-Sales and Profits Increase Significantly From Prior Year Periods- WEST MELBOURNE, Fla., Nov. 10 /PRNewswire-FirstCall/ -- RELM Wireless Corporation (NYSE Amex: RWC) today announced its financial and operating results for the quarter and nine months ended September 30, 2009. For the quarter ended September 30, 2009, sales increased $2.5 million (43.2%) to approximately $8.3 million, compared with $5.8 million for the same quarter last year. Pretax income for the quarter increased 265.0%, or $1.1 million, to $1.5 million compared with $0.4 million for the same quarter last year. Net income for the third quarter 2009 approximated $0.9 million, or $0.07 per diluted share, compared with $0.3 million, or $0.02 per share, for the prior year's third quarter. Gross profit margin for the third quarter 2009 was improved to 51.1% of sales, versus 50.7% of sales for the same quarter last year. Selling, general and administrative expenses were $2.7 million (32.8% of sales) in the third quarter 2009, compared with $2.6 million (44.1% of sales) in the third quarter 2008. The Company had approximately $16.2 million in working capital as of September 30, 2009. Cash and trade receivables increased almost 70% ($5.1 million) to-date in 2009 to $12.3 million, compared with $7.2 million at the start of the year. During the nine months ended September 30, 2009, the Company reduced net inventories by approximately $3.6 million (37.1%), and repaid in its entirety the $1.5 million balance that was outstanding at the start of the year on its revolving credit facility. RELM President and Chief Executive Officer David Storey commented, "Following our record results for the second quarter, we are encouraged with the continued strength in sales and profits relative to the same periods last year. We were particularly pleased with the sales of our P25 digital products and new KNG products, which comprised almost 60% of our total sales. This is a positive indicator for the KNG line and its acceptance among new customers. Success in aggressively pursuing more sales gains with KNG products is key to our strategy for profitable growth. Meanwhile, we are being cautious in maintaining operating expenses at the reduced levels established late last year, as business conditions gradually improve." For the nine months ended September 30, 2009, sales increased approximately $6.5 million (41.9%) to $22.1 million, compared with $15.6 million for the same period last year. Pretax income for the nine months ended September 30, 2009 increased $4.9 million to approximately $2.9 million, compared with a pretax loss of $2.0 million for the same period last year. Net income for the nine months ended September 30, 2009 totaled approximately $2.0 million, or $0.15 per diluted share, compared with a net loss of $1.3 million, or $0.10 per share, for the same period last year. Gross profit margin for the nine months ended September 30, 2009 was 48.5% of sales, versus 48.2% of sales for the same period last year. Selling, general and administrative expenses for the nine months ended September 30, 2009 declined $1.9 million (19.4%) to approximately $7.8 million (35.2% of sales), compared with $9.7 million (62.0% of sales) for the same period last year. Conference Call and Webcast The Company will host a conference call and webcast for investors at 9:00 a.m. Eastern Time, Thursday, November 12, 2009. Shareholders and other interested parties may participate in the conference call by dialing 800-860-2442 (international/local participants dial 412-858-4600) and asking to be connected to the "RELM Wireless Corporation Conference Call" a few minutes before 9:00 a.m. Eastern Time on November 12, 2009. The call will also be webcast 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 webcast. An online archive of the webcast will be available on the Company's website for 30 days following the call at http://www.relm.com/. A replay of the conference call will be available one hour after the completion of the call until November 20, 2009, by dialing 877-344-7529 (international/local participants dial 412-317-0088) and entering the conference ID 435360. 