x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada
|
88-0168936
|
|
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large Accelerated Filer
|
¨
|
|
Accelerated Filer
|
¨
|
|
Non-accelerated Filer
|
¨
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
x
|
ITEM 1.
|
BUSINESS
|
ITEM 1.A
|
RISK FACTORS
|
|
·
|
reduced control over delivery schedules and quality;
|
|
·
|
risks of inadequate manufacturing yields and excessive costs;
|
|
·
|
the potential lack of adequate capacity during periods of excess demand; and
|
|
·
|
potential increases in prices due to raw material and/or labor costs.
|
|
·
|
rapidly changing technologies;
|
|
·
|
evolving and competing industry standards;
|
|
·
|
short product life cycles;
|
|
·
|
changing customer needs;
|
|
·
|
emerging competition;
|
|
·
|
frequent new product introductions and enhancements; and
|
|
·
|
rapid product obsolescence.
|
|
·
|
product quality;
|
|
·
|
reliability;
|
|
·
|
customer support;
|
|
·
|
time-to-market;
|
|
·
|
price;
|
|
·
|
market acceptance of competitors’ products; and
|
|
·
|
general economic conditions.
|
·
|
longer accounts receivable payment cycles;
|
·
|
difficulty in enforcing agreements and in collecting accounts receivable;
|
·
|
tariffs and other restrictions on foreign trade;
|
·
|
economic and political instability; and the
|
·
|
burdens of complying with a wide variety of foreign laws.
|
|
·
|
diversion of management’s attention;
|
|
·
|
the effect on the Company’s financial statements of the amortization of acquired intangible assets;
|
|
·
|
the cost associated with acquisitions and the integration of acquired operations;
|
|
·
|
the Company may not be able to secure capital to finance future acquisitions to the extent additional debt or equity is needed; and
|
|
·
|
assumption of unknown liabilities, or other unanticipated events or circumstances.
|
·
|
any shortfall in revenues or net income from revenues or net income expected by securities analysts
|
·
|
fluctuations in the Company’s financial results or the results of other connector and communications-related companies, including those of the Company’s direct competitors
|
·
|
changes in analysts’ estimates of the Company’s financial performance, the financial performance of the Company’s competitors, or the financial performance of connector and communications-related public companies in general
|
·
|
general conditions in the connector and communications industries
|
·
|
changes in the Company’s revenue growth rates or the growth rates of the Company’s competitors
|
·
|
sales of large blocks of the Company’s common stock
|
·
|
conditions in the financial markets in general
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
DESCRIPTION OF PROPERTY
|
|
(i)
|
The cable assembly manufacturing portion of the Connector and Cable Assembly Division operates in a separate 3,180 square foot facility that is located adjacent to the Company’s corporate headquarters. The lease for this space expires on March 31, 2014.
|
|
(ii)
|
The Neulink and RadioMobile Divisions operate from a separate building that is located near the Company’s corporate headquarters at 7606 Miramar Road, Building 7200. The building consists of approximately 2,500 square feet of administrative and manufacturing space and houses the production and sales staff of the Neulink and RadioMobile divisions. The lease for this space expires on March 31, 2014.
|
|
(iii)
|
During fiscal 2009, Aviel entered into a facility lease agreement for approximately 4,500 square feet at 3060 Post Road, Suite 100 Las Vegas Nevada. The lease term commenced September 1, 2009 and will expire March 31, 2015.
|
|
(iv)
|
The Oddcables.com Division leases an approximately 4,000 square foot facility located at 7642 Clairemont Mesa Boulevard Suite 211, San Diego, California. The lease for this space expires December 31, 2013.
|
|
(v)
|
The Cables Unlimited Division leases an approximately 12,000 square foot facility located at 3 Old Dock Road, Yaphank, New York. The lease for this space expires June 30, 2016. However, Cables Unlimited has a one time option to extend the term of the Lease for an additional five (5) year term. Cables Unlimited’s monthly rent expense under the lease is $13,000 per month, plus payments of all utilities, janitorial expenses, routine maintenance costs, and costs of insurance for Cables Unlimited’s business operations and equipment. The landlord is a company controlled by Darren Clark, the former owner of Cables Unlimited and a current director of the Company.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
RESERVED
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Quarter
|
High
|
Low
|
||||||
Fiscal 2011
|
||||||||
November 1, 2010 - January 31, 2011
|
$ | 3.65 | $ | 3.00 | ||||
February 1, 2011 - April 30, 2011
|
4.39 | 3.63 | ||||||
May 1, 2011 - July 31, 2011
|
4.48 | 3.50 | ||||||
August 1, 2011 - October 31, 2011
|
4.46 | 2.99 | ||||||
Fiscal 2010
|
||||||||
November 1, 2009 - January 31, 2010
|
$ | 2.43 | $ | 2.02 | ||||
February 1, 2010 - April 30, 2010
|
2.70 | 2.25 | ||||||
May 1, 2010 - July 31, 2010
|
2.92 | 2.45 | ||||||
August 1, 2010 - October 31, 2010
|
3.50 | 2.60 |
A
|
B
|
C
|
||||||||||
Plan Category
|
Number of Securities to
be Issued Upon Exercise
of Outstanding Options
|
Weighted Average
Exercise Price of
Outstanding Options ($)
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column A)
|
|||||||||
Equity Compensation Plans Approved by Stockholders (1)
|
1,191,948 | $ | 3.02 | 640,583 | ||||||||
Equity Compensation Plans Not Approved by Stockholders (2)
|
907,724 | $ | 0.90 | 0 | ||||||||
Total
|
2,099,672 | $ | 2.13 | 640 ,583 |
(1)
|
Consists of options granted under the R.F. Industries, Ltd. (i) 2010 Stock Option Plan and (ii) 2000 Stock Option. The 2000 Stock Option Plan has expired, and no additional options can be granted under this plan. Accordingly, all 640,583 shares remaining available for issuance represent shares under the 2010 Stock Option Plan.
|
(2)
|
Consists of options granted to six officers and/or key employees of the Company under employment agreements entered into by the Company with each of these officers and employees.
