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The Coca-Cola Company Message Board

ejschultheis 16 posts  |  Last Activity: Apr 22, 2015 10:14 AM Member since: Oct 3, 2000
  • Reply to


    by ejschultheis Apr 17, 2015 9:57 AM
    ejschultheis ejschultheis Apr 22, 2015 10:14 AM Flag

    Where do you get information on the contracts you mentioned or the amount of price penalty when compared to other radios?


  • ejschultheis by ejschultheis Apr 17, 2015 9:57 AM Flag

    Anytime a company brings out a new product should boost margins, otherwise why bring out a new product. The company had low first quarter margins last year and had demonstrated improved margins each of the last three quarters. If nothing else changes we should see a nice jump in margins from last years depressed first quarter and thereafter we should see expanding margins from the new product launch later this year. That along with rising sales projections (see earlier post) could push this stock toward the mid 9s by year end as long as the market doesn't have a major correction.

  • ejschultheis by ejschultheis Mar 27, 2015 10:24 AM Flag

    I don't see any analyst expectations for sales or earnings for RWC so I will give my estimates.

    Looking back on 2014 we had sales of $31mm and earnings and 12 cents. The companys backlog increased by 1.7mm over the 4th q 2013.

    My target for sales in 2015 is $40-42mm.
    31mm 2014
    2mm increased backlog
    2mm additional international business
    2mm additional state and local
    3-5mm lumpy contracts

    The good sales we had with the interior department and CA fire should continue with the continued drought in the west. State and Local seem to be getting traction and the company already announced a 2 million international contract. The company is still looking for a coast guard contract to be funded which by its self could increase sales by 4-9mm although I would expect it to be filled over several years. The company is also named on several contracts (not funded or awarded) which could each add $2mm to the top line. We also may get lucky with some FBI contracts which were contested last year and other homeland security activity.

    I only included 3-5mm in lumpy contracts while the potential is many times that amount. The company needs about 6mm a quarter in ssales to reach break even and then about 2 cents falls to the bottom line for each 1mm in additional sales. In addition another 4-6 cents should be added annually when the amortization of software costs expense is finished later this year.

    The bottom line is that I expect 32-36 cents this year with another 4-6 cents added from amortization in the future. The Russell 2000 companies (with positive earnings) trade with a 25 P/E at this time. That would equate to a $8.75 price target with 35 cents in earnings.

    If you think my assumptions are wrong, please show me where you differ.


  • They added about 6k shares prior to earnings and another 18k after. The yoy increase in backlog 4.2mm from 2.5mm more than offset the the 800k dip in revenue. The 1.5mm in new contracts announced last week along with the largest reported backlog in the last 3 years should provide a strong base for revenues as the year progresses.

    Im also encouraged by the director exercising 3 sets of options two of which had a few more years prior to expiration. Early exercise of options (without selling) indicates that the holder expects the stock to rise. If you exercise an option you pay regular income taxes on the difference between market price and the strike price. If the stock were to rise in the next two years and the option holder waited to exercise the option then he would have to pay a higher (earned income) tax on the difference between todays price and the future market price. On the other hand If he exercises the option today any gain in the future would be taxed at a lower capital gain tax rate.

    Still looking for that mega contract that will make a meaningful move in the stock. Meanwhile Fundamental keeps moping up any share from weak hands which will provide a solid base for the stock to move higher.


  • Reply to


    by ejschultheis Mar 5, 2015 11:31 AM
    ejschultheis ejschultheis Mar 5, 2015 12:54 PM Flag


  • ejschultheis by ejschultheis Mar 5, 2015 11:31 AM Flag


  • The company does't release quarterly backlog information but the number is released in the 10-k
    This year the backlog is 4.2mm and the past 3 years have been 2.5, 2.3, and 1.5mm. Sales this past quarter were less than I had hopped but it looks as if more was pushed into next year.

    Gross margins continue to improve. The firs quarter was a disappointment but the margin continued to improve thru the 4th quarter. The margins for the 4 quarters of 2014 44%, 43.7%, 42.8% and 40.2%.

    Amortization of capitalized software fell to 134k from the 197k in each of the previous 3 quarters. The current balance is now down to 753k and should be nearly fully amortized by year end. The lowered cost should drop 2 cents to the bottom line this year and another 4 cents next year.

