RELM Wireless Reports 2008 First Quarter Results

WEST MELBOURNE, Fla. , May 7 /PRNewswire-FirstCall/ -- RELM Wireless Corporation (Amex: RWC) today announced its financial and operating results for the first quarter ended March 31, 2008 . For the first quarter ended March 31, 2008...


WEST MELBOURNE, Fla. , May 7 /PRNewswire-FirstCall/ -- RELM Wireless Corporation (Amex: RWC) today announced its financial and operating results for the first quarter ended March 31, 2008 .

For the first quarter ended March 31, 2008 , sales totaled approximately $3.5 million, compared with approximately $4.6 million for the same quarter in 2007. The pretax loss for the first quarter approximated $2.1 million, compared with a loss of approximately $0.5 million for the first quarter last year. Net loss for the quarter ended March 31, 2008 was approximately $1.4 million, or $0.10 per diluted share, compared with a net loss of $0.3 million, or $0.03 per diluted share, for the first quarter in 2007. The non-cash tax benefit for the first quarter was approximately $0.7 million, compared with $0.2 million for the same quarter last year.

Gross profit margin for the first quarter 2008 was 39.4% of sales, versus 42.4% of sales for the same quarter in 2007. Selling, general and administrative expenses for the quarter totaled approximately $3.5 million (99.8% of sales), compared with approximately $2.6 million (56.3% of sales) for the first quarter last year.

Cash and cash equivalents at March 31, 2008 totaled approximately $6.3 million, compared with approximately $8.5 million at the end of 2007. The Company as of March 31, 2008 continued to be debt-free other than trade payables.

The financial and operating results for the first quarter 2008 reflect declining land mobile radio procurements in the Company's addressable markets for the second consecutive quarter, particularly by the federal government, which is the Company's largest customer. Also, operating expenses increased due primarily to the application of additional variable engineering resources to accelerate the final completion of the Company's next-generation P25 digital product line.

Although the current and near-term economic and business climate is uncertain, the Company believes that sales prospects should improve during the next two quarters based upon identified customers' requirements and the approval of a federal budget earlier in 2008. Additionally, the Company anticipates that the introduction of its new products will broaden its addressable market and, thus, provide a range of sales opportunities.

RELM President and Chief Executive Officer David Storey commented, "Clearly business conditions were difficult over the last two quarters. During this period we have seen a widespread decline in federal government procurement and purchases of land mobile radio equipment. Based on our dealings with radio users and customers, we believe their requirements remain largely intact. The timing and extent of improvement in these conditions, however, is difficult to predict, though we believe sales activity should improve during the next two quarters. Meanwhile, we are continuing the drive toward improving our competitive position with a wide array of new P25 products, several of which will enable us to compete for opportunities in areas that we couldn't enter previously. Doing so, positions RELM for P25 sales growth when customer purchasing activity gains traction and momentum."

Conference Call and Webcast

The Company will host a conference call and web cast for investors at 9:00 a.m. Eastern Time , Thursday, May 8, 2008 . Shareholders and other interested parties may participate in the conference call by dialing 800-860-2442 (international/local participants dial 412-858-4600) and ask to be connected to the RELM Wireless Conference Call a few minutes before 9:00 a.m. Eastern Time on May 8, 2008 . The call will also be web cast 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 web cast. An online archive of the web cast will be available on the Company's website for 30 days following the call at http://www.relm.com.

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