|
2011
|
2010
|
|||||||||||||||
Amount
|
% Total Assets
|
Amount
|
% Total Assets
|
|||||||||||||
Cash and cash equivalents and certificates of deposit
|
$ | 5,855,540 | 24.0 | % | $ | 9,306,454 | 48.7 | % | ||||||||
Current assets
|
16,413,206 | 67.3 | % | 17,533,406 | 91.8 | % | ||||||||||
Current liabilities
|
3,494,849 | 14.3 | % | 1,879,213 | 9.8 | % | ||||||||||
Working capital
|
12,918,357 | 53.0 | % | 15,654,193 | 81.9 | % | ||||||||||
Property and equipment - net
|
2,442,738 | 10.0 | % | 530,327 | 2.8 | % | ||||||||||
Total assets
|
24,377,946 | 100.0 | % | 19,109,363 | 100.0 | % | ||||||||||
Stockholders’ equity
|
19,678,028 | 80.7 | % | 16,913,960 | 88.5 | % |
|
·
|
As of October 31, 2011, the amount of cash and cash equivalents and short-term certificates of deposit was equal to $5,855,540 in the aggregate. Accordingly, the Company believes that it has sufficient cash available to operate its current business and fund its anticipated capital expenditures for the upcoming year.
|
|
·
|
As of October 31, 2011, the Company had $16,413,206 in current assets and $3,494,849 in current liabilities.
|
2011
|
2010
|
|||||||||||||||
Amount
|
% of Net
Sales
|
Amount
|
% of Net
Sales
|
|||||||||||||
Net sales
|
$ | 19,433,503 | 100 | % | $ | 16,322,178 | 100 | % | ||||||||
Cost of sales
|
10,097,130 | 52 | % | 8,158,798 | 50 | % | ||||||||||
Gross profit
|
9,336,373 | 48 | % | 8,163,380 | 50 | % | ||||||||||
Engineering expenses
|
1,246,758 | 6 | % | 887,865 | 5 | % | ||||||||||
Selling and general expenses
|
6,953,510 | 36 | % | 5,133,967 | 31 | % | ||||||||||
Goodwill impairment
|
- | - | 137,328 | 1 | % | |||||||||||
Operating income
|
1,136,105 | 6 | % | 2,004,220 | 12 | % | ||||||||||
Other income/expense, net
|
15,738 | 0 | % | 86,614 | 1 | % | ||||||||||
Income before income taxes
|
1,151,843 | 6 | % | 2,090,834 | 13 | % | ||||||||||
Income taxes
|
378,832 | 2 | % | 870,587 | 5 | % | ||||||||||
Net income
|
773,011 | 4 | % | 1,220,247 | 8 | % |
ITEM 7A.
|
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
STATEMENTS AND SUPPLEMENTARY DATA
|
|
·
|
Report of J.H. Cohn LLP, Independent Registered Public Accounting Firm
|
|
·
|
Consolidated Balance Sheets as of October 31, 2011 and 2010
|
|
·
|
Consolidated Statements of Income for the years ended October 31, 2011 and 2010
|
|
·
|
Consolidated Statements of Stockholders’ Equity for the years ended October 31, 2011 and 2010
|
|
·
|
Consolidated Statements of Cash Flows for the years ended October 31, 2011 and 2010
|
|
·
|
Notes to Consolidated Financial Statements
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
Age
|
Director Since
|
||
Darren Clark
|
44
|
2011
|
||
Marvin H. Fink
|
75
|
2001
|
||
Howard F. Hill
|
71
|
1979
|
||
William Reynolds
|
76
|
2005
|
||
David Sandberg
|
38
|
2011
|
||
Randall Waterfield
|
38
|
2011
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)(3)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||||||
Howard F. Hill
|
||||||||||||||||||||||||||||||||||
Chief Executive
|
2011
|
226,512 | 80,000 | - | 11,151 | - | - | 43,358 | (1) | 361,021 | ||||||||||||||||||||||||
Officer and Director
|
2010
|
211,292 | 50,000 | - | 7,422 | - | - | 45,877 | 314,591 | |||||||||||||||||||||||||
James S. Doss
|
||||||||||||||||||||||||||||||||||
President Chief Financial Officer
|
2011
|
140,619 | - | - | 31,755 | - | - | 17,102 | (2) | 189,475 | ||||||||||||||||||||||||
2010
|
111,624 | 25,000 | - | 29,524 | - | - | 10,972 | 177,120 |
Name
|
Grant Date
|
All Other
Option Awards
(# of Shares)
|
Exercise Price of
Option Awards
($/Share)(1)
|
Grant Date
Fair Value of
Option Awards
($)(2)
|
||||||||||
Howard F. Hill
|
||||||||||||||
Chief Executive Officer
|
12/10/10
|
4,000 | 3.14 | 3,995 | ||||||||||
10/31/11
|
4,000 | 3.16 | 3,279 | |||||||||||
James Doss
|
||||||||||||||
President and Chief Financial Officer
|
12/10/10
|
4,000 | 3.14 | 3,995 | ||||||||||
10/31/11
|
2,000 | 3.16 | 1,639 |
Option Awards
|
||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#) Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#) Unexercisable
|
Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised
Unearned Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
|||||||||
Howard Hill
|
370,408 | 0.05 |
___
|
|||||||||||
Howard Hill
|
12,000 | 3.75 |
10/31/16
|
|||||||||||
Howard Hill
|
4,000 | 3.78 |
10/31/17
|
|||||||||||
Howard Hill
|
8,000 | 3.78 |
10/31/17
|
|||||||||||
Howard Hill
|
5,334 | 2.25 |
10/31/13
|
|||||||||||
Howard Hill
|
5,334 | 2,666 | (1) | 2.025 |
10/31/14
|
|||||||||
Howard Hill
|
4,000 | 2.245 |
01/21/15
|
|||||||||||
Howard Hill
|
2,666 | 5,334 | (2) | 3.40 |
10/31/15
|
|||||||||
Howard Hill
|
4,000 | 3.14 |
12/10/15
|
|||||||||||
Howard Hill
|
4,000 | (3) | 3.16 |
10/31/16
|
||||||||||
James Doss
|
32,832 | 3.78 |
10/31/17
|
|||||||||||
James Doss
|
33,000 | 3.78 |
10/31/17
|
|||||||||||
James Doss
|
2,666 | 2.25 |
10/31/13
|
|||||||||||
James Doss
|
2,666 | 1,334 | (4) | 2.025 |
10/31/14
|
|||||||||
James Doss
|
23,310 | 140,000 | (5) | 2.025 |
10/31/19
|
|||||||||
James Doss
|
1,334 | 2,666 | (6) | 3.40 |
10/31/15
|
|||||||||
James Doss
|
4,000 | 3.14 |
12/10/15
|
|||||||||||
James Doss
|
2,000 | (7) | 3.16 |
10/31/16
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Name and Address of Beneficial Owner
|
Number of Shares
(1)
Beneficially Owned
|
Percentage
Beneficially Owned
|
||||||
Howard H. Hill
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
|
491,242 | (2) | 6.7 | % | ||||
James Doss
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
|
102,308 | (3) | 1.5 | % | ||||
David Sandberg
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
|
624,510 | (4) | 9.0 | % | ||||
Randall Waterfield
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
|
41,534 | 0.6 | % | |||||
Marvin H. Fink
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
|
52,000 | (5) | 0.7 | % | ||||
William Reynolds
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
|
60,705 | (6) | 0.9 | % | ||||
Darren Clark
3 Old Dock Road,
Yaphank, NY 11980
|
777,738 | (7) | 11.2 | % | ||||
All Directors and Officers as a Group (7 Persons)
|
2,150,037 | (8) | 30.6 | % |
Name and Address of Beneficial Owner
|
Number of Shares
(1)
Beneficially Owned
|
Percentage
Beneficially Owned
|
||||||
Hytek International, Ltd
PO Box 10927 APO
George Town
Cayman Islands
|
901,860 | 13.0 | % | |||||
Red Oak Partners, LLC
654 Broadway, Suite 5, New York,
New York 10012
|
624,510 | (9) | 9.0 | % |
|
(1)
|
Shares of Common Stock, which were not outstanding but which could be acquired upon exercise of an option within 60 days from the date of this filing, are considered outstanding for the purpose of computing the percentage of outstanding shares beneficially owned. However, such shares are not considered to be outstanding for any other purpose.
