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7-11-2006 RWC -RELM Wireless Corp

CURRENT PRICE: $6.10

TYPE OF PLAY: EARNINGS GROWTH/TECHNICAL ANALYSIS/SITUATIONAL

RELM Wireless Corp. is engaged in the manufacture and marketing of high-specification two-way communications equipment for use by public safety professionals and government agencies, as well as radios for use in a wide range of commercial and industrial applications, including disaster recovery, hotels, construction firms, schools, airports, and taxies. The stock is down almost 50% from the highs reached in February, all the while reporting great earnings and new contracts. For the first quarter ended March 31, 2006, sales increased approximately 29.6% to $7.2 million from $5.5 million for the same quarter last year. Net income for the first quarter was $0.06 per diluted share, compared to $0.02 per diluted share, for the same quarter last year. In a recent Forbes article, RELM Wireless CEO David Stoney says that he "sees an opportunity to increase sales so that Relm will have a 10% global market share within ten years. He also states: "If it can do that, Relm will be a company with about $1 billion in sales in ten years". RWC was also recently added to the Russell Microcap Index, increasing their visibility to the investment community. They are also generating sales from the federal government due to the APCO Project (more on this project below), which we expect to continue as the government tries to compensate for previous infrastructure failures during disasters by being overly prepared for future events. [ The 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 towards interoperability has gained momentum as a result of the recent communications failures during the Oklahoma City bombings, 9/11 attacks and most recently Hurricane Katrina. RELM was one of the first manufacturers to develop P25-compliant technology. ]

LINKS FOR FURTHER READING:
RWC Homepage
Forbes Article
RWC Russell Microcap addition
APCO Project 25 information
SEC filings for RWC
General RWC statistics