Exhibit
99.1
Company Contact:
RELM Wireless Corporation
William Kelly, EVP & CFO
(321) 984-1414
RELM Wireless Reports Third Quarter 2016 Results
-Sales for the Quarter Grow Approximately 93.7% from Prior Year
Third Quarter-
-Q3 EPS Totals $0.05 Compared With $0.02 for Same Quarter Last
Year-
WEST
MELBOURNE, Florida – November 2, 2016 -- RELM Wireless
Corporation (NYSE MKT: RWC) today announced its financial and
operating results for the third quarter and nine months ended
September 30, 2016.
For the
third quarter ended September 30, 2016, sales increased 93.7% to
approximately $14.7 million, compared with $7.6 million for the
third quarter of 2015. Net income for the third quarter of 2016
totaled approximately $719,000, or $0.05 per basic and diluted
share, compared with net income of approximately $212,000, or $0.02
per basic and diluted share, for the same quarter last
year.
Gross
profit margin for the third quarter 2016 was 31.4% of sales,
compared with 45.8% of sales for the same quarter last year.
Selling, general and administrative expenses totaled approximately
$3.5 million (24.1% of sales) for the third quarter 2016, compared
with approximately $3.2 million (41.9% of sales) for the third
quarter of 2015.
The
Company had approximately $24.3 million in working capital as of
September 30, 2016, of which approximately $14.9 million was
comprised of cash, cash equivalents and trade receivables. This
compares with working capital of approximately $23.9 million as of
December 31, 2015, of which approximately $8.8 million was
comprised of cash, cash equivalents and trade receivables. As of
September 30, 2016, the Company had no borrowings outstanding under
its revolving credit facility.
RELM
President and Chief Executive Officer David Storey commented,
“Our sales for the quarter ended September 30, 2016 were a
company record for the third consecutive quarter, and were
approximately 94% higher than last year’s third quarter. This
brings our year-to-date sales to over $43 million through nine
months. Sales to the U.S. Transportation Security Administration
(TSA) were a major contributor to this sales performance. We have
now shipped over 19,000 radios to 406 airports, and feedback from
the field has been very positive.”
Mr.
Storey continued, “In addition to the next year on our
contract with the TSA, our team is now focused on several
substantial new sales opportunities. I believe our success with the
TSA provides an important advantage; serving as a foundation and
reference that validates RELM’s ability to meet the
requirements of other large agencies, which should foster
confidence with prospective new customers. We expect this will
enhance our ultimate objectives of increased market share and sales
growth.”
For the
nine months ended September 30, 2016, sales totaled approximately
$43.5 million compared with $22.8 million for the same period last
year. Net income for the nine months ended September 30, 2016
totaled approximately $2.6 million, or $0.19 per basic and diluted
share, compared with $829,000, or $0.06 per basic and diluted share
for the same period last year.
Gross
profit margins for the nine months ended September 30, 2016 were
32.3% of sales, versus 42.0% of sales for the same period last
year. Selling, general and administrative expenses for the nine
months ended September 30, 2016 totaled approximately $10.1 million
compared with approximately $8.4 million 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 3, 2016. Shareholders
and other interested parties may participate in the conference call
by dialing 877-407-8031 (international/local participants dial
201-689-8031) and asking to be connected to the “RELM
Wireless Corporation Conference Call” a few minutes before
9:00 a.m. Eastern Time on November 3, 2016. 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 13, 2016, by dialing
877-481-4010 (international/local participants dial 919-882-2331)
and entering the conference ID# 13647359.
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 in critical emergency situations. RELM was
one of the first manufacturers to develop P25-compliant
technology.
Forward-Looking Statements
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: changes or advances in
technology; the success of our LMR product line; competition in the
land mobile radio industry; general economic and business
conditions, including federal, state and local government budget
deficits and spending limitations; the availability, terms and
deployment of capital; reliance on contract manufacturers and
suppliers; heavy reliance on sales to agencies of the U.S.
government; our ability to utilize deferred tax assets; retention
of executive officers and key personnel; our ability to manage our
growth; our ability to identify potential candidates for, and
consummate, acquisition or investment transactions, and risks
incumbent to being a minority stockholder in a corporation; impact
of our investment strategy; government regulation; our business
with manufacturers located in other countries; our inventory and
debt levels; protection of our intellectual property rights;
fluctuation in our operating results; acts of war or terrorism,
natural disasters and other catastrophic events; any infringement
claims; data security breaches and other factors impacting our
technology systems; availability of adequate insurance coverage;
maintenance of our NYSE MKT listing; and the effect on our stock
price and ability to raise equity capital of future sales of shares
of our common stock. 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, 2015 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.
