-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VnTgh6ohe8QzhCWToQPn5hg0BfrCU858TjmTaQiziItThz88Ps38wn5ZM8/1EfWz S5OGnD9O4BENui1M+7/qrQ== 0000740664-96-000004.txt : 19960523 0000740664-96-000004.hdr.sgml : 19960523 ACCESSION NUMBER: 0000740664-96-000004 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960522 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: R F INDUSTRIES LTD CENTRAL INDEX KEY: 0000740664 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678] IRS NUMBER: 880168936 STATE OF INCORPORATION: NV FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-13301 FILM NUMBER: 96570937 BUSINESS ADDRESS: STREET 1: 7620 MIRAMAR RD STREET 2: BLDG 4100 CITY: SAN DIEGO STATE: CA ZIP: 92126 BUSINESS PHONE: 619-549-6340 MAIL ADDRESS: STREET 2: 7620 MIRAMAR RD #4100 CITY: SAN DIEGO STATE: CA ZIP: 92126-4202 FORMER COMPANY: FORMER CONFORMED NAME: CELLTRONICS INC DATE OF NAME CHANGE: 19910204 10QSB/A 1 REVISED QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FOR 10-QSB Quarterly Report Under Section 13 or 15 (d) of Securities Exchange Act of 1934 for Quarter ended April 30, 1996 Commission File Number 0-13301 RF INDUSTRIES, LTD. (Exact name of registrant as specified in its charter) Nevada 88-0168936 (State of Incorporation) (I.R.S. Employer Identification No.) 7610 Miramar Road., Bldg. 6000, San Diego, California 92126-4202 (Address of principal executive offices) (Zip Code) (619) 549-6340 FAX (619) 549-6345 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock at the latest practicable date. As of April 30, 1996, the registrant had 2,738,547 shares of Common Stock, $.01 par value, issued and outstanding. Part I. FINANCIAL INFORMATION Item 1: Financial Statements BALANCE SHEET April 30 October 31 1996 1995 ---------- ---------- (unaudited) (audited) CURRENT ASSETS Cash ................................................ $ 353,295 $ 211,290 Investments in available-for-sale securities ........ 582,436 569,453 Trade accounts receivable less allowance for doubtful accounts of $25,705 .................... 507,076 343,596 Inventories - Note 3 ................................ 1,544,107 1,397,319 Prepaid expenses and deposits ....................... 295,810 225,169 Deferred tax assets ................................. 43,000 ---------- ---------- TOTAL CURRENT ASSETS ........................... 3,282,724 2,789,827 FIXED ASSETS Furniture and office equipment ...................... 105,897 99,893 Equipment and tooling ............................... 375,560 360,217 ---------- ---------- Fixed assets, at cost .......................... 481,457 460,110 Less accumulated depreciation and amortization ...... 355,256 333,033 ---------- ---------- NET FIXED ASSETS ............................... 126,201 127,077 Deferred tax assets ................................. 33,000 Other assets ........................................ 4,901 5,067 ---------- ---------- TOTAL ASSETS................................... $3,413,826 $2,954,971 ========== ========== See Notes to Financial Statements BALANCE SHEET (continued) April 30 October 31 1996 1995 ---------- ---------- (unaudited) (audited) LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------- CURRENT LIABILITIES Accounts payable ................................. $ 105,958 $ 170,074 Accrued expenses ................................. 313,669 74,985 ----------- ----------- TOTAL CURRENT LIABILITIES ................... 419,627 245,059 STOCKHOLDERS' EQUITY Common Stock - $.01 par value Authorized - 10,000,000 shares Issued & outstanding 2,738,547 shares ............ 27,385 25,385 Capital paid in excess of par value .............. 3,237,938 3,219,938 Accumulated deficit .............................. (149,729) (394,851) Unearned compensation ............................ (121,395) (140,560) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY .................. 2,994,199 2,709,912 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ..................... $ 3,413,826 $ 2,954,971 =========== =========== See Notes to Financials
