Nevada
|
88-0168936
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
7610 Miramar Road, Building 6000
San Diego, California
|
92126
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer ¨
|
Accelerated filer ¨
|
Non-accelerated filer ¨
|
Smaller reporting company x
|
|
|
January 31,
|
|
October 31,
|
|
||
|
|
2014
|
|
2013
|
|
||
|
|
(Unaudited)
|
|
(Note 1)
|
|
||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
12,777
|
|
$
|
11,881
|
|
Trade accounts receivable, net of allowance for doubtful accounts of $84 and $103
|
|
|
2,521
|
|
|
3,160
|
|
Inventories
|
|
|
6,030
|
|
|
5,995
|
|
Other current assets
|
|
|
960
|
|
|
1,552
|
|
Deferred tax assets
|
|
|
322
|
|
|
322
|
|
TOTAL CURRENT ASSETS
|
|
|
22,610
|
|
|
22,910
|
|
|
|
|
|
|
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
Equipment and tooling
|
|
|
2,508
|
|
|
2,500
|
|
Furniture and office equipment
|
|
|
761
|
|
|
759
|
|
|
|
|
3,269
|
|
|
3,259
|
|
Less accumulated depreciation
|
|
|
2,300
|
|
|
2,206
|
|
Total property and equipment
|
|
|
969
|
|
|
1,053
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
3,076
|
|
|
3,076
|
|
Amortizable intangible assets, net
|
|
|
1,352
|
|
|
1,407
|
|
Non-amortizable intangible assets
|
|
|
410
|
|
|
410
|
|
Note receivable from stockholder
|
|
|
67
|
|
|
67
|
|
Other assets
|
|
|
23
|
|
|
30
|
|
TOTAL ASSETS
|
|
$
|
28,507
|
|
$
|
28,953
|
|
2 | ||
|
|
January 31,
|
|
October 31,
|
|
||
|
|
2014
|
|
2013
|
|
||
|
|
(Unaudited)
|
|
(Note 1)
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
589
|
|
$
|
792
|
|
Accrued expenses
|
|
|
1,178
|
|
|
1,741
|
|
Customer deposit
|
|
|
51
|
|
|
51
|
|
TOTAL CURRENT LIABILITIES
|
|
|
1,818
|
|
|
2,584
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
950
|
|
|
950
|
|
TOTAL LIABILITIES
|
|
|
2,768
|
|
|
3,534
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Common stock - authorized 20,000,000 shares of $0.01 par value; 8,184,887 and 8,075,124 shares issued and outstanding at January 31, 2014 and October 31, 2013, respectively
|
|
|
82
|
|
|
81
|
|
Additional paid-in capital
|
|
|
16,330
|
|
|
15,706
|
|
Retained earnings
|
|
|
9,327
|
|
|
9,632
|
|
TOTAL STOCKHOLDERS' EQUITY
|
|
|
25,739
|
|
|
25,419
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
28,507
|
|
$
|
28,953
|
|
3 | ||
|
|
Three Months Ended January 31,
|
|
||||
|
|
2014
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
5,850
|
|
$
|
9,896
|
|
Cost of sales
|
|
|
3,268
|
|
|
5,331
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2,582
|
|
|
4,565
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Engineering
|
|
|
256
|
|
|
289
|
|
Selling and general
|
|
|
1,987
|
|
|
2,258
|
|
Totals
|
|
|
2,243
|
|
|
2,547
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
339
|
|
|
2,018
|
|
|
|
|
|
|
|
|
|
Other income interest/dividends
|
|
|
7
|
|
|
3
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before provision for income taxes
|
|
|
346
|
|
|
2,021
|
|
Provision for income taxes
|
|
|
82
|
|
|
564
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
264
|
|
|
1,457
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of tax
|
|
|
1
|
|
|
25
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
265
|
|
$
|
1,482
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.03
|
|
$
|
0.21
|
|
Discontinued operations
|
|
|
0.00
|
|
|
0.00
|
|
Net income per share
|
|
$
|
0.03
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.03
