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Business activities and summary of significant accounting policies (Policies)
 12 Months Ended
Oct. 31, 2015
Accounting Policies [Abstract]  
Business activities
Business activities
 
RF Industries, Ltd., together with its three wholly-owned subsidiaries (collectively, hereinafter the “Company”), primarily engages in the design, manufacture, and marketing of interconnect products and systems, including coaxial and specialty cables, fiber optic cables and connectors, and electrical and electronic specialty cables. For internal operating and reporting purposes, and for marketing purposes, as of the end of the fiscal year ended October 31, 2015 the Company classified its operations into the following six divisions/subsidiaries: (i) The Connector and Cable Assembly Division designs, manufactures and distributes coaxial connectors and cable assemblies that are integrated with coaxial connectors; (ii) the Aviel Electronics Division designs, manufactures and distributes specialty and custom RF connectors primarily for aerospace and military customers; (iii) the Bioconnect Division manufactures and distributes cabling and interconnect products to the medical monitoring market; (iv) Cables Unlimited, Inc., the subsidiary that manufactures custom and standard cable assemblies, complex hybrid fiber optic power solution cables, adapters, and electromechanical wiring harnesses for communication, computer, LAN, automotive and medical equipment; (v) Comnet Telecom Supply, Inc. subsidiary that manufactures and sells fiber optics cable, distinctive cabling technologies and custom patch cord assemblies, as well as other data center products; and (vi) the recently acquired Rel-Tech Electronics, Inc. subsidiary is a designer and manufacturer of cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation and military customers. Both the Cables Unlimited division and the Comnet Telecom division are Corning Cables Systems CAH Connections SM Gold Program members that are authorized to manufacture fiber optic cable assemblies that are backed by Corning Cables Systems’ extended warranty.
Use of estimates
Use of estimates 
 
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from those estimates.
Principles of consolidation
Principles of consolidation
 
The accompanying consolidated financial statements for the year ended October 31, 2014 include the accounts of RF Industries, Ltd. and Cables Unlimited, Inc. (“Cables Unlimited”), a wholly-owned subsidiary. The consolidated financial statements for the year ended October 31, 2015 include the accounts of RF Industries, Ltd., Cables Unlimited, Comnet Telecom Supply, Inc. (“Comnet”), a wholly-owned subsidiary that RF Industries, Ltd. acquired effective November 1, 2014, and Rel-Tech Electronics, Inc. (“Rel-Tech”), a wholly-owned subsidiary that RF Industries, Ltd. acquired effective June 1, 2015. For periods ending on or before October 31, 2014, references herein to the “Company” shall refer to RF Industries, Ltd. and Cables Unlimited, and the year ended after October 31, 2015, references to the “Company” shall refer to RF Industries, Ltd., Cables Unlimited, Comnet and Rel-Tech, collectively. All intercompany balances and transactions have been eliminated in consolidation.
Cash equivalents
Cash equivalents
 
The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Revenue recognition
Revenue recognition
 
Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company recognizes revenue from product sales after purchase orders are received which contain a fixed price and the products are shipped. Most of the Company’s products are sold to continuing customers with established credit histories.
Inventories
Inventories
 
Inventories are valued at their weighted average cost. Certain items in inventory may be considered obsolete or excess and, as such, are periodically reviewed for excess and slow moving items and make provisions as necessary to properly reflect inventory value. Because inventories have, during the past few years, represented approximately one-third of the Company’s current assets, any reduction in the value of inventories would require the Company to take write-offs that would affect our net worth and future earnings. In June 2015, the Company acquired Rel-Tech Electronics, Inc. (“Rel-Tech”), a company that currently values inventories using specific identification (last purchase price) on a FIFO basis. The Company intends to convert the inventory valuation principles used by Rel-Tech to the weighted average cost during early fiscal 2016.
Property and equipment
Property and equipment
 