STATEMENTS OF OPERATIONS Three Months Ended Six Months Ended April 30 April 30 ---------------------- --------------------- 1996 1995 1996 1995 ------ ------ ------ ------ Net Sales ................... $ 1,269,624 $ 901,775 $ 2,179,589 $ 1,644,801 Cost of Sales ............... 510,839 466,667 961,804 772,795 ----------- ----------- ----------- ----------- Gross Profit ........... 758,785 435,108 1,217,785 872,006 ----------- ----------- ----------- ----------- Operating expenses: Engineering ............ 130,582 105,143 235,239 161,880 Selling and general .... 362,025 317,999 642,333 555,929 ----------- ----------- ----------- ----------- Total ................ 492,607 423,142 877,572 717,809 ----------- ----------- ----------- ----------- Operating income ....... 266,178 11,966 340,213 154,196 Interest expenses (income) .. (10,898) (7,138) (24,909) (13,943) ----------- ----------- ----------- ----------- Income before provision for income tax .............. 277,076 19,104 365,122 168,139 Provision for state & federal income tax .................. 100,000 3,000 120,000 43,000 ----------- ----------- ----------- ----------- Net income ............. $ 177,076 $ 16,104 $ 245,122 $ 125,139 =========== =========== =========== =========== Per share data: Net income ............. $ 0.06 $ 0.01 $ 0.08 $ 0.06 =========== =========== =========== =========== Weighted average common and common equivalent shares outstanding 2,988,235 2,300,571 2,921,202 2,085,650 =========== =========== =========== ===========
See Notes to Financial Statements STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended April 30 -------------------- 1996 1995 ------ ------ OPERATING ACTIVITIES Net income............................................ $ 245,122 $ 125,139 Adjustments to reconcile net income to net cash (used in) provided by operations Depreciation and amortization ................... 22,223 38,332 Amortization of unearned compensation ........... 19,165 28,040 Change in assets - (incr) decr: Accounts receivable - trade ................. (163,480) ( 11,597) Inventories ................................. (146,788) (250,779) Other assets ................................ 5,525 (67,933) Change in liabilities - incr (decr): Accounts payable ............................ (64,116) (26,077) Accrued expenses ............................ 238,684 89,807 --------- --------- Net cash (used in) provided by operating activities ..................... 156,335 (75,068) --------- --------- INVESTING ACTIVITIES Purchase of available-for-sale securities ... (12,983) 0 Capital expenditures ........................ (21,347) (23,006) --------- --------- Net cash provided by (used in) operating activities ...................... (34,330) (23,006) --------- --------- FINANCING ACTIVITIES Proceeds from exercise of common stock options .......................... 20,000 7,780 --------- --------- Net (decrease) increase in cash and cash equivalents ......................... 142,005 (90,294) Cash and cash equivalents at the beginning of the period ...................... 211,290 862,050 --------- --------- Cash and cash equivalents at the end of period .. $ 353,295 $ 771,756 ========= ======== See Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS Note 1 - Management's opinion In the opinion of management, the accompanying financial statements contain all adjustments necessary to present the financial position of RF Industries, Ltd. as of April 30, 1996 and the results of operations for the three month and six month periods ended April 30, 1996 and 1995. Note 2 - Interim reporting The results of operation for the three month and six month periods ended April 30, 1996 and 1995 are not necessarily indicative of the results to be expected for the remainder of the year. Note 3 - Components of Inventory April 30, 1996 ---------------------- (Unaudited) Raw material and supplies.............. $ 220,300 Finished goods......................... 1,323,807 ------------ TOTAL................... $ 1,544,107 Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SIX MONTHS 1996 VS. SIX MONTHS 1995 Sales increased $534,788, or 33% to $2,179,589 in the six month period from $1,644,801 in the first six months of fiscal 1995. The sales gain is attributable to the company's increased customer base, higher inventory levels to meet customer demand, and greater product exposure due to the company's expanded marketing efforts. Neulink sales were $472,204 compared to $70,554 in the comparable period last year. For the first six months, RF Connector sales increased $133,137 compared to connector sales in the first half of 1995. Cost of sales rose $189,009 but declined, as a percentage of sales, to 44% compared to 47% last year. The decline is primarily due to an improved product mix, efficiencies associated with higher utilization of facilities, increased sales, volume purchasing, and improved RF Connector pricing. Engineering expenses increased $73,359 to support the development and planned introduction of new RF Connector and Neulink products