|
|
$
|
0.19
|
|
Discontinued operations
|
|
|
0.00
|
|
|
0.00
|
|
Net income per share
|
|
$
|
0.03
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
8,143,640
|
|
|
7,074,095
|
|
Diluted
|
|
|
8,817,351
|
|
|
8,004,166
|
|
4 | ||
|
|
Three Months Ended January 31,
|
|
||||
|
|
2014
|
|
2013
|
|
||
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
265
|
|
$
|
1,482
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Bad debt (recovery) expense
|
|
|
(15)
|
|
|
24
|
|
Accounts receivable write-off
|
|
|
4
|
|
|
-
|
|
Depreciation and amortization
|
|
|
149
|
|
|
159
|
|
Stock-based compensation expense
|
|
|
47
|
|
|
33
|
|
Excess tax benefit from stock-based compensation
|
|
|
(237)
|
|
|
(236)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Trade accounts receivable
|
|
|
650
|
|
|
(636)
|
|
Inventories
|
|
|
(35)
|
|
|
247
|
|
Other current assets
|
|
|
592
|
|
|
(310)
|
|
Other long-term assets
|
|
|
7
|
|
|
-
|
|
Accounts payable
|
|
|
(203)
|
|
|
(373)
|
|
Customer deposit
|
|
|
-
|
|
|
51
|
|
Income taxes prepaid (payable)
|
|
|
237
|
|
|
(41)
|
|
Accrued expenses
|
|
|
(563)
|
|
|
260
|
|
Other long-term liabilities
|
|
|
-
|
|
|
(10)
|
|
Net cash provided by operating activities
|
|
|
898
|
|
|
650
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(10)
|
|
|
(43)
|
|
Net cash used in investing activities
|
|
|
(10)
|
|
|
(43)
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options
|
|
|
341
|
|
|
1,314
|
|
Excess tax benefit from exercise of stock options
|
|
|
237
|
|
|
236
|
|
Dividends paid
|
|
|
(570)
|
|
|
(700)
|
|
Net cash provided by financing activities
|
|
|
8
|
|
|
850
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
896
|
|
|
1,457
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
11,881
|
|
|
5,492
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
12,777
|
|
$
|
6,949
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information income taxes paid
|
|
$
|
-
|
|
$
|
603
|
|
5 | ||
6 | ||
|
|
Three Months Ended January 31,
|
|
||||
|
|
2014
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
8
|
|
$
|
613
|
|
Cost of sales
|
|
|
-
|
|
|
242
|
|
Gross profit
|
|
|
8
|
|
|
371
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
6
|
|
|
329
|
|
Operating income
|
|
|
2
|
|
|
42
|
|
Provision for income taxes
|
|
|
1
|
|
|
17
|
|
Income from discontinued operations, net of tax
|
|
$
|
1
|
|
$
|
25
|
|
|
|
January 31,
2014 |
|
October 31,
2013 |
|
||
|
|
|
|
|
|
|
|
Raw materials and supplies
|
|
$
|
2,006
|
|
$
|
1,913
|
|
Work in process
|
|
|
35
|
|
|
15
|
|
Finished goods
|
|
|
3,989
|
|
|
4,067
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
6,030
|
|
$
|
5,995
|
|
|
|
Three Months Ended January 31,
|
|
||
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
Weighted average shares outstanding for basic earnings per share
|
|
8,143,640
|
|
7,074,095
|
|
|
|
|
|
|
|
Add effects of potentially dilutive securities-assumed exercise of stock options
|
|
673,711
|
|
930,071
|
|
|
|
|
|
|
|
Weighted average shares for diluted earnings per share
|
|
8,817,351
|
|
8,004,166
|
|
7 | ||
|
|
|
2014
|
|
|
|
2013
|
|
Risk-free interest rate
|
|
|
0.69
|
%
|
|
|
0.36
|
%
|
Dividend yield
|
|
|
4.09
|
%
|
|
|
4.45
|
%
|
Expected life of the option
|
|
|
3.5 years
|
|
|
|
3.5 years
|
|
Volatility factor
|
|
|
49.2
|
%
|
|
|
42.5
|
%
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