|
|
(2)
|
Includes 415,742 shares that Mr. Hill has the right to acquire upon exercise of options exercisable within 60 days.
|
|
(3)
|
Includes 99,808 shares that Mr. Doss has the right to acquire upon exercise of options exercisable within 60 days.
|
|
(4)
|
Represents shares owned by Red Oak Partners, LLC, a New York limited liability company, The Red Oak Fund, LP, a Delaware limited partnership, and Pinnacle Fund LLLP, a Colorado limited liability limited partnership. Red Oak Partners, LLC is the general partner of The Red Oak Fund, LP and a managing member of Pinnacle Fund LLLP. David Sandberg, is the controlling member of Red Oak Partners, LLC.
|
|
(5)
|
Includes 20,000 shares that Mr. Fink has the right to acquire upon exercise of options exercisable within 60 days.
|
|
(6)
|
Includes 44,000 shares, which Mr. Reynolds has the right to acquire upon exercise of options exercisable within 60 days.
|
|
(7)
|
Includes 15,000 shares, which Mr. Clark has the right to acquire upon exercise of options exercisable within 60 days.
|
|
(8)
|
Includes 579,550 shares, which the directors and officers have the right to acquire upon exercise of options exercisable within 60 days.
|
|
(9)
|
Information is based on a report on Schedule 13G (Amendment No. 2) filed on July 7, 2011.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Fee Category
|
2011
|
2010
|
||||||
Audit Fees
|
$ | 161,000 | $ | 146,000 | ||||
Audit-Related Fees
|
189,000 | - | ||||||
Total Fees
|
$ | 350,000 | $ | 146,000 |
ITEM 15.
|
EXHIBITS
|
31.2
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
|
32.2
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350
|
99.1
|
Press release issued January 27, 2012 announcing the financial results for fiscal year ended October 31, 2011
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets
|
|
October 31, 2011 and 2010
|
F-3 & F-4
|
Consolidated Statements of Income
|
|
Years Ended October 31, 2011 and 2010
|
F-5
|
Consolidated Statements of Stockholders’ Equity
|
|
Years Ended October 31, 2011 and 2010
|
F-6
|
Consolidated Statements of Cash Flows
|
|
Years Ended October 31, 2011 and 2010
|
F-7
|
Notes to Consolidated Financial Statements
|
F-8-F-22
|
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents ($420,663 for settlement of VIE obligations)
|
$ | 1,760,816 | $ | 4,728,884 | ||||
Restricted cash (all related to VIE)
|
66,926 | - | ||||||
Certificates of deposit
|
4,094,724 | 4,577,570 | ||||||
Trade accounts receivable, net of allowance for doubtful accounts of $102,736 and $75,734 ($809,120 for settlement of VIE obligations)
|
2,605,965 | 2,557,822 | ||||||
Inventories ($487,687 for settlement of VIE obligations)
|
6,189,601 | 4,607,843 | ||||||
Other current assets ($33,263 for settlement of VIE obligations)
|
511,832 | 448,187 | ||||||
Prepaid income taxes
|
572,642 | - | ||||||
Deferred tax assets ($42,100 for settlement of VIE obligations)
|
610,700 | 613,100 | ||||||
Total current assets
|
16,413,206 | 17,533,406 | ||||||
Equipment and furnishings:
|
||||||||
Land and building ($1,548,100 of collateral for VIE obligations)
|
1,548,100 | - | ||||||
Equipment and tooling ($305,399 for settlement of VIE obligations)
|
2,938,388 | 2,434,176 | ||||||
Furniture and office equipment ($16,150 for settlement of VIE obligations)
|
575,586 | 508,221 | ||||||
5,062,074 | 2,942,397 | |||||||
Less accumulated depreciation
|
2,619,336 | 2,412,070 | ||||||
Total equipment and furnishings
|
2,442,738 | 530,327 | ||||||
Goodwill
|
3,076,023 | - | ||||||
Amortizable intangible assets, net
|
1,866,171 | - | ||||||
Non-amortizable intangible assets
|
410,000 | - | ||||||
Note receivable from stockholder
|
66,980 | 66,980 | ||||||
Long-term investments in certificates of deposit
|
- | 946,491 | ||||||
Other assets ($70,668 for settlement of VIE obligations)
|
102,828 | 32,159 | ||||||
Total assets
|
$ | 24,377,946 | $ | 19,109,363 |
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 521,174 | $ | 537,850 | ||||
Accrued expenses
|
1,579,445 | 1,217,454 | ||||||
Mortgages payable ($1,394,230 recourse limited to VIE creditors)
|
1,394,230 | - | ||||||
Income taxes payable
|
- | 123,909 | ||||||
Total current liabilities
|
3,494,849 | 1,879,213 | ||||||
Deferred tax liabilities
|
1,072,202 | 18,800 | ||||||
Other long-term liabilities
|
132,867 | 297,390 | ||||||
Total liabilities
|
4,699,918 | 2,195,403 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Common stock - authorized 200,000,000 shares at $.01 par value; 7,110,507 and 5,861,764 shares issued and outstanding
|
71,105 | 58,618 | ||||||
Additional paid-in capital
|
11,382,605 | 6,996,656 | ||||||
Retained earnings
|
8,010,701 | 9,858,686 | ||||||
Total RF Industries, Ltd. and Subsidiary
|
19,464,411 | 16,913,960 | ||||||
Noncontrolling interest
|
213,617 | - | ||||||
Total equity
|
