EXHIBIT 99.1
Company Contact:
RELM Wireless Corporation
William Kelly, EVP & CFO
(321) 984-1414
RELM Wireless Reports Third Quarter 2011 Results
WEST MELBOURNE, Florida -- November 9, 2011 -- RELM Wireless Corporation (NYSE Amex: RWC) today announced its financial and operating results for the quarter and nine months ended September 30, 2011.
For the quarter ended September 30, 2011, sales totaled approximately $7.0 million, compared with approximately $7.1 million for the third quarter last year. Pretax income for the quarter ended September 30, 2011 was approximately $939,000 compared with approximately $261,000 for the third quarter last year. Net income for the quarter ended September 30, 2011 was approximately $914,000, or $0.07 per diluted share, compared with $127,000, or $0.01 per diluted share, for the same quarter last year.
Gross profit margin for the third quarter 2011 was 50.3% of sales, versus 46.4% of sales for the same quarter last year. Selling, general and administrative expenses totaled approximately $2.5 million (36.4% of sales) for the third quarter 2011, compared with $3.0 million (42.6% of sales) for the third quarter last year.
The Company had approximately $20.2 million in working capital as of September 30, 2011, of which $8.2 million was comprised of cash and trade receivables. This compares with working capital of $19.7 million as of December 31, 2010, of which $9.0 million was comprised of cash and trade receivables. The Company had long-term debt of $1.8 million outstanding under its revolving credit facility at September 30, 2011, which represents a decrease of $200,000 from December 31, 2010.
RELM President and Chief Executive Officer David Storey commented, “We were pleased to return to profitability for the third quarter 2011 and encouraged by improvements in customer orders this quarter. Particularly noteworthy was our first significant international military order for our P25 KNG products. This order was for the Australian Defence Industries, and can be linked to our success and reputation with the U.S. military. In this troubled economy, our value proposition and positive reputation are gaining traction with prospective customers. Our pipeline of potential sales opportunities is growing; bolstered by a broader line of products that can address more state and local public safety requirements. During the third quarter, business improved with our federal customers as many looked to utilize funds before the federal government’s fiscal year end. Heading into the fourth quarter, challenges remain as federal budget and funding uncertainties persist. Refinements to manufacturing processes and reductions to our cost structure, should enable us to maintain profitability at reduced revenue levels. When the market improves, we are poised to capitalize; realizing long-term goals for growth in sales and market share.”
For the nine months ended September 30, 2011, sales totaled approximately $18.4 million compared with approximately $20.6 million for the same period last year. Pretax loss for the nine months ended September 30, 2011 was approximately $603,000 compared with pretax income of approximately $812,000 for the same period last year. Net loss for the nine months ended September 30, 2011 totaled approximately $628,000, or $0.05 per basic share, compared with net income of approximately $468,000, or $0.03 per diluted share, for the same period last year.
Gross profit margins for the nine months ended September 30, 2011 were 42.3% of sales, versus 46.8% of sales for the same period last year. Selling, general and administrative expenses for the nine months ended September 30, 2011 totaled approximately $8.3 million (45.1% of sales) compared with approximately $8.8 million (42.8% 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 10, 2011. Shareholders and other interested parties may participate in the conference call by dialing 877-317-6789 (international/local participants dial 412-317-6789) and asking to be connected to the “RELM Wireless Corporation Conference Call” a few minutes before 9:00 a.m. Eastern Time on November 10, 2011. 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 18, 2011, by dialing 877-344-7529 (international/local participants dial 412-317-0088) and entering the conference ID# 10005749.
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 uncertain economic conditions in the United States; 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; 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, 2010 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)
|
|||||||||||||||
|
9/30/2011
|
9/30/2010
|
9/30/2011
|
9/30/2010
|
|||||||||||||
|
Sales, net
|
$ | 6,976 | $ | 7,052 | $ | 18,361 | $ | 20,579 | ||||||||
|
Expenses:
|
||||||||||||||||
|
Cost of products
|
3,467 | 3,780 | 10,594 | 10,943 | ||||||||||||
|
Selling, general and administrative expenses
|
2,541 | 3,003 | 8,273 | 8,810 | ||||||||||||
|
Total expenses
|
6,008 | 6,783 | 18,867 | 19,753 | ||||||||||||
|
Operating income (loss)
|
968 | 269 | (506 | ) | 826 | |||||||||||
|
Other expense:
|
||||||||||||||||
|
Net interest expense
|
(27 | ) | (6 | ) | (89 | ) | (6 | ) | ||||||||
|
Other expense
|
(2 | ) | (2 | ) | (8 | ) | (8 | ) | ||||||||
|
Income (loss) before income taxes
|
939 | 261 | (603 | ) | 812 | |||||||||||
|
Income tax expense
|
(25 | ) | (134 | ) | (25 | ) | (344 | ) | ||||||||
|
Net income (loss)
|
$ | 914 | $ | 127 | $ | (628 | ) | $ | 468 | |||||||
|
Net earnings (loss) per share - basic
|
$ | 0.07 | $ | 0.01 | $ | (0.05 | ) | $ | 0.03 | |||||||
|
Net earnings (loss) per share - diluted
|
$ | 0.07 | $ | 0.01 | $ | (0.05 | ) | $ | 0.03 | |||||||
|
Weighted average common shares outstanding, basic
|
13,519 | 13,490 | 13,512 | 13,472 | ||||||||||||
|
Weighted average common shares outstanding, diluted
|
13,525 | 13,736 | 13,512 | 13,827 | ||||||||||||
RELM WIRELESS CORPORATION
Condensed Consolidated Balance Sheets
(In Thousands, Except Share Data) (Unaudited)
|
September 30,
|
December 31,
|
|||||||
|
2011
|
2010
|
|||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash & cash equivalents
|
$ | 4,899 | $ | 5,050 | ||||
|
Trade accounts receivable, net
|
3,267 | 3,900 | ||||||
|
Inventories, net
|
12,220 | 11,942 | ||||||
|
Deferred tax assets, net
|
2,165 | 2,165 | ||||||
|
Prepaid expenses & other current assets
|
505 | 703 | ||||||
|
Total current assets
|
23,056 | 23,760 | ||||||
|
Property, plant and equipment, net
|
1,245 | 1,357 | ||||||
|
Deferred tax assets, net
|
5,637 | 5,637 | ||||||
|
Capitalized software, net
|
3,027 | 3,776 | ||||||
|
Other assets
|
228 | 262 | ||||||
|
Total assets
|
$ | 33,193 | $ | 34,792 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 1,474 | $ | 2,753 | ||||
|
Accrued compensation and related taxes
|
856 | 795 | ||||||
|
Accrued warranty expense
|
297 | 266 | ||||||
|
Accrued other expenses and other current liabilities
|
261 | 202 | ||||||
|
Total current liabilities
|
2,888 | 4,016 | ||||||
|
Deferred revenue
|
612 | 386 | ||||||
|
Long-term debt
|
1,800 | 2,000 | ||||||
|
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; 13,519,323 and 13,508,815 issued and outstanding shares
|
||||||||
|
at September 30, 2011 and December 31, 2010, respectively.
|
8,111 | 8,105 | ||||||
|
Additional paid-in capital
|
24,529 | 24,404 | ||||||
|
Accumulated deficit
|
(4,747 | ) | (4,119 | ) | ||||
|
Total stockholders' equity
|
27,893 | 28,390 | ||||||
|
Total liabilities and stockholders' equity
|
$ | 33,193 | $ | 34,792 | ||||