|
|
Shares
|
|
Exercise Price
|
|
|
Outstanding at November 1, 2013
|
|
988,215
|
|
$
|
2.24
|
|
Options granted
|
|
122,903
|
|
$
|
6.84
|
|
Options exercised
|
|
(109,763)
|
|
$
|
3.12
|
|
Options canceled or expired
|
|
(1,836)
|
|
$
|
4.05
|
|
Options outstanding at January 31, 2014
|
|
999,519
|
|
$
|
2.70
|
|
Options exercisable at January 31, 2014
|
|
658,978
|
|
$
|
1.78
|
|
Options vested and expected to vest at January 31, 2014
|
|
989,331
|
|
$
|
2.67
|
|
8 | ||
9 | ||
|
|
Three Months Ended January 31,
|
|
||||
|
|
2014
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
United States
|
|
$
|
5,448
|
|
$
|
9,436
|
|
Foreign Countries:
|
|
|
|
|
|
|
|
Canada
|
|
|
102
|
|
|
148
|
|
Israel
|
|
|
65
|
|
|
97
|
|
Mexico
|
|
|
122
|
|
|
191
|
|
All Other
|
|
|
113
|
|
|
24
|
|
|
|
|
402
|
|
|
460
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
5,850
|
|
$
|
9,896
|
|
|
|
RF Connector
|
|
|
|
Medical
|
|
|
|
|
|
|
|
|||
|
|
and
|
|
Cables
|
|
Cabling and
|
|
|
|
|
|
|
|
|||
|
|
Cable Assembly
|
|
Unlimited
|
|
Interconnector
|
|
Corporate
|
|
Total
|
|
|||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,972
|
|
$
|
2,127
|
|
$
|
751
|
|
$
|
-
|
|
$
|
5,850
|
|
Income (loss) from continuing operations before provision for income taxes
|
|
|
368
|
|
|
(167)
|
|
|
140
|
|
|
5
|
|
|
346
|
|
Depreciation and amortization
|
|
|
49
|
|
|
92
|
|
|
8
|
|
|
-
|
|
|
149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
3,817
|
|
$
|
5,392
|
|
$
|
687
|
|
$
|
-
|
|
$
|
9,896
|
|
Income from continuing operations before provision for income taxes
|
|
|
551
|
|
|
1,312
|
|
|
157
|
|
|
1
|
|
|
2,021
|
|
Depreciation and amortization
|
|
|
32
|
|
|
86
|
|
|
40
|
|
|
1
|
|
|
159
|
|
10 | ||
|
|
January 31, 2014
|
|
October 31, 2013
|
|
||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
Non-compete agreements (estimated life 5 years)
|
|
$
|
200
|
|
$
|
200
|
|
Accumulated amortization
|
|
|
(105)
|
|
|
(95)
|
|
|
|
|
95
|
|
|
105
|
|
|
|
|
|
|
|
|
|
Customer relationships (estimated life 9.6 years)
|
|
|
1,730
|
|
|
1,730
|
|
Accumulated amortization
|
|
|
(473)
|
|
|
(428)
|
|
|
|
|
1,257
|
|
|
1,302
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
1,352
|
|
$
|
1,407
|
|
|
|
|
|
|
|
|
|
Non-amortizable intangible assets:
|
|
|
|
|
|
|
|
Trademarks
|
|
$
|
410
|
|
$
|
410
|
|
|
|
January 31, 2014
|
|
October 31, 2013
|
|
||
|
|
|
|
|
|
|
|
Wages payable
|
|
$
|
651
|
|
$
|
1,188
|
|
Accrued receipts
|
|
|
426
|
|
|
376
|
|
Other current liabilities
|
|
|
101
|
|
|
177
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
1,178
|
|
$
|
1,741
|
|
11 | ||
· | As of January 31, 2014, the Company had cash and cash equivalents equal to $12.8 million. |
12 | ||
· | As of January 31, 2014, the Company had $22.6 million in current assets and $1.8 million in current liabilities. |
· | As of January 31, 2014, the Company had no outstanding indebtedness (other than accounts payable, accrued expenses and income taxes payable). |
13 | ||
14 | ||
Exhibit
|
|
Number
|
|
31.1:
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2:
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1:
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2:
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
99.1:
|
Press Release dated March 13, 2014 announcing the financial results for the fiscal quarter ended January 31, 2014.
|
|
RF INDUSTRIES, LTD.