19,678,028 | 16,913,960 | ||||||
Total liabilities and stockholders’ equity
|
$ | 24,377,946 | $ | 19,109,363 |
2011
|
2010
|
|||||||
Net sales
|
$ | 19,433,503 | $ | 16,322,178 | ||||
Cost of sales
|
10,097,130 | 8,158,798 | ||||||
Gross profit
|
9,336,373 | 8,163,380 | ||||||
Operating expenses:
|
||||||||
Engineering
|
1,246,758 | 887,865 | ||||||
Selling and general
|
6,953,510 | 5,133,967 | ||||||
Goodwill impairment
|
- | 137,328 | ||||||
Totals
|
8,200,268 | 6,159,160 | ||||||
Operating income
|
1,136,105 | 2,004,220 | ||||||
Other income/(expense)
|
||||||||
Interest income
|
44,542 | 86,614 | ||||||
Interest expense
|
(28,804 | ) | - | |||||
Other income, net
|
15,738 | 86,614 | ||||||
Income before provision for income taxes
|
1,151,843 | 2,090,834 | ||||||
Provision for income taxes
|
378,832 | 870,587 | ||||||
Consolidated net income
|
773,011 | 1,220,247 | ||||||
Net loss attributable to noncontrolling interest
|
(2,727 | ) | - | |||||
Net income attributable to RF Industries, Ltd. and Subsidiary
|
$ | 775,738 | $ | 1,220,247 | ||||
Earnings per share:
|
||||||||
Basic
|
$ | .12 | $ | .21 | ||||
Diluted
|
$ | .11 | $ | .19 |
Common Stock
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Total RF
Industries, Ltd
and Subsidiary
|
Noncontrolling
Interest
|
Total Equity
|
||||||||||||||||||||||
Balance, November 1, 2009
|
5,696,626 | $ | 56,966 | $ | 6,473,964 | $ | 8,722,552 | $ | 15,253,482 | $ | - | $ | 15,253,482 | |||||||||||||||
Net income
|
- | - | - | 1,220,247 | 1,220,247 | - | 1,220,247 | |||||||||||||||||||||
Stock based compensation expense
|
- | - | 231,000 | - | 231,000 | - | 231,000 | |||||||||||||||||||||
Stock issuance related to contingent liability
|
5,230 | 52 | 9,949 | - | 10,001 | - | 10,001 | |||||||||||||||||||||
Exercise of stock options
|
159,908 | 1,600 | 203,508 | - | 205,108 | - | 205,108 | |||||||||||||||||||||
Excess tax benefit from exercise of stock options
|
- | - | 78,235 | - | 78,235 | - | 78,235 | |||||||||||||||||||||
Dividends
|
- | - | - | (84,113 | ) | (84,113 | ) | - | (84,113 | ) | ||||||||||||||||||
Balance, October 31, 2010
|
5,861,764 | 58,618 | 6,996,656 | 9,858,686 | 16,913,960 | - | 16,913,960 | |||||||||||||||||||||
Net income
|
- | - | - | 775,738 | 775,738 | (2,727 | ) | 773,011 | ||||||||||||||||||||
Stock based compensation expense
|
- | - | 312,311 | - | 312,311 | - | 312,311 | |||||||||||||||||||||
Stock issuance for acquisition of business
|
762,738 | 7,627 | 2,792,373 | - | 2,800,000 | - | 2,800,000 | |||||||||||||||||||||
Exercise of stock options
|
517,817 | 5,178 | 976,575 | - | 981,753 | 981,753 | ||||||||||||||||||||||
Excess tax benefit from exercise of stock options
|
- | - | 312,325 | - | 312,325 | - | 312,325 | |||||||||||||||||||||
Consolidation of VIE
|
- | - | - | - | - | 216,344 | 216,344 | |||||||||||||||||||||
Treasury stock purchased and retired
|
(31,812 | ) | (318 | ) | (7,635 | ) | (94,752 | ) | (102,705 | ) | - | (102,705 | ) | |||||||||||||||
Dividends
|
- | - | - | (2,528,971 | ) | (2,528,971 | ) | - | (2,528,971 | ) | ||||||||||||||||||
Balance, October 31, 2011
|
7,110,507 | $ | 71,105 | $ | 11,382,605 | $ | 8,010,701 | $ | 19,464,411 | $ | 213,617 | $ | 19,678,028 |
2011
|
2010
|
|||||||
Operating activities:
|
||||||||
Net income
|
$ | 773,011 | $ | 1,220,247 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Bad debt expense
|
15,626 | 15,279 | ||||||
Depreciation and amortization
|
391,633 | 214,266 | ||||||
Goodwill impairment
|
- | 137,328 | ||||||
Inventory write-downs
|
92,675 | 247,539 | ||||||
Deferred income taxes
|
16,940 | (166,600 | ) | |||||
Stock based compensation expense
|
312,311 | 231,000 | ||||||
Excess tax benefit from stock based compensation
|
(312,325 | ) | (78,235 | ) | ||||
Changes in operating assets and liabilities:
|
||||||||
Restricted cash
|
(4,451 | ) | - | |||||
Trade accounts receivable
|
750,531 | (309,835 | ) | |||||
Inventories
|
(1,228,728 | ) | 129,539 | |||||
Income taxes prepaid (payable)
|
(384,226 | ) | 127,010 | |||||
Other current assets
|
(43,432 | ) | (107,825 | ) | ||||
Other long-term assets
|
- | (882 | ) | |||||
Accounts payable
|
(302,843 | ) | 312,876 | |||||
Accrued expenses
|
210,645 | 554,590 | ||||||
Other long-term liabilities
|
(164,523 | ) | (23,641 | ) | ||||
Net cash provided by operating activities
|
122,844 | 2,502,656 | ||||||
Investing activities:
|
||||||||
Acquisition of business (Cables Unlimited)
|
(2,800,000 | ) | - | |||||
Purchase of certificates of deposit
|
(4,647,540 | ) | (5,014,406 | ) | ||||
Maturity of certificates of deposit
|
6,076,877 | 5,967,327 | ||||||
Capital expenditures
|
(368,205 | ) | (151,850 | ) | ||||
Net cash provided by (used in) investing activities
|
(1,738,868 | ) | 801,071 | |||||
Financing activities:
|
||||||||
Proceeds from exercise of stock options
|
981,753 | 205,108 | ||||||