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 during events such as the Oklahoma City bombings, the 9/11 attacks and Hurricane Katrina. RELM was one of the first manufacturers to develop P25-compliant technology. About RELM Wireless Corporation As an American Manufacturer for more than 60 years, RELM Wireless Corporation has produced highspecification twoway communications equipment of unsurpassed reliability and value for use by public safety professionals and government agencies, as well as radios for use in a wide range of commercial and industrial applications. Advances include a broad new line of leading digital twoway radios compliant with APCO Project 25 specifications. RELM's 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 http://www.relm.com/ or directly at 18008212900. The Company's common stock trades on the NYSE Amex market under the symbol "RWC". 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: risks relating to the current financial crisis and adverse economic conditions; reliance on contract manufacturers; heavy reliance on sales to the U.S. Government; federal, state and local budget deficits and spending limitations; limitations in available radio spectrum for use by land mobile radios; general economic and business conditions amid the financial crisis; changes in customer preferences; competition; changes in technology; changes in business strategy; the debt and inventory levels of the Company; quality of management, business abilities and judgment of the Company's personnel; and the availability, terms and deployment of capital. 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, 2008 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) RELM WIRELESS CORPORATION Condensed Consolidated Statements of Operations (In Thousands, Except Per Share Amounts) Three Months Ended Nine Months Ended ------------------ ----------------- (Unaudited) (Unaudited) ----------- ----------- 9/30/2009 9/30/2008 9/30/2009 9/30/2008 --------- --------- --------- --------- Sales, net $8,292 $5,790 $22,141 $15,599 Expenses: Cost of products 4,058 2,852 11,398 8,077 Selling, general and administrative expenses 2,718 2,553 7,802 9,676 ----- ----- ----- ----- Total expenses 6,776 5,405 19,200 17,753 Operating income (loss) 1,516 385 2,941 (2,154) Other income (expense): Interest (expense) income (5) 29 (41) 134 Other expense (7) (2) (4) (9) --- --- --- --- Pretax income (loss) 1,504 412 2,896 (2,029) Income tax (expense) benefit (577) (75) (881) 749 ---- --- ---- --- Net income (loss) $927 $337 $2,015 $(1,280) ==== ==== ====== ======= Income (loss) per share - basic $0.07 $0.03 $0.15 $(0.10) ===== ===== ===== ====== Income (loss) per share - diluted $0.07 $0.02 $0.15 $(0.10) ===== ===== ===== ====== Weighted average common shares outstanding, basic 13,411 13,405 13,411 13,400 Weighted average common shares outstanding, diluted 13,726 13,528 13,520 13,400 RELM WIRELESS CORPORATION Condensed Consolidated Balance Sheets (In Thousands, Except Share Data) (Unaudited) Sept. 30, Dec. 31, 2009 2008 ---- ---- ASSETS ------ Current assets: Cash & cash equivalents $8,068 $5,475 Trade accounts receivable, net 4,227 1,769 Inventories, net 6,146 9,774 Deferred tax assets, net 707 1,562 Prepaid expenses & other current assets 476 931 --- --- Total current assets 19,624 19,511 Property, plant and equipment, net 1,400 1,386 Deferred tax assets, net 7,638 7,638 Capitalized software, net 2,672 1,732 Other assets 377 355 --- --- Total assets $31,711 $30,622 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $1,748 $1,849 Accrued compensation and related taxes 1,117 617 Accrued warranty expense 224 302 Accrued other expenses and other current liabilities 320 110 --- --- Total current liabilities 3,409 2,878 Long-term debt - 1,500 Commitments and contingencies Stockholders' equity: Preferred stock; $1.00 par value; 1,000,000 authorized shares, none issued or outstanding. - - Common stock; $0.60 par value; 20,000,000 authorized shares, 13,410,871 issued and outstanding shares at September 30, 2009 and December 31, 2008, respectively. 8,046 8,046 Additional paid-in capital 24,063 24,020 Accumulated deficit (3,807) (5,822) ------ ------ Total stockholders' equity 28,302 26,244 ------ ------ Total liabilities and stockholders' equity $31,711 $30,622 ======= ======= DATASOURCE: RELM Wireless Corporation CONTACT: William Kelly, EVP & CFO, RELM Wireless Corporation, +1-321-984-1414; or Investor Relations: R Jerry Falkner, CFA, R J Falkner & Company, Inc., +1-800-377-9893 Web Site: http://www.relm.com/

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