SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
for Quarter ended April 30, 2002
Commission File Number 0-13301
RF INDUSTRIES, LTD.
(Exact name of registrant as specified in its charter)
Nevada 88-0168936
(State of Incorporation) (I.R.S. Employer Identification No.)
7610 Miramar Road., Bldg. 6000, San Diego, California 92126-4202
(Address of principal executive offices) (Zip Code)
(858) 549-6340 FAX (858) 549-6345
(Issuer's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None.
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days
Yes X No
---
State the number of shares outstanding of each of the issuer's classes of common
stock at the latest practicable date.
As of May 31, 2002, the registrant had 3,409,354 shares of Common Stock, $.01
par value, outstanding.
Transitional small business disclosure format
Yes No X
---
Part I. FINANCIAL INFORMATION
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
Item 1: Financial Statements
ASSETS April 30 October 31
----------- 2002 2001
---------- ----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents ............................ $1,393,572 $ 915,538
Investments in available-for-sale securities ......... 1,790,040 1,744,851
Trade accounts receivable, net of allowance
for doubtful accounts of $90,411 and $42,000 ......... 1,187,820 981,803
Notes receivable ..................................... 12,000 12,000
Income tax refund receivable ......................... 105,192 216,192
Inventories .......................................... 4,272,630 4,746,125
Other current assets ................................. 215,885 111,214
Deferred tax assets .................................. 150,130 155,700
---------- ----------
TOTAL CURRENT ASSETS ............................ 9,127,269 8,883,423
---------- ----------
PROPERTY AND EQUIPMENT
Equipment and tooling ................................ 1,062,414 1,050,922
Furniture and office equipment ....................... 248,826 243,357
---------- ----------
Fixed assets, at cost ........................... 1,311,240 1,294,279
Less accumulated depreciation ................... 819,370 737,279
---------- ----------
NET FIXED ASSETS ................................ 491,870 557,000
---------- ----------
Intangible assets .................................... 174,698 174,698
Less accumulated amortization ........................ 11,646 11,646
---------- ----------
NET INTANGIBLE ASSETS ........................... 163,052 163,052
Note receivable from stockholder ..................... 70,000 70,000
Other assets ......................................... 11,471 11,471
---------- ----------
TOTAL ASSETS $9,863,662 $9,684,946
========== ==========
See Notes to Condensed Consolidated Unaudited Financial Statements.
2
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
Item 1: Financial Statements
April 30 October 31
2002 2001
---------- ----------
(Unaudited)
LIABILITIES AND
STOCKHOLDERS' EQUITY
--------------------------
CURRENT LIABILITIES
Accounts payable ................................. $ 133,010 $ 107,145
Notes payable .................................... 41,663 50,000
Accrued expenses ................................. 202,949 278,407
----------- -----------
Total current liabilities.................... 377,622 435,552
Notes payable, net of current portion ............ 39,163
Deferred tax liabilities ......................... 25,700 25,700
----------- -----------
TOTAL LIABILITIES ........................... 403,322 500,415
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common Stock - authorized 10,000,000 shares
of $.01 par value; 3,441,054 shares issued ..... 34,410 34,410
Additional paid-in capital ....................... 4,695,147 4,695,147
Retained earnings ................................ 4,786,986 4,543,376
Unearned compensation ............................ 0 (23,490)
Accumulated other comprehensive gain (loss)....... 723 (7,986)
Receivables from sale of stock ................... (1,715) (1,715)
Treasury stock, at cost - 31,700 shares .......... (55,211) (55,211)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY .................. 9,460,340 9,184,531
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ..................... $ 9,863,662 $ 9,684,946
=========== ===========
See Notes to Condensed Consolidated Unaudited Financial Statements.
