UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

     
Date of Report (date of earliest event reported): September 8, 2017

 

  RF INDUSTRIES, LTD.  
  (Exact name of registrant as specified in its charter)  

 

Nevada

(State or Other Jurisdiction
of Incorporation)

 

0-13301

(Commission File Number)

88-0168936

(I.R.S. Employer
Identification No.)

 

7610 Miramar Road, Bldg. 6000

San Diego, California 92126-4202

(Address of Principal Executive Offices)

 

(858) 549-6340

(Registrant’s Telephone Number)

 
         

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On September 8, 2017, RF Industries, Ltd. (the “Company”), with the approval of its Board of Directors, entered into indemnification agreements with (1) all directors (Marvin H. Fink, Howard F. Hill, William L. Reynolds, Gerald T. Garland and Joseph Benoit) in connection with their roles as members of the Board of Directors; (2) Robert Dawson in connection with his role as the Company’s President and Chief Executive Officer; and (3) Mark Turfler in connection with his role as the Company’s Chief Financial Officer and Corporate Secretary (the “Indemnification Agreements”). A copy of the form of Indemnification Agreement entered into with the foregoing persons is filed as Exhibit 10.1 to this Current Report on Form 8-K.

 

The Indemnification Agreement provides, among other things, that the Company will indemnify each such director and executive officer (the “Indemnitee”) to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any proceeding (including a proceeding by or in the right of the Company to procure a judgment in its favor) against all expenses, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the proceeding, if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful. In addition, and subject to certain limitations, the Indemnification Agreement requires the Company to advance expenses incurred by or on behalf of the indemnitee in connection with any proceeding and the reimbursement to the Company of the amounts advanced (without interest) to the extent that it is ultimately determined that the Indemnitee is not entitled to be indemnified by the Company.

 

The Indemnification Agreement is not exclusive of any other rights to indemnification or advancement of expenses to which Indemnitee may be entitled, including any rights arising under the applicable law of the State of Nevada, the Company’s Articles of Incorporation or Bylaws, a vote of stockholders or a resolution of the Board of Directors, or otherwise.

 

The foregoing description is qualified in its entirety by reference to the full text of the Form of Indemnification Agreement, which is attached as an exhibit hereto and incorporated in this Item 1.01 by reference.

 

Item 2.02 Results of Operations and Financial Condition.

 

On September 12, 2017, the Company issued a press release announcing information regarding the Company's financial results for the third quarter and nine months ended July 31, 2017. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

 

The information furnished under this Item 2.02, including the accompanying Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed to be incorporated by reference in any subsequent filing by the Company under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as specifically stated in such filing.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

On September 8, 2017, the Company’s Board of Directors granted Howard F. Hill, the Company’s interim Chief Executive Officer through July 17, 2017, a non-qualified option (the “Option”) to purchase 15,000 shares of the Company’s common stock. Effective July 17, 2017, Robert D. Dawson was appointed as the Company’s new President and Chief Executive Officer. The Option was granted to Mr. Hill in consideration for his advisory services rendered, and to be rendered, from July 17, 2017 through October 31, 2017 in connection with the transition of the chief executive officer’s duties to Mr. Dawson. The Option was fully vested on the date of grant, has a term of five years, and an exercise price of $1.80 (the closing trading price of the Company’s common stock on the date of grant).

 

 

 

 

Item 5.07 Submission of Matters to a Vote of Security Holders.

 

Annual Meeting of Stockholders

 

On September 8, 2017, the Company held its Annual Meeting at the offices of TroyGould PC, 1801 Century Park East, 16 th Floor, Los Angeles, CA 90501. At the Annual Meeting, the Company’s stockholders voted on four proposals, each of which is described in more detail in the Company’s definitive Proxy Statement filed with the Securities and Exchange Commission on July 27, 2017. At the Annual Meeting, 8,000,345 shares, or approximately 90.5% of all outstanding shares of common stock, were present either in person or by proxy. The following is a brief description of each matter voted upon and the certified results, including the number of votes cast for and against each matter and, if applicable, the number of abstentions and broker non-votes with respect to each matter.

