x
|
Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
|
For
the quarterly period ended April 30,
2009
|
Nevada
|
88-0168936
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
7610
Miramar Road, Building 6000
San
Diego, California
|
92126
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(858) 549-6340
|
|
(Registrant’s
telephone number, including area
code)
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
April
30,
2009
|
October
31,
2008
|
|||||||
(Note
1)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 1,140,215 | $ | 1,060,838 | ||||
Certificates
of deposit
|
5,580,592 | 6,315,864 | ||||||
Investments
in available-for-sale securities
|
547,847 | |||||||
Trade
accounts receivable, net of allowance for doubtful accounts of $48,921 and
$46,775
|
1,877,681 | 2,071,349 | ||||||
Inventories
|
5,707,534 | 5,949,708 | ||||||
Other
current assets
|
401,830 | 217,443 | ||||||
Deferred
tax assets
|
542,100 | 542,100 | ||||||
TOTAL
CURRENT ASSETS
|
15,249,952 | 16,705,149 | ||||||
Equipment
and furnishings:
|
||||||||
Equipment
and tooling
|
2,339,518 | 2,205,525 | ||||||
Furniture
and office equipment
|
389,446 | 377,286 | ||||||
2,728,964 | 2,582,811 | |||||||
Less
accumulated depreciation
|
2,131,293 | 2,016,951 | ||||||
TOTALS
|
597,671 | 565,860 | ||||||
Goodwill
|
347,091 | 347,091 | ||||||
Amortizable
intangible asset, net
|
40,734 | 54,311 | ||||||
Note
receivable from stockholder
|
66,980 | 66,980 | ||||||
Other
assets
|
34,776 | 28,382 | ||||||
TOTAL
ASSETS
|
$ | 16,337,204 | $ | 17,767,773 |
April
30,
2009
|
October
31,
2008
|
|||||||
(Note
1)
|
||||||||
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$ | 203,571 | $ | 329,509 | ||||
Accrued
expenses
|
677,072 | 760,762 | ||||||
Income
taxes payable
|
18,519 | 232,927 | ||||||
TOTAL
CURRENT LIABILITIES
|
899,162 | 1,323,198 | ||||||
Deferred
tax liabilities
|
105,700 | 105,700 | ||||||
Other
long-term liabilities
|
235,045 | 217,185 | ||||||
TOTAL
LIABILITIES
|
1,239,907 | 1,646,083 | ||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||
STOCKHOLDERS’
EQUITY
|
||||||||
Common
stock - authorized 10,000,000 shares of $0.01 par value; 2,898,939 and
3,226,264 shares issued and outstanding
|
28,989 | 32,263 | ||||||
Additional
paid-in capital
|
6,438,611 | 6,411,810 | ||||||
Retained
earnings
|
8,629,697 | 9,677,617 | ||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
15,097,297 | 16,121,690 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 16,337,204 | $ | 17,767,773 |
Three
Months Ended April 30,
|
Six
Months Ended April 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
sales
|
$ | 3,524,716 | $ | 4,507,879 | $ | 7,107,299 | $ | 8,334,445 | ||||||||
Cost
of sales
|
1,802,049 | 2,147,264 | 3,738,946 | 4,102,757 | ||||||||||||
Gross
profit
|
1,722,667 | 2,360,615 | 3,368,353 | 4,231,688 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Engineering
|
294,514 | 224,472 | 550,239 | 496,864 | ||||||||||||
Selling
and general
|
1,147,488 | 1,330,084 | 2,396,279 | 2,661,627 | ||||||||||||
Totals
|
1,442,002 | 1,554,556 | 2,946,518 | 3,158,491 | ||||||||||||
Operating
income
|
280,665 | 806,059 | 421,835 | 1,073,197 | ||||||||||||
Other
income - interest
|
43,765 | 68,337 | 126,113 | 138,043 | ||||||||||||
Income
before provision for income taxes
|
324,430 | 874,396 | 547,948 | 1,211,240 | ||||||||||||
Provision
for income taxes
|
109,817 | 332,644 | 170,895 | 497,247 | ||||||||||||
Net
income
|
$ | 214,613 | $ | 541,752 | $ | 377,053 | $ | 713,993 | ||||||||
Basic
earnings per share
|
$ | 0.07 | $ | 0.16 | $ | 0.12 | $ | 0.22 | ||||||||
Diluted
earnings per share
|
$ | 0.07 | $ | 0.15 | $ | 0.11 | $ | 0.19 | ||||||||
Basic
weighted average shares outstanding
|
2,962,620 | 3,292,801 | 3,042,660 | 3,292,144 | ||||||||||||
Diluted