3
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME
Three Months Ended Six Months Ended
April 30 April 30
----------------------- ------------------------
(Unaudited) (Unaudited)
2002 2001 2002 2001
--------- --------- --------- ---------
Net sales .............................. $ 2,090,989 $ 2,403,539 $ 4,275,906 $ 4,752,140
Cost of sales .......................... 956,996 1,138,063 2,106,676 2,358,227
--------- --------- --------- ---------
Gross profit ...................... 1,133,993 1,265,476 2,169,230 2,393,913
--------- --------- --------- ---------
Operating expenses:
Engineering ....................... 142,192 125,675 306,227 241,404
735,628 792,080 1,505,611 1,443,635
Selling and general ............... --------- --------- --------- ---------
Totals ........................ 877,820 917,755 1,811,838 1,685,039
--------- --------- --------- ---------
Operating income ....................... 256,173 347,721 357,392 708,874
--------- --------- --------- ---------
Other income:
Commissions ....................... 0 42,784 8,215 60,857
Interest .......................... 16,249 23,413 40,003 54,921
--------- --------- --------- ---------
Totals ........................ 16,249 66,197 48,218 115,778
--------- --------- --------- ---------
Income before provision
for income tax ..................... 272,422 413,918 405,610 824,652
Provision for income tax ............... 111,000 164,500 162,000 330,000
--------- --------- --------- --------
Net income ............................. $ 161,422 $ 249,418 $ 243,610 $ 494,652
========= ========= ========= =========
Basic earnings per share ............... $ 0.05 $ 0.07 $ 0.07 $ 0.15
========= ========= ========= =========
Diluted earnings per share ............. $ 0.04 $ 0.06 $ 0.06 $ 0.13
========= ========= ========= =========
Basic weighted average ................. 3,409,354 3,403,054 3,409,354 3,402,882
shares outstanding ................. ========= ========= ========= =========
Diluted weighted average ............... 3,851,303 3,876,147 3,848,809 3,949,752
shares outstanding ................. ========= ========= ========= =========
COMPREHENSIVE INCOME:
Net income ............................. $ 161,422 $ 249,418 $ 243,610 $ 494,652
Unrealized gain (loss) on available-
for-sale securities, net of deferred tax 1,613 4,018 8,709 (16,743)
--------- --------- --------- ----------
Total comprehensive income ........ $ 163,035 $ 253,436 $ 252,319 $ 477,909
========= ========= ========= =========
See Notes to Condensed Consolidated Unaudited Financial Statements.
4
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended April 30
---------------------------------
2002 2001
OPERATING ACTIVITIES -------- --------
Net income .............................................. $ 243,610 $ 494,652
Adjustments to reconcile net income to
net cash provided by (used in) operating activities
Bad debts .......................................... 50,000 28,320
Inventory deposit write-offs ....................... 30,294
Depreciation and amortization ...................... 82,721 62,588
Amortization of unearned compensation .............. 23,490 47,028
Changes in operating assets and liabilities, net of
acquisition payment in 2001:
Trade accounts receivable ..................... (256,017) 376,293
Inventories ................................... 473,495 (933,463)
Other assets .................................. 6,329 11,509
Accounts payable .............................. 25,865 (251,455)
Accrued expenses .............................. (75,458) (193,479)
----------- -----------
Net cash provided by (used in) operating activities 574,035 (327,713)
----------- -----------
INVESTING ACTIVITIES
Proceeds from sale of (investment in) securities .. (30,910) 461,706
Capital expenditures (17,591) (110,345)
Payment for acquisition, net of cash acquired ..... (147,078)
----------- -----------
Net cash provided by (used in) investing activities (48,501) 204,283
----------- -----------
FINANCING ACTIVITIES
Payments on loans payable ......................... (47,500) (220,371)
Proceeds from exercise of common stock options .... 1,561
----------- -----------
Net cash used in financing activities ............ (47,500) (218,810)
----------- -----------
Net increase (decrease) in cash and cash equivalents .... 478,034 (342,240)
Cash and cash equivalents at the
beginning of the period ........................... 915,538 557,923
----------- -----------
Cash and cash equivalents at the end of the period ...... $ 1,393,572 $ 215,683
=========== ===========
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid .................................. $ 51,000 $ 255,000
=========== ===========
Noncash investing and financing activities:
Fair value of assets acquired ...................... $ 496,504
Liabilities assumed ................................ (207,341)
Seller financing ................................... (139,163)
-----------
Cash paid .......................................... $ 150,000
===========
See Notes to Condensed Consolidated Unaudited Financial Statements.
