Attached files
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| 8-K - CURRENT REPORT - BK Technologies Corp | relm_8k.htm |
Exhibit 99.1
Company Contact:
RELM Wireless Corporation
William Kelly, EVP & CFO
(321) 984-1414
RELM Wireless Reports 2017 Full Year and Fourth Quarter
Results
WEST
MELBOURNE, Florida -- March 6, 2018 -- RELM Wireless Corporation
(NYSE American: RWC) today announced financial and operating
results for the quarter and year ended December 31,
2017.
For the
year ended December 31, 2017, revenues totaled approximately $39.4
million, compared with approximately $50.7 million for 2016. Net
loss for the year was approximately $3.6 million, or $0.27 per
diluted share, compared with net income of approximately $2.7
million, or $0.19 per diluted share, for the prior
year.
For the
fourth quarter ended December 31, 2017, revenues totaled
approximately $9.4 million, compared with approximately $7.2
million for the fourth quarter of 2016. Net loss for the quarter
ended December 31, 2017 was approximately $4.3 million, or $0.31
per diluted share, compared with net income of approximately
$92,000, or $0.01 per diluted share, for the same quarter in
2016.
The
financial results for the three and twelve month periods of 2017
were unfavorably impacted by certain non-recurring items, including
a $3.2 million charge for the write-off of inventory, $1.8 million
of incremental costs related to product modifications and upgrades,
and $1.4 million for a legal settlement. Also, during the first
quarter, we incurred one-time expenses of approximately $0.9
associated with product enhancements, severance arrangements, and
the discontinuation of a development project.
The
Company had approximately $26.7 million in working capital as of
December 31, 2017, of which $12.7 million was comprised of cash and
trade receivables. This compares with working capital of
approximately $23.4 million as of December 31, 2016, of which $14.4
million was comprised of cash and trade receivables. As of December
31, 2017 the Company had no borrowings outstanding under its
revolving credit facility.
Tim
Vitou, RELM’s President, commented, “We are encouraged
by the sales momentum created during 2017. Totaling near $40
million, this was our second-highest annual sales in over 20 years;
exceeded only by 2016, which benefitted from $18 million in sales
associated with a single large contract. This performance was the
product of broad-based success across different markets and
customers. During 2017 we were awarded several multi-year federal
contracts and were successful in securing new business with state
and local public safety agencies. Supplementing sales, we realized
close to $2 million in gains and cash from strategic
investments.
Mr.
Vitou continued, “Otherwise, 2017 was a year of
transformation filled with significant and positive changes.
Although some of these changes unfavorably impacted our financial
and operating results, we believe they were necessary in order to
establish a solid strategic foundation for the company’s
future. Early in the year the company’s board and management
leadership was changed, and new product development efforts were
redirected, launching new initiatives that are crucial to future
success while discontinuing others. Thereafter, we took a
comprehensive look at our markets, products, technologies and
strategic direction, which resulted in some non-recurring expenses
and charges, including inventory write-offs, product modification
and enhancement costs, legal dispute resolution expenses, and
severance. We also invested in programs to improve manufacturing
operations and product quality. Ultimately, we believe these
actions will prove to be critical, yielding future benefits in the
form of product cost savings, while positioning the company 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, on Wednesday, March 7, 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 March 7, 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 March 18, 2018 by dialing 877-481-4010
PIN#25018 (international/local participants dial 919-882-2331
PIN#25018).
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; 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 investment 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.
# #
#
(Financial Tables To Follow)
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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)
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|
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Three Months Ended
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Twelve Months Ended
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||
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(Unaudited)
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12/31/2017
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12/31/2016
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12/31/2017
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12/31/2016
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Sales,
net
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$9,422
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$7,226
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$39,395
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$50,689
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|
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Expenses:
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|
|
|
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Cost
of products
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10,420
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4,200
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29,845
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33,612
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Selling,
general and administrative expenses
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3,953
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2,683
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14,577
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12,792
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Total
expenses
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14,373
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6,883
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44,422
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46,404
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|
|
|
|
|
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Operating
(loss) income
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(4,951)
|
343
|
(5,027)
|
4,285
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
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Interest
income
|
14
|
5
|
46
|
9
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Gain
on sale of available-for-sale securities
|
546
|
-
|
1,833
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-
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Legal
settlement
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(1,436)
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-
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(1,436)
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-
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Gain
(loss) on disposal of property, plant and equipment
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(1)
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-
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(95)
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-
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Other
(expense) income
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41
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(30)
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(106)
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(22)
|
|
|
|
|
|
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(Loss)
income before income taxes
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(5,787)
|
318
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(4,785)
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4,272
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|
|
|
|
|
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Discrete
tax item (expense) - impact of tax reform
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(665)
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-
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(665)
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-
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Income
tax benefit (expense)
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2,177
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(226)
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1,824
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(1,583)
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|
|
|
|
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Net
(loss) income
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$(4,275)
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$92
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$(3,626)
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$2,689
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|
|
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|
|
|
|
|
|
|
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Net
(loss) earnings per share - basic
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$(0.31)
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$0.01
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$(0.27)
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$0.20
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Net
(loss) earnings per share - diluted
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$(0.31)
|
$0.01
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$(0.27)
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$0.19
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Weighted
average common shares outstanding, basic
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13,691
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13,733
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13,625
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13,735
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Weighted
average common shares outstanding, diluted
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13,691
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13,816
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13,625
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13,823
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RELM WIRELESS CORPORATION
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|||
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Condensed Consolidated Balance Sheets
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|||
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(In Thousands, Except Share Data)
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December 31,
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December 31,
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2017
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2016
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ASSETS
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Current
assets:
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Cash
and cash equivalents
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$7,147
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$10,910
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Available-for-sale
securities
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9,184
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-
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Trade
accounts receivable, net
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5,524
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3,448
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Inventories,
net
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14,358
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13,999
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Prepaid
expenses and other current assets
|
772
|
1,410
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Total
current assets
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36,985
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29,767
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|
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Property,
plant and equipment, net
|
2,201
|
2,486
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Available-for-sale
securities
|
-
|
6,472
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Deferred
tax assets, net
|
3,317
|
3,418
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Other
assets
|
298
|
401
|
|
|
|
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Total assets
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$42,801
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$42,544
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LIABILITIES AND STOCKHOLDERS' EQUITY
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|
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Current
liabilities:
|
|
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Accounts
payable
|
$5,971
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$1,973
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Accrued
compensation and related taxes
|
1,364
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2,193
|
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Accrued
warranty expense
|
1,389
|
650
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Accrued
other expenses and other current liabilities
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1,159
|
169
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Dividends
payable
|
273
|
1,235
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Deferred
revenue
|
157
|
142
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Total
current liabilities
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10,313
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6,362
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|
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Deferred
revenue
|
481
|
408
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Total
liabilities
|
10,794
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6,770
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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 shares,
none issued or outstanding.
|
-
|
-
|
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Common
stock; $0.60 par value; 20,000,000 authorized shares;
13,844,584 and 13,754,749 issued and outstanding shares
at
December 31, 2017 and 2016, respectively.
|
8,307
|
8,253
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Additional
paid-in capital
|
25,642
|
25,382
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Accumumulated
(deficit) earnings
|
(5,450)
|
240
|
|
Accumulated
other comprehensive income
|
4,318
|
2,061
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Treasury
Stock, at cost 192,094 and 30,422 shares at December 31, 2017 and
2016, respectively
|
(810)
|
(162)
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Total
stockholders' equity
|
32,007
|
35,774
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|
|
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Total liabilities and stockholders' equity
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$42,801
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$42,544
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