-----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, QtEzFt3zjvyWlLYtoKo3Tjd5FqsZt+iw9AJmFKRI3BXPN1jsCGFK6UAF0y2GpKSv agVU0bpxDN8NamuMQSHXRQ== 0000740664-97-000006.txt : 19970828 0000740664-97-000006.hdr.sgml : 19970828 ACCESSION NUMBER: 0000740664-97-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970731 FILED AS OF DATE: 19970827 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: 97670972 BUSINESS ADDRESS: STREET 1: 7610 MIRAMAR RD STREET 2: BLDG 6000 CITY: SAN DIEGO STATE: CA ZIP: 92126 BUSINESS PHONE: 6195496340 MAIL ADDRESS: STREET 1: 7620 MIRAMAR RD #4100 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 3RD QUARTER 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, 1997 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 July 31, 1997, the registrant had 3,064,599 shares of Common Stock, $.01 par value, issued and outstanding. Part I. FINANCIAL INFORMATION Item 1: Financial Statements BALANCE SHEET July 31 October 31 1997 1996 ----------- ----------- (Unaudited) (Audited) ASSETS - ----------------- CURRENT ASSETS Cash ............................................... $ 798,047 $ 403,547 Investments in available-for-sale securities ....... 632,848 604,186 Trade accounts receivable less allowance for doubtful accounts of $11,596 ................... 787,287 703,097 Inventories - Note 3 ............................... 2,203,082 1,861,856 Prepaid expenses and deposits ...................... 470,718 276,109 Deferred tax assets ................................ 60,000 60,000 ---------- ---------- TOTAL CURRENT ASSETS .......................... 4,951,982 3,908,795 FIXED ASSETS Furniture and office equipment ..................... 107,633 107,633 Equipment and tooling .............................. 433,189 381,891 ---------- ---------- Fixed assets, at cost ......................... 540,822 489,524 Less accumulated depreciation and amortization ..... 408,949 377,715 ---------- ---------- NET FIXED ASSETS .............................. 131,873 111,809 Deferred tax assets ................................ 38,000 38,000 Other assets ....................................... 4,901 4,900 ---------- ---------- TOTAL ASSETS .................................. $5,126,756 $4,063,504 ========== ========== See Notes to Financial Statements 2 Item 1: Financial Statements (continued) BALANCE SHEET July 31 October 31 1997 1996 ----------- ---------- (Unaudited) (Audited) LIABILITIES AND STOCKHOLDERS' EQUITY - ---------------------------- CURRENT LIABILITIES Accounts payable ............................. $ 298,393 $ 186,250 Accrued expenses ............................. 246,202 268,015 ----------- ----------- TOTAL CURRENT LIABILITIES ............... 544,595 454,265 STOCKHOLDERS' EQUITY Common Stock - $.01 par value Authorized - 10,000,000 shares Issued & outstanding 3,064,599 shares ...... 30,646 27,782 Capital paid in excess of par value .......... 4,803,366 3,868,642 Retained earnings ............................ 676,227 166,547 Unearned compensation ........................ (928,078) (453,732) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY .............. 4,582,161 3,609,239 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ................. $ 5,126,756 $ 4,063,504 =========== =========== See Notes to Financial Statements 3 Item 1: Financial Statements (continued) STATEMENTS OF OPERATIONS (Unaudited) (Unaudited) Three Months Ended Nine Months Ended July 31 July 31 ---------------------- --------------------- 1997 1996 1997 1996 ------- ------- ------- ------- Net Sales ................... $1,523,442 $1,649,959 $5,202,370 $3,829,549 Cost of Sales ............... 796,540 750,331 2,917,852 1,711,959 ---------- ---------- ---------- ---------- Gross Profit ........... 726,902 899,628 2,284,518 2,117,590 ---------- ---------- ---------- ---------- Operating expenses: Engineering ............ 106,280 112,618 327,875 347,856 Selling and general .... 360,419 330,215 1,155,500 972,548 ---------- ---------- ---------- ---------- Total ................ 466,699 442,833 1,483,375 1,320,404 ---------- ---------- ---------- ---------- Operating income ....... 260,203 456,795 801,143 797,186 Interest income ............. 17,834 13,144 48,534 38,053 ---------- ---------- ---------- ---------- Income before provision for income tax .............. 278,037 469,939 849,677 835,239 Provision for state & federal income tax .................. 112,000 176,000 340,000 296,000 ---------- ---------- ---------- ---------- Net income ............. $ 166,037 $ 293,939 $ 509,677 $ 539,239 ========== ========== ========== ========== Per share data: Net income ............. $ 0.05 $ 0.10 $ 0.16 $ 0.18 ========== ========== ========== ========== Weighted average common and common equivalent shares outstanding ................. 3,315,157 2,996,614 3,153,946 2,939,836 ========== ========== ========== ========== See Notes to Financial Statements 4 STATEMENTS OF CASH FLOWS Net income ........................................... $ 509,677 $ 539,239 Adjustments to reconcile net income to net cash (used in) provided by operations Depreciation and amortization ................... 31,234 33,473 Amortization of unearned compensation ........... 461,660 35,246 Change in assets - (incr) dear: Accounts receivable - trade ................ (84,190) (469,732) Inventories ................................ (341,226) (439,686) Other assets ............................... (194,609) (148,688) Change in liabilities - incr. (decr.): Accounts payable ........................... 112,143 139,062 Accrued expenses ........................... (21,813) 451,629 --------- --------- Net cash (used in) provided by operating activities .................... 