5
RF INDUSTRIES, LTD. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Unaudited interim financial statements:
The accompanying unaudited condensed consolidated financial statements have
been prepared in conformity with accounting principles generally accepted
in the United States of America for interim financial information and with
the instructions to Form 10-QSB. Accordingly, they do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and six month periods ended April
30, 2002 are not necessarily indicative of the results that may be expected
for the year ending October 31, 2002. The unaudited condensed consolidated
financial statements should be read in conjunction with the financial
statements and footnotes thereto included in the Company's annual report on
Form 10-KSB for the year ended October 31, 2001.
Note 2 - Components of inventory
April 30, 2002 October 31, 2001
--------------- ------------------
(Unaudited) (Audited)
Raw material and supplies ..... $ 781,410 $ 822,180
Finished goods ................ 3,491,220 3,923,945
---------- ----------
Totals ....................... $ 4,272,630 $ 4,746,125
========== ==========
Note 3 - Earnings per share:
The Company follows the provisions of Statement of Financial Accounting
Standards No. 128, "Earnings per Share", which requires the presentation of
"basic" and "diluted" earnings per common share, as further explained in
Note 1 of the notes to the audited financial statements of the Company,
included in Form 10-KSB for the fiscal year ended October 31, 2001.
Basic earnings per share is computed by dividing net earnings by the
weighted average number of common stock outstanding during the period.
Diluted earnings per share is computed by dividing net earnings by the
weighted average number of shares of common stock increased by the effects
of assuming that other potentially dilutive securities (such as stock
options) outstanding during the period had been exercised.
6
The following table summarizes basic and diluted shares:
Three Months Ended Six Months Ended
April 30 April 30
2002 2001 2002 2001
--------- --------- ---------- ---------
Weighted average shares outstanding for
basic net earnings per share ............. 3,409,354 3,403,054 3,409,354 3,402,882
Add effects of potentially dilutive securities-
assumed exercised of stock options ....... 441,949 473,093 439,455 546,870
--------- --------- --------- ---------
Weighted average shares for diluted net
earnings per share ....................... 3,851,303 3,876,147 3,848,809 3,949,752
========= ========= ========= =========
Note 4 - Segment Information
Net sales and income (loss) before provision for income taxes for the three
months ended April 30, 2002 and 2001 follows:
Common/ Intercompany
Connector Neulink Bioconnect Corporate Sales Total
----------- ---------- ------------ ----------- ------------ ----------
2002
--------
Net sales ................. $ 1,787,971 $ 203,914 $ 284,506 $ (185,402) $ 2,090,989
Income (loss) before
provision for income
taxes ................. 246,708 (20,686) 30,151 16,249 272,422
Depreciation and
amortization ........... 22,217 6,042 13,277 41,536
Total assets .............. 8,644,055 1,105,355 114,252 9,863,662
Additions to property
and equipment .......... 7,198 5,842 13,040
2001
--------
Net sales ................. $ 2,176,271 $ 157,689 $ 69,579 $ 2,403,539
Income (loss) before
provision for income
taxes ................. 465,613 30,748 (144,902) $ 62,459 413,918
Depreciation and
amortization ........... 17,775 3,225 9,624 30,624
Total assets .............. 7,701,887 1,240,142 358,429 9,300,458
Additions to property
and equipment .......... 19,706 19,706
7
Net sales and income (loss) before provision for income taxes for the six
months ended April 30, 2002 and 2001 follows:
Common/ Intercompany
Connector Neulink Bioconnect Corporate Sales Total
----------- ---------- ------------ ----------- ------------ ----------
2002
--------
Net sales ................ $ 3,558,721 $ 553,146 $ 454,919 $ (290,880) $ 4,275,906
Income (loss) before
provision for income
taxes ................ 458,797 43,794 (136,984) $ 40,003 405,610
Depreciation and
amortization .......... 45,610 11,043 26,068 82,721
Total assets ............. 8,644,055 1,105,355 114,252 9,863,662
Additions to property
and equipment ......... 10,945 6,646 17,591
2001
--------
Net sales ................ $ 4,229,547 $ 402,943 $ 119,650 $ 4,752,140
Income (loss) before
provision for income
taxes ................. 1,089,655 (110,546) (212,230) $ 57,773 824,652
Depreciation and
amortization .......... 40,985 6,543 15,060 62,588
Total assets ............. 7,701,887 1,240,142 358,429 9,300,458
Additions to property
and equipment ......... 110,345 110,345
Note 5 - New accounting policy
The Company has elected early adoption of SFAS No. 142, "Goodwill and Other
Intangible Assets", which requires that goodwill and certain intangible
assets, including those recorded in past business combinations, no longer
be amortized against earnings, but instead be tested for impairment at
least annually. The Company believes there is no material impact on the
financial statements.