    Backlog rising, Margins improving, and Costs falling are all moving in the right direction. It looks as if the environment for both Federal and State and Local markets are better than they have been in years. The stock may dip on the 4th quarter results but I don't expect it to stay low for too long.

    Privet and fundamental have purchased over 25% of the stock in the past two years and most of the other institutional investors have added to positions. Throw in the shares owned by insiders and the available balance is down to about 3mm shares. Thats why volume has been so low. If any institutional investor wants to take the long run view (which they have to do with such a small float) and add to positions they will have to add to positions when the market dips on a preceived disappointment.

  • 4TH Q 2013 HAD announced 1.6MM STATE AND LOCAL ORDERS and none this past quarter. The forest service late in the quarter (December) placed a 2.9mm dollar order. Net increased announced orders for the 4th q 2014 were 1.3mm (2.9-1.6) but it looks as if most of the increased orders were carried over to 2015.

    The initial report of a fall in sales of 800 k for the 4th quarter y/y looks bad on the surface but taken in the context of the increased backlog of 1.7mm it doesn't look bad at all. This is a small company and lumpy orders will bounce the revenue line quite a bit.

    The outlook is what counts and the 10-k seems to indicate that things are looking better as we enter 2015.

    Good Luck

  • Last year the company posted 6.2mm in sales with break even results. In mid December RWC received a $2.9mm contract which should push revenue and earnings above last year levels. The question will be how much of this contract was fulfilled in the 4th quarter and how much will be carried over into the next few quarters? I missed results of the last few quarters by such a wide margin, I won't embarrass my self with projections but don't expect much change from last year.

    The stock has performed well this past quarter and almost all institutional player added too positions. (they must expect something good). This may be a breakout year for the company. The last few years have crimped by the sequesters and prior to that most State and Local authorities were pressed with tight budgets. Relm has had its products in the market for several years now and I expect the value proposition to be accepted by more state and local agencies as the product reliability has been demonstrated over the past few years.

    In addition, The company had a large contract win with the Coast Guard about 18 months ago that hasn't yet been filled and other opportunities with the FBI (previously Motorola exclusive contract) and many others.

    The bottom line should also benefit (about 6 cents a share)from the amortization expense decline toward zero.

    In the past two years about 25% of the shares have been acquired by Privet and Fundamental. These fund managers can't just sell their shares if we get a point or two movement in the stock. These large positions would take months to liquidate so they are not here for the short term. The liquidity in this stock is rather thin and the fact that nearly all institutional holders increased positions lead me to believe that they see something positive in the near term.

    Good Luck

  • Reply to

    MSI looking to sell?!

    by see2see Feb 6, 2015 8:48 PM
    ejschultheis ejschultheis Feb 7, 2015 10:41 AM Flag

    I think we would be a much better fit for TASR. They entered the body cam market and and are gaining market share quickly. If you add radios they would have synergies and would be able to sell all of their products with each presentation.

    I would rather see RWC stay independent and just have some accelerating organic growth. Announced contracts in the 4th q were higher than in 2013 and if we can continue with the qoq and yoy growth in revenues, earnings should pop once fixed costs are covered (about 6mm revenue/q) the bottom line grows rather quickly. If we start seeing 3-5mm contracts the stock will run.

    Motorola has had an advantage because clients tend to replace products with the same brand. In a few short years RWC in addition to its organic growth, should start to get a tail wind from the replacement of radios placed in the past few years. (assume 5-7 year replacement cycle).

    Good Luck

  • Reply to

    Earnings release date????

    by saketyme Feb 6, 2015 1:08 PM
    ejschultheis ejschultheis Feb 6, 2015 7:22 PM Flag

    LAST YEAR they released earnings on March 5. I wouldn't think any earlier this year.


  • ejschultheis by ejschultheis Feb 2, 2015 10:13 AM Flag

    We got a pop at the end of the auction ... in fact the stock bottomed on the minute that the FCC announced that the auction had closed and the stock rallied about 2.5 points,

    Now we find that dish purchased about 13 billion in spectrum. If they borrow 10 billion at 5% it will cost them $500mm a year in interest. Uncertainty rules the moment. I will wait for a sell off to purchase. In a few short years the spectrum they recently purchased will look as cheap as the spectrum they purchased a few years ago.

    Good Luck

  • ejschultheis by ejschultheis Jan 29, 2015 7:36 PM Flag


    They either have conviction or they expect some major orders in the near term.
    either way, they continue to prop up the price.

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