:00 a.m. Eastern Time, Thursday, November 12, 2009.  Shareholders and other interested parties may participate in the conference call by dialing 800-860-2442 (international/local participants dial 412-858-4600) and asking to be connected to the “RELM Wireless Corporation Conference Call” a few minutes before 9:00 a.m. Eastern Time on November 12, 2009.  The call will also be webcast at http://www.relm.com.  Please allow extra time prior to the call to visit the site and download any necessary software to listen to the Internet webcast.  An online archive of the webcast will be available on the Company’s website for 30 days following the call at http://www.relm.com.

A replay of the conference call will be available one hour after the completion of the call until November 20, 2009, by dialing 877-344-7529 (international/local participants dial 412-317-0088) and entering the conference ID 435360.  

About APCO Project 25 (P25)

APCO Project 25 (P25), which requires interoperability among compliant equipment regardless of the manufacturer, was established by the Association of Public-Safety Communications Officials and is approved by the U.S. Department of Homeland Security.  The shift toward interoperability gained momentum as a result of significant communications failures during events such as the Oklahoma City bombings, the 9/11 attacks and Hurricane Katrina.  RELM was one of the first manufacturers to develop P25-compliant technology.

About RELM Wireless Corporation

As an American Manufacturer for more than 60 years, RELM Wireless Corporation has produced high-specification two-way communications equipment of unsurpassed reliability and value for use by public safety professionals and government agencies, as well as radios for use in a wide range of commercial and industrial applications.  Advances include a broad new line of leading digital two-way radios compliant with APCO Project 25 specifications.  RELM’s products are manufactured and distributed worldwide under BK Radio and RELM brand names. The Company maintains its headquarters in West Melbourne, Florida and can be contacted through its web site at www.relm.com or directly at 1-800-821-2900.  The Company’s common stock trades on the NYSE Amex market under the symbol “RWC”.

This press release contains certain forward-looking statements that are made pursuant to the “Safe Harbor” provisions of the Private Securities Litigation Reform Act Of 1995.  These forward-looking statements concern the Company’s operations, economic performance and financial condition and are based largely on the Company’s beliefs and expectations.  These statements involve known and unknown risks, uncertainties and other factors that




may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors and risks include, among others, the following: risks relating to the current financial crisis and adverse economic conditions; reliance on contract manufacturers; heavy reliance on sales to the U.S. Government; federal, state and local budget deficits and spending limitations; limitations in available radio spectrum for use by land mobile radios; general economic and business conditions amid the financial crisis; changes in customer preferences; competition; changes in technology; changes in business strategy; the debt and inventory levels of the Company; quality of management, business abilities and judgment of the Company’s personnel; and the availability, terms and deployment of capital.  Certain of these factors and risks, as well as other risks and uncertainties, are stated in more detail in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and in the Company’s subsequent filings with the SEC.  These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.


# # #


(Financial Tables to Follow)




RELM WIRELESS CORPORATION

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

9/30/2009

 

9/30/2008

 

9/30/2009

 

9/30/2008

 

 

     

 

                  

     

 

                  

     

 

                  

     

 

                  

 

Sales, net

 

$

8,292 

 

$

5,790 

 

$

22,141 

 

$

15,599 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products

 

 

4,058 

 

 

2,852 

 

 

11,398 

 

 

8,077 

 

Selling, general and administrative expenses

 

 

2,718 

 

 

2,553 

 

 

7,802 

 

 

9,676 

 

Total expenses

 

 

6,776 

 

 

5,405 

 

 

19,200 

 

 

17,753 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

1,516 

 

 

385 

 

 

2,941 

 

 

(2,154)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest (expense) income

 

 

(5)

 

 

29 

 

 

(41)

 

 

134 

 

Other expense

 

 

(7)

 

 

(2)

 

 

(4)

 

 

(9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income (loss)

 

 

1,504 

 

 

412 

 

 

2,896 

 

 

(2,029)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit

 

 

(577)

 

 

(75)

 

 

(881)

 

 

749 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

927 

 

$

337 

 

$

2,015 

 

$

(1,280)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per share - basic

 

$

0.07 

 

$

0.03 

 

$

0.15 

 

$

(0.10)

 

Income (loss) per share - diluted

 

$

0.07 

 

$

0.02 

 

$

0.15 

 

$

(0.10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

13,411 

 

 

13,405 

 

 

13,411 

 

 

13,400 

 

Weighted average common shares outstanding, diluted

 

 

13,726 

 

 

13,528 

 

 

13,520 

 

 

13,400 

 







RELM WIRELESS CORPORATION

Condensed Consolidated Balance Sheets

(In Thousands, Except Share Data) (Unaudited)

 

 

September 30,
2009

 

December 31,
2008,

 

 

 

 

 

 

 

 

 

ASSETS

     

 

                  

     

 

                  

 

Current assets:

 

 

 

 

 

 

 

Cash & cash equivalents

 

$

8,068 

 

$

5,475 

 

Trade accounts receivable, net

 

 

4,227 

 

 

1,769 

 

Inventories, net

 

 

6,146 

 

 

9,774 

 

Deferred tax assets, net

 

 

707 

 

 

1,562 

 

Prepaid expenses & other current assets

 

 

476 

 

 

931 

 

Total current assets

 

 

19,624 

 

 

19,511 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

1,400 

 

 

1,386 

 

Deferred tax assets, net

 

 

7,638 

 

 

7,638 

 

Capitalized software, net

 

 

2,672 

 

 

1,732 

 

Other assets

 

 

377 

 

 

355 

 

 

 

 

 

 

 

 

 

Total assets

 

$

31,711 

 

$

30,622 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

1,748 

 

$

1,849 

 

Accrued compensation and related taxes

 

 

1,117 

 

 

617 

 

Accrued warranty expense

 

 

224 

 

 

302 

 

Accrued other expenses and other current liabilities

 

 

320 

 

 

110 

 

Total current liabilities

 

 

3,409 

 

 

2,878 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

— 

 

 

1,500 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Preferred stock; $1.00 par value; 1,000,000 authorized shares,
none issued or outstanding.

 

 

— 

 

 

— 

 

Common stock; $0.60 par value; 20,000,000 authorized
shares, 13,410,871 issued and outstanding shares at
September 30, 2009 and December 31, 2008, respectively.

 

 

8,046 

 

 

8,046 

 

Additional paid-in capital

 

 

24,063 

 

 

24,020 

 

Accumulated deficit

 

 

(3,807)

 

 

(5,822)

 

Total stockholders' equity

 

 

28,302 

 

 

26,244 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

31,711 

 

$

30,622