|
|
|
|
|
Date: March 13, 2014
|
By:
|
/s/ Howard F. Hill
|
|
|
Howard F. Hill
|
|
|
Chief Executive Officer
|
Date: March 13, 2014
|
By:
|
/s/ Mark Turfler
|
|
|
Mark Turfler
|
|
|
Chief Financial Officer
|
15 | ||
Exhibit 31.1
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Howard F. Hill, certify that:
1. I have reviewed this report on Form 10-Q for the quarter ended January 31, 2014 of RF Industries, Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period for which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 13, 2014 | /s/ Howard F. Hill | |
Howard F. Hill | ||
Chief Executive Officer |
Exhibit 31.2
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Mark Turfler, certify that:
1. I have reviewed this report on Form 10-Q for the quarter ended January 31, 2014 of RF Industries, Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period for which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 13, 2014 | /s/ Mark Turfler | |
Mark Turfler | ||
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of RF Industries, Ltd. (the “Company”) on Form 10-Q for the quarter ended January 31, 2014, as filed with the Securities and Exchange Commission (the “Report”), I, Howard F. Hill, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: March 13, 2014 | /s/ Howard F. Hill | |
Howard F. Hill | ||
Chief Executive Officer |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of RF Industries, Ltd. (the “Company”) on Form 10-Q for the quarter ended January 31, 2014, as filed with the Securities and Exchange Commission (the “Report”), I, Mark Turfler, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: March 13, 2014 | /s/ Mark Turfler | |
Mark Turfler | ||
Chief Financial Officer |
RF INDUSTRIES, LTD. | For Immediate Release |
Investor Contact: | Company Contact: |
John Nesbett/Jennifer Belodeau | Howard Hill, Chief Executive Officer |
Institutional Marketing Services (IMS) | (858) 549-6340 |
(203) 972-9200 | rfi@rfindustries.com |
jnesbett@institutionalms.com |
RF Industries Reports First Fiscal Quarter Results
- As Forecasted, Company Remains Profitable on Lower Sales For The Quarter –
- Quarterly Dividend of $0.07 Per Share–
- Balance Sheet Remains Strong with $12.8 Million in Cash and No Debt -
San Diego, California, March 13, 2014 – RF Industries, Ltd. (NASDAQ: RFIL) announced results for the first fiscal quarter ended January 31, 2014.
RF Industries reported net sales of $5.9 million in the first quarter of fiscal 2014, a decrease of 41% compared to net sales of $9.9 million in the first quarter of fiscal 2013. The Company saw a significant decrease in revenues from its Cables Unlimited subsidiary, where first quarter sales decreased by 61% to $2.1 million. The Company reported operating income of $0.3 million in the first quarter of fiscal 2014 as compared to operating income of $2.0 million in the prior year’s period. Income from continuing operations was $0.3 million or $0.03 per basic and per diluted share in the first quarter of fiscal 2014 as compared to $1.5 million or $0.21 per basic and $0.19 per diluted share in the first quarter of 2013.
At January 31, 2014, RF Industries reported cash and cash equivalents of nearly $13 million, no long term debt, and a current ratio of 12 to 1.
Howard Hill, Chief Executive Officer, commented, “Our reduced first quarter sales and marginal profitability were in line with the guidance we previously provided. We were able to proactively adjust our cost structure to maintain profitability which has been a corporate priority for 20 years. Consolidated revenues in the first quarter of 2014 were impacted by a significant decline in revenues in our Cables Unlimited division as a result of the decrease in demand for its OptiFlex™ fiber optic cabling solution for cell towers. The OptiFlex™ fiber optic cabling solution was specifically developed for wireless service providers who are engaged in upgrading their cell towers to handle 4G technologies. Accordingly, orders for the OptiFlex™ cables will fluctuate as cell towers are upgraded. However, since Cables Unlimited has a reputation as an innovative designer and developer of fiber connectivity solutions, we expect its range of capabilities will result in other leading edge solutions for our existing and new customers. We also experienced softening demand during the most recent quarter in our RF Connector and Cable Assembly division, which resulted in a $0.8 million reduction in net sales as compared to the 2013 fiscal quarter. We believe that the harsh winter weather contributed to the sales decrease at both Cables Unlimited and our RF Connector and Cable Assembly divisions. Sales to date in the second quarter of fiscal 2014 at Cables Unlimited and our RF Connector and Cable Assembly division are below the comparable quarter last year. However, we are optimistic about our long-term prospects from both our existing products as well as the new products we are developing. Our Medical Cabling segment reported a 9% increase in revenues as compared to the first quarter of fiscal 2013, primarily due to increased sales to existing customers.”