Item 2: Management's discussion and analysis of financial condition and results
of operations
This report contains forward-looking statements. These statements relate to
future events or the Company's future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "except," "plan," "anticipate," "believe," "estimate," "predict,"
"potential" or "continue," the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially.
8
Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements. Moreover, neither the
Company, nor any other person, assumes responsibility for the accuracy and
completeness of the forward-looking statements. The Company is under no
obligation to update any of the forward-looking statements after the filing of
this Quarterly Report on Form 10-QSB to conform such statements to actual
results or to changes in its expectations.
The following discussion should be read in conjunction with the Company's
financial statements and the related notes and other financial information
appearing elsewhere in this Form 10-QSB. Readers are also urged to carefully
review and consider the various disclosures made by the Company which attempt to
advise interested parties of the factors which affect the Company's business,
including without limitation the disclosures made under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," under the caption "Risk Factors," and the audited financial
statements and related notes included in the Company's Annual Report filed on
Form 10-KSB for the year ended October 31, 2001 and other reports and filings
made with the Securities and Exchange Commission.
Liquidity and Capital Resources
Management believes that existing current assets and the amount of cash it
anticipates it will generate from current operations will be sufficient to fund
the anticipated liquidity and capital resource needs of the Company for at least
twelve months. The Company does not, however, currently have any commercial
banking arrangements providing for loans, credit facilities or similar matters
should the Company need to obtain additional capital. Management believes that
its existing assets and the cash expected to be generated from operations will
be sufficient during the current fiscal year are based on the following:
o As of April 30, 2002, the amount of cash, cash equivalents, and
available-for-sale securities was equal to $ 3,183,612 in the aggregate.
o As of April 30, 2002, the Company had $9,127,269 in current assets, and
only $377,622 of current liabilities
o As of April 30, 2002, the Company had only $41,663 of outstanding
indebtedness (other than accounts payable and other current liabilities).
The Company does not believe it will need material additional capital equipment
in fiscal 2002. In the past, the Company has financed some of its fixed asset
requirements through capital leases. No additional capital equipment purchases
have been currently identified that would require significant additional leasing
or capital obligations during fiscal 2002. Management also believes that based
on the Company's financial condition at April 30, 2002, the absence of
outstanding bank debt and recent operating results, the Company would be able to
obtain bank loans to finance its expansion, if necessary, although there can be
no assurance any bank loan would be obtainable, or if obtained, would be on
favorable terms or conditions.
9
Net cash provided by operating activities for the first six months of 2002 was
$574,035 whereas cash used in operating activities for the first six months of
2001 was $327,713. Non cash outlays for bad debts, inventory deposit write-offs,
depreciation and amortization, and amortization of unearned income for the first
six months were $ 156,211 compared to $168,230 for the previous year. Trade
accounts receivable increased $256,017 compared to an decrease of $376,293 the
previous year. The increase is due to some slow paying accounts due to our
economy. Accounts payable increased $25,865 compared to a decrease of $251,455
the previous year. Accrued expenses decreased $ 75,458 compared to a decrease of
$193,479 the previous year. The Company was able to further reduce its accrued
expenses as a result of its good cash position.
Net cash used in investing activities was $48,501 for the first six months ended
April 30, 2002, and consisted of investments in securities of $30,910 and
capital expenditures of $17,591.
Net cash used in financing activities was $47,500 for the six months ended April
20, 2002, and consisted of payment on the loan payable to Bioconnect.
As of April 30, 2002 the Company had $1,393,572 in cash and cash equivalents and
$1,790,040 in investments, as compared to $915,538 in cash and cash equivalents
and $1,744,851 in investments at October 31, 2001. As a result, as of April 30,
2002, the Company had working capital of $8,749,647 and a current ratio of 24.17
to 1.
