RELM Wireless Reports Second Quarter and Six-Month 2008 Results

WEST MELBOURNE, Fla. , Aug. 13 /PRNewswire-FirstCall/ -- RELM Wireless Corporation (Amex: RWC) today announced its financial and operating results for the second quarter and first half of 2008. For the quarter ended June 30, 2008 , sales...


WEST MELBOURNE, Fla. , Aug. 13 /PRNewswire-FirstCall/ -- RELM Wireless Corporation (Amex: RWC) today announced its financial and operating results for the second quarter and first half of 2008.

For the quarter ended June 30, 2008 , sales totaled approximately $6.3 million, compared with $9.4 million in the same quarter last year. Pretax loss for the quarter approximated $0.4 million, compared with pretax income of $2.4 million in the second quarter of 2007. The Company reported a net loss for the quarter ended June 30, 2008 of approximately $0.3 million, or $0.02 per share, compared with net income of $1.5 million, or $0.10 per fully diluted share, in the same quarter last year. Income tax benefit for the quarter approximated $0.1 million, compared with income tax expense of $0.9 million for the quarter ended June 30, 2007 . The income tax benefit and income tax expense reported for each quarter are primarily non-cash items.

Gross profit margin for the second quarter of 2008 was 50.8% of sales, versus 57.8% of sales in the same quarter last year. Selling, general and administrative expenses for the quarter totaled $3.6 million (57.4% of sales), compared with $3.2 million (33.8% of sales) in the corresponding quarter of the previous year.

RELM President and Chief Executive Officer David Storey commented, "Although our financial and operating results for the second quarter 2008 were below those of the comparable quarter last year, they reflect a significant improvement from the first quarter results. Total second quarter sales were almost 80% higher, and P25 digital sales more than doubled when compared with the first quarter of 2008, both of which contributed to a rebound in gross margins. Also, considering the current uncertain economic environment, we have taken steps to reduce our selling, general and administrative expenses by approximately $1.4 million annually and $0.7 million for the second half of 2008."

Storey continued, "Both quarters included higher than normal product development expenses, reflecting initiatives to accelerate the introduction of our next-generation KNG line of P25 digital products. The first product model in this line was completed and released for sale in June 2008 . Additional models will be introduced in coming months that will address frequencies and markets in which we have not previously had a presence. Once these models are completed, we anticipate that engineering and product development expenses will return to normalized levels."

"Many competitors are currently enduring a difficult business climate. We believe, however, that RELM's broader line of new digital products with their competitive advantages, combined with a reduced cost structure, will strengthen and position RELM for success going forward," concluded Storey.

For the six months ended June 30, 2008 , sales totaled approximately $9.8 million, compared with $14.0 million in the same period last year. Pretax loss for the first half of 2008 approximated $2.4 million, compared with pretax income of $1.9 million in the six months ended June 30, 2007 . Net loss for the six months ended June 30, 2008 totaled approximately $1.6 million, or $0.12 per share, compared with net income of $1.1 million, or $0.08 per fully diluted share in the same period last year. Income tax benefit for the six months ended June 30, 2008 approximated $0.8 million, compared with income tax expense of $0.8 million in the first half of 2007. The income tax benefit and income tax expense reported for each period are primarily non-cash items.

Gross profit margin for the six months ended June 30, 2008 was 46.7% of sales, versus 52.7% of sales in the corresponding period of the previous year. Selling, general and administrative expenses for the year-to-date period approximated $7.1 million (72.6% of sales), compared with $5.8 million (41.2% of sales) in the same period last year.

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