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RELM Wireless Corp. Message Board

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  • Reply to


    by form1_fan Nov 12, 2014 5:07 PM


    Last year sales were $7.6mm and during that quarter Relm had two press releases announcing $1.7mm contracts with public safety agencies and another press release showing $1.2mm in military sales. Both were expected to be fulfilled in the 3rd quarter of last year. Subtract those lumpy contracts from 7.6mm and you get $4.7mm ordinary (non lumpy) sales. This past quarter we had no announced (lumpy) contracts but sales grew to $8.6mm. Thats up 83% when you adjust for the lumpy contracts.

    Most on wall street will just look at the top line and miss the great improvement in base sales. It should take another quarter or two to confirm this trend but as of now, it looks to me, that the market and customers are increasingly accepting the value proposition that Relm products offer.

    I don't know when or if Relm will get the 5-10mm lumpy contracts we all hope for but I do expect to see more of the 1-2mm contracts on a more regular basis as the market shows further acceptance of their P-25 products.

    Lets look for some additional good news on the call.

    Good Luck

  • Were really all I expected with lack of announcements. Shares are fairly priced in the $4's until they can demonstrate the ability to bring $5M+ contracts, you really can't expect the share price to more. RWC has been around along time- they know this business, but for some reason the next step up doesn't come. Maybe they need to get bought out by a larger more diversified company in the public emergency service field- something to supply real marketing and sales muscle to their very good products. For some reason a great product at a 50% discount isn't enough by itself.
    Yes, I'm frustrated by our lack of sales breakthroughs, but when you look at the risk/reward it's still a very low risk vs. potentially very high reward situation being a RWC shareholder. I keep saying the same thing "let's give'm another year and see what happens"- and that's still what I'm saying today.

  • My thesis is that RWC starts by getting the small contracts, where motorola cannot outspend then by tens of thousands of dollars for marketing to those small contracts. Once RWC is winning those they move up a rung on the ladder and get the next larger size of contract. These things take time. A look at the sales of the newer radios has been showing gains in the recent quarters. I believe they are mostly smaller contracts. Given the lack of announced contracts, I believe that is all they would have received in the third quarter. (I do not know if all, some , or no municipalities follow the federal government with the fiscal year staring 10/1, but I doubt they do. If so , we might see these smaller ( municipal) contracts hit more in the fourth quarter. )

    RWC has always had "lumpy" sales. I would not make too much of sales for any one quarter, but rather average them over a year and note the general trend, not each data point. I am not as optimistic as you but doubt they will hit your numbers. My best estimate is revenue of 6.9- 7.8 million, and for many that will be seen as a miss. ( I hope your numbers turn out to be correct, because if they do that much business without any large federal contracts, they are clearly on the right path and ready to start moving up the sales ladder. Your numbers would make $6 seem quite undervalued IMO)

    I look at a longer term and still think that they are making progress in invading motorola territory. Part of me hopes we see a big plunge in stock price so I can put my money from sales of Apple and Bank of Satan into RWC here at a low. You cannot sell out of the stock completely, because the best exit scenario for these new big holders is a sale of the company. And a fall in the stock price gives a good point for a company to try to take out RWC.

  • Hard to be too confident with the lack of sales announcements last Q. I guess I'm hoping for some positive comments in the PR and on the CC.
    I like the fund buying at $5 and above. Considering the risk of a micro micro cap that RWC is, they have to be expecting AT LEAST to double their money .
    In a recent CC, Mr Storey said they were "chipping away" at the competition .... I think that's about right, the big orders are still out of reach- for whatever reason.

  • I believe that Relm had some backlog carried from the 2nd to the 3rd quarter. In addition I believe they may have had a good quarter even without the $1mm plus orders that are usually announced. I believe that will do north of 10mm in revenues and earnings in the 7 cent range. That would put revenues up 30+% yoy and earnings up more than 50%.

    I would still like to see some major announcements in the 4th q but this is usually one of the slowest quarters of the year. If the company can achieve my revenue target for the 3rd quarter without any major announcements it will show some real traction with their products that were released in the past few years.
    The stock should react quite well. The market should be willing to pay more for a company with steady growth than one with lumpy revenues.

    Good Luck

  • Reply to

    Like a cancer to Motorola

    by see2see Aug 25, 2014 5:28 PM

    Think any of these no bid officials will go to jail for costing taxpayers millions. Hope so. Doubt it. Would love to see Relm go after the actual officials and name names in local papers.

  • I am long RWC, quite long, and believe there is a lot of money yet to be made here. I think they will take share from Motorola over time (more than a few quarters, more like over the next several years. Each 1% of Motorola's losses to RWC is a gigantic gain for RWC, and I think they will eventually get 5 to 10% of Motorola's business. Motorola cannot fight back very much because a huge part of RWC's advantage is in pricing. Motorola will not reduce pricing by 25% on the 90% of sales it retains, because it would then run huge losses, and even if they did this RWC would still have some pricing advantage.

    RWC was due for a pullback after its meteoric rise, and especially when sales failed to materialize for the last quarter. I took money off the table at the plateau, some a bit early even.

    I also sold Bank of Satan (BAC) to raise extra cash for the drop. Then I wished for a climactic selling day, just like yesterday. (So I could restock my full position)

    Well yesterday my wish comes true and the market drops 400 points and I am thinking I can buy below $4, maybe even 3.50!! But no! RWC has to go UP on the WORST DAY OF THE YEAR! So my orders sat unfilled while they (Privet and Global likely) run the price back up.