Three Months 2002 vs. Three Months 2001
---------------------------------------
Net sales decreased 13%, or $309,000, to $2,091,000 from $2,400,000 in the first
three months ended April 30, 2002. The decrease was the result of declining
sales at the Company's RF Connectors division. The RF Connectors manufactures
and sells connectors used in radio communications applications, such as cellular
and PCS telephones, cellular and PCS base stations, GPS products, and cable and
dish radio/TV systems. Net sales at the RF Connector division decreased by 18%
during the fiscal quarter ended April 30, 2002 compared to the same fiscal
quarter last year because of decreased demand for wireless application products.
The Company believes that sales for wireless products have decreased in the
current year compared to the past year due to an industry-wide slowdown in the
demand for wireless products. The decrease in connector sales was partially
offset by an increase in cable assembly systems. During the fiscal quarter ended
April 30, 2002, net sales of cable assembly systems was $687,500 compared to net
cable system sales of $490,400 during the same fiscal quarter last year. Since
the acquisition of the Bioconnect division, the RF Connector division has
attempted to increase sales of its radio frequency connectors by selling its
connectors as part of completed cable assemblies that are manufactured for the
RF Connector division by the Bioconnect division. The Company believes that its
new marketing strategy of marketing complete cable assemblies has managed to
reduce the decline of revenues from the sales of connectors. However, since
cable assembly sales are still developing and inconsistent, the Company
anticipates that sales of such assemblies will fluctuate in the future.
10
Sales at the Company's RF Neulink division increased by 29% to $204,200 compared
to $157,700 in the fiscal quarter ended April 30, 2002. This increase can be
attributed to stronger sales in new application areas. However, while RF
Neulink's net sales increased during the current fiscal quarter, RF Neulink
experienced a net loss before taxes of approximately $21,000 during the current
fiscal quarter, compared to income before taxes of approximately $31,000 during
the same fiscal quarter in 2001. The loss is attributable to sales of lower
margin products.
Net sales at the Company's Bioconnect division increased in the fiscal quarter
ended April 30. 2002 from $69,600 to $284,500. However, of the increase in
Bioconnect's sales, $185,400 resulted from intercompany sales of cable
assemblies to the RF Connector division. The RF Connector division currently
anticipates that sales of cable assemblies will decrease somewhat in the near
term, which will therefore also result in a decrease in Bioconnect's revenues.
Bioconnect is completing the development of some additional interconnect
products for medical monitoring applications, which new products, when released,
are expected to contribute to increased Bioconnect medical interconnect sales.
Cost of sales decreased 16%, or $181,100 to $957,000 from $1,138,100 last year.
The decrease is due to the 13% decrease in the Company's net sales, and the
Company's overall gross margins as a percentage of sales did not materially
change during the current fiscal quarter.
Engineering expenses increased $16,500, or 13%, from $125,700 in the second
quarter last year. Engineering expenses increased during the current year as the
Company responded to the rapid changes in the wireless industry for new products
and for connectors that are used in new applications. This Company anticipates
that engineering expenses will remain above last year's levels while the number
of wireless applications continues to increase.
Selling and general expenses decreased 7% or $56,400, to $735,600 from $792,000
last year. The decrease is in response to declining net sales, which decreased
by 13% during the current period compared to the prior year's quarter. During
the current fiscal quarter, the Company attempted to reduce its general expenses
by reducing its labor force and taking other cost cutting steps. The Company did
not, however, significantly reduced its marketing and advertising expenses.
Net interest income decreased $7,200 to $16,200 from $23,400 the previous year
due to lower interest rates.
No commissions were paid to the Neulink division in current fiscal quarter
ending April 30, 2002. For the past two years, the Company has been receiving
commissions under an agreement with a third party relating to sales made by that
third party. The Company believes that the foregoing agreement has been
substantially completed and that, therefore, no material amounts of such
payments will be received in the future. During last year's fiscal quarter
ending April 30, 2001, the Company still received these payments, which payments
totaled $42,800 during last year's quarter.