“As we’ve stated previously, demand for wireless connectivity is rapidly changing and growing, with consumers expecting full connectivity in almost any location or situation. Our goal is to continue to develop state-of-the-art, customized connectivity solutions for new and existing customers that allow our customers to remain competitive in this space. We have dealt before with ebbs and flows in our business as new products are developed and rolled out, and while we’re not pleased with the revenue decline in our first quarter, we are focusing our efforts to execute on our ability to provide innovative, customized connectivity solutions to meet the needs of the marketplace.”
Mr. Hill further commented, “Our Company has maintained its strong cash position and has no debt, so the cash generated from operations allows us to return capital to our shareholders through dividends such as the one we recently announced, and/or stock repurchases, while also allowing us to consider strategic transactions.”
Conference Call Information
RF Industries will host a conference call today, March 13 at 12:00 noon Eastern Time to discuss its fiscal first quarter 2014 results. To participate, callers should dial (877) 407-9210 and international callers may dial (201) 689-8049. A simultaneous webcast of the conference call can be accessed from the Investor Information page at www.rfindustries.com.
A replay of the call will be available until April 13, 2014 and may be accessed by dialing (877) 660-6853. International callers should call (201) 612-7415. Callers should use conference i.d. 13577047.
About RF Industries
RF Industries is a leading designer and manufacturer of innovative interconnect products and complex cable assemblies across diversified, high growth markets including wireless carriers & infrastructure, medical and industrial. The Company’s products include RF connectors, coaxial and custom cable assemblies, fiber optic cables, wiring harnesses and medical wiring. The Company’s leading edge connectivity solutions are used throughout the growing and evolving wireless infrastructure. The Company has reported 20 consecutive years of profitability and is headquartered in San Diego, California with operations in Las Vegas, Nevada and Yaphank, New York. Please visit the RF Industries website at www.rfindustries.com.
Forward-Looking Statements
This press release contains forward-looking statements with respect to future events which are subject to a number of factors that could cause actual results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to: changes in the telecommunications industry; the operations of the Cables Unlimited division; and the Company’s reliance on certain distributors for a significant portion of anticipated revenues. Further discussion of these and other potential risk factors may be found in the Company’s public filings with the Securities and Exchange Commission (www.sec.gov) including its Form 10-K. All forward-looking statements are based upon information available to the Company on the date they are published and the Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or new information after the date of this release.
(tables attached)
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 12,777 | $ | 11,881 | ||||
Trade accounts receivable, net | 2,521 | 3,160 | ||||||
Inventories | 6,030 | 5,995 | ||||||
Other current assets | 960 | 1,552 | ||||||
Deferred tax assets | 322 | 322 | ||||||
TOTAL CURRENT ASSETS | 22,610 | 22,910 | ||||||
Property and equipment, net | 969 | 1,053 | ||||||
Goodwill | 3,076 | 3,076 | ||||||
Amortizable intangible assets, net | 1,352 | 1,407 | ||||||
Non-amortizable intangible assets | 410 | 410 | ||||||
Note receivable from stockholder | 67 | 67 | ||||||
Other assets | 23 | 30 | ||||||