472,876 140,543 --------- --------- INVESTING ACTIVITIES Purchase of available-for-sale securities ... (28,662) (24,337) Capital expenditures ........................ (51,298) (29,415) --------- --------- Net cash provided by (used in) operating activities ....................... (79,960) (53,752) --------- --------- FINANCING ACTIVITIES Proceeds from exercise of common stock options 1,584 42,651 --------- --------- Net cash provided by financing activities .... 1,584 42,651 --------- --------- Net (decrease) increase in cash and cash equivalents ......................... 394,500 129,442 Cash and cash equivalents at the beginning of the period ...................... 403,547 211,290 --------- --------- Cash and cash equivalents at the end of period... $ 798,047 $ 340,732 ========= ========= See Notes to Financial Statements 5 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, 1997 and the results of operations for the three month and nine month periods ended July 31, 1997 and 1996. Note 2 - Interim reporting The results of operations for the three month and nine month periods ended July 31, 1997 and 1996 are not necessarily indicative of the results to be expected for the remainder of the year. Note 3 - Components of Inventory July 31, 1997 ------------- (Unaudited) Raw material and supplies....... $ 345,454 Finished goods ................. 1,857,628 ---------- TOTAL ....................... $2,203,082 6 Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NINE MONTHS 1997 VS. NINE MONTHS 1996 Net sales increased 36%, or $1,372,821, to $5,202,370 from $3,829,549 in the first nine months of fiscal 1997. RF Connectors sales increased 32% to $3,782,070, and RF Neulink sales increased 49% to $1,420,300, from the first nine months of fiscal 1996. Cost of sales increased 70%, or $1,205,893, to $2,917,852 from $1,711,959 last year and increased to 56% of sales from 45% of sales last year. The increase is primarily due to the increase in sales. The increase in cost of sales, as a percent of sales, is primarily due to reduced sales from the Neulink division and the higher costs, as a percentage of sales, which are associated with the lower Neulink sales. Engineering expenses decreased 6%, or $19,981, to $327,875 from $347,856 last year and declined, as a percent of sales, to 6% from 9% of sales last year due to the increase in net sales. Selling and general expenses increased 19%, or $182,952, to $1,155,500 from $972,548, but declined, as a percent of sales, to 22% from 25% last year. The decline as a percent of sales is attributable to the sales increase. Interest income increased $10,481 to $48,534 from $38,053 due to the company's higher average cash balances and an increase in the rate of interest received. The provision for income taxes increased $44,000. The lower tax rate in fiscal 1996 benefitted from the use of tax loss carryforwards. THREE MONTHS 1997 VS. THREE MONTHS 1996 Sales decreased 8%, or $126,517, to $1,523,442 from $1,649,959 in the third quarter of fiscal 1997. Connector sales increased 8% to $1,262,757 and Neulink sales declined 46% to $260,685 in the third quarter. Neulink sales declined in the third quarter due to delays in receipt of orders from major customers. The cause of these delays vary but include the acquisition of a major customer by a large corporation, rescheduled satellite launches, project delays for underground steam monitoring systems and the postponement of the FCCs decision to deploy the emergency alert system to cable TV networks. Cost of sales increased 6%, or $46,209, to $796,540 from $750,331 and as a percentage of sales increased to 52% from 45% last year. The reasons for the increase are discussed in the nine month results. Engineering expenses decreased 5%, or $6,338, to $106,280 from $112,618 last year and increased, as a percent of sales, to 7% from 6% of sales last year. Engineering expenses increased, as a percent of sales, primarily as a result of the decline in Neulink sales. Selling and general expenses increased 9%, or $30,204, to $360,419 from 330,215, and increased, due to the decline in sales, to 24% from 20% of sales last year. Interest income increased $4,690 to $17,834 due to the company's higher average cash balances and an increase in the rate of interest received. 7 Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) MATERIAL CHANGES IN FINANCIAL CONDITION: Cash increased $394,500 to $798,047 compared to the October 31, 1996 fiscal year balance of $403,547. Cash and cash equivalents are $1,430,895 at July 31, 1997. Trade accounts receivable increased $84,190, or 12% to $787,287 compared to the October 31, 1996 balance of $703,097. This is due to the company's increased sales . Inventories increased $341,226 compared to the October 31, 1996 inventory level as a result of purchases to meet higher customer demand. Prepaid expenses and deposits increased $194,609 from October 31, 1996 due to more deposits for inventory purchases. 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, 1997. 8 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 27, 1997 By: /s/ Howard F. Hill ------------------------------------- Howard F. Hill, President Chief Executive Officer Dated: August 27, 1997 By: /s/ Terrie A. Gross ------------------------------------- Terrie A. Gross Chief Financial Officer 9 EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-QSB
5 9-MOS OCT-31-1996 NOV-01-1996 JUL-31-1997 798,047 632,848 798,883 11,596 2,203,082 4,951,982 540,822 408,959 5,126,756 544,595 0 0 0 30,646 4,551,515 5,126,756 5,202,370 5,202,370 2,917,852 4,401,227 0 0 (48,534) 849,677 340,000 509,677 0 0 0 509,677 .16 .16
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