-----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, QDtvl5Efpf90BNsIo5JzqTsxBk60+n4oDyF3OIYp+3LVqbSUMl1se2Y2u8E3wvxg mqENQjXgg84ViVv5ZGyw6A== 0000740664-96-000006.txt : 19960830 0000740664-96-000006.hdr.sgml : 19960830 ACCESSION NUMBER: 0000740664-96-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19960829 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 SEC ACT: 1934 Act SEC FILE NUMBER: 000-13301 FILM NUMBER: 96623182 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 1 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 July 31, 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 issuers classes of common stock at the latest practicable date. As of July 31, 1996, the registrant had 2,775,440 shares of Common Stock, $.01 par value, issued and outstanding. Part I. FINANCIAL INFORMATION Item 1: Financial Statements BALANCE SHEET July 31 October 31 1996 1995 ---------- ---------- (unaudited) (audited) ASSETS - ------------------ CURRENT ASSETS Cash ................................................ $ 340,732 $ 211,290 Investments in available-for-sale securities ........ 593,790 569,453 Trade accounts receivable less allowance for doubtful accounts of $22,818 and $28,000 ........ 813,328 343,596 Inventories - Note 3 ................................ 1,837,005 1,397,319 Prepaid expenses and deposits ....................... 450,023 225,169 Deferred tax assets ................................. 43,000 ---------- ---------- TOTAL CURRENT ASSETS ........................... 4,034,878 2,789,827 FIXED ASSETS Furniture and office equipment ...................... 86,129 99,893 Equipment and tooling ............................... 403,396 360,217 ---------- ---------- Fixed assets, at cost .......................... 489,525 460,110 Less accumulated depreciation and amortization ...... 366,506 333,033 ---------- ---------- NET FIXED ASSETS ............................... 123,019 127,077 Deferred tax assets.................................. 33,000 Other assets ........................................ 4,901 5,067 ---------- ---------- TOTAL ASSETS.................................... $4,162,798 $2,954,971 =========== ========== See Notes to Financial Statements BALANCE SHEET (continued) July 31 October 31 1996 1995 ----------- ---------- (unaudited) (audited) LIABILITIES AND STOCKHOLDERS' EQUITY - -------------------------------------- CURRENT LIABILITIES Accounts payable ................................... $ 309,136 $ 170,074 Accrued expenses ................................... 526,614 74,985 ----------- ----------- TOTAL CURRENT LIABILITIES ..................... 835,750 245,059 STOCKHOLDERS EQUITY Common Stock - $.01 par value Authorized - 10,000,000 shares Issued & outstanding 2,775,440 and 2,538,547 shares 27,754 25,385 Capital paid in excess of par value ................ 3,260,220 3,219,938 Accumulated deficit ................................ 144,388 (394,851) Unearned compensation .............................. (105,314) (140,560) ----------- ----------- TOTAL STOCKHOLDERS EQUITY ..................... 3,327,048 2,709,912 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS EQUITY ....................... $ 4,162,798 $ 2,954,971 =========== =========== See Notes to Financial Statements
STATEMENTS OF OPERATIONS Three Months Ended Nine Months Ended July 31 July 31 ------------------------- ------------------------- 1996 1995 1996 1995 --------- --------- --------- --------- Net Sales .................... $ 1,649,959 $ 797,294 $ 3,829,549 $ 2,442,095 Cost of Sales ................ 750,331 424,476 1,711,959 1,197,272 ----------- ----------- ----------- ----------- Gross Profit ............ 899,628 372,818 2,117,590 1,244,823 ----------- ----------- ----------- ----------- Operating expenses: Engineering ............. 112,618 96,420 347,856 258,299 Selling and general ..... 330,215 332,118 972,548 888,048 ----------- ----------- ----------- ----------- Total ................. 442,833 428,538 1,320,404 1,146,347 ----------- ----------- ----------- ----------- Operating income (loss) . 456,795 (55,720) 797,186 98,476 Interest income .............. (13,144) (13,847) (38,053) (27,790) ----------- ----------- ----------- ----------- Income (loss) before provision for income tax ............... 469,939 (41,873) 835,239 126,266 Provision (credit) for state & federal income tax ........... 176,000 (16,750) 296,000 26,250 ----------- ----------- ----------- ----------- Net income (loss) ....... $ 293,939 $ (25,123) $ 539,239 $ 100,016 =========== =========== =========== =========== Per share data: Net income (loss) ....... $ 0.10 $ ( 0.01) $ 0.18 $ 0.03 =========== =========== =========== =========== Weighted average common and common equivalent shares outstanding .................. 2,996,614 2,300,571 2,939,836 2,085,650 =========== =========== =========== =========== See Notes to Financial Statements
STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended July 31 -------------------- 1996 1995 ------- ------- OPERATING ACTIVITIES Net income.............................................. 539,239 $ 100,016 Adjustments to reconcile net income to net cash (used in) provided by operations Depreciation and amortization ..................... 33,473 42,919 Amortization of unearned compensation ............. 35,246 67,082 Change in assets - (incr) decr: Accounts receivable - trade ................... (469,732) 126,271 Inventories ................................... (439,686) (489,146) Other assets .................................. (148,688) (108,268) Change in liabilities - incr (decr): Accounts payable .............................. 139,062 22,266 Accrued expenses .............................. 451,629 (96,568) --------- --------- Net cash (used in) provided by operating activities ...................... 140,543 (335,428) --------- --------- INVESTING ACTIVITIES Purchase of available-for-sale securities ..... (24,337) 0 Capital expenditures .......................... (29,415) (47,907) --------- --------- Net cash used in investing activities ......... (53,752) (47,907) --------- --------- FINANCING ACTIVITIES Proceeds from exercise of common stock options ............................ 