in fiscal 1996. As a percent of sales, engineering expense increased to 11% from 10% of sales last year. Selling and general expenses increased $86,404 due to higher labor costs, advertising expenses, marketing and trade show expenses. The company continues to travel to trade shows throughout North America to promote its products. As a percentage of sales, selling and general expenses declined to 29% from 34% of sales last year. The decline is primarily due to the company's increased sales and cost control efforts. Interest income increased $10,966 due to the company's higher average cash balances and an increase in the rate of interest received. The provision for income taxes increased $77,000 to $120,000. The increase in the company's tax rate is due to the absence of tax loss carry forwards which reduced the company's tax rate last year. THREE MONTHS 1996 VS. THREE MONTHS 1995 Sales increased $367,849, or 41% to $1,269,624 from $901,775 in the second quarter of fiscal 1995. The sales gain is attributable to those reasons set out in the six month analysis. Neulink sales were $276,098 in the quarter, compared to $41,531 in the second quarter of 1995. RF Connector sales increased $131,862 from the same quarter last year. Cost of sales rose $44,172 but declined, as a percentage of sales, to 40% compared to 52% last year. The decline is primarily attributable to reasons discussed in the six month analysis, as well as an improvement in RF Connector pricing during the quarter. Engineering expenses increased $25,439. During the quarter, the company commenced development on a large connector program. These higher priced large connectors should allow the Connector Division to move into a new market area. Neulink contributed to the increased expense in order to introduce a high performance modular receiver, wireless digital repeater, and a RTU (Remote Terminal Unit) for multiple control and monitoring of wireless networks. As a percent of sales, engineering expense declined to 10% from 12% last year due to the increase in sales. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Selling and general expenses increased $44,026 primarily due to reasons described in the six month analysis. As a percentage of sales, selling and general expenses declined to 29% from 35% last year. The decline is primarily due to the company's increased sales. Interest income increased $3,760 due to the company's higher average cash balances and an increase in the rate of interest received. The provision for income taxes increased $97,000. This is due to reasons addressed in the six month analysis. MATERIAL CHANGES IN FINANCIAL CONDITION: Cash increased $142,005 to $353,295, compared to the October 31, 1995 fiscal year end balance of $211,290. The increase in cash is attributable to the company's increased sales and improved profitability. Management anticipates that combined cash and cash equivalents of $935,731, together with internally generated capital, will be adequate to fund the company throughout the current fiscal year. If additional capital is required for operations, the company will seek to open a line of credit with a local bank. Trade accounts receivable increased $163,480, or 48% to $507,076 compared to the October 31, 1995 balance of $343,596. The increase is due to the addition of new customers and the company's sales growth during the period. Inventories increased $146,788 compared to the October 31, 1995 inventory level as a result of purchases to meet higher sales and customer demand. Prepaid expenses increased $70,641 from October 31, 1995. This increase is due to higher deposits for future inventory purchases. Accounts payable declined $64,116 compared to October 31, 1995. Accounts payable remain low due to the company's strong cash flow and tight cost controls. Accrued expense increased $238,684 from the $74,985 October 31, 1995 level. The increase is primarily due to the income taxes payable. PART II. OTHER INFORMATION Items 1-4: Not applicable Item 5: Information required in lieu of Form 8-K None. Item 6: Exhibits and Reports on 8-K (a) None required (b) Reports on Form 8-K No reports on Form 8-K were filed during fiscal quarter ended April 30, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RF INDUSTRIES, LTD. By: /s/ HOWARD F. HILL -------------------------------- Howard F. Hill, President Dated: May 22, 1996 By: /s/ HOWARD F. HILL ------------------------------- Howard F. Hill, President Chief Financial Officer Dated: May 22, 1996 -----END PRIVACY-ENHANCED MESSAGE-----