Exhibit
99.1
Company Contact:
RELM Wireless Corporation
William Kelly, EVP & CFO
(321) 984-1414
RELM Wireless Reports Second Quarter and Six Months 2017
Results
WEST
MELBOURNE, Florida – August 1, 2017 -- RELM Wireless
Corporation (NYSE American: RWC) today announced its financial and
operating results for the second quarter and six months ended June
30, 2017.
For the
second quarter ended June 30, 2017, sales totaled approximately
$10.8 million, compared with approximately $16.7 million for the
second quarter of 2016. Net income for the second quarter of 2017
totaled approximately $1.3 million, or $0.10 per basic and diluted
share, compared with approximately $1.4 million, or $0.10 per basic
and diluted share, for the same quarter last year.
Gross
profit margin for the second quarter 2017 was 41.8% of sales,
compared with 33.6% of sales for the same quarter last year.
Selling, general and administrative (SG&A) expenses totaled
approximately $3.5 million for both the second quarter of 2017 and
last year’s second quarter. For the second quarter of 2017
and 2016, SG&A expenses were 32.7% of sales and 21.0% of sales,
respectively.
Sales
for last year’s second quarter and six months included sales
under the Company’s contract with the TSA. Sales for the
base-year and first option year were completed in 2016 and not
replicated during the first six months of 2017.
The
Company had approximately $24.5 million in working capital as of
June 30, 2017, of which approximately $12.8 million was comprised
of cash, cash equivalents and trade receivables. This compares with
working capital of approximately $23.4 million as of December 31,
2016, of which approximately $14.4 million was comprised of cash,
cash equivalents and trade receivables. As of June 30, 2017, the
Company had no borrowings outstanding under its revolving credit
facility.
Tim
Vitou, RELM’s President, commented, “Early this year we
implemented changes in our leadership and subsequently launched
improvement initiatives throughout the Company. We are encouraged
with our progress to date, and pleased to see our financial and
operating results start to reflect it. Sales to both state and
federal public safety agencies showed strength during the quarter.
It is noteworthy that a significant portion of last year’s
sales in the second quarter included the TSA delivery orders which
were largely completed last year. Comparing quarter-over-quarter
sales to customers other than the TSA, this year’s second
quarter sales increased by approximately 34%.”
Mr.
Vitou continued, “With a solid mix of product sales, gross
profit margins for the second quarter returned to more customary
levels. Also, we are continuing to scrutinize SG&A expenses
through our zero-based budgeting initiative, which enables us to
more strategically deploy Company resources in sales and
engineering applications designed to drive future
growth.”
Mr.
Vitou concluded, “Supplementing our core business, are
strategic investments in other areas that yielded a return in the
second quarter and hold the potential for greater returns moving
forward. Additionally, we have prioritized new product development
efforts that we believe address the best opportunities for growth
and enhanced value.”
For the
six months ended June 30, 2017, sales totaled approximately $18.1
million compared with approximately $28.7 million for the same
period last year. Net income for the six months ended June 30, 2017
totaled approximately $50,000, or $0.00 per basic and diluted
share, compared with $1.9 million, or $0.14 per basic and diluted
share for the same period last year.
Gross
profit margins for the six months ended June 30, 2017 were 37.1% of sales, versus 32.8% of
sales for the same period last year. SG&A expenses for the six
months ended June 30, 2017 totaled approximately $7.0 million,
compared with approximately $6.6 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, Wednesday, August 2, 2017. 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 August 2, 2017. 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 August 11, 2017, by dialing
877-481-4010 #18335 (international/local participants dial
919-882-2331 #18335).
About RELM Wireless
As an
American manufacturer for 70 years, RELM Wireless is deeply rooted
in the public safety communications industry, manufacturing
high-specification communications equipment of unsurpassed
reliability and value for use by public safety professionals and
government agencies. Advances include a broad new line of leading
digital two-way radios compliant with APCO Project 25
specifications. RELM Wireless’ 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 American market under the symbol
“RWC”.