11
Six Months 2002 vs Six Months 2001
-----------------------------------
Net sales decreased by $476,200, or 10%, to $4,275,900 for the six month period
ended April 30, 2002 from $4,752,100 in the previous year. As discussed above,
the decrease was the result of declining sales at the Company's RF Connectors
division, which decrease is attributable to an industry-wide decrease in demand
for radio frequency connectors. As a result of the decrease in connector sales,
net sales made by the RF Connectors division decreased by 16% to $3,558,700 from
$4,229,500 last year.
Sales in the Company's RF Neulink division increased during the current
six-month period ending April 30, 2002 by 37% to $553,150 from $403,000 for the
comparable six-month period in the previous year. The increase can be attributed
to stronger sales of new application areas.
Bioconnect's sales during the six-month period ending April 30, 2002 were
$455,000, compared to $119,650 for the same six months last year. The two fiscal
periods are not, however, comparable since the Bioconnect division was acquired
in December 2000 and, therefore, did not have six months operations during the
prior year's period. In addition, Bioconnect's sales during the six-month period
ending April 30, 2002 included intercompany sales of $291,000, representing
cable assemblies that Bioconnect sold to the RF Connector division. No similar
intercompany sales were effected last year.
Cost of sales decreased $251,500, or 11%, to $2,106,700 from $2,358,200 last
year due to the 10% decrease in sales. Overall, gross profits as a percent of
sales, remained relatively unchanged for the Company at 51% during the current
six-month period compared to 50% last year.
Engineering expenses increased $64,800, or 27%, to $306,200 from $241,400 last
year. This increase can be attributed to added personnel and expenses associated
with the Bioconnect acquisition and the Company's expansion of its engineering
departments to meet the increased business demands.
Selling and general expenses increased $62,000, or 4%, to $1,505,600 compared to
$1,443,600 last year, and as a percent of sales increased to 35% from 30% of
sales last year. The increase is due to the added expenses incurred primarily
during the first three months of the period. The increases in selling and
general expenses include the additional expenses associated with the Bioconnect
acquisition and higher expenses for legal fees, increased travel, advertising,
and insurance expenses.
Net interest income decreased $14,900 to $40,000 from $54,900 the previous year
primarily due to lower interest rates earned on cash and cash equivalents.
Commissions for the Neulink division's sales were $8,200, all of which were
received during the first three months of the six month fiscal period, compared
to $60,850 in commissions the previous year as sales under the third party
agreement began to wind down.
12
MATERIAL CHANGES IN FINANCIAL CONDITION:
Cash and cash equivalents increased by $478,034 to $1,393,572 compared to the
October 31, 2001 fiscal year-end balance of $915,538. As a result, cash and cash
equivalents were $3,183,612 at April 30, 2002. The increase in the Company's
cash position is due to the decrease in inventory levels and the collection of
an income tax refund.
Trade accounts receivable increased $206,017, or 21% to $1,187,820 compared to
the October 31, 2001 balance of $981,803. The increase is due to a slow-down in
payment schedules of a few customers, which the Company attributes to the
overall economy. Nevertheless, the Company increased its net allowance for
doubtful accounts by approximately $49,000 to reflect the increased difficulties
the Company has experienced in receiving timely payments from its customers.
Inventories, as of April 30, 2002, decreased to $4,272,630, a $473,495 decrease
from $4,746,125 on October 31, 2001. As part of its business strategy, and
because of its off-shore manufacturing arrangements, the Company normally
maintains a high level of inventory. Due to an overall slow-down in the demand
for the Company's connectors, the Company has been reducing its inventory
levels.
Other current assets, including prepaid expenses and deposits, increased
$104,700 to $215,900, from $111,200 on October 31, 2001. This increase is part
of the normal operating cycle of the Company and is due to the annual invoices
received early each year for prepaid cargo insurance, prepaid property and
liability insurance, audit fees, computer maintenance agreement, and
miscellaneous expenses.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2-5 Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Description
None
(b) Reports on Form 8-K
None
13
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 thereunto duly authorized.
RF INDUSTRIES, LTD.
Dated: June 13, 2002 By: /s/ Howard F. Hill
-------------------------------
Howard F. Hill, President
Chief Executive Officer
Dated: June 13, 2002 By: /s/ Terrie A. Gross
-------------------------------
Terrie A. Gross
Chief Financial Officer
14