Purchases of treasury stock
|
(102,705 | ) | - | |||||
Excess tax benefit from stock based compensation
|
312,325 | 78,235 | ||||||
Principal payments on mortgages payable
|
(14,446 | ) | - | |||||
Dividends paid
|
(2,528,971 | ) | (84,113 | ) | ||||
Net cash provided by (used in) financing activities
|
(1,352,044 | ) | 199,230 | |||||
Net increase (decrease) in cash and cash equivalents
|
(2,968,068 | ) | 3,502,957 | |||||
Cash and cash equivalents at beginning of year
|
4,728,884 | 1,225,927 | ||||||
Cash and cash equivalents at end of year
|
$ | 1,760,816 | $ | 4,728,884 | ||||
Supplemental cash flow information
|
||||||||
Income taxes paid
|
$ | 925,000 | $ | 928,000 | ||||
Interest paid
|
$ | 28,804 | $ | - | ||||
Noncash investing and financing activities:
|
||||||||
Retirement of treasury stock
|
$ | 102,705 | $ | - | ||||
Stock issuance related to contingent liability
|
$ | - | $ | 10,001 | ||||
Stock issuance for acquisition of business (Cables Unlimited)
|
$ | 2,800,000 | $ | - |
|
•
|
Income Approach: To determine each reporting unit’s estimated fair value, the Company discounts the expected cash flows of its reporting units. The Company estimate its future cash flows after considering current economic conditions and trends; estimated future operating results, growth rates, anticipated future economic and regulatory conditions; and the availability of necessary technology. The discount rate used represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in the Company’s operations and the rate of return an outside investor would expect to earn. To estimate cash flows beyond the final year of the Company’s model, the Company uses a terminal value approach. Under this approach, the Company uses estimated operating income before depreciation and amortization in the final year of the Company’s model, adjusted to estimate a normalized cash flow, and then apply a perpetuity growth assumption and discount by a perpetuity discount factor to determine a terminal value. The Company incorporates the present value of the resulting terminal value into its estimate of fair value.
|
RF Connectors | ||||||||||||
And Cable Assembly
|
Cables Unlimited
|
Total
|
||||||||||
Balance at November 1, 2009
|
$
|
137,328
|
$
|
-
|
$
|
137,328
|
||||||
Impairment Charge
|
(137,328
|
)
|
-
|
(137,328
|
)
|
|||||||
Balance at October 31, 2010
|
-
|
-
|
-
|
|||||||||
Acquisition of Cables Unlimited
|
-
|
3,076,023
|
3,076,023
|
|||||||||
Balance at October 31, 2011
|
$
|
-
|
$
|
3,076,023
|
$
|
3,076,023
|
October 31, 2011
|
||||
Intangible assets
|
||||
Non-compete agreements (estimated life 5 years)
|
$
|
200,000
|
||
Accumulated amortization
|
(15,000
|
) | ||
185,000
|
||||
Customer relationships (estimated life 9.6 years)
|
1 ,730,000
|
|||
Accumulated amortization
|
(67,579
|
) | ||
1,662,421
|
||||
Backlog (estimated life 6 months)
|
75,000
|
|||
Accumulated amortization
|
(56,250
|
) | ||
18,750
|
||||
Total | $ | 1,866,171 | ||
Non-amortizable intangible assets
|
||||
Trademarks
|
$ |
410,000
|
||
Year ending
October 31,
|
Amount
|
|||
2012
|
$ | 238,958 | ||
2013
|
220,208 | |||
2014
|
220,208 | |||
2015
|
220,208 | |||
2016
|
205,208 | |||
Thereafter
|
761,381 | |||
Total
|
$ | 1,866,171 |
2011
|
2010
|
|||||||
Numerators:
|
||||||||
Consolidated net income (A)
|
$
|
773,011
|
$
|
1,220,247
|
||||
Denominators:
|
||||||||
Weighted average shares outstanding for basic earnings per share (B)
|
6,382,845
|
5,719,606
|
||||||
Add effects of potentially dilutive securities - assumed exercise of stock options
|
909,003
|
766,004
|
||||||
Weighted average shares for diluted earnings per share (C)
|
7,291,848
|
6,485,610
|
||||||
Basic net earnings per share (A)÷(B)
|
$
|
0.12
|
$
|
0.21
|
||||
Diluted net earnings per share (A)÷(C)
|
$
|
0.11
|
$
|
0.19
|
2011
|
2010
|
|||||||
Raw materials and supplies
|
$
|
2,023,108
|
$
|
1,405,443
|
||||
Work in process
|
5,425
|
15,425
|
||||||
Finished goods
|
4,309,914
|
3,348,944
|
||||||
Less inventory reserve
|
(148,846
|
)
|
(161,969
|
)
|
||||
Totals
|
$
|
6,189,601
|
$
|
4,607,843
|
Year Ending
October 31,
|
Amount
|
|||
2012
|
$
|
604,000
|
||
2013
|
599,000
|
|||
2014
|
355,000
|
|||
2015
|
176,000
|
|||
2016
|
102,000
|
|||
Total
|
$
|
1,836,000
|
2011
|
2010
|
|||||||
United States
|
$
|
17,330,928
|
$
|
14,504,628
|
||||
Foreign countries:
|
||||||||
Canada
|
1,117,660
|
524,878
|
||||||
Israel
|
386,426
|
696,022
|
||||||
Mexico
|
388,191
|
429,718
|
||||||
All other
|
210,298
|
166,932
|
||||||
Totals
|
$
|
19,433,503
|
$
|
16,322,178
|
2011
|
RF Connectors
and
Cable Assembly
|
Cables
Unlimited
|
Medical
Cabling and
Interconnector
|
RF
Wireless
|
Corporate
|
Total
|
||||||||||||||||||
Net sales
|
$
|
13,867,770
|
$
|
2,643,552
|
$
|
2,153,639
|
$
|
768,542
|
$
|
-
|
$
|
19,433,503
|
||||||||||||