 

Proposal 1 : to elect Marvin H. Fink and Gerald T. Garland to the Company’s Board of Directors as Class I directors, for a three-year term expiring at the 2020 Annual Meeting;

 

Proposal 2 : a proposal to approve an amendment to the Company’s 2010 Stock Incentive Plan to increase the number of shares of common stock available for issuance under the plan to 3,000,000 shares;

 

Proposal 3 : a proposal to approve, on an advisory basis, the compensation of the Company’s named executive officers;

 

Proposal 4 : a proposal to ratify CohnReznick LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2017.

 

Voting Results

 

Proposal 1 : Marvin H. Fink and Gerald T. Garland were elected as directors on the following vote:

 

Marvin H. Fink was elected with 3,718,823 “FOR” votes and 561,612 “WITHHELD” votes;

 

Gerald T. Garland was elected with 4,129,868 “FOR” votes and 150,567 “WITHHELD” votes.

 

In addition, there were 3,719,910 broker non-votes in connection with this proposal.

 

Proposal 2 : This proposal was approved with 2,779,524 “FOR” votes, 1,486,532 “AGAINST” votes and 14,379 “ABSTAIN” votes. There were 3,719,910 broker non-votes in connection with this proposal.

 

 

 

 

Proposal 3 : This proposal was approved with 3,886,847 “FOR” votes, 360,688 “AGAINST” votes and 32,900 “ABSTAIN” votes. There were 3,719,910 broker non-votes in connection with this proposal.

 

Proposal 4 : This proposal was approved with 7,816,030 “FOR” votes, 159,129 “AGAINST” votes and 25,186 “ABSTAIN” votes. There were no broker non-votes in connection with this proposal.

 

Item 9.01 Financial Statements and Exhibits

 

  (d) Exhibits.

 

Exhibit No.  

  Description  
10.1    Form of Indemnification Agreement
99.1    Press Release of RF Industries, Ltd. dated September 12, 2017.

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

September 12, 2017 By: /s/ Robert Dawson  
    Robert Dawson  
    President and Chief Executive Officer  

 

 

 

 

 

EXHIBIT 10.1

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “ Agreement ”) is made and entered into as of _________________, 201__, by and between R F Industries Ltd., a Nevada corporation (the “ Company ”) and ____________________ (the “ Indemnitee ”).

 

RECITALS

 

WHEREAS, the Company values the Indemnitee’s service to the Company as a director and/or officer and desires that the Indemnitee continue to serve the Company in such capacity;

 

WHEREAS, the Indemnitee does not regard the protection available under the organizational documents of the Company and any insurance policies maintained by the Company as adequate in the present circumstances, and the Indemnitee may not be willing to continue to serve in his or her capacity as a director and/or officer of the Company without the additional protections set forth in this Agreement;

 

WHEREAS, the Board of Directors of the Company (the “ Board ”) has determined that, on the basis of the foregoing, it is reasonable, prudent and necessary for the Company to obligate itself contractually to indemnify, and to advance expenses on behalf of, the Indemnitee on the terms described in this Agreement so that the Indemnitee will serve or continue to serve the Company free from undue concern that he or she will not be so indemnified;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Amended and Restated Certificate of Incorporation (as amended from time to time, the “ Certificate of Incorporation ”) and Amended and Restated Bylaws (as amended from time to time, the “ Bylaws ”) of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor nor to diminish or abrogate any rights of the Indemnitee thereunder;

 

NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, and intending to be legally bound, the parties to this Agreement agree as follows:

 

AGREEMENT

 

1.                   Definitions . For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below:

 

(a)                Corporate Status ” describes the status of an individual who is or was at any time (including, without limitation, any time prior to the date of this Agreement) a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, limited liability company, trust or other enterprise or entity that such individual is or was serving at the express written request of the Company.

 

     

 

 

(b)                Disinterested Director ” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.

 

(c)                Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

(d)                Expenses ” means all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including, without limitation, the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by the Indemnitee or the amount of judgments or fines against the Indemnitee.

 

(e)                Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (1) the Company or the Indemnitee in any matter material to either such party or (2) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(f)                 Person ” means any individual, corporation, partnership, joint venture, limited liability company, trust or other enterprise or entity.

