Exhibit
99.1
Company
Contact:
RELM
Wireless Corporation
William
Kelly, EVP & CFO
(321)
984-1414
RELM
Wireless Reports Third Quarter and Nine Months 2017
Results
WEST MELBOURNE,
Florida – November 1, 2017 -- RELM Wireless Corporation (NYSE
American: RWC) today announced its financial and operating results
for the third quarter and nine months ended September 30,
2017.
For the third
quarter ended September 30, 2017, sales totaled approximately $11.8
million, compared with approximately $14.7 million for the third
quarter of 2016. Net income for the third quarter of
2017 totaled approximately $600,000, or $0.04 per basic and diluted
share, compared with approximately $719,000, or $0.05 per basic and
diluted share, for the same quarter last year.
Gross profit margin
for the third quarter 2017 was 32.3% of sales, compared with 31.4%
of sales for the same quarter last year. Selling,
general and administrative (SG&A) expenses totaled
approximately $3.7 million, or 30.9% of total sales, for the third
quarter of 2017, compared with approximately $3.5 million, or 24.1%
of sales, for last year’s third quarter.
Sales for last
year’s third quarter and nine months included sales under the
Company’s contract with the TSA. Sales for the
base-year and first option year of the contract were completed in
2016 and not replicated during 2017.
The Company had
approximately $24.5 million in working capital as of September 30,
2017, of which approximately $16.0 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
September 30, 2017, the Company had no borrowings outstanding under
its revolving credit facility.
Tim Vitou,
RELM’s President, commented, “We are very encouraged by
the sales momentum created during the third
quarter. Third quarter sales were the highest of the
year, and were the product of broad-based success across different
markets and customers. Comparatively, last year’s
sales growth was fueled primarily by one customer: the
TSA. Excluding the TSA sales, this year’s
nine-month sales are approximately 18% higher than last
year. Also, during the quarter we were awarded three
multi-year contracts and blanket purchase agreements from federal
agencies that are anticipated to yield sales in future
periods. Recent successes such as these, we believe, are
indicators that our products are gaining traction and our sales and
marketing strategies are increasingly
effective.”
Mr. Vitou
continued, “We continue to make progress in transforming the
company, particularly in manufacturing operations and
engineering. We have invested resources in numerous
programs to improve operational efficiencies and reduce costs, as
well as to enhance product designs and quality. As these
programs take root, we believe they will yield improved operating
results in coming quarters. We are also investing in
exciting new product development that is anticipated to expand our
technology portfolio starting next year. Meanwhile, our
core business remains profitable with a strong balance sheet,
supplemented by strategic investments in other areas that have
yielded exceptional returns to shareholders. We believe
the Company is well positioned for success heading into next
year.”
1
For the nine months
ended September 30, 2017, sales totaled approximately $30.0 million
compared with approximately $43.5 million for the same period last
year. Net income for the nine months ended September 30,
2017 totaled approximately $650,000, or $0.05 per basic and diluted
share, compared with $2.6 million, or $0.19 per basic and diluted
share for the same period last year.
Gross profit
margins for the nine months ended September 30, 2017 were 35.2% of
sales, versus 32.3% of sales for the same period last
year. SG&A expenses for the nine months ended
September 30, 2017 totaled approximately $10.6 million, or 35.4% of
total sales, compared with approximately $10.1 million, or 23.3% of
total 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 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 November 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 November 11, 2017 by dialing 877-481-4010 PIN#21300
(international/local participants dial 919-882-2331
PIN#21300).
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.