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 American 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, 2016 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 Balance Sheets
(In Thousands, Except Share Data)
|
|
June 30,
|
December 31,
|
|
|
2017
|
2016
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$7,490
|
$10,910
|
|
Available-for-sale
securities
|
2,103
|
-
|
|
Trade
accounts receivable, net
|
5,313
|
3,448
|
|
Inventories,
net
|
14,793
|
13,999
|
|
Prepaid
expenses and other current assets
|
884
|
1,410
|
|
Total
current assets
|
30,583
|
29,767
|
|
|
|
|
|
Property,
plant and equipment, net
|
2,427
|
2,486
|
|
Available-for-sale
securities
|
7,942
|
6,472
|
|
Deferred
tax assets, net
|
1,943
|
3,418
|
|
Other
assets
|
356
|
401
|
|
|
|
|
|
Total assets
|
$43,251
|
$42,544
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$2,872
|
$1,973
|
|
Accrued
compensation and related taxes
|
1,355
|
2,193
|
|
Accrued
warranty expense
|
1,060
|
650
|
|
Accrued
other expenses and other current liabilities
|
372
|
169
|
|
Dividends
payable
|
275
|
1,235
|
|
Deferred
revenue
|
147
|
142
|
|
Total
current liabilities
|
6,081
|
6,362
|
|
|
|
|
|
Deferred
revenue
|
397
|
408
|
|
Total
liabilities
|
6,478
|
6,770
|
|
|
|
|
|
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;
13,844,584 and 13,754,749 issued and outstanding
shares
|
|
|
|
at
June 30, 2017 and December 31, 2016, respectively.
|
8,307
|
8,253
|
|
Additional
paid-in capital
|
25,533
|
25,382
|
|
Accumumulated
(deficit) earnings
|
(1,227)
|
240
|
|
Accumulated
other comprehensive income
|
4,539
|
2,061
|
|
Treasury
Stock, at cost
|
(379)
|
(162)
|
|
Total
stockholders' equity
|
36,773
|
35,774
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$43,251
|
$42,544
|
RELM WIRELESS CORPORATION
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
|
|
Three Months Ended
|
Six Months Ended
|
||
|
|
(Unaudited)
|
(Unaudited)
|
||
|
|
6/30/17
|
6/30/16
|
6/30/17
|
6/30/16
|
|
|
|
|
|
|
|
Sales,
net
|
$10,762
|
$16,664
|
$18,142
|
$28,733
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Cost
of products
|
6,268
|
11,073
|
11,411
|
19,313
|
|
Selling,
general and administrative expenses
|
3,521
|
3,497
|
6,964
|
6,560
|
|
Total
expenses
|
9,789
|
14,570
|
18,375
|
25,873
|
|
|
|
|
|
|
|
Operating
income (loss)
|
973
|
2,094
|
(233)
|
2,860
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
Interest
income
|
10
|
1
|
18
|
2
|
|
Gain
on available-for-sale securities
|
617
|
0
|
617
|
0
|
|
Loss
on disposal of property, plant and equipment
|
0
|
0
|
(104)
|
0
|
|
Other
(expense) income
|
(60)
|
7
|
(147)
|
8
|
|
|
|
|
|
|
|
Income
before income taxes
|
1,540
|
2,102
|
151
|
2,870
|
|
|
|
|
|
|
|
Income
tax expense
|
(222)
|
(737)
|
(101)
|
(992)
|
|
|
|
|
|
|
|
Net
income
|
$1,318
|
$1,365
|
$50
|
$1,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings per share - basic
|
$0.10
|
$0.10
|
$0.00
|
$0.14
|
|
Net
earnings per share - diluted
|
$0.10
|
$0.10
|
$0.00
|
$0.14
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding, basic
|
13,785
|
13,734
|
13,760
|
13,732
|
|
Weighted
average common shares outstanding, diluted
|
13,815
|
13,841
|
13,903
|
13,820
|