 

(g)                Proceeding ” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding (including one pending on or before the date of this Agreement but excluding one initiated by the Indemnitee pursuant to Section 7 of this Agreement to enforce his or her rights under this Agreement), whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which the Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that the Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or her or of any inaction on his or her part while acting as an officer or director of the Company, or by reason of the fact that he or she is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, limited liability company, trust or other enterprise or entity, in each case whether or not he or she is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.

 

  2  

 

 

2.                   Indemnification of the Indemnitee . Subject to the terms of this Agreement, if, by reason of the Indemnitee’s Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding, the Company agrees to hold harmless and indemnify the Indemnitee to the fullest extent permitted by applicable law (as such law may be amended from time to time to increase the scope of such permitted indemnification) against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her, or on his or her behalf, in connection with such Proceeding or any claim, issue or matter therein. In furtherance of the foregoing indemnification, and without limiting the generality of the preceding sentence:

 

(a)                The Indemnitee shall be entitled to the rights of indemnification provided in this Section 2(a) if, by reason of his or her Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding other than a Proceeding by or in the right of the Company. Pursuant to this Section 2(a), the Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her, or on his or her behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

 

(b)                The Indemnitee shall be entitled to the rights of indemnification provided in this Section 2(b) if, by reason of his or her Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 2(b), the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. However, if applicable law so provides and notwithstanding any provision in this Section 2 or elsewhere in this Agreement to the contrary, no indemnification against such Expenses (or against any judgments, penalties, fines and amounts paid in settlement) shall be made in respect of any claim, issue or matter in such Proceeding as to which the Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that a court of competent jurisdiction shall determine that such indemnification may and should be made.

 

(c)                Notwithstanding any other provision of this Agreement to the contrary, to the extent that the Indemnitee is, by reason of his or her Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he or she shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time to increase the scope of such permitted indemnification, against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 2(c) and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

  3  

 

 

(d)                Notwithstanding the foregoing, the Company shall not be obligated to make any payment to the Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 of this Agreement) to be unlawful.

 

3.                   Contribution .

 

(a)                Whether or not the indemnification provided in Section 2 of this Agreement is available, in respect of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring the Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against the Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against the Indemnitee.

 

(b)                Without diminishing the obligations of the Company set forth in Section 3(a), if, for any reason, the Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by the Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than the Indemnitee, who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, in connection with the events that resulted in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than the Indemnitee, who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

 

  4  

 

 

(c)                The Company agrees to fully indemnify and hold the Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than the Indemnitee, who may be jointly liable with the Indemnitee.

 

(d)                If the indemnification required to be paid by the Company pursuant to this Agreement is unavailable to the Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying the Indemnitee to the extent required by this Agreement, shall contribute to the amount incurred by the Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (1) the relative benefits received by the Company and the Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding and/or (2) the relative fault of the Company (and its directors, officers, employees and agents) and the Indemnitee in connection with such event(s) and/or transaction(s).

 

4.                   Indemnification for Expenses of a Witness . Notwithstanding any provision of this Agreement to the contrary, to the extent that the Indemnitee is, by reason of his or her Corporate Status, a witness, or is made (or asked to) respond to discovery requests, in any Proceeding to which the Indemnitee is not a party, he or she shall be indemnified against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with such Proceeding.

 

5.                   Advancement of Expenses . Notwithstanding any provision of this Agreement to the contrary, but subject to Section 9, the Company shall advance all Expenses incurred by or on behalf of the Indemnitee in connection with any Proceeding by reason of the Indemnitee’s Corporate Status within thirty days after the receipt by the Company of a statement or statements from the Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by the Indemnitee (but may omit such information as necessary to avoid having the Indemnitee waive any privilege with respect to legal work under applicable law) and shall include or be preceded or accompanied by a written undertaking by or on behalf of the Indemnitee to repay any Expenses advanced if it shall ultimately be determined by a court of competent jurisdiction (with the burden of proof on the Company) that the Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and shall not bear interest.

 

6.                   Procedures and Presumptions for Determining Entitlement to Indemnification . The following procedures and presumptions shall apply in the event of any question as to whether the Indemnitee is entitled to indemnification under this Agreement:

 

(a)                To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of the Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to the Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.

 

  5  

 

 

(b)                Upon written request by the Indemnitee for indemnification pursuant to the first sentence of Section 6(a), a determination with respect to the Indemnitee’s entitlement to indemnification shall be made in the specific case by one of the following four methods, which shall be at the election of the Board: (1) by a majority vote of the Disinterested Directors, even though less than a quorum; (2) by a committee of those Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum; (3) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee; or (4) if so directed by the Board and with the consent of the Indemnitee, by the stockholders of the Company.