    It is not as much fun playing in my sandbox now that even bigger bullies have moved in.


    Long term sentiment: GET OUT OF MY SANDBOX !!!

  • RWC closed at 4.18 on the last earnings release. The company has $2.00 of working capital and no debt. You are paying only about 2.20 for the future earnings at these levels. The company has had good sales these past 2 quarters and I expect 9-10mm this quarter. Earnings will get about 6 cent per share boost next year as amortized software costs drop to nearly zero from nearly 900k in 2013. with just a little more growth RWC could be earning 25 cents per share equivalent to 10x current price less working capital.

    Im using the sell off to add to positions.

    Good Luck


  • Reply to

    Painting the tape

    by see2see Sep 30, 2014 5:14 PM

    "Painting the tape"....very possible with the big players involved in this small company. My guess would be that it was a normal bounce due to the recent sell off. We simply ran out of sellers and a few bargain hunters stepped in. Bought a few $5 shares myself. Todays trading will tell who is correct....

    Sentiment: Buy

  • Large volume at the end of the quarter. Somebody wanted the picture to look a little better in the quarterly report.

  • Reply to


    by ejschultheis Sep 24, 2014 2:01 PM

    Agree 100%. Completely normal correction and consolidation after a very good run. Two steps forward and one back. But no contract announcements that still really bothers me.

  • Reply to


    by ejschultheis Sep 24, 2014 2:01 PM

    One big seller at the open has led to a shakeout of weak hands and some understandable profit taking. This has all the signs of a "healthy" correction. We shall see.



  • Little discussed here (or anywhere else) is the possibility of foreign sales. RELM does not have the marketing muscle to do this. And foreign markets are even more corrupt than the US markets. Nevertheless, RELM has occasionally gotten a few foreign sales. Given the price differential between Motorola products and RELM products, there is room for a third party to sell RELM products and still have enough profit for RELM and the other party to make decent money. This is another unnoticed potential catalyst that is never considered with RELM.


    My opinion is that RELM has been very undervalued for some time now, and only as the sales started to trend higher did it start to close the gap between value and price. I believe it is still priced below value, although not as severely. I hold 7.50 as a reasonable value with the current situation. As sales happen, the value will increase. We all know that the price does not always reflect the value, but only the current supply and demand. This is a very small company flying beneath the radar of analysts. That is a major reason it traded so far below its value for so long.

    If you guessed that I am long this stock you are correct. I am very long.
    I see tons of upside potential. The only downside is that the upside could take longer to materialize fully than I expect. Much of my stake is in retirement accounts, so I can wait if I have to wait. Others have apparently seen the value also.

    Your mileage may vary!!!

  • Another factor to value in RELM is that they actually have pricing power, meaning that they could raise pricing and still be the lowest cost competitor. At some point they will have to do it, because nobody believes you give a premium product when you are selling at a cost so far below the competitors. A 5% price increase would drop straight to the bottom line, and their products would still be significantly less expensive than the competitors.
    Right now they are using pricing to get new customers to try their products, but once the products are accepted in the marketplace and seen to be of good value, an increase in price would be needed. The bottom line is that when RELMs products start to sell, the pricing can go up too. The growth in profits from increasing sales at increasing margins is the recipe for fast profit growth. It will not happen this year, but if the company is not bought out by goliath Motorola, it will happen.

    Look at a chart and see RELM in 2006. The price was over $10. The hoped for breakthroughs of that time did not materialize with the crisis of 2008 unfolding and cramping state and local as well as federal spending. Now the product line is expanded, many governments are needing replacement radios, and RELM has the right products at the right price. RELM should make significant gains in price with the slightest whiff of sales momentum. A contract announcement or two would move the stock significantly because now that would be confirming the improving sales trends of the latest quarters. That is IMO the only thing holding back RELM now. Because sales are lumpy, not everybody is convinced that it is actually improving sales and not just a lump of sales dropping in their laps never to be repeated for another few years. When sales start happening, profits will increase and uncertainty of product acceptance is removed. The value of the company increases and the price should also.

  • We all see the price of the stock, but it is much harder to value the company. My best estimate is 7.5 as current value, and events may change the value as well as the price.

    One way to look at the company is it's value in a takeover. I believe right now it would behoove Motorola to buy out the company to protect their current pricing. At 7.5 they would spend about 100 million to get RELM out of their way. Over a five year period that is 20 million a year for the 5 years. I think that the lessened price competition would allow them to increase their profits by more than that each year given the huge base of sales that they have. Motorola cannot compete effectively on price as it stands now unless they downsize their company very significantly. They need to make their quarterly profits or the stock drops even further.

    Another way is to look at profits, and for this we look forward. If we look at RELM's addressable markets now compared to what they had at their baseline, it is at least 5 times larger. They will not reach the same penetration in a hurry in the areas new to them but it will come. When it does happen , given that they do not bloat their overhead, profits should be up by more that 5 times the baseline of past years. It is happening now. We have seen a couple of good quarters. The sales will remain lumpy, but I believe a trend toward increasing sales is under way. I expect it to take time to reach their full potential with sales, but it is happening and will be slowly (or maybe not so slowly) picking up speed. Given the current sales numbers, a few big contracts would change the picture drastically in a hurry.

  • Reply to

    We have a strange situation here...

    by form1_fan Sep 12, 2014 7:57 AM

    CHAIRMAN was 76-77 years old when would you retire? Motorola will never buy this company but I could see Thales or even Taser expand their product line with Relm.

    Like the rest of you, I'm still looking for that big contract to send this stock higher.

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