weighted average shares outstanding
|
3,225,956 | 3,696,618 | 3,336,811 | 3,709,668 | ||||||||||||
Dividends
paid
|
$ | 0 | $ | 196,460 | $ | 94,780 | $ | 196,460 |
2009
|
2008
|
|||||||
OPERATING
ACTIVITIES:
|
||||||||
Net
income
|
$ | 377,053 | $ | 713,993 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Bad
debt expense adjustment
|
4,956 | (6,087 | ) | |||||
Depreciation
and amortization
|
132,747 | 138,404 | ||||||
Loss
on disposal of equipment
|
4,827 | |||||||
Deferred
income taxes
|
(29,400 | ) | ||||||
Stock-based
compensation expense
|
77,210 | 268,310 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Trade
accounts receivable
|
188,711 | (47,643 | ) | |||||
Inventories
|
242,174 | (690,103 | ) | |||||
Income
taxes payable
|
(214,408 | ) | 67,823 | |||||
Other
current assets
|
(184,387 | ) | (36,827 | ) | ||||
Other
long term assets
|
(6,394 | ) | 2,552 | |||||
Accounts
payable
|
(125,938 | ) | 191,830 | |||||
Accrued
expenses
|
(51,651 | ) | 289,967 | |||||
Other
long-term liabilities
|
17,860 | 17,471 | ||||||
Net
cash provided by operating activities
|
462,760 | 880,290 | ||||||
INVESTING
ACTIVITIES:
|
||||||||
Purchases
of short term investments
|
(2,117,184 | ) | (5,957,797 | ) | ||||
Sales
of short term investments
|
3,400,303 | 5,730,000 | ||||||
Capital
expenditures
|
(155,807 | ) | (5,729 | ) | ||||
Net
cash provided by (used in) investing activities
|
1,127,312 | (233,526 | ) | |||||
FINANCING
ACTIVITIES:
|
||||||||
Proceeds
from exercise of stock options
|
- | 41,941 | ||||||
Purchases
of treasury stock
|
(1,415,915 | ) | - | |||||
Dividends
paid
|
(94,780 | ) | (196,460 | ) | ||||
Net
cash used in financing activities
|
(1,510,695 | ) | (154,519 | ) | ||||
Net
increase (decrease) in cash and cash equivalents
|
79,377 | (492,245 | ) | |||||
Cash
and cash equivalents, beginning of period
|
1,060,838 | 3,400,566 | ||||||
Cash
and cash equivalents, end of period
|
$ | 1,140,215 | $ | 3,892,811 | ||||
Supplemental
cash flow information:
|
||||||||
Income
taxes paid
|
$ | 295,000 | $ | 450,000 | ||||
Retirement
of treasury stock
|
$ | 1,415,915 | ||||||
Stock
issuance related to contingent liability
|
$ | 30,000 |
April
30,
2009
|
October
31,
2008
|
|||||||
Raw
materials and supplies
|
$ | 1,602,502 | $ | 1,496,364 | ||||
Work
in process
|
9,120 | 31,131 | ||||||
Finished
goods
|
4,124,614 | 4,502,890 | ||||||
Inventory
reserve
|
(28,702 | ) | (80,677 | ) | ||||
Totals
|
$ | 5,707,534 | $ | 5,949,708 |
Three
Months Ended April 30
|
Six
Months Ended April 30
|
|||||||||
2009
|
2008
|
2009
|
2008
|
|||||||
Weighted
average shares outstanding for basic net earnings per
share
|
2,962,620
|
3,292,801
|
3,042,660
|
3,292,144
|
||||||
Add
effects of potentially dilutive securities-assumed exercise of stock
options
|
263,336
|
403,817
|
294,151
|
417,524
|
||||||
Weighted
average shares for diluted net earnings per share
|
3,225,956
|
3,696,618
|
3,336,811
|
3,709,668
|
2009
|
||||
Risk-free
interest rate
|
1.01 | |||
Dividend
yield
|
2.96 | % | ||
Expected
life of the option
|
2.5 years
|
|||
Volatility
factor
|
60.37 | % |
Shares
|
Weighted
Average
Exercise
Price
|
Weighted Average
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
|||||||
Outstanding
at November 1, 2008
|
1,067,041
|
$
|
3.77
|
|||||||
Options
granted
|
16,000
|
$
|
4.05
|
|||||||
Options
exercised
|
-
|
$
|
-
|
|||||||
Options
canceled or expired
|
(22,210)
|
$
|
6.08
|
|||||||
Options
outstanding at April 30, 2009
|
1,060,831
|
$
|
3.72
|
5.14
years
|
$
|
1,031,183
|
||||
Options
exercisable at April 30, 2009
|
853,648
|
$
|
3.75
|
5.40
years
|
$
|
949,483
|
Three
Months Ended April 30,
|
Six
Months Ended April 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
United
States
|
$ | 2,979,452 | $ | 3,871,413 | $ | 5,753,749 | $ | 7,038,553 | ||||||||