 

(c)                If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b), Independent Counsel shall be selected as provided in this Section 6(c). Independent Counsel shall be selected by the Board, and the Board shall notify the Indemnitee of the name of such Independent Counsel. The Indemnitee may, within ten days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that Independent Counsel so selected does not meet the requirements of Independent Counsel, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall act as Independent Counsel. If a written objection is made and substantiated, Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b), and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed. Any costs or expenses (including attorneys’ fees and disbursements) incurred by the Indemnitee in cooperating with the Independent Counsel or the Company with respect to a determination of entitlement to indemnification (and irrespective of the ultimate determination on such entitlement) shall be borne by the Company.

 

(d)                In making a determination with respect to the Indemnitee’s entitlement to indemnification under this Agreement, the Person or Persons making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.

 

  6  

 

 

(e)                It shall be presumed that the Indemnitee has acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(f)                 If the Person or Persons empowered or selected under this Section 6 to determine whether the Indemnitee is entitled to indemnification shall not have made a determination within sixty days after receipt by the Company of the request for indemnification, the requisite determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee shall be entitled to such indemnification absent (1) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification or (2) a prohibition of such indemnification under applicable law. However, such sixty-day period may be extended for a reasonable time, not to exceed an additional thirty days, if the Person or Persons making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the Company’s stockholders pursuant to Section 6(b) and if (A) within fifteen days after receipt by the Company of the request for such determination, the Board resolves to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five days after such receipt and such determination is made thereat or (B) a special meeting of stockholders is called within fifteen days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty days after having been so called and such determination is made at such meeting.

 

(g)                The Indemnitee shall cooperate with the Person or Persons making the determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such Person or Persons upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating with the Person or Persons making such determination shall be borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification), and the Company hereby indemnifies and agrees to hold the Indemnitee harmless from such costs and expenses.

 

  7  

 

 

(h)                The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which the Indemnitee is a party is resolved in any manner other than by adverse judgment against the Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that the Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(i)                  The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

 

(j)                  For purposes of any determination of “good faith” or “best interests of the Company”, Indemnitee shall be deemed to have acted in good faith and/or in the best interests of the Company, as applicable, if Indemnitee’s action is based on the records or books of account of the Company, including financial statements, or on information supplied to Indemnitee by the Company, or on the advice of legal counsel for the Company or Board or any counsel selected by any committee of the Board or on information or records given or reports made to the Company by the Company’s accountants, an independent certified public accountant or by an appraiser, investment banker, compensation consultant, or other expert selected with reasonable care by the Company or the Board or any committee thereof. The provisions of this section shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct.

 

7.                   Remedies of the Indemnitee .

 

(a)                In the event that (1) a determination is made pursuant to Section 6 of this Agreement that the Indemnitee is not entitled to indemnification under this Agreement, (2) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (3) no determination of entitlement to indemnification is made pursuant to Section 6 of this Agreement within ninety days after the later of receipt by the Company of the request for indemnification (as such deadline may be extended pursuant to Section 6(f) upon a determination to be made by the stockholders of the Company) and the final disposition of the Proceeding for which indemnification is sought, (4) payment of indemnification is not made as required by Section 4 or Section 2(c) or the last sentence of Section 6(c) of this Agreement within ten days after receipt by the Company of a written request therefor, or (5) payment of indemnification is not made within ten days after a determination has been made that the Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, the Indemnitee shall be entitled to an adjudication in any court of competent jurisdiction of the Indemnitee’s entitlement to such indemnification. The Company shall not oppose the Indemnitee’s right to seek any such adjudication.

 

  8  

 

 

(b)                In the event that a determination shall have been made pursuant to Section 6 of this Agreement that the Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and the Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6.

 

(c)                If a determination shall have been made pursuant to Section 6 of this Agreement that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7 absent (1) a misstatement by the Indemnitee of a material fact or an omission of a material fact necessary to make the Indemnitee’s misstatement not materially misleading in connection with the application for indemnification or (2) a prohibition of such indemnification under applicable law.