42,651 257,780 --------- --------- Net cash provided by financing activities ................... 42,651 257,780 --------- --------- Net (decrease) increase in cash and cash equivalents ........................... 129,442 (125,555) Cash and cash equivalents at the beginning of the period ........................ 211,290 862,050 Cash and cash equivalents at the end of period .... $ 340,732 $ 736,495 ========= ========= 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 July 31, 1996 and the results of operations for the three month and nine month periods ended July 31, 1996 and 1995. Note 2 - Interim reporting The results of operation for the three month and nine month periods ended July 31, 1996 and 1995 are not necessarily indicative of the results to be expected for the remainder of the year. Note 3 - Components of Inventory July 31 October 31 1996 1995 ------------ ------------ (Unaudited) (Audited) Raw material and supplies........ $ 236,000 $ 146,547 Finished goods................... 1,601,005 1,250,772 ------------- ------------- TOTAL......................... $ 1,837,005 $ 1,297,319 ============= ============= Item 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Nine Months 1996 vs. Nine Months 1995 Sales increased $1,387,454, or 57% to $3,829,549 in the nine month period ended July 31, 1996, compared to $2,442,095 in the same period in fiscal 1995. The sales gain is attributable to the company's expanded customer base, higher inventory levels to meet customer demand and improved market exposure associated with the company's expanded sales and marketing efforts. Neulink sales were $955,108 compared to $126,452 in the comparable period last year. For the first nine months, RF Connector sales increased $558,798 compared to connector sales in the first half of 1995. Cost of sales rose $514,687 but declined, as a percentage of sales, to 45% compared to 49% of sales 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 $89,557 to support the development and planned introduction of new RF Connector and Neulink products in fiscal 1996. As a percent of sales, engineering expense decreased to 9% from 11% of sales last year. Selling and general expenses increased $84,500 due to higher labor costs associated with the company's growth and increased advertising, 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 25% from 36% of sales last year. The decline is primarily due to the companys increased sales and cost control efforts. Interest income increased $10,263 due to the company higher average cash balances and an increase in the rate of interest received. The provision for income taxes increased $269,750 to $296,000. 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 reached $1,649,959, and increase of $852,665, or 107%, over sales of $797,294 for the third quarter last year. The sales gain is attributable to those reasons set out in the nine month analysis. Neulink sales were $482,904 in the quarter, compared to $55,900 in the third quarter of 1995. RF Connector sales increased $425,661, or 57%, compared to Connector sales for the same quarter last year. Cost of sales rose $325,855 but declined, as a percentage of sales, to 45% compared to 53% last year. The decline is primarily attributable to reasons discussed in the six month analysis, as well as an improved RF Connector pricing earlier this year. Engineering expenses increased $16,198. Part of this increase in engineering is due to the commencement by RF Connector of a large connector program. These large connectors, which accommodate coaxial cable from 1/2 to 1.5inches, sell at much higher per unit prices and will enable this division to enter a new segment of the connector market. Neulink engineering expenses increased to develop a new high-performance modular receiver, a wireless digital repeater and an RTU (Remote Terminal Unit) for multiple control and monitoring of wireless networks. As a percent of sales, engineering expense declined to 7% 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 declined $1,903, primarily due to reasons described in the nine month analysis. Due to the strong sales increase, selling and general expenses declined to 20% of sales from 42% last year. Interest income decreased $703 due to a lower average balance of interest bearing deposits during the quarter. The provision for income taxes increased $192,750. This is due to reasons addressed in the nine month analysis. Material changes in financial condition: Cash at July 31, 1996 increased $129,442 to $340,732, 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 $934,522, 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 $469,732, or 137% to $813,328 compared to the October 31, 1995 balance of $343,596. The increase is due to the addition of new customers and the companys sales growth during the period. Inventories increased $439,686, or 31% compared to the October 31, 1995 inventory level. Inventories have been expanded to meet higher sales demand and the addition of several new distributors. Prepaid expenses and deposits increased $224,854 from October 31, 1995. This increase is due to higher deposits for future inventory purchases. Accounts payable increased $139,062 compared to October 31, 1995. This increase is due to the companys growth. Accrued expenses increased $451,629 from the $74,985 October 31, 1995 level. This increase is primarily attributable to higher 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 July 31, 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. Dated: August 29, 1996 By: Howard F. Hill ----------------------------------------- Howard F. Hill, President Dated: August 29, 1996 By: Howard F. Hill ----------------------------------------- Howard F. Hill, President EX-27 2 ART. 5 FDS FOR 3ND QUARTER 10-QSB
5 9-MOS OCT-31-1996 JUL-31-1996 340,732 593,790 836,146 22,818 1,837,005 4,034,878 489,525 366,506 4,162,798 835,750 0 0 0 27,754 3,299,294 4,162,798 3,829,549 3,829,549 1,711,959 3,032,363 0 0 (38,053) 835,239 296,000 539,239 0 0 0 539,239 .18 .18
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