Income (loss) before provision for income taxes
|
1,317,319
|
21,757
|
438,839
|
(669,383
|
)
|
43,311
|
1,151,843
|
|||||||||||||||||
Depreciation and amortization
|
177,329
|
179,607
|
32,811
|
1,886
|
391,633
|
|||||||||||||||||||
Total assets
|
5,280,427
|
7,614,660
|
585,557
|
503,890
|
10,393,412
|
24,377,946
|
||||||||||||||||||
Additions to equipment and furnishings
|
272,606
|
18,549
|
77,050
|
-
|
-
|
368,205
|
||||||||||||||||||
2010
|
||||||||||||||||||||||||
Net sales
|
$
|
14,094,158
|
$
|
-
|
$
|
1,724,819
|
$
|
503,201
|
$
|
-
|
$
|
16,322,178
|
||||||||||||
Income (loss) before provision for income taxes
|
2,606,201
|
-
|
306,161
|
(908,142
|
)
|
86,614
|
2,090,834
|
|||||||||||||||||
Depreciation, amortization and impairment
|
164,055
|
-
|
23,315
|
26,896
|
-
|
214,266
|
||||||||||||||||||
Total assets
|
4,204,819
|
-
|
316,149
|
617,202
|
13,971,193
|
19,109,363
|
||||||||||||||||||
Additions to equipment and furnishings
|
115,839
|
-
|
32,549
|
3,462
|
-
|
151,850
|
2011
|
2010
|
|||||||
Current:
|
||||||||
Federal
|
$
|
318,148
|
$
|
825,965
|
||||
State
|
43,744
|
211,222
|
||||||
361,892
|
1,037,187
|
|||||||
Deferred:
|
||||||||
Federal
|
24,540
|
(135,300
|
)
|
|||||
State
|
(7,600
|
) |
(31,300
|
)
|
||||
16,940
|
(166,600
|
)
|
||||||
Totals
|
$
|
378,832
|
$
|
870,587
|
2011
|
2010
|
|||||||||||||||
Amount
|
% of Pretax
Income
|
Amount
|
% of Pretax
Income
|
|||||||||||||
Income tax at Federal statutory rate
|
$
|
392,500
|
34.1
|
%
|
$
|
710,100
|
34.0
|
%
|
||||||||
State tax provision, net of Federal tax benefit
|
23,855
|
2.1
|
118,748
|
5.7
|
||||||||||||
Nondeductible differences:
|
||||||||||||||||
ISO stock options, net
|
16,297
|
1.4
|
38,000
|
1.8
|
||||||||||||
Business acquisition costs
|
131,504
|
11.4
|
-
|
-
|
||||||||||||
Uncertain tax positions
|
(116,284
|
) |
(10.1
|
) |
-
|
-
|
||||||||||
R&D credit
|
(86,166
|
) |
(7.5
|
) |
-
|
-
|
||||||||||
Other
|
17,126
|
1.5
|
3,739
|
0.1
|
||||||||||||
Provision for income taxes
|
$
|
378,832
|
32.9
|
%
|
$
|
870,587
|
41.6
|
%
|
2011
|
2010
|
|||||||
Current Assets:
|
||||||||
Allowance for doubtful accounts
|
$
|
40,000
|
$
|
30,200
|
||||
Inventory obsolescence
|
58,600
|
64,500
|
||||||
Accrued vacation
|
114,100
|
105,500
|
||||||
State income taxes
|
19,700
|
71,800
|
||||||
Stock based compensation awards
|
209,600
|
200,300
|
||||||
Section 263A costs
|
132,800
|
97,600
|
||||||
Other
|
35,900
|
43,200
|
||||||
Total current assets
|
610,700
|
613,100
|
||||||
Long-Term Assets:
|
||||||||
Amortization / intangible assets
|
-
|
131,600
|
||||||
Long-Term Liabilities:
|
||||||||
Amortization / intangible assets
|
(763,700
|
) |
-
|
|||||
Depreciation / equipment and furnishings
|
(308,500
|
) |
(150,400
|
)
|
||||
Net deferred tax assets (liabilities)
|
$
|
(461,500
|
) |
$
|
594,300
|
Balance at November 1, 2009
|
$
|
241,344
|
||
Lapse of statute of limitations- tax positions in prior period
|
(194,921
|
)
|
||
Gross increase – tax positions in current period
|
169,748
|
|||
Balance at October 31, 2010
|
216,171
|
|||
Lapse of statute of limitations - tax positions in prior period
|
(136,948
|
)
|
||
Balance at October 31, 2011
|
$
|
79,223
|
2011
|
2010
|
|||||||
Expected volatility
|
35.9%-55.8
|
%
|
50.9%-57.7
|
%
|
||||
Weighted-average volatility
|
52.7
|
%
|
52.1
|
%
|
||||
Expected dividends
|
1.9%-6.3
|
%
|
1.7
|
%
|
||||
Expected term (in years)
|
2.5-3.5
|
2.5-3.5
|
||||||
Risk-free interest rate
|
0.7%-1.2
|
%
|
0.5%-1.4
|
%
|
||||
Weighted average fair market value of options granted during the year
|
$
|
0.89
|
$
|
1.07
|
||||
Weighted average fair market value of options vested during the year
|
$
|
0.94
|
$
|
0.89
|
2011
|
2010
|
|||||||||||||||
Shares or
Price Per
Share
|
Weighted
Average
Exercise
Price
|
Shares or
Price Per
Share
|
Weighted
Average
Exercise
Price
|
|||||||||||||
Options outstanding at beginning of year
|
2,454,952
|
$
|
2.00
|
2,486,612
|
$
|
1.87
|
||||||||||
Options granted
|
178,009
|
3.24
|
184,908
|
3.20
|
||||||||||||
Options exercised
|
(517,817
|
)
|
1.90
|
(159,908
|
)
|
1.29
|
||||||||||
Options forfeited
|
(15,472
|
)
|
2.70
|
(56,660
|
)
|
2.20
|
||||||||||
Options outstanding at end of year
|
2,099,672
|
$
|
2.13
|
2,454,952
|
$
|
2.00
|
||||||||||
Options exercisable at end of year
|
1,599,095
|
$
|
2.00
|
|||||||||||||
Options vested and expected to vest at end of year
|
2,070,866
|
$
|
2.02
|
|||||||||||||
Option price range at end of year
|
$
|
0.05 - $3.78
|
$
|
0.05 - $3.78
|
||||||||||||
Aggregate intrinsic value of options exercised during year:
|
$
|
693,490
|
$
|
338,580
|
|
Included in the options outstanding are 907,724 in 2011 and 1,054,408 in 2010 previously granted to six officers and/or key employees of the Company under employment agreements entered into by the Company with each of these officers and employees.