TOTAL ASSETS | $ | 28,507 | $ | 28,953 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 589 | $ | 792 | ||||
Accrued expenses | 1,178 | 1,741 | ||||||
Customer deposit | 51 | 51 | ||||||
TOTAL CURRENT LIABILITIES | 1,818 | 2,584 | ||||||
Deferred tax liabilities | 950 | 950 | ||||||
TOTAL LIABILITIES | 2,768 | 3,534 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common stock - authorized 20,000,000 shares of $0.01 par value; 8,184,887 and 8,075,124 shares issued and outstanding at January 31, 2014 and October 31, 2013, respectively | 82 | 81 | ||||||
Additional paid-in capital | 16,330 | 15,706 | ||||||
Retained earnings | 9,327 | 9,632 | ||||||
TOTAL STOCKHOLDERS' EQUITY | 25,739 | 25,419 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 28,507 | $ | 28,953 |
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except share and per share amounts)
Three Months Ended January 31, | ||||||||
2014 | 2013 | |||||||
Net sales | $ | 5,850 | $ | 9,896 | ||||
Cost of sales | 3,268 | 5,331 | ||||||
Gross profit | 2,582 | 4,565 | ||||||
Operating expenses: | ||||||||
Engineering | 256 | 289 | ||||||
Selling and general | 1,987 | 2,258 | ||||||
Totals | 2,243 | 2,547 | ||||||
Operating income | 339 | 2,018 | ||||||
Other income – interest/dividends | 7 | 3 | ||||||
Income from continuing operations before provision for income taxes | 346 | 2,021 | ||||||
Provision for income taxes | 82 | 564 | ||||||
Income from continuing operations | 264 | 1,457 | ||||||
Income from discontinued operations, net of tax | 1 | 25 | ||||||
Net income | $ | 265 | $ | 1,482 | ||||
Earnings per share | ||||||||
Basic | ||||||||
Continuing operations | $ | 0.03 | $ | 0.21 | ||||
Discontinued operations | 0.00 | 0.00 | ||||||
Net income per share | $ | 0.03 | $ | 0.21 | ||||
Earnings per share | ||||||||
Diluted | ||||||||
Continuing operations | $ | 0.03 | $ | 0.19 | ||||
Discontinued operations | 0.00 | 0.00 | ||||||
Net income per share | $ | 0.03 | $ | 0.19 | ||||
Weighted average shares outstanding | ||||||||
Basic | 8,143,640 | 7,074,095 | ||||||
Diluted | 8,817,351 | 8,004,166 |
Components of Intangible Assets (Detail) (USD $)
|
Jan. 31, 2014
|
Oct. 31, 2013
|
---|---|---|
Intangible Assets [Line Items] | ||
Amortizable intangible assets, net | $ 1,352,000 | $ 1,407,000 |
Non-amortizable intangible assets, trade marks | 410,000 | 410,000 |
Non-compete agreements (estimated life 5 years)
|
||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 200,000 | 200,000 |
Amortizable intangible assets, accumulated amortization | (105,000) | (95,000) |
Amortizable intangible assets, net | 95,000 | 105,000 |
Customer relationships (estimated life 9.6 years)
|
||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 1,730,000 | 1,730,000 |
Amortizable intangible assets, accumulated amortization | (473,000) | (428,000) |
Amortizable intangible assets, net | $ 1,257,000 | $ 1,302,000 |
21\0\QMW]0ZD1>J*FQ6^CL?I+^^QP1&WT:8>*JB2>Q(][A;D-JQVB8+K'
M$'/;*[5^TRLM^^_?E/P_8&CB.,=B+=83@8'7#^*U"$[O0E3?9L6_\T'\ZS$K
M,'@G1L1S`T\[):D"">W0LV.Y`E7>K%L`IA[Z$9B>4,0(>1$)75\SF`]/.(V`
MV+9'`KE(E(?#$9P=5+0YT)2696OD[,P''P0R?/@M#F42&,KT$PQK*,!,Y)0=
MZ(^L.11U:Y1T#X_:"SZ^:'"J@A\Z=NK_=]^R#J8A_8]'F'Y1N"P#O&>NN
M'_BT8)BG;?X'``#__P,`4$L#!!0`!@`(````(0`@U6^N&00``-D0```9````
M>&PO=V]R:W-H965T `A3]/2BL59GEDP>`FJ_\7SE`V *AUCRH
M17HIJ`7D\G4=3>9+_Q7BG[::S5`3VHKM!<7L+/&![PP)V^M"CL,I,6S"=?[#
M38.SK][`QFCBCB:Q%=LQA<4[J>38E7+GB?V>+(?O#&2&8ZJBA*H$WTX+>6
M(@ZF786%!OOKHEV76[7(1HRFJ,=H-!/-&"-X?A]Q1&`10M'?3J@6V81AW" >F2U-;T8#U'\8YE=*#(54@ *^]T=[_DT_HU(^V]CX6U"`OZF "O41:T-"`BV;>MZ<"#BT-[WIKN8C)?3ET;S(UG
MTK11025-(W]MVJK\FQG97(J)N%P$KES$F4U6\_ELL5J"RIV1,SX2K/C(^_8+
M;@_7#SYIR4?"]:$GP03I`@-7;K^>+.WIVOV!1VL^#JZ/O:'%,M(E.,C:;+>I
MJW<#9@W$O+EE=`[:'JAA9EDT^US_6ZHAQU3DB:IL3?`:LMA`?;[MG,5B8[U!
