Exhibit 99.1
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Company Contact:
RELM Wireless Corporation
William Kelly, EVP & CFO
(321) 984-1414
RELM Wireless Reports First Quarter 2018 Results
WEST
MELBOURNE, Florida -- May 9, 2018 -- RELM Wireless Corporation
(NYSE American: RWC) today announced financial and operating
results for the first quarter ended March 31, 2018.
For the
first quarter ended March 31, 2018, revenues increased
approximately 59.2% to approximately $11.7 million, compared with
approximately $7.4 million for the first quarter of 2017. The
Company recognized operating income of approximately $748,000 for
the first quarter of 2018, an increase of approximately 162% from
an operating loss totaling approximately $1.2 million for the first
quarter last year. The net loss for the first quarter of 2018 was
approximately $443,000, or $0.03 per diluted share, compared with a
net loss of approximately $1.3 million, or $0.09 per diluted share,
for the same quarter in 2017.
The
financial results for the first quarter of 2018 include a loss on
the sale of securities totaling approximately $849,000, and a loss
of approximately $297,000 on an investment. There were no
comparable transactions during last year’s first
quarter.
The
Company had approximately $22.9 million in working capital as of
March 31, 2018, of which $15.8 million was comprised of cash, cash
equivalents and trade receivables. This compares with working
capital of approximately $26.7 million as of December 31, 2017, of
which $12.7 million was comprised of cash, cash equivalents and
trade receivables. As of March 31, 2018, the Company had no
borrowings outstanding under its revolving credit
facility.
Tim
Vitou, RELM’s President, commented, “We are very
pleased with our operating results for the first quarter,
particularly our sales performance, which built upon the momentum
of 2017. This was one of our best first quarters for sales,
exceeded only by 2016, which was driven primarily by our TSA
contract. Conversely, the sales for this year’s first quarter
were sourced from a wide range of federal, state and international
customers. Operationally, gross profit margins increased
significantly compared with last year’s first quarter as we
realized some benefits from initiatives in manufacturing
operations, as well as a more favorable mix of product sales. On
the strength of these improvements, we generated operating income
versus last year’s operating loss. Furthermore, we continued
to invest in engineering, progressing toward the anticipated
introduction of a new line of leading-edge products later this
year.”
Mr.
Vitou continued, “Below operating income, we reported a loss
on the sale of our remaining shares of Iteris. This reporting is
the result of a change in accounting guidance, and does not reflect
the actual economics of our investment. We originally invested $3.2
million in Iteris stock that was ultimately sold for approximately
$11.0 million in cash, which supplemented our working capital and
enabled us to make another strategic investment. Although that
investment generated a loss in the first quarter of 2018, we
believe the future for this investment is favorable. Overall, I am
encouraged by our outlook for sales and new products, and the trend
of improvements in our operations, all of which should yield growth
and enhanced shareholder value.”
Conference Call and Webcast
The
Company will host a conference call and webcast for investors at
9:00 a.m. Eastern Time, on Wednesday, May 9, 2018. 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 May 9, 2018. The call will also be
webcast at http://www.bktechnologies.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.bktechnologies.com.
A
replay of the conference call will be available one hour after the
completion of the call until May 18, 2018 by dialing 877-481-4010
PIN#28104 (international/local participants dial 919-882-2331
PIN#28104).
About RELM Wireless
As an
American manufacturer for over 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.bktechnologies.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; successful
introduction of new products and technologies; 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 capital allocation 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, 2017 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.
# #
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RELM
WIRELESS CORPORATION
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Condensed
Consolidated Statements of Operations
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(In Thousands, Except Per Share Amounts) (Unaudited)
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Three Months
Ended
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3/31/2018
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3/31/2017
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Sales,
net
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$11,746
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$7,380
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Expenses:
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Cost of
products
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6,909
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5,143
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Selling, general
and administrative expenses
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4,089
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3,443
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Total
expenses
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10,998
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8,586
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Operating (loss)
income
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748
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(1,206)
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Other
(expense) income:
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Net interest
income
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17
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8
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Loss on
Available-for-sale securities and investment
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(1,146)
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-
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Loss on disposal of
property, plant and equipment
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-
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(104)
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Other (expense)
income
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(168)
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(87)
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(Loss) income
before income taxes
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(549)
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(1,389)
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Income tax benefit
(expense)
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106
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121
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Net (loss)
income
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$(443)
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$(1,268)
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Net (loss) earnings
per share - basic
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$(0.03)
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$(0.09)
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Net (loss) earnings
per share - diluted
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$(0.03)
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$(0.09)
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Weighted average
common shares outstanding, basic
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13,754
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13,734
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Weighted average
common shares outstanding, diluted
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13,754
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13,734
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Condensed
Consolidated Balance Sheets
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(In Thousands, Except Share Data)
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March
31,
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December
31,
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2018
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2017
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ASSETS
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Current
assets:
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Cash and cash
equivalents
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$8,058
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$7,147
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Available-for-sale
securities
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-
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9,184
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Trade accounts
receivable, net
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7,708
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5,524
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Inventories,
net
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15,318
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14,358
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Prepaid expenses
and other current assets
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760
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772
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Total current
assets
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31,844
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36,985
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Property, plant and
equipment, net
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2,151
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2,201
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Investment - FGI
1347 Holdings LP
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3,036
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-
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Deferred tax
assets, net
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3,423
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3,317
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Other
assets
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273
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298
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Total
assets
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$40,727
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$42,801
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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Current
liabilities:
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Accounts
payable
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$4,855
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$5,971
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Accrued
compensation and related taxes
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1,288
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1,364
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Accrued warranty
expense
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1,447
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1,389
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Accrued other
expenses and other current liabilities
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956
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1,159
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Dividends
payable
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271
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273
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Deferred
revenue
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166
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157
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Total current
liabilities
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8,983
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10,313
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Deferred
revenue
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753
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481
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Total
liabilities
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9,736
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10,794
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Commitments and
contingencies
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Stockholders'
equity:
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Preferred stock;
$1.00 par value; 1,000,000 authorized
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shares; none issued
or outstanding
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-
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-
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Common stock; $0.60
par value; 20,000,000 authorized
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shares; 13,844,584
issued and outstanding shares at
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March 31, 2018 and
December 31, 2017, respectively
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8,307
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8,307
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Additional paid-in
capital
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25,697
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25,642
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Accumumulated
(deficit) earnings
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(1,846)
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(5,450)
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Accumulated other
comprehensive income
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-
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4,318
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Treasury Stock, at
cost, 285,514 and 192,094 at March 31, 2018
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and December 31,
2017, respectively
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(1,167)
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(810)
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Total stockholders'
equity
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30,991
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32,007
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Total
liabilities and stockholders' equity
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$40,727
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$42,801
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