|
Cash consideration paid
|
$
|
2,800,000
|
||
RF Industries, Ltd. common shares issued, (762,738 shares)
|
2,800,000
|
|||
Total consideration
|
$
|
5,600,000
|
Other assets
|
$
|
6,000
|
||
Accounts receivable
|
814,000
|
|||
Inventories
|
442,000
|
|||
Property, plant and equipment
|
313,000
|
|||
Intangible assets
|
2,415,000
|
|||
Goodwill (all non-deductible for tax purposes)
|
3,076,000
|
|||
Interest bearing liabilities
|
(7,000
|
)
|
||
Non-interest bearing liabilities
|
(423,000
|
)
|
||
Deferred tax liabilities
|
(1,036,000
|
)
|
||
Net assets
|
$
|
5,600,000
|
(Unaudited)
|
||||||||
Year ended October
|
||||||||
2011
|
2010
|
|||||||
Revenue
|
$
|
23,007,486
|
$
|
22,168,702
|
||||
Net income
|
$
|
775,618
|
$
|
1,283,258
|
||||
Earnings per share
|
||||||||
Basic
|
$
|
.12
|
$
|
.22
|
||||
Diluted
|
$
|
.11
|
$
|
.20
|
2011
|
2010
|
|||||||
Wages payable
|
$
|
932,398
|
$
|
834,188
|
||||
Accrued receipts
|
556,678
|
318,490
|
||||||
Other current liabilities
|
90,369
|
64,776
|
||||||
Totals
|
$
|
1,579,445
|
$
|
1,217,454
|
2011
|
2010
|
|||||||
Tax related liabilities
|
$
|
79,222
|
$
|
216,171
|
||||
Deferred lease liabilities
|
53,645
|
81,219
|
||||||
Totals
|
$
|
132,867
|
$
|
297,390
|
·
|
Mortgage payable with TFCU in the amount of $800,000. The loan bears interest at a rate per annum of 6.625% with minimum monthly payments due of principal and interest of $5,490 commencing March 1, 2010 through February 2020. The agreement includes a financial covenant which requires K&K to maintain a minimum debt service coverage ratio. The note is guaranteed by Cables Unlimited and collateralized by K&K’s real property. In November 2011, TFCU released Cables Unlimited as a guarantor on the mortgage. In addition, the mortgage was paid in full through a refinancing in January 2012. The outstanding balance of $777,155 has been classified as current in the consolidated balance sheets at October 31, 2011.
|
·
|
Second mortgage payable to a bank in the amount of $640,000 due in monthly installments of interest only of $3,485 from February 2010 through April 2010, at a rate per annum of 6.625%, and then due in monthly installments of $8,197 of principal and interest at 9.25% from May 2010 through September 2010. The mortgage was collateralized by K&K’s building. This mortgage was paid in full in September 2010 with the proceeds received through the financing noted below.
|
|
·
|
In September 2010, K&K entered into a mortgage payable with the Small Business Administration (“SBA”) in the amount of $643,000. The loan bears interest at a rate per annum of 4.605% with minimum monthly payments due of principal and interest of $4,236 commencing October 1, 2010 through September 2030. The note is guaranteed by Cables Unlimited and the former owner of Cables Unlimited and is collateralized by K&K’s real property. The note includes two provisions that require the prior written consent of the SBA for significant changes in ownership structure and/or the sale of property or assets not in the ordinary course of business. The former shareholder of Cables Unlimited did not obtain prior written consent prior to selling 100% of his interest. As a result, the loan was in default and was paid in full on November 7, 2011. The outstanding balance of $617,075 has been classified as current in the consolidated balance sheet at October 31, 2011.
|
Note payable - TFCU
|
$
|
777,155
|
||
Note payable - SBA
|
617,075
|
|||
Total
|
$
|
1,394,230
|
|
RF INDUSTRIES, LTD.
|
|
Date: January 27, 2012
|
By:
|
/s/ Howard F. Hill
|
Howard F. Hill, Chief Executive Officer
|
Date: January 27, 2012
|
By:
|
/s/ James S. Doss
|
James S. Doss, President and Chief Financial Officer
|
||
(Principal Financial Officer and Principal
|
||
Accounting Officer)
|
||
Date: January 27, 2012
|
By:
|
/s/ Howard F. Hill
|
Howard F. Hill, Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Date: January 27, 2012
|
By:
|
/s/ Marvin Fink
|
Marvin Fink, Director
|
||
Date: January 27, 2012
|
By:
|
/s/ David Sandberg
|
David Sandberg, Director
|
||
Date: January 27, 2012
|
By:
|
/s/ William Reynolds
|
William Reynolds, Director
|
||
Date: January 27, 2012
|
By:
|
/s/ Randall Waterfield
|
Randall Waterfield, Director
|
||
Date: January 27, 2012
|
By:
|
/s/ Darren Clark
|
Darren Clark, Director
|
|
A.
|
Pursuant to an Agreement and Plan of Reorganization, dated as of June 6, 2011 (the “
Reorganization Agreement
”), by and among RF Industries, Ltd., a Nevada corporation (“
Parent
”), CUI Acquisitions, Inc., a wholly owned subsidiary of Parent, Cables Unlimited, Inc., a New York corporation (the “
Predecessor
”), and Darren Clark (“
Shareholder
”), the Predecessor has merged with, and into, CUI Acquisitions, Inc. (the “
Merger
”). The Merger was effected immediately prior to the execution and delivery of this Lease.
|
|
B.
|
In connection with the Merger, CUI Acquisitions, Inc., the Tenant hereunder, has changed its name to “Cables Unlimited, Inc.”
|
|
C.
|
The Predecessor has heretofore rented the Premises (as defined below) from Landlord and has conducted its business from the Premises. Tenant, as the successor to the Predecessor by virtue of the Merger, intends to continue to conduct its business from the Premises.
|
|
1. PREMISES AND TERM.
|
|
1.1
|
Termination of any Prior Agreement.
