WEST MELBOURNE, Florida – May 9, 2017 — RELM Wireless Corporation (NYSE MKT: RWC) today announced its financial and operating results for the first quarter ended March 31, 2017.
For the first quarter ended March 31, 2017, sales totaled approximately $7.4 million, compared with $12.1 million for the first quarter of 2016. Net loss for the first quarter of 2017 totaled approximately $1.3 million, or $0.09 per basic and diluted share, compared with net income of approximately $513,000, or $0.04 per basic and diluted share, for the same quarter last year.
Gross profit margin for the first quarter 2017 was 30.3% of sales, compared with 31.7% of sales for the same quarter last year. Selling, general and administrative expenses totaled approximately $3.4 million (46.7% of sales) for the first quarter 2017, compared with approximately $3.1 million (25.4% of sales) for the first quarter of 2016.
Sales for the first quarter last year 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 quarter of 2017. The financial results for the first quarter of 2017 include certain non-recurring items that had an unfavorable impact. Among others, the most significant of these items included approximately $0.4 million related to severance arrangements, $0.2 million related to the discontinuation of a development project, and $0.3 million for product enhancements.
The Company had approximately $20.8 million in working capital as of March 31, 2017, of which approximately $11.6 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 March 31, 2017, the Company had no borrowings outstanding under its revolving credit facility.
RELM Chairman Kyle Cerminara stated, “During the first quarter, our board was reconfigured with 5 new members, each of whom brings a new perspective and a unique and valuable skillset to the Company. We also named Tim Vitou as RELM’s President during the first quarter. Tim assumed the President role after nine years as the Company’s Senior VP of Sales where he was a significant contributor to the key sales of the Company.”
Tim Vitou, RELM’s President commented, “Demonstrating our commitment to public safety communications, we are investing in engineering and sales resources that we expect will contribute to future successes. At the same time, we are building on that foundation with strategic investments in other areas with significant potential for returns.”
Mr. Vitou added, “Over the last few months, we redirected product development efforts, assigning the highest priority to initiatives that are critical to our future success while discontinuing others. Some of the changes adversely impacted our financial and operating results in the first quarter. Ultimately, however, we believe these actions will provide meaningful benefits moving forward in the form of cost savings, and available resources to more effectively address the best opportunities for 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, Wednesday, May 10, 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 May 10, 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 May 20, 2017, by dialing 877-481-4010 (international/local participants dial 919-882-2331) and entering the conference replay ID# 13660397.