WEST MELBOURNE, Florida — November 4, 2015 — RELM Wireless Corporation (NYSE MKT: RWC) today announced its financial and operating results for the third quarter and nine months ended September 30, 2015.
For the quarter ended September 30, 2015, sales totaled approximately $7.6 million, compared with $8.7 million for the third quarter last year. Net income for the quarter ended September 30, 2015 was approximately $212,000, or $0.02 per basic and diluted share, compared with approximately $656,000, or $0.05 per basic and diluted share, for the same quarter last year.
Gross profit margin for the third quarter 2015 improved to 45.8% of sales, compared with 43.7% for the same quarter last year and 36.2% for the preceding quarter. Selling, general and administrative expenses totaled approximately $3.2 million (41.9% of sales) for the third quarter 2015, compared with $2.8 million (31.8% of sales) for the third quarter last year.
The Company had approximately $27.0 million in working capital as of September 30, 2015, of which $12.1 million was comprised of cash and trade receivables. This compares with working capital of $28.9 million as of December 31, 2014, of which $14.6 million was comprised of cash and trade receivables. The Company had no balance outstanding under its revolving credit facility at September 30, 2015.
RELM President and Chief Executive Officer David Storey commented, “While we continued to experience general softness in the federal, state and local government markets through most of the third quarter, the quarter ended with an announced landmark win when we received awards totaling $26.2 million from the U.S. Department of Homeland Security Transportation Security Administration. Approximately $15.5 million, or almost 60% of the total amount, is specified in delivery orders. The precise timing for fulfilling these orders has not yet been determined as several logistical variables are addressed. Accordingly, the impact to sales revenue in any particular quarter is uncertain. We anticipate, however, that shipments will commence during the first quarter of 2016. The remaining $10.7 million is for four option years, which we believe will be fully exercised moving forward. Our team is excited and ready to impress the TSA user base with world-class products and service. Beyond the obvious benefits of such a substantial award, this is a high-profile opportunity for RELM to more widely cement its reputation as a preferred alternative to the market leader; a company that offers unsurpassed quality, reliability and value.”
Mr. Storey continued, “Operationally for the quarter, better efficiencies and costs drove a near-10% improvement in gross profit margins from the preceding quarter. We also strengthened our sales and engineering team with key talent to better execute our growth objectives and capitalize on our growing sales prospects. Additionally, during the quarter we invested approximately $2.7 million to purchase approximately 1.6 million shares of the common stock of Iteris (NYSE MKT: ITI). This investment is recognized on our balance sheet as of September 30, 2015, including a net unrealized gain after taxes totaling approximately $700,000. We are presently evaluating alternatives with regard to this investment.”
For the nine months ended September 30, 2015, sales totaled approximately $22.8 million compared with $25.6 million for the same period last year. Net income for the nine months ended September 30, 2015 totaled approximately $829,000, or $0.06 per basic and diluted share, compared with $1.8 million, or $0.13 per basic and diluted share, for the same period last year.
Gross profit margins for the nine months ended September 30, 2015 were 42.0% of sales, versus 42.3% of sales for the same period last year. Selling, general and administrative expenses for the nine months ended September 30, 2015 totaled approximately $8.4 million compared with approximately $8.1 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 5, 2015. 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 5, 2015. 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 13, 2015, by dialing 877-660-6853 (international/local participants dial 201-612-7415) and entering the conference ID# 13624052.
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.
About RELM Wireless Corporation
As an American Manufacturer for almost 70 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 MKT market under the symbol “RWC”.