Effective as of the date of this Agreement, any lease, rental agreement, license, or other understanding, arrangement, or agreement, written or oral, between the Predecessor and the Landlord (any such arrangement being a “
Prior Agreement
”) shall terminate, without any further action or notice being required, and such termination shall not entitle Landlord to any claim of default or demand for damages or other remedies against Predecessor or Tenant. Any Prior Agreement shall be of no further force and effect and is hereby replaced in its entirety by this Lease.
|
|
1.2
|
Lease of Premises.
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord the real property located at 3 Old Dock Road, Yaphank, New York, 11980, together with the building located thereon, and all affixed property, furniture, fixtures, and equipment currently located in the building (the “
Premises
”). The lease of the Premises includes Tenant’s exclusive right to use the parking spaces, loading docks, walkways, and other improvements on the real property on which the Premises are located.
|
|
1.3
|
Term.
The term (“
Term
”) of this Lease is a five (5) year term that shall commence on the date of this Agreement (the “
Commencement Date
”) and shall terminate on the last day of the month in which the fifth anniversary of the Commencement Date occurs, subject to Tenant’s option to extend as described in Paragraph 21.12 (the “
Termination Date
”). The Premises shall be delivered to Tenant on the Commencement Date.
|
|
1.4
|
Condition of Premises.
Tenant acknowledges and agrees that the Premises are being delivered and leased in as-is condition; provided, however, that Landlord represents and warrants to Tenant that the existing structure (including without limitation the roof, foundations, exterior walls), and all building systems (including without limitation, the plumbing, electrical, ventilating, air conditioning, heating, and loading doors, if any) shall be (a) in good operating condition and free of any leakage; (b) in compliance with applicable laws, and (c) free of all Hazardous Material, as defined below, including, but not limited to any asbestos containing material (whether or not friable) and any lead-containing paint.
|
|
2. BASE RENT AND ADDITIONAL PAYMENTS; SECURITY DEPOSIT.
|
10.
|
FIRE AND CASUALTY DAMAGE.
|
11.
|
INDEMNITY AND INSURANCE.
|
13.
|
ASSIGNMENT AND SUBLETTING.
|
15.
|
SURRENDER AND HOLDING OVER.
|
17.
|
EVENTS OF DEFAULT.
|
18.
|
LANDLORD’S REMEDIES.
|
21.
|
GENERAL PROVISIONS.
|
|
21.12
|
Option to Extend
.
|
1.
|
I have reviewed this annual report on Form 10-K 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.
|
The registrant’s other certifying officer(s) and I are 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 in 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 my 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.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and 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 financial 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: January 27, 2012
|
|
/s/ Howard Hill
|
|
Name:
|
Howard Hill
|
Its:
|
Chief Executive Officer
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K 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.
|
The registrant’s other certifying officer(s) and I are 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 in 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 my 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.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and 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 financial information; and
|
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: January 27, 2012
|
|
/s/ James S. Doss
|
|
Name:
|
James S. Doss
|
Its:
|
President/Chief Financial Officer
|
(Principal Financial Officer)
|
/s/ Howard F. Hill
|
|
Name:
|
Howard F. Hill
|
Its:
|
Chief Executive Officer
|
(Principal Executive Officer)
|
|
January 27, 2012
|
/s/ James S. Doss
|
|
Name:
|
James S. Doss
|
Its:
|
Chief Financial Officer
|
(Principal Financial Officer)
|
|
January 27, 2012
|
RF INDUSTRIES, LTD
.
|
For Immediate Release
|
|
Investor Contact:
Neil Berkman Associates
(310) 477 - 3118
info@berkmanassociates.com
|
Company Contact:
James Doss, President
(858) 549-6340
rfi@rfindustries.com
|
RF INDUSTRIES, LTD. AND SUBSIDIARY
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(in thousands, except per share and share amounts)
|
||||||||||||||||
(unaudited)
|
||||||||||||||||
Three Months Ended
|
Year Ended
|
|||||||||||||||
October 31,
|
October 31,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales
|
$ | 5,954 | $ | 5,001 | $ | 19,434 | $ | 16,322 | ||||||||
Cost of sales
|
3,440 | 2,441 | 10,098 | 8,159 | ||||||||||||
Gross profit
|
2,514 | 2,560 | 9,336 | 8,163 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Engineering
|
343 | 263 | 1,247 | 888 | ||||||||||||
Selling and general
|
2,185 | 1,533 | 6,953 | 5,134 | ||||||||||||
Goodwill impairment
|
-- | -- | 137 | |||||||||||||
Total Operating expenses
|
2,528 | 1,796 | 8,200 | 6,159 | ||||||||||||
Operating income (loss)
|
(14 | ) | 764 | 1,136 | 2,004 | |||||||||||
Interest income (expense)
|
(7 | ) | 18 | 16 | 87 | |||||||||||
Income (loss) before provision for income taxes
|
(21 | ) | 782 | 1,152 | 2,091 | |||||||||||
Provision for income taxes
|
29 | 347 | 379 | 871 | ||||||||||||
Consolidated net income (loss)
|
(50 | ) | 435 | 773 | 1,220 | |||||||||||
Net loss attributable to non-controlling interest
|
4 | -- | 3 | -- | ||||||||||||
Net income (loss) attributable
|
||||||||||||||||
to RF Industries Ltd. and Subsidiary
|
$ | (46 | ) | $ | 435 | $ | 776 | $ | 1,220 | |||||||
Earnings (loss) per share:
|
||||||||||||||||
Basic
|
$ | (0.01 | ) | $ | 0.08 | $ | 0.12 | $ | 0.21 | |||||||
Diluted
|
$ | (0.01 | ) | $ | 0.07 | $ | 0.11 | $ | 0.19 | |||||||
Weighted average shares outstanding
|
||||||||||||||||
Basic
|
7,135,549 | 5,777,518 | 6,382,845 | 5,719,606 | ||||||||||||
Diluted
|
7,898,944 | 6,726,234 | 7,291,848 | 6,485,610 | ||||||||||||
Dividends paid
|
$ | -- | $ | 84,113 | $ | 2,528,971 | $ | 84,113 |