Foreign
countries:
|
||||||||||||||||
Israel
|
173,570 | 148,142 | 685,718 | 373,276 | ||||||||||||
All
other
|
371,694 | 488,324 | 667,832 | 922,616 | ||||||||||||
$ | 3,524,716 | $ | 4,507,879 | $ | 7,107,299 | $ | 8,334,445 |
2009
|
RF
Connectors
and
Cable Assembly
|
Medical
Cabling
and
Interconnector
|
RF
Wireless
|
Corporate
|
Total
|
|||||||||||||||
Net
sales
|
$
|
2,936,842
|
$
|
303,414
|
$
|
284,460
|
$
|
3,524,716
|
||||||||||||
Income
(loss) before provision for income taxes
|
441,659
|
(17,961)
|
(143,033)
|
$
|
43,765
|
324,430
|
||||||||||||||
Depreciation
and amortization
|
54,836
|
3,875
|
11,616
|
70,327
|
||||||||||||||||
2008
|
||||||||||||||||||||
Net
sales
|
$
|
3,330,459
|
428,562
|
$
|
748,858
|
$
|
4,507,879
|
|||||||||||||
Income
(loss) before provision for income taxes
|
512,557
|
95,406
|
198,096
|
$
|
68,337
|
874,396
|
||||||||||||||
Depreciation
and amortization
|
46,454
|
5,571
|
7,677
|
59,702
|
2009
|
RF
Connectors
and
Cable Assembly
|
Medical
Cabling
and
Interconnector
|
RF
Wireless
|
Corporate
|
Total
|
|||||||||||||||
Net
sales
|
$
|
6,065,099
|
$
|
576,571
|
$
|
465,629
|
$
|
7,107,299
|
||||||||||||
Income
(loss) before provision for income taxes
|
742,008
|
(33,756)
|
(286,417)
|
$
|
126,113
|
547,948
|
||||||||||||||
Depreciation
and amortization
|
106,751
|
7,296
|
18,700
|
132,747
|
||||||||||||||||
2008
|
||||||||||||||||||||
Net
sales
|
$
|
6,607,828
|
$
|
630,965
|
$
|
1,095,652
|
$
|
8,334,445
|
||||||||||||
Income
(loss) before provision for income taxes
|
851,183
|
78,986
|
143,028
|
$
|
138,043
|
1,211,240
|
||||||||||||||
Depreciation
and amortization
|
111,906
|
11,143
|
15,355
|
138,404
|
April
30,
2009
|
October
31,
2008
|
|||||||
Intangible
assets
|
||||||||
Non-compete
agreement
|
$
|
120,000
|
$
|
120,000
|
||||
Accumulated amortization
|
(120,000
|
)
|
(120,000
|
)
|
||||
—
|
—
|
|||||||
Software
|
47,522
|
47,522
|
||||||
Accumulated
amortization
|
(23,761
|
)
|
(15,841
|
)
|
||||
23,761
|
31,681
|
|||||||
Customer
List
|
33,945
|
33,945
|
||||||
Accumulated
amortization
|
(16,972
|
)
|
(11,315
|
)
|
||||
16,973
|
22,630
|
|||||||
Totals
|
$
|
40,734
|
$
|
54,311
|
|
·
|
As
of April 30, 2009, the amount of cash and cash equivalents was equal to
$1,140,215 in the aggregate and the Company had $5,580,592 of investments
in certificates of deposit.
|
|
·
|
As
of April 30, 2009, the Company had $15,249,952 in current assets, and
$899,162 in current liabilities.
|
|
·
|
As
of April 30, 2009, the Company had no outstanding indebtedness (other than
accounts payable, accrued expenses and income taxes
payable).
|
Period:
|
Total
Number
of
Shares
Purchased
|
Average
Price
Paid
per Share
|
Total
Number of
Shares
Purchased
as
Part
of Publicly
Announced Plans
of
Programs
|
Approximate
Dollar
Value of
Shares
that May
Yet
Be
Purchased
Under
the Plans
or
Programs
|
||||||
February
1, 2009 through February 28, 2009
|
119,521
|
(1) |
$
|
4.09
|
19,521
|
$
|
0
|
|||
March
1, 2009 through March 31, 2009
|
19,701
|
$
|
3.83
|
19,701
|
$
|
0
|
||||
April
1, 2009 through April 30, 2009
|
45,510
|
$
|
3.22
|
45,510
|
$
|
0
|
||||
Totals
|
184,732
|
84,732
|
(1)
|
In
February of 2009, the Company purchased 100,000 shares of common stock in
a privately negotiated transaction at a price of $4.05 per
share.
|
Exhibit
|
|
Number
|
|
31.1:
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
31.2:
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
32.1:
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2:
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
RF
INDUSTRIES, LTD.
|
||
Dated:
June 12, 2009
|
By:
|
/s/
Howard F. Hill
|
Howard
F. Hill, President
|
||
Chief
Executive Officer
|
Dated:
June 12, 2009
|
By:
|
/s/
James Doss
|
James
Doss
|
||
Chief
Financial Officer
|