WEST MELBOURNE, Florida – August 1, 2017 — RELM Wireless Corporation (NYSE American: RWC) today announced its financial and operating results for the second quarter and six months ended June 30, 2017.
For the second quarter ended June 30, 2017, sales totaled approximately $10.8 million, compared with approximately $16.7 million for the second quarter of 2016. Net income for the second quarter of 2017 totaled approximately $1.3 million, or $0.10 per basic and diluted share, compared with approximately $1.4 million, or $0.10 per basic and diluted share, for the same quarter last year.
Gross profit margin for the second quarter 2017 was 41.8% of sales, compared with 33.6% of sales for the same quarter last year. Selling, general and administrative (SG&A) expenses totaled approximately $3.5 million for both the second quarter of 2017 and last year’s second quarter. For the second quarter of 2017 and 2016, SG&A expenses were 32.7% of sales and 21.0% of sales, respectively.
Sales for last year’s second quarter and six months 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 six months of 2017.
The Company had approximately $24.5 million in working capital as of June 30, 2017, of which approximately $12.8 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 June 30, 2017, the Company had no borrowings outstanding under its revolving credit facility.
Tim Vitou, RELM’s President, commented, “Early this year we implemented changes in our leadership and subsequently launched improvement initiatives throughout the Company. We are encouraged with our progress to date, and pleased to see our financial and operating results start to reflect it. Sales to both state and federal public safety agencies showed strength during the quarter. It is noteworthy that a significant portion of last year’s sales in the second quarter included the TSA delivery orders which were largely completed last year. Comparing quarter-over-quarter sales to customers other than the TSA, this year’s second quarter sales increased by approximately 34%.”
Mr. Vitou continued, “With a solid mix of product sales, gross profit margins for the second quarter returned to more customary levels. Also, we are continuing to scrutinize SG&A expenses through our zero-based budgeting initiative, which enables us to more strategically deploy Company resources in sales and engineering applications designed to drive future growth.”
Mr. Vitou concluded, “Supplementing our core business, are strategic investments in other areas that yielded a return in the second quarter and hold the potential for greater returns moving forward. Additionally, we have prioritized new product development efforts that we believe address the best opportunities for growth and enhanced value.”
For the six months ended June 30, 2017, sales totaled approximately $18.1 million compared with approximately $28.7 million for the same period last year. Net income for the six months ended June 30, 2017 totaled approximately $50,000, or $0.00 per basic and diluted share, compared with $1.9 million, or $0.14 per basic and diluted share for the same period last year.
Gross profit margins for the six months ended June 30, 2017 were 37.1% of sales, versus 32.8% of sales for the same period last year. SG&A expenses for the six months ended June 30, 2017 totaled approximately $7.0 million, compared with approximately $6.6 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, Wednesday, August 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 August 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 August 11, 2017, by dialing 877-481-4010 #18335 (international/local participants dial 919-882-2331 #18335).