WEST MELBOURNE, Fla., March 9 /PRNewswire-FirstCall/ -- RELM
Wireless Corporation (NYSE:AmexNYSE:-NYSE:RWC) today announced its
financial and operating results for the quarter and year ended
December 31, 2008. For the year ended December 31, 2008, sales
totaled approximately $19.2 million, compared with $27.0 million
for 2007. Net loss for the year ended December 31, 2008
approximated $1.6 million, or $0.12 per share, compared with net
income of $1.8 million, or $0.13 per diluted share, in 2007. Income
tax benefit for 2008 approximated $1.3 million, compared with 2007
income tax expense of $1.0 million. The income tax benefit in 2008
and expense in 2007 were largely non-cash items as a result of the
Company's deferred tax assets, which are derived primarily from its
net operating loss (NOL) carry-forwards. Gross profit margin for
2008 narrowed to 47.3% of sales, versus 51.2% of sales in the
previous year. Selling, general and administrative expenses totaled
$12.1 million (63.2% of sales) in 2008, compared with $11.6 million
(42.8% of sales) in 2007. For the quarter ended December 31, 2008,
sales totaled approximately $3.6 million, compared with $4.6
million during the same quarter in 2007. Net loss for the quarter
ended December 31, 2008 approximated $0.3 million, or $0.03 per
share, compared with a net loss of $0.4 million, or $0.03 per
share, in the final quarter of 2007. Tax benefit for the most
recent quarter approximated $0.5 million, compared with $0.6
million in the prior-year quarter. The tax benefits in both
quarters were primarily non-cash in nature. Gross profit margin for
the fourth quarter 2008 improved to 43.3% of sales, when compared
with 37.4% of sales in the quarter ended December 31, 2007.
Selling, general and administrative expenses for the quarter
totaled $2.4 million (68.3% of sales), versus $2.8 million (61.2%
of sales) in the fourth quarter of 2007. Cash and cash equivalents
at December 31, 2008 totaled approximately $5.5 million, compared
with $8.5 million at the end of 2007. Shareholders' equity totaled
$26.2 million and the Company had $1.5 million in long-term debt
outstanding as of December 31, 2008. RELM President and Chief
Executive Officer David Storey commented, "Clearly, 2008 was a very
difficult year for RELM Wireless. Our sales and operating results
for both the year and the fourth quarter reflect a general slowdown
in purchases of land mobile radio equipment, particularly by
government and public safety agencies, which comprise our largest
market. This also resulted in lower sales of our P25 digital
products. Many agencies in this segment of the market, including
most of our embedded base of legacy customers, struggled throughout
the year with funding and contract issues. Furthermore, the initial
models in our new KNG line of P25 digital radios were introduced
later in the year than anticipated, which limited our effectiveness
in generating sales to agencies that have not previously been
customers. The combination of lower total sales and a less
favorable mix of digital and analog product shipments, resulted in
lower gross margins when compared with the previous year. Our
bottom line results were further impacted by increased new product
development expenses related to the new KNG product line." "The
investment in our new KNG products will, we believe, yield
significant benefits in the future," continued Storey. "During the
past year we completed and introduced three new KNG models, two of
which address frequencies used by potential customers in markets
that we have been unable to target with our legacy products,
significantly increasing our addressable market. More new models
and capabilities will be added to the KNG line in 2009 and beyond,
providing the foundation for a resumption of profitable growth as
we expand our share of the land mobile radio market." Conference
Call and Webcast The Company will host a conference call and
webcast for investors at 9:00 a.m. Eastern Time, Tuesday, March 10,
2009. Shareholders and other interested parties may participate in
the conference call by dialing 800-860-2442 (international/local
participants dial 412-858-4600) and asking to be connected to the
"RELM Wireless Corporation Conference Call" a few minutes before
9:00 a.m. Eastern Time on March 10, 2009. 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/investor_information.asp. A replay
of the conference call will be available two hours after the
completion of the call, from March 10, 2009 until March 17, 2009,
by dialing 877-344-7529 (international/local participants dial
412-317-0088) and entering the conference ID 428030. 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 has gained
momentum as a result of significant communications failures during
events such as the Oklahoma City bombings, the 9/11 attacks and
Hurricane Katrina. RELM was one of the first manufacturers to
develop P25-compliant technology. About RELM Wireless Corporation
For more than 60 years, RELM Wireless Corporation has manufactured
and marketed highspecification twoway communications equipment for
use by public safety professionals and government agencies, as well
as radios for use in a wide range of commercial and industrial
applications, including disaster recovery. Advances include a broad
new line of leading digital twoway 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 http://www.relm.com/ or
directly at 18008212900. The Company's common stock trades on the
NYSE Amex market under the symbol "RWC". 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: risks relating to the current financial crisis and
adverse economic conditions; reliance on contract manufacturers;
heavy reliance on sales to the U.S. Government; federal, state and
local budget deficits and spending limitations; limitations in
available radio spectrum for use by land mobile radios; general
economic and business conditions; changes in customer preferences;
competition; changes in technology; changes in business strategy;
the debt and inventory levels of the Company; quality of
management, business abilities and judgment of the Company's
personnel; and the availability, terms and deployment of capital.