Equipment, tooling and furniture are recorded at cost and depreciated over their estimated useful lives (generally 3 to 5 years) using the straight-line method. Expenditures for repairs and maintenance are charged to operations in the period incurred.
Goodwill
Goodwill
 
Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. Goodwill is not amortized, but is subject to impairment analysis at least once annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. At October 31, 2015, the Company performed a qualitative assessment of factors to determine whether it was necessary to perform further impairment testing. Based on the results of the work performed, the Company concluded that no impairment loss was warranted at October 31, 2015. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events, management expertise and stability at key positions. Additional impairment analyses at future dates may be performed to determine if indicators of impairment are present, and if so, such amount will be determined and the associated charge will be recorded to the Consolidated Statement of Income.  
 
On June 15, 2011, the Company completed its acquisition of Cables Unlimited. Goodwill related to this acquisition is included within the Cables Unlimited reporting unit. Effective November 1, 2014, the Company also completed its acquisition of Comnet. Goodwill related to this acquisition is included within the Comnet reporting unit. As of May 19, 2015, the Company completed its acquisition of the CompPro Product Line. Goodwill related to this acquisition is included within the Connector and Cable Assembly Division. Effective June 1, 2015, the Company completed its acquisition of Rel-Tech. Goodwill related to this acquisition is included within the Rel-Tech reporting unit. No goodwill impairment occurred in 2015 or 2014.
Long-lived assets
Long-lived assets
 
The Company assesses property, plant and equipment and intangible assets, which are considered definite-lived assets for impairment. Definite-lived assets are reviewed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. The Company has made no material adjustments to our long-lived assets in any of the years presented.
 
The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment.
 
In addition, the Company tests our trademarks and indefinite-lived asset for impairment at least annually or more frequently if events or changes in circumstances indicate that these assets may be impaired. No impairments have been identified in any of the years presented.
Earn-out liability
Earn-out liability
 
The purchase agreement for the Comnet and Rel-Tech acquisitions provide for earn-out payments of up to $1,360,000 and $800,000, respectively.  The earn-out liability is valued at its fair value using the Monte Carlo simulation and is included as a component of the total purchase price.  The earn-outs will be revalued quarterly and any resulting increase or decrease will be recorded into selling, general and administrative expenses. Any changes in the assumed timing and amount of the probability of payment scenarios could impact the fair value. Significant judgment is employed in determining the appropriateness of the assumptions used in calculating the fair value of the earn-out as of the acquisition date. Accordingly, changes in the assumptions can materially impact the amount of contingent consideration expense we record in future periods. The Comnet and Rel-Tech acquisitions are more fully described in Note 2 of this report.  
Intangible assets
Intangible assets
 
Intangible assets consist of the following as of October 31 (in thousands): 
 
 
 
2015
 
2014
 
Amortizable intangible assets:
 
 
 
 
 
 
 
Non-compete agreements (estimated lives 3 - 5 years)
 
$
310
 
$
200
 
Accumulated amortization
 
 
(212)
 
 
(135)
 
 
 
 
98
 
 
65
 
 
 
 
 
 
 
 
 
Customer relationships (estimated lives 7 - 15 years)
 
 
5,099
 
 
1,730
 
Accumulated amortization
 
 
(1,101)
 
 
(608)
 
 
 
 
3,998
 
 
1,122
 
 
 
 
 
 
 
 
 
Backlog (estimated life 1 year)
 
 
134
 
 
75
 
Accumulated amortization
 
 
(100)
 
 
(75)
 
 
 
 
34
 
 
-
 
 
 
 
 
 
 
 
 
Patents (estimated life 14 years)
 
 
142
 
 
-
 
Accumulated amortization
 
 
(4)
 
 
-
 
 
 
 
138
 
 
-
 
 
 
 
 
 
 
 
 
Totals
 
$
4,268
 
$
1,187
 
 
 
 
 
 
 
 
 
Non-amortizable intangible assets:
 
 
 
 
 
 
 
Trademarks
 
$
1,387
 
$
410
 
 
Amortization expense for the years ended October 31, 2015 and 2014 was $598,000 and $220,000, respectively.
 