 

(d)                In the event that the Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his or her rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall, to the fullest extent permitted by law, pay on his or her behalf, in advance of such final adjudication, and shall indemnify the Indemnitee against, any and all expenses (including attorneys’ fees and any and all other costs that would qualify as Expenses, as defined herein, if the proceeding contemplated by this paragraph or the next paragraph were a “Proceeding,” as defined herein, hereinafter, “ Enforcement Expenses ”)) actually and reasonably incurred by him or her in such judicial adjudication, regardless of whether the Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery.

 

(e)                The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all of the provisions of this Agreement. The Company shall indemnify the Indemnitee against any and all Enforcement Expenses and, if requested by the Indemnitee, shall (within ten days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Enforcement Expenses to the Indemnitee, which are incurred by the Indemnitee in connection with any action brought by the Indemnitee for indemnification or advance of Enforcement Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether the Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Enforcement Expenses or insurance recovery, as the case may be.

 

(f)                 Notwithstanding any provision of this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

  9  

 

 

8.                   Non-Exclusivity and Survival of Rights .

 

(a)                The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation and Bylaws of the Company, any other agreement with the Company, a vote of the Company’s stockholders, a resolution of the Board or otherwise. No amendment, alteration or repeal of this Agreement or of any provision of this Agreement shall limit or restrict any right of the Indemnitee under this Agreement in respect of any action taken or omitted by the Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in any applicable law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Company’s Certificate of Incorporation and Bylaws and this Agreement, it is the intent of the parties to this Agreement that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)                To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms of this Agreement, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all commercially reasonable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

 

(c)                In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(d)                Except as provided in Section 8(c), the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received payment of such amounts under any insurance policy, contract, other agreement or otherwise.

 

(e)                Except as provided in Section 8(c), the Company’s obligation to indemnify or advance Expenses hereunder to the Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any enterprise or entity other than the Company shall be reduced by any amount the Indemnitee has actually received as indemnification or advancement of Expenses from such other enterprise or entity.

 

  10  

 

 

9.                   Exception to the Right of Indemnification . Notwithstanding any provision of this Agreement to the contrary, the Company shall not be obligated under this Agreement to provide any indemnification (and, in the case of Section 9(c), the Company shall not be obligated under this Agreement to advance expenses) in connection with any claim made by or against the Indemnitee: (a) for which payment has actually been made to or on behalf of the Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; (b) for an accounting of profits made from the purchase and sale (or sale and purchase) by the Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law; or (c) in connection with any Proceeding (or any part of any Proceeding), other than a Proceeding under Section 7 of this Agreement to enforce his or her right to indemnification under this Agreement, initiated by the Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by the Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (A) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (B) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

 

10.               Duration of Agreement . All agreements and obligations of the Company contained in this Agreement shall continue until the date that is six years after the date upon which the Indemnitee’s Corporate Status terminates and shall continue thereafter so long as the Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7) by reason of his Corporate Status, whether or not he or she is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties to this Agreement and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

 

11.               Security . To the extent requested by the Indemnitee and approved by the Board in its sole discretion, the Company may at any time and from time to time provide security to the Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to the Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

 

12.               Enforcement . The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it by this Agreement in order to induce the Indemnitee to serve as an officer and/or director of the Company, and the Company acknowledges that the Indemnitee is relying upon this Agreement in serving as an officer and/or director of the Company. The Company shall not seek from a court, or agree to, a “bar order” that would have the effect of prohibiting or limiting the Indemnitee’s rights to receive advancement of Expenses under this Agreement.

 

  11  

 

 

13.               Severability . The invalidity or unenforceability of any provision of this Agreement shall in no way affect the validity or enforceability of any other provision. In the event any provision of this Agreement conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

 

14.               Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties to this Agreement. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

15.               Notice by the Indemnitee . The Indemnitee agrees to promptly notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

 

16.               Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day; (c) five business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All notices and other communications shall be sent:

 

(a)                To the Indemnitee at the address set forth below the Indemnitee’s signature on this Agreement.

 

(b)                To the Company at:

 

                    R F Industries Ltd.

                    7610 Miramar Road

                    San Diego, California 92126

                    Attention: Board of Directors

 

or to such other address as may have been furnished to the Indemnitee by the Company or to the Company by the Indemnitee, as the case may be.