M3>7NX46G;VV>Z%ACMK7"CZ;#`9/X`&X$$*?%V;B]Q_B[7\```#_
M_P,`4$L#!!0`!@`(````(0!ZBU6GE@0``$\3```9````>&PO=V]R:W-H965T
M?7WWSU
M53V\*B9YO55=%U.>7%2S23[GS]GE5_7UK,A']551S"?CKW:WMY]]-X]8BA=RF+,
MR\U(8[JG+)L$4K<>P2)RC#MF0!/UI-S*7)B7LD!RX;8+.[
M]?*9X\B>F=.M#=$B-I#=6UJ6YU:7VUD`)?PZF1PI:=6.4&.V>96/E^,:O"$*
MHDM5M3?XI$)V7"4K^W_7GNQN9G>.<3+-WE`)0E6<#[3:9>OZ7%>L[_12%7;)
MW4KM[/E8)5XQEY`-<+(.2[X.J,PG&K/BV'K./MI'W7PW=M:'#W50AFHI17Y^
MKOB[>O1PW;P%9]7&_*=TA($[90^TYUCM<(*FO\K%D+YMF<6H
MO4+DXQ\6;EAIP1[Y.V\RCH*:INTMM[D2ZA\2F(@SRQX[=G&,O)']-#C,'O9#
M;':?A&N33C6(0$M/WN?.I;@+P61Y/:FJJB4W.G4!/UQR0$*1H/$IT%_)W"_U
M%;,W[JL)`+W%%+\=&$AD>7:CS['%O$&Z9#(L;YR!/%(X.GUL#!P<&CA65VYO
M4(\^3QOB&[OO\YW&RPO2)J(NA?,?LIBU[U)"ZT_?Z;=8"X*4,-W(7AT>'[@P
M-VIL%:AK.UVQ0L%EWAP$#I7.Z90>A4/KZ0-'*^^+;F1V/3D?0>K3RC7LAX=:
MG+R<=[UCN8$OIUO,(QW7X:G.K-(IJTC9F"1]\"JMD"8`KQO.TW;_Z"#1G20)
M@25\>57$DUEI!UC6$0:7&>YR/I*+"5EU<3QLFBXU/0R5/K_["%/ZAH^968%9
M#*;]"@6`N2HR%X%;M_!NX*Y55$4FMO$09;[\,U]]WK3LW]G_TZH"Q'3-(8:F
M3-875>"E'`6#?!TVM
M+$6:]?Y&K9/1+(#LXS+M;K51K;OX`OWU)9E;G4ZGT4IEL40-R#[6E_`;U69]
M>\W!&Y#%-Y;P]
X?FRDL$3I2.'ZH9'ZW`^N=XW48B5!*RPJAF+[T+5O!BQ;F//^6I!-
MP`Y`3)06JX.QV+Y7:U!D1.21J&Q,B!ZJJ(<%\KJUW?6#]0I%77*;W0T;U2(4
M%J2"B6RD@U@'B0Y2'60ZR"5@01+&3$!=_X),$!62"1'#3H`I-8X6MK`0+I$.