Estimated amortization expense related to finite lived intangible assets is as follows (in thousands):
 
Year ending
 
 
 
 
October 31,
 
Amount
 
 
 
 
 
 
2016
 
$
649
 
2017
 
 
589
 
2018
 
 
553
 
2019
 
 
553
 
2020
 
 
553
 
Thereafter
 
 
1,371
 
Total
 
$
4,268
 
Advertising
Advertising
 
The Company expenses the cost of advertising and promotions as incurred. Advertising costs charged to operations were approximately $152,000 and $147,000 in 2015 and 2014, respectively.
Research and development
Research and development
 
Research and development costs are expensed as incurred. The Company’s research and development expenses relate to its engineering activities, which consist of the design and development of new products for specific customers, as well as the design and engineering of new or redesigned products for the industry in general. During the years ended October 31, 2015 and 2014, the Company recognized $923,000 and $948,000 in engineering expenses, respectively.
Income taxes
Income taxes
 
The Company accounts for income taxes under the asset and liability method, based on the income tax laws and rates in the jurisdictions in which operations are conducted and income is earned. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Developing the provision for income taxes requires significant judgment and expertise in federal, international and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Management’s judgments and tax strategies are subject to audit by various taxing authorities.
 
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.
Stock options
Stock options
 
For stock option grants to employees, the Company recognizes compensation expense based on the estimated fair value of the options at the date of grant. Stock-based employee compensation expense is recognized on a straight-line basis over the requisite service period. The Company issues previously unissued common shares upon the exercise of stock options.
 
For the fiscal years ended October 31, 2015 and 2014, charges related to stock-based compensation amounted to approximately $232,000 and $390,000, respectively. For the fiscal years ended October 31, 2015 and 2014, stock-based compensation classified in cost of sales amounted to $53,000 and $67,000 and stock-based compensation classified in selling, general and engineering expense amounted to $179,000 and $323,000, respectively.
Earnings per share
Earnings per share
 
Basic earnings per share is calculated by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally those issuable upon the exercise of stock options, were issued and the treasury stock method had been applied during the period. The greatest number of shares potentially issuable by the Company upon the exercise of stock options in any period for the years ended October 31, 2015 and 2014, that were not included in the computation because they were anti-dilutive, totaled 792,386 and 328,569, respectively.
 
The following table summarizes the computation of basic and diluted earnings per share:
 
 
 
2015
 
2014
 
Numerators:
 
 
 
 
 
 
 
Consolidated net income (A)
 
$
994,000
 
$
1,439,000
 
 
 
 
 
 
 
 
 
Denominators:
 
 
 
 
 
 
 
Weighted average shares outstanding for basic earnings per share (B)
 
 
8,494,111
 
 
8,215,688
 
Add effects of potentially dilutive securities - assumed exercise of stock options
 
 
368,106
 
 
526,337
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding for diluted earnings per share (C)
 
 
8,862,217
 
 
8,742,025
 
 
 
 
 
 
 
 
 
Basic earnings per share (A)/(B)
 
$
0.12
 
$
0.18
 
 
 
 
 
 
 
 
 
Diluted earnings per share (A)/(C)
 
$
0.11
 
$
0.16
 
Recent accounting standards
Recent accounting standards
 
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers.
 
The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of 2018. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for one year and permits early adoption as early as the original effective date of ASU 2014-09. Accordingly, the Company may adopt the standard in either its first quarter of 2018 or 2019. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the timing of its adoption and the impact of adopting the new revenue standard on its consolidated financial statements.
 
In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,  which eliminates the requirement to retrospectively account for adjustments made to provisional amounts recognized in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs. This guidance will be effective for the Company in its fiscal year ending October 31, 2017. The Company does not expect this amendment to have a significant effect on the consolidated financial statements.