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): January 28, 2016

 

RF INDUSTRIES, LTD.

(Exact name of registrant as specified in its charter)

 

Nevada   0-13301   88-0168936
(State or other jurisdiction of
incorporation or organization)
 

(Commission
File Number)

  (I.R.S. Employer
Identification No.)
         
    7610 Miramar Road
Bldg. 6000
San Diego, California 92126-4202
   
   

(Address of Principal
Executive Offices) (Zip Code)

 

   

Registrant’s telephone number, including area code: (858) 549-6340

 

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))

 

 

 

 

 

 

Item 2.02Results of Operations and Financial Condition.

 

On January 28, 2016, RF Industries, Ltd. (the "Company") issued a press release announcing information regarding the Company's financial results for the fourth fiscal quarter and the fiscal year ending October 31, 2015. 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 9.01Financial Statements and Exhibits.

 

(d)Exhibits

 

Exhibit No. Description
   
99.1 Press Release of RF Industries, Ltd. dated January 28, 2016.

  

 

 

 

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.

 

  RF Industries, Ltd.
     
     
Date:  January 28, 2016 By: /s/ Johnny Walker
    Johnny Walker
    Chief Executive Officer

 

 



 

Exhibit 99.1

 

    FOR IMMEDIATE RELEASE
 

Company Contact:

Johnny Walker 

President/CEO 

(858) 549-6340 

rfi@rfindustries.com 

 

Investor Contact:

Robert Jacobs 

Jacobs Communications 

(310) 927 3108 

robert.jacobs@jacobscon.com 

 

 

 

RF Industries' Fiscal 2015 Sales Increase 42% to $32.8 Million

 

Acquisitions lead to increased sales

 

San Diego, California, January 28, 2016 -- RF Industries, Ltd. (NASDAQ: RFIL) today announced results for the fourth quarter and fiscal year ended October 31, 2015.

 

Fourth Quarter Results

Net sales for the fourth quarter of fiscal 2015 increased $3.0 million, or 50%, to $8.9 million compared to net sales of $5.9 million for the same quarter last year. Despite the increase in net sales, net income decreased in the 2015 quarter to $270,000, or $0.03 per diluted share, compared to $325,000, or $0.04 per diluted share, in the same period last year due in part to weaker sales in the Company’s core Connector and Cable Assembly segment.

 

Johnny Walker, President and CEO said, "Comnet Telecom Supply and Rel-Tech Electronics, two companies that we acquired in fiscal 2015, together contributed $4.4 million to fourth quarter sales. Along with our existing Cables Unlimited subsidiary, these three businesses now comprise the Company’s largest segment, Custom Cabling and Manufacturing, which achieved fourth quarter sales of $5.9 million or 66% of Company sales. We believe this segment should contribute increased sales in fiscal 2016."

 

Gross profit for the fourth quarter of fiscal 2015 increased to $2.9 million from $2.6 million, but declined as a percentage of net sales to 32% from 44% in the same period last year, primarily due to strong sales contributions from the typically lower margin businesses comprising the Custom Cabling and Manufacturing segment. While the operations of Comnet and Rel-Tech increased fourth quarter selling and general expenses by $628,000, to $2.3 million, these expenses decreased to 26% of net sales, compared to 31% in the same period last year.

 

Fiscal Year Results

Net sales for the fiscal year ended October 31, 2015 increased $9.7 million, or 42%, to $32.8 million compared to net sales of $23.1 million for fiscal 2014. Net income decreased to $1.0 million, or $0.11 per diluted share, compared to $1.4 million, or $0.16 per diluted share, in fiscal 2014. Comnet and Rel-Tech together contributed $13.4 million to Custom Cabling and Manufacturing segment sales, which increased 165% to $19.2 million compared to $7.2 million in fiscal 2014. Net sales for the Company's other business segments declined by $2.3 million to $13.6 million, compared to $15.9 million in fiscal 2014.

 

Fiscal 2015 gross profit declined to 34% from 45% of sales in fiscal 2014 primarily due to strong sales contributions from the typically lower margin businesses comprising the Custom Cabling and Manufacturing segment.

 

The operations of Comnet and Rel-Tech primarily accounted for a $2.1 million increase in selling and general expenses to $9.1 million from $7.2 million in fiscal 2014. These expenses declined, however, to 29% of net sales from 31% of sales last year.