 

  12  

 

 

17.               Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

18.               Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without regard to its conflict of laws rules. The Company and the Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Clark County Nevada District Court (the “ Nevada Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Nevada Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) consent to service of process at the address set forth in, or determined by reference in, this Agreement of this Agreement with the same legal force and validity as if served upon such party personally within the State of Nevada, (iv) waive any objection to the laying of venue of any such action or proceeding in the Nevada Court and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Nevada Court has been brought in an improper or inconvenient forum.

 

19.               Entire Agreement . This Agreement (and the Certificate of Incorporation and Bylaws) constitutes the entire agreement between the parties to this Agreement with respect to the subject matter this Agreement and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter of this Agreement.

 

20.               Counterparts . This Agreement may be executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by e-mail signature in PDF format or facsimile signature (or other similar electronic means) and in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  13  

 

 

IN WITNESS WHEREOF, the Company and the Indemnitee have executed and delivered this Agreement as of the date first written above.

 

  R F INDUSTRIES LTD.
   
  By:                                                                                                         
   
  Print Name:                                                                                           
   
  Title:                                                                                                      
   
   
   
                                                                                                                 
  Signature of the Indemnitee
   
  Print Name:                                                                                           
   
  Address:                                                                                                
                                                                                                                
                                                                                                                
   

 

  14  

EXHIBIT 99.1

 

    FOR IMMEDIATE RELEASE
 

Company Contact:

Robert Dawson 

President/CEO 

(858) 549-6340 

rfi@rfindustries.com 

 

Investor Contact:

Robert Jacobs 

Jacobs Consulting 

(310) 927 3108 

robert.jacobs@jacobscon.com 

 

 

RF Industries Reports Positive Third Quarter 2017 Financial Results

 

San Diego, California , September 12, 2017 -- RF Industries, Ltd. (NASDAQ: RFIL) today announced results for the third quarter and nine months ended July 31, 2017.

 

Third Quarter Highlights

Revenues increased for the third consecutive quarter and year-over-year
Distributed Antenna Systems (DAS) product sales continue to grow
Net income increased $0.8 million
Achieved $0.02 diluted EPS vs. loss of $0.07 in the same quarter last year.
Strong balance sheet maintained with positive cash flow
Declared quarterly dividend of $.02 per share
29 th consecutive quarterly dividend

 

    Q3 2017     Q3 2016     Q2 2017     Q1 2017  
Revenue   $ 7.8 M   $ 7.6 M   $ 7.6 M   $ 6.6 M
Diluted EPS   $ 0.02     $ (0.07 )   $ 0.01     $ (0.02 )
Operating margin     2.4 %     (8.7 )%     0.1 %     (5.4 )%
Cash balance   $ 5.5 M   $ 4.6 M   $ 4.3 M   $ 4.4 M

 

Message from Robert Dawson, President and CEO:

“It was my pleasure to join the Company during the third quarter and I feel energized with the results that the team delivered to improve our profitable growth. Third quarter net income more than doubled from our recent second quarter results, and our cash position has significantly improved. I am encouraged by the Company’s increasing DAS product sales, the return to profitability in our hybrid fiber optic product business, and improving sales in our cable assembly and wiring business.

 

“The RFI team has done a great job of putting strong cost controls in place. We are now focusing our efforts on increasing sales through improved go-to-market strategies and channel models across all of the Company’s divisions. We have great quality products, a strong balance sheet, a solid team, and long-standing customer and vendor relationships. With those core fundamentals in place, the coming quarters are really about getting all of our businesses cranked up to deliver positive results. While we still have work to do, I am optimistic about the remainder of the fiscal year. In coming quarters I look forward to communicating more frequently about our ongoing strategies to profitably grow the business while maintaining the same level of quality we have delivered for over 35 years.”

 

Third Quarter Results

Net sales for the third quarter of fiscal 2017 increased 2.2% to $7.8 million compared to $7.6 million in the same quarter last year. Net sales at the RF Connector and Cable Assembly (RF Connector) segment increased $0.4 million or 15.1% to $3.0 million compared to $2.6 million in the same quarter last year, on the back of continuing strong sales growth of DAS products. Custom Cabling and Manufacturing (Custom Cabling) segment net sales declined 4.3% to $4.8 million from $5.1 million in the same quarter last year. While our sales into the data center and equipment markets were down, this segment is benefitting from growing demands for fiber optic, cable assembly products and custom wiring harnesses and services.