RELM WIRELESS CORPORATION
Condensed Consolidated Statements of Income
(In Thousands, Except Per Share Amounts)
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
|
(Unaudited)
|
(Unaudited)
|
||
|
|
9/30/16
|
9/30/15
|
9/30/16
|
9/30/15
|
|
|
|
|
|
|
|
Sales,
net
|
$14,730
|
$7,606
|
$43,463
|
$22,773
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Cost
of products
|
10,099
|
4,120
|
29,412
|
13,217
|
|
Selling,
general and administrative expenses
|
3,549
|
3,186
|
10,110
|
8,407
|
|
Total
expenses
|
13,648
|
7,306
|
39,522
|
21,624
|
|
|
|
|
|
|
|
Operating
income
|
1,082
|
300
|
3,941
|
1,149
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
Interest
income
|
2
|
1
|
4
|
1
|
|
Other
income (expense)
|
0
|
(4)
|
7
|
37
|
|
Total
other income (expense)
|
2
|
(3)
|
11
|
38
|
|
|
|
|
|
|
|
Income
before income taxes
|
1,084
|
297
|
3,952
|
1,187
|
|
|
|
|
|
|
|
Income
tax expense
|
(365)
|
(85)
|
(1,355)
|
(358)
|
|
|
|
|
|
|
|
Net
income
|
$719
|
$212
|
$2,597
|
$829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings per share - basic
|
$0.05
|
$0.02
|
$0.19
|
$0.06
|
|
Net
earnings per share - diluted
|
$0.05
|
$0.02
|
$0.19
|
$0.06
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding, basic
|
13,741
|
13,718
|
13,735
|
13,699
|
|
Weighted
average common shares outstanding, diluted
|
13,836
|
13,794
|
13,825
|
13,858
|
RELM WIRELESS CORPORATION
Condensed Consolidated Balance Sheets
(In Thousands, Except Share Data) (Unaudited)
|
|
September 30,
|
December 31,
|
|
|
2016
|
2015
|
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$8,621
|
$4,669
|
|
Trade
accounts receivable, net
|
6,237
|
4,122
|
|
Inventories,
net
|
13,284
|
16,282
|
|
Prepaid
expenses & other current assets
|
1,821
|
3,081
|
|
Total
current assets
|
29,963
|
28,154
|
|
|
|
|
|
Property,
plant and equipment, net
|
2,629
|
1,840
|
|
Available-for-sale
securities
|
6,472
|
3,402
|
|
Deferred
tax assets, net
|
3,564
|
5,461
|
|
Capitalized
software, net
|
211
|
370
|
|
Other
assets
|
229
|
222
|
|
|
|
|
|
Total assets
|
$43,068
|
$39,449
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$2,811
|
$2,285
|
|
Accrued
compensation and related taxes
|
1,939
|
1,136
|
|
Accrued
warranty expense
|
586
|
538
|
|
Customer
deposits
|
2
|
-
|
|
Accrued
other expenses and other current liabilities
|
201
|
168
|
|
Deferred
revenue
|
144
|
136
|
|
Total
current liabilities
|
5,683
|
4,263
|
|
|
|
|
|
Deferred
revenue
|
394
|
366
|
|
Total
liabilities
|
6,077
|
4,629
|
|
|
|
|
|
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;
13,754,749 and 13,730,562 issued and outstanding
shares
|
8,253
|
8,238
|
|
at
September 30, 2016 and December 31, 2015,
respectively.
|
|
|
|
Additional
paid-in capital
|
25,376
|
24,926
|
|
Retained
earnings
|
1,384
|
1,259
|
|
Accumulated
other comprehensive income
|
2,061
|
397
|
|
Treasury
Stock, at cost
|
(83)
|
-
|
|
Total
stockholders' equity
|
36,991
|
34,820
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$43,068
|
$39,449
|