2
RELM
WIRELESS CORPORATION
Condensed
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
|
|
|
Three
Months Ended
|
|
|
Nine
Months Ended
|
|
||||||||||
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
||||||||||
|
|
|
9/30/2017
|
|
|
9/30/2016
|
|
|
9/30/2017
|
|
|
9/30/2016
|
|
||||
|
|
|
|
|
|
|
|
|
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|
|
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||||
|
Sales,
net
|
|
$
|
11,831
|
|
|
$
|
14,730
|
|
|
$
|
29,973
|
|
|
$
|
43,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
|
8,014
|
|
|
|
10,099
|
|
|
|
19,425
|
|
|
|
29,412
|
|
|
Selling, general
and administrative expenses
|
|
|
3,660
|
|
|
|
3,549
|
|
|
|
10,624
|
|
|
|
10,110
|
|
|
Total
expenses
|
|
|
11,674
|
|
|
|
13,648
|
|
|
|
30,049
|
|
|
|
39,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
157
|
|
|
|
1,082
|
|
|
|
(76
|
)
|
|
|
3,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
14
|
|
|
|
2
|
|
|
|
32
|
|
|
|
4
|
|
|
Gain on
available-for-sale securities
|
|
|
670
|
|
|
|
0
|
|
|
|
1,287
|
|
|
|
0
|
|
|
Gain (loss) on
disposal of property, plant and equipment
|
|
|
10
|
|
|
|
0
|
|
|
|
(94
|
)
|
|
|
0
|
|
|
Other (expense)
income
|
|
|
1
|
|
|
|
-
|
|
|
|
(146
|
)
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
|
|
852
|
|
|
|
1,084
|
|
|
|
1,003
|
|
|
|
3,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
(252
|
)
|
|
|
(365
|
)
|
|
|
(353
|
)
|
|
|
(1,355
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
600
|
|
|
$
|
719
|
|
|
$
|
650
|
|
|
$
|
2,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share - basic
|
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.19
|
|
|
Net earnings per
share - diluted
|
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding, basic
|
|
|
13,666
|
|
|
|
13,741
|
|
|
|
13,602
|
|
|
|
13,735
|
|
|
Weighted average
common shares outstanding, diluted
|
|
|
13,688
|
|
|
|
13,836
|
|
|
|
13,705
|
|
|
|
13,825
|
|
3
RELM
WIRELESS CORPORATION
Condensed
Consolidated Balance Sheets
(In Thousands, Except Share Data)
|
|
|
September
30,
|
|
|
December
31,
|
|
||
|
|
|
2017
|
|
|
2016
|
|
||
|
|
|
(Unaudited)
|
|
|
|
|
||
|
ASSETS
|
|
|
|
|
|
|
||
|
Current
assets:
|
|
|
|
|
|
|
||
|
Cash and cash
equivalents
|
|
$
|
8,938
|
|
|
$
|
10,910
|
|
|
Available-for-sale
securities
|
|
|
1,180
|
|
|
|
-
|
|
|
Trade accounts
receivable, net
|
|
|
7,032
|
|
|
|
3,448
|
|
|
Inventories,
net
|
|
|
15,235
|
|
|
|
13,999
|
|
|
Prepaid expenses
and other current assets
|
|
|
843
|
|
|
|
1,410
|
|
|
Total current
assets
|
|
|
33,228
|
|
|
|
29,767
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
2,347
|
|
|
|
2,486
|
|
|
Available-for-sale
securities
|
|
|
8,573
|
|
|
|
6,472
|
|
|
Deferred tax
assets, net
|
|
|
1,701
|
|
|
|
3,418
|
|
|
Other
assets
|
|
|
307
|
|
|
|
401
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
46,156
|
|
|
$
|
42,544
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
5,776
|
|
|
$
|
1,973
|
|
|
Accrued
compensation and related taxes
|
|
|
1,250
|
|
|
|
2,193
|
|
|
Accrued warranty
expense
|
|
|
1,195
|
|
|
|
650
|
|
|
Accrued other
expenses and other current liabilities
|
|
|
120
|
|
|
|
169
|
|
|
Dividends
payable
|
|
|
274
|
|
|
|
1,235
|
|
|
Deferred
revenue
|
|
|
150
|
|
|
|
142
|
|
|
Total current
liabilities
|
|
|
8,765
|
|
|
|
6,362
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
revenue
|
|
|
452
|
|
|
|
408
|
|
|
Total
liabilities
|
|
|
9,217
|
|
|
|
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 September 30,
2017 and December 31, 2016, respectively.
|
|
|
8,307
|
|
|
|
8,253
|
|
|
Additional paid-in
capital
|
|
|
25,586
|
|
|
|
25,382
|
|
|
Accumumulated
(deficit) earnings
|
|
|
(901
|
)
|
|
|
240
|
|
|
Accumulated other
comprehensive income
|
|
|
4,514
|
|
|
|
2,061
|
|
|
Treasury Stock, at
cost
|
|
|
(567
|
)
|
|
|
(162
|
)
|
|
Total stockholders'
equity
|
|
|
36,939
|
|
|
|
35,774
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
46,156
|
|
|
$
|
42,544
|
|
4