 

 

(more)

 

7610 Miramar Road, San Diego, CA 92126-4202 ● (858) 549-6340 ● (800) 233-1728 ● FAX (858) 549-6345

E-mail: rfi@rfindustries.com ● Internet: www.rfindustries.com

 

 

 

 

RF Industries Reports Third Quarter Results

September 12, 2017

Page Two

  

Third quarter fiscal 2017 overall gross margins were substantially unchanged compared to the same quarter last year. However, the Company’s cost cutting efforts reduced selling and general expenses by $760,000, to $1.8 million, compared to $2.6 million in the same quarter last year. Selling and general expenses in the third quarter last year were affected by one-time expenses of $256,000 related to an abandoned strategic transaction.

 

Although third quarter fiscal 2017 sales and gross margins improved slightly over the comparable prior year period, as a direct result of its cost cutting efforts the Company was able to increase its operating income by $0.9 million from a loss of $0.7 million in fiscal 2016 to a profit of $0.2 million in fiscal 2017. Net income for the quarter was $192,000, or $0.02 per diluted share, compared to a net loss of $597,000, or $0.07 per share. We believe that our cost cutting efforts have positioned the Company to take advantage of improved future sales growth.

 

Nine Months Results

Net sales of $22.1 million for the first nine months of fiscal 2017 remained consistent compared to sales of $22.2 million in the same period last year. Growing DAS product sales in the first nine months of fiscal 2017 largely contributed to a 22.6% increase in net sales at the RF Connector segment, to $8.1 million, compared to $6.6 million in the same period last year. Sales for the same period last year included $86,000 from the Aviel division, which was sold in December, 2015. Custom Cabling net sales for the first nine months of fiscal 2017 declined 10.2%, to $14.0 million compared to $15.6 million for the same period last year, due to sluggish sales into the wireless and telecom markets. Slower sales of our fiber optic, cable assembly products and custom wiring harnesses and services in the first half of fiscal 2017 also contributed to the decline.

 

Overall gross margin for the first nine months of fiscal 2017 was 27.3% of sales, compared to 29.3% of sales in the same period last year. Gross margin was affected by a lower margin product mix at the RF Connector segment and a decline in sales at the Custom Cables segment. However, the Company’s cost cutting efforts helped reduce selling and general expenses for the first nine months of fiscal 2017 by $1.8 million to $5.5 million from $7.3 million.

 

Although the nine month fiscal 2017 sales remained relatively unchanged and gross margins decreased over the comparable prior year period, as a direct result of its cost cutting efforts the Company was able to decrease its operating loss by $1.2 million to a loss of $0.1 million in fiscal 2017. Net income for the fiscal 2017 period improved to $77,000, or $0.01 per diluted share, compared to a net loss of $1.1 million, or $0.12 per diluted share, for the same period last year.

 

Balance Sheet Data

At July 31, 2017, the Company reported working capital of $13.1 million, including cash and cash equivalents of $5.5 million, a current ratio of 4.9-to-1, no outstanding debt, and stockholders' equity of $21.1 million. During the first nine months of fiscal 2017, the Company paid out cash dividends of $0.06 per share, or $530,000.

 

Dividend

At its September 8, 2017 meeting, the Company's Board of Directors declared a quarterly cash dividend of $0.02 per share, payable on October 15, 2017 to stockholders of record on September 30, 2017. Cash dividends are made at the discretion of the Company's Board of Directors, subject to applicable laws, and depend on a number of factors, including the Company’s financial condition, results of operations, capital requirements, plans for future acquisitions, contractual restrictions, general business conditions and other factors that the Board of Directors may deem relevant.

 

(more)

 

 

 

 

RF Industries Reports Third Quarter Results

September 12, 2017

Page Three

 

About RF Industries

RF Industries designs and manufactures a broad range of interconnect products across diversified, growing markets including wireless/wireline telecom, data communications and industrial. The Company's products include RF connectors, coaxial cables, wire harnesses, fiber optic cables, custom cabling and data center equipment. The Company is headquartered in San Diego, California with operations in New York, Connecticut and New Jersey. 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, including higher sales, increased future demand for the Company’s products, and improved profitability, 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 Company's reliance on certain distributors for a significant portion of anticipated revenues, the Company’s ability to penetrate the Distributed Antenna Systems (DAS) market, its ability to expand its OEM relationships the success it has with newly designed solutions for fiber optics, cable assemblies and DAS components and its ability to successfully reduce its operating expenses as planned. 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.

