Relm Reports Financial Results, Plans Multiband Radio Launch
Thursday, May 10, 2018 | Comments

Relm Wireless, doing business as BK Technologies, announced financial and operating results for the first quarter ended March 31. Executives said during an investor call the company will launch its first multiband radio by the fourth quarter this year.

For the first quarter, revenues increased about 59.2 percent to about $11.7 million, compared with approximately $7.4 million for the first quarter of 2017. The company recognized operating income of about $748,000 for the first quarter of 2018, an increase of about 162 percent from an operating loss totaling approximately $1.2 million for the first quarter last year.

The net loss for the first quarter of 2018 was about $443,000 compared with a net loss of approximately $1.3 million for the same quarter in 2017.

The financial results for the first quarter of 2018 include a loss on the sale of securities totaling about $849,000 and a loss of approximately $297,000 on an investment. There were no comparable transactions during last year’s first quarter.

The company had about $22.9 million in working capital as of March 31, of which $15.8 million was comprised of cash, cash equivalents and trade receivables. This compares with working capital of about $26.7 million as of Dec. 31, 2017, of which $12.7 million was comprised of cash, cash equivalents and trade receivables. As of March 31, Relm had no borrowings outstanding under its revolving credit facility.

“We are very pleased with our operating results for the first quarter, particularly our sales performance, which built upon the momentum of 2017,” said Tim Vitou, Relm’s president. “This was one of our best first quarters for sales, exceeded only by 2016, which was driven primarily by our TSA (Transportation Security Administration) contract. Conversely, the sales for this year’s first quarter were sourced from a wide range of federal, state and international customers. Operationally, gross profit margins increased significantly compared with last year’s first quarter as we realized some benefits from initiatives in manufacturing operations, as well as a more favorable mix of product sales. On the strength of these improvements, we generated operating income versus last year’s operating loss. Furthermore, we continued to invest in engineering, progressing toward the anticipated introduction of a new line of leading-edge products later this year.”

The company reported a loss on the sale of its remaining shares of Iteris, the result of a change in accounting guidance. The loss does not reflect the actual economics of the firm’s investment, Vitou said.

“We originally invested $3.2 million in Iteris stock that was ultimately sold for approximately $11 million in cash, which supplemented our working capital and enabled us to make another strategic investment,” he said. “Although that investment generated a loss in the first quarter of 2018, we believe the future for this investment is favorable. Overall, I am encouraged by our outlook for sales and new products, and the trend of improvements in our operations, all of which should yield growth and enhanced shareholder value.”

Vitou highlighted the company’s broad customer base, with new customers in state and local public safety, along with legacy federal and international customers. He expects to add new talent to the firm’s sales team this year as well. Vitou said the company demonstrated prototype multiband radios in March and plans to commercially release the products later this year.

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