M8ATD.DAUD.D@EX`2-JS*7Q`V4=F8\*]4`+X:YX[;P.(:C1:J23B:C+E`)$8D
M021%)$,DEXF2$=AN?D%&B`HL*GC*&"U>$\S(?2\EH\F8$D1B1!)$4D0R1'*9
M*"F!C51.R>T7C]@,B#&-7(QXQXBK[`_>7)O[T4BX18C$B"2(I(ADB.0R40*%
MF;@_4&*L!LJ(NQZ7?XA(A$B,2()(BDB&2"X3)2I(O!P5V>2=Q0R2\,%MGNBH
M`3,"`4M5[MG:S(Y&X\PB$B.2()(BDB&2RT3)`6F&I1?=^R5,C-5`&9%G%I$(
MD1B1!)$4D0R17"9*5/#*OC\J8JQ&Q8CG3?6*2#02>8JU=U@\&HDI3A!)1R(+
MN6JM9*.1$,IEHL1N0R,M!\]ZEQEI:8=373[O6JAS>-O?F&H7>A3>N1`1-2E4
M=V/*6<$HXLCU:+OCS&U/C22>#$0H"99))RO2-8&,GI#)0,CDBHR:$M+4EV\L)3W@<6O-[SA!^/C955;^(RDX$G]?^5%ZTQ7+1VMY).'X![SE.Z
MY]_3>I^7C77D.UCJ3L659"UO2N6'MCIU]W$O50LWG-V?![C1YG!]Z$X!O*NJ
M]O)!W`#V=^2;_P$``/__`P!02P,$%``&``@````A``UW8,+``P``0PX``!D`
M``!X;"]W;W)K
K[I4;P6.H8">?V_,3`P7OI9K6:X`;WC26.D='Q25=ON\'I
M._F&('@L%2*+_A+V9L)\")=02UO)3[)I'!%FCW<_@6LU1(>QM$UP_\OX(MOV
MXXH-'V!<=+R2W[BM5.M((TN@G$4KZ)X-`R
IFC$;4IP)$MI^LFXQ5
MVZQ[?7[X$*$,*<>(KBHGKG*G->`3)LJ0\@315>6IL3*K;+?/%MD9JI#P'-%5
MX04)TXHCZR;4(OD5HJOR:V-E8BV_"LA0IE1VNQ$_D'IWW=229U,&.0MKGQ6?
M8S2BL1`@HK$0(M++1X>7L!%>)Y48$:DD!IF"TH/W7-RO^5/T(9D)(I*9(C)K
M64?T"QT*:PJ;HPNI+!`9%;C:=L.O;CR-;/(B'U2P59'1@[I3,VE5OA8XA
MAR(.Q1Q*.)1R:,VAC0&9-(@>[0,TR);.H$'O\MJ&927>`X0\^I4JY%#$H9A#
M"8=2#JTYM#$@LV;1KGV@9MG=&34K2&O`'`:%'(HX%"O(`X'UBS_]>)#T5BBC
MU(AE%BAZ+BP0-JAWI*TZ-%W:>M.FQI1!H<.@B$.Q@DA]I--(>JN^/CV\69]H
ME+3Z/M55.ZK;TLM6D#ZL#`K1$42N#1A9(B.TZF/%"AJ;(TT6C*2WZIG0'\)D
M0C0]&A/OC+1LD0PE*P@R:,6PG5E9]4U%Z$@(/H.(KGD6!*[#*&!>L?(2WR+[
M=&/BF*"5[,CA,Z1GZW_(AI\J<[@`8P8]HJ.ZG9[6VNSR%&0V+E/R%6>%5GWC
M$"K(DR4XKCNS20<2<:\8(:.;8/2@E6Q*)E9`)E.*!NWSF(2(WNQFO8BRR6L#
M0J9>2,^_0BM-+PKR[%8O=XX]FTX8(RI?[Q9C)",?9T0Z0MU"C&/+H1+!,!TR0@RKN:0F4AUOX4NIM*06
MMKHBIM.<%OZ0;$@RFZ5$4M'BP)#I*1RJ+`7C-XH=)6]M(-&\H1;\-[7HS#.;
M9%/H)-6'8W?!E.R`8B\:89\\*4:297=5JS3=-Q#W8[R@[)G;;U[12\&T,JJT
M$="1X.CKF*_(%0&FS;H0$(%+.]*\S/$VSG:7F&S6/C^_!#^9LW=D:G7ZK$7Q
M5;0
A`15);>8T>[4_),;^_6
M2\1G);G*2YH3NB:44