 

 

*  *  *  *  *

 

 

 

 

 

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED) (In thousands, except share and per share amounts)

       

    Three Months Ended     Nine Months Ended  
    July 31,      July 31,   
    2017     2016     2017     2016  
                         
Net sales   $ 7,808     $ 7,640     $ 22,065     $ 22,159  
Cost of sales     5,592       5,513       16,038       15,657  
Gross profit     2,216       2,127       6,027       6,502  
                                 
Operating expenses:                                
  Engineering     215       217       643       557  
  Selling and general     1,817       2,577       5,493       7,261  
Total Operating Expenses     2,032       2,794       6,136       7,818  
                                 
Operating income (loss)     184       (667 )     (109 )     (1,316 )
                                 
Other income (loss)     5       (32 )     23       (4 )
                                 
Income (loss) from continuing operations                                
  before provision (benefit) for income taxes     189       (699 )     (86 )     (1,320 )
Provision (benefit) for income taxes     18       45       (54 )     (330 )
Income (loss) from continuing operations     171       (744 )     (32 )     (990 )
                                 
Income (loss) from                                
  discontinued operations, net of tax     21       147       109       (74 )
                                 
Net income (loss)   $ 192     $ (597 )   $ 77     $ (1,064 )
                                 
Earnings (loss) per share - Basic:                                
  Continuing operations   $ 0.02     $ (0.08 )   $ 0.00     $ (0.11 )
  Discontinued operations     0.00       0.01       0.01       (0.01 )
  Net income (loss) per share   $ 0.02     $ (0.07 )   $ 0.01     $ (0.12 )
                                 
Earnings (loss) per share - Diluted:                                
  Continuing operations   $ 0.02     $ (0.08 )   $ 0.00     $ (0.11 )
  Discontinued operations     0.00       0.01       0.01       (0.01 )
  Net income (loss) per share   $ 0.02     $ (0.07 )   $ 0.01     $ (0.12 )
                                 
Weighted average shares outstanding:                                
  Basic     8,838,027       8,834,747       8,835,852       8,770,375  
  Diluted     8,915,794       8,834,747       8,886,395       8,770,375  

 

 

 

 

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

   

Jul. 31,

2017

   

Oct. 31,

2016

 
              (audited)    
ASSETS                
CURRENT ASSETS                
   Cash and cash equivalents   $ 5,498     $ 5,258  
   Trade accounts receivable, net     3,793       4,077  
   Inventories, net     6,482       6,022  
   Other current assets     730       1,436  

     TOTAL CURRENT ASSETS

    16,503       16,793  
                 
Property and equipment, net     665       828  
Goodwill     3,219       3,219  
Amortizable intangible assets, net     3,177       3,619  
Non-amortizable intangible assets     1,237       1,237  
Other assets     90       141  

     TOTAL ASSETS

  $ 24,891     $ 25,837  
                 

LIABILITIES AND STOCKHOLDERS' EQUITY  

               

CURRENT LIABILITIES

               
   Accounts payable   $ 1,224     $ 1,138  
   Accrued expenses     2,133       2,770  

     TOTAL CURRENT LIABILITIES 

    3,357       3,908  
                 
Deferred tax liabilities, net     433       409  
Other long-term liabilities     --       128  

     TOTAL LIABILITIES 

    3,790       4,445  
                 

COMMITTMENTS AND CONTINGENCIES

               
                 

STOCKHOLDERS' EQUITY  

               
   Common stock, authorized 20,000,000 shares of $0.01 par value;                
     8,852,246 and 8,835,483 shares issued and outstanding at July 31, 2017 and October 31, 2016, respectively     89       88  
   Additional paid-in capital     19,540       19,379  
   Retained earnings     1,472       1,925  

     TOTAL STOCKHOLDERS' EQUITY 

    21,101       21,392  

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

  $ 24,891     $ 25,837