Subject: [NEXTEL-1] RELM Wireless 2003 Results Show Dramatic Improvement

From: Marcelrf <[email-masked]>
Date: Mon, 01 Mar 2004 09:53:06 -0500

RELM Wireless 2003 Results Show Dramatic Improvement

Revenue Up 23%, Gross Margins Up 46%, Over Last Year;
Net Income of $0.11 Per Diluted Share
Driven by New Proprietary High-Spec Digital Public Safety Product

WEST MELBOURNE, Fla., Feb. 25 /PRNewswire-FirstCall/ -- RELM Wireless
Corporation (OTC Bulletin Board: RELM) today announced its operating
results
for the fourth quarter and year ended December 31, 2003.
Revenue for the fourth quarter of 2003 increased approximately $3.6
million (156.5%) to $5.9 million, from $2.3 million for the same quarter
last
year. Fourth quarter net income increased approximately $3.2 million to
$1.0
million, or $0.09 per diluted share, from a net loss of ($2.2) million,
or
($0.26) per diluted share, for the fourth quarter of the prior year.
Revenue for the year 2003 increased approximately $3.7 million (23.1%)
to
$19.7 million from $16.0 million for the prior year. Net income for the
year
2003 increased approximately $4.6 million to $1.0 million, or $0.11 per
diluted share, from a net loss of ($3.6) million, or ($0.47) per diluted

share, for the prior year.

Revenue growth during the fourth quarter and year ended December 31,
2003
was the result of orders for new products, principally the Company's BK
Radio-
brand digital portable radio, which was approved by various federal
government
agencies in the first half of 2003. The Company also realized additional

revenue during the fourth quarter of 2003 from the introduction of a new
line
of portable radios targeting business and industrial customers.
Gross profit margins for the fourth quarter 2003 increased to 47.2% from

7.2% for the same period last year, an improvement of approximately
555.6%.
For the year 2003, gross profit margins increased to 38.6% from 26.4%
for
2002, an improvement of approximately 46.2%. The Company successfully
reduced
its product costs through a series of programs that have improved
manufacturing efficiencies.  These programs incorporate new, more cost-
effective product designs and the utilization of high-quality contract
manufacturers.

Selling, general and administrative costs (SG&A) for the fourth quarter
2003 decreased approximately 19.1% to $1.7 million compared with $2.1
million
for the same period last year. For the year 2003, SG&A expenses
decreased
approximately 4.6% to $6.2 million compared to $6.5 million for 2002.
The
Company increased its spending related to digital product development
programs
and certain sales and marketing activities. These increases were more
than
offset by decreases in administrative functions and other non-recurring
expenses from 2002.

"These results represent RELM's best performance in 17 years, validating

our recent turnaround," commented RELM President and Chief Executive
Officer
Dave Storey. "Leading the way was the first wave of new product
introductions
in our premier BK Radio-brand digital radios for public safety, homeland

security, military and federal/state/local government agency users. Our
digital products feature proprietary, streamlined technology certified
as
compliant with the Project 25 standard of APCO (Association of
Public-Safety
Communications Officials). Compliance with the standard is increasingly
becoming the key decision factor for public safety purchasers. We
believe that
the demand for Project 25-compliant equipment will fuel growth in the
LMR
(land mobile radio) market as users upgrade systems to comply with the
FCC
mandate for the use of spectrum-efficient technology.

"Our flagship digital portable radio, the DPH, is impressing users not
only with cost savings, but also with better audio quality, longer
battery
life and easier operation under emergency conditions," Storey continued.

"Also successfully launched in 2003 was our new product line of low-cost

high-quality RELM-brand RP Series portable radios for commercial and
industrial applications," said Storey. "The timely arrival of the new
digital
radio and RELM RP Series products -- combined with the impact of
fundamental
product design and manufacturing improvements, and rigorous cost
containment
-- served as catalysts for strong revenue growth and significant
improvement
in gross margins.

"Our plan is in place," Storey commented, "to capitalize on these gains
in
2004 and beyond, with a dynamic array of new products and enhancements
in the
pipeline, several scheduled to make their debut this year. Aggressive
sales
and marketing efforts are accelerating, increasing our market
penetration and
raising awareness of RELM Wireless. We are optimistic in believing these
2003
results show that RELM is headed in the right direction, both near-term
and
well into the future."

Since 1993, a civil action has been pending against the Company relating

to the note of a former affiliate totaling $1.7 million plus $2.6
million in
alleged accrued interest. This action, disclosed in the Company's
filings with
the Securities and Exchange Commission from its inception, has been
scheduled
for trial on March 22, 2004. Counsel maintains its position that the
Company
has meritorious defenses and will be successful in defending this
action.
On February 23, 2004 the Company's senior lender increased the Company's

revolving line of credit and extended its term. The original agreement
provided a $2.5 million revolving line of credit for one year, secured
by
substantially all of the Company's assets, principally trade receivables
and
inventory.  The maximum amount of the credit facility was increased to
$3.5
million, and the facility will mature on January 1, 2005. The original
maturity date was August 29, 2004.

For more than 55 years, RELM Wireless Corp. has manufactured and
marketed
high-specification two-way communications equipment for use by public
safety
professionals and government agencies, as well as business-band radios
for use
in a wide range of commercial and industrial applications.
Revolutionary
advances include new low-cost digital portable two-way radios compliant
with
APCO Project 25 technical specifications. Products are manufactured and
distributed worldwide under BK Radio, RELM and Uniden PRC brand names.
The
company maintains its headquarters in West Melbourne, Florida and can be

contacted through its web site at http://www.relm.com or directly at
1-800-821-2900.

RELM WIRELESS CORPORATION
Condensed Consolidated Statements of Operations
(In Thousands Except Per Share Amounts)

Three Months Ended  Twelve Months Ended
(Unaudited)
12/31/03 12/31/02    12/31/03 12/31/02

Sales                                5,901    2,316      19,728   15,978

Costs & Expenses:
Cost Of Sales                        3,118    2,150      12,112   11,760

SG&A                                 1,705    2,117       6,210    6,476

Loss On Notes Receivable                 0      175           0    1,075

Total Costs & Exp                    4,823    4,442      18,322   19,311

Operating Income (Loss)              1,078   (2,126)      1,406
(3,333)

Other Income (Expense):
Interest Expense                      (105)    (120)       (442)
(456)
Other Income (Expense)                  12       22          57      158

Income (Loss) From Operations          985   (2,224)      1,021
(3,631)

Tax Expense (Benefit)                   13        0          13        0

Net Income (Loss)                     $972  $(2,224)     $1,008
$(3,631)

Earnings (Loss) per share - basic    $0.11   $(0.26)      $0.11
$(0.47)

Earnings (Loss) per share - diluted  $0.09   $(0.26)      $0.11
$(0.47)

Weighted Average Common Shares
Outstanding, Basic                  9,072    8,540       9,002    7,787
Weighted Average Common Shares
Outstanding, Diluted               10,750    8,540       9,173    7,787

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/02-25-2004/0002117066&EDATE=

SOURCE RELM Wireless Corporation

Web Site: http://www.relm.com

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