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 year ended December 31, 2008 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
Operations (In Thousands, Except Per Share Amounts) Three Months
Ended Twelve Months Ended ------------------ -------------------
(Unaudited) ----------- 12/31/2008 12/31/2007 12/31/2008 12/31/2007
---------- ---------- ---------- ---------- Sales, net $3,576
$4,562 $19,175 $26,976 Expenses: Cost of products 2,028 2,854
10,105 13,154 Selling, general and administrative expenses 2,444
2,791 12,119 11,554 ----- ----- ------ ------ Total expenses 4,472
5,645 22,224 24,708 Operating income (loss) (896) (1,083) (3,049)
2,268 Other income (expense): Net interest income 10 117 143 598
Other income (expense) 3 2 (6) (49) ---- ---- ---- ---- Income
(loss) before income tax (expense) benefit (883) (964) (2,912)
2,817 Income tax (expense) benefit 538 552 1,286 (971) ---- ----
----- ---- Net income (loss) $(345) $(412) $(1,626) $1,846 =====
===== ======= ====== Net income (loss) per share - basic $(0.03)
$(0.03) $(0.12) $0.14 ====== ====== ====== ===== Net income (loss)
per share - diluted $(0.03) $(0.03) $(0.12) $0.13 ====== ======
====== ===== Weighted average common shares outstanding, basic
13,403 13,395 13,403 13,362 Weighted average common shares
outstanding, diluted 13,403 13,395 13,403 14,062 RELM WIRELESS
CORPORATION Condensed Consolidated Balance Sheets (In Thousands,
Except Share Data) December 31, December 31, 2008 2007 ------------
------------ ASSETS ------ Current assets: Cash & cash
equivalents $5,475 $8,452 Trade accounts receivable, net 1,769
1,992 Inventories, net 9,774 8,899 Deferred tax assets, net 1,562
2,545 Prepaid expenses & other current assets 931 1,097 ---
----- Total current assets 19,511 22,985 Property, plant and
equipment, net 1,386 1,338 Deferred tax assets, net 7,638 5,359
Capitalized software, net 1,732 - Other assets 355 463 --- ---
Total assets $30,622 $30,145 ======= ======= LIABILITIES AND
STOCKHOLDERS' EQUITY ------------------------------------ Current
liabilities: Accounts payable $1,849 $1,161 Accrued compensation
and related taxes 617 687 Accrued warranty expense 302 240 Accrued
other expenses and other current liabilities 110 263 --- --- Total
current liabilities 2,878 2,351 Long-term debt 1,500 - 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,
13,410,871 issued and outstanding shares at December 31, 2008 and
13,395,871 at December 31, 2007, respectively. 8,046 8,037
Additional paid-in capital 24,020 23,953 Accumulated deficit
(5,822) (4,196) ------ ------ Total stockholders' equity 26,244
27,794 ------ ------ Total liabilities and stockholders' equity
$30,622 $30,145 ======= ======= DATASOURCE: RELM Wireless
Corporation CONTACT: William Kelly, EVP & CFO of RELM Wireless
Corporation, +1-321-984-1414; or Investor Relations, R Jerry
Falkner, CFA of R J Falkner & Company, Inc., +1-800-377-9893
Web Site: http://www.relm.com/
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