 

"Our fiscal 2015 acquisitions increased Custom Cabling and Manufacturing segment sales to 59% of total sales, compared to only 31% of sales in fiscal 2014. Our strategy to focus on this business segment and improve the profitability of the Connector and Cable Assembly core operating segment led to the sale of our Aviel Electronics division on December 22, 2015," said Mr. Walker.

 

(more)

 

 

 

 

RF Industries Reports Fourth Quarter and Fiscal 2015 Results

January 28, 2016

Page Two

 

 

"In response to a sluggish business environment we reduced our annual operating payroll expense by approximately $0.8 million during the fourth quarter of fiscal 2015. We should see the results of this action over the course of fiscal 2016," added Mr. Walker.

 

Balance Sheet Data

At October 31, 2015, the Company reported working capital of $15.3 million, including cash and cash equivalents of $7.6 million, a current ratio of approximately 4.5-to-1, no long-term debt, and stockholders' equity of $26.4 million. During the fiscal 2015, the Company used net cash of $5.1 million and issued 302,848 shares of unregistered common stock to acquire the Comnet and Rel-Tech subsidiaries and to purchase a new, patented line of connector products known as CompPro. The Company also paid cash dividends of $0.28 per share to its shareholders, for a total of $2.4 million in fiscal 2015.

 

Dividend

At its December 16, 2015 meeting, the Company's Board of Directors declared a quarterly cash dividend of $0.07 per share, which was paid on January 15, 2016 to shareholders of record on December 31, 2015. All cash dividends are made at the discretion of our board of directors, subject to applicable laws, and depend on a number of factors, including our financial condition, results of operations, capital requirements, plans for future acquisitions, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant.

 

About RF Industries

RF Industries is a leading designer and manufacturer of innovative interconnect products and complex cable assemblies across diversified, high growth markets including wireless carriers and infrastructure, medical and industrial. The Company's products include RF connectors, coaxial and custom cable assemblies, fiber optic cables, wiring harnesses and medical wiring. The Company's connectivity products are used throughout the growing and evolving infrastructure of wireless communications. Through its newly acquired Rel-Tech Electronics, Inc. and Comnet Telecom Supply, Inc. subsidiaries, the Company also manufactures and sells other cabling technologies and data center equipment solutions. The Company is headquartered in San Diego, California with operations in Yaphank, New York, East Brunswick, New Jersey and Milford, Connecticut. 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 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 and the uncertainty of impact upon the Company's operations of recent acquisitions of Comnet Telecom Supply, the patented braided cable product line, and Rel-Tech Electronics. 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

 

    Three Months Ended     Twelve Months Ended  
    October 31,     October 31,  
    2015     2014     2015     2014  
                         
Net sales   $ 8,936     $ 5,965     $ 32,804     $ 23,155  
Cost of sales     6,073       3,334       21,537       12,662  
Gross profit     2,863       2,631       11,267       10,453  
                                 
Operating expenses:                                
Engineering     235       251       923       948  
Selling and general     2,293       1,844       9,126       7,239  
Total operating expenses     2,528       2,095       10,049       8,187  
                                 
Operating income     335       536       1,218       2,266  
                                 
Other income     16       7       35       29  
                                 
Income from continuing operations before provision for income taxes     351       543       1,253       2,295  
                                 
Provision for income taxes     95       289       315       959  
                                 
Income from continuing operations     256       254       938       1,336  
                                 
Income from discontinued operations, net of tax     14       71       56       103  
                                 
Net income   $ 270     $ 325     $ 994     $ 1,439  
                                 
Earnings per basic share:                                
Continuing operations   $ 0.03     $ 0.03     $ 0.11     $ 0.17  
Discontinued operations     0.00       0.01       0.01       0.01  
Net income per share   $ 0.03     $ 0.04     $ 0.12     $ 0.18  
                                 
Earnings per diluted share:                                
Continuing operations   $ 0.03     $ 0.03     $ 0.10     $ 0.15  
Discontinued operations     0.00       0.01       0.01       0.01  
Net income per share   $ 0.03     $ 0.04     $ 0.11     $ 0.16  
                                 
Weighted average shares outstanding:                                
Basic     8,636,029       8,260,964       8,494,111       8,215,688  
Diluted     8,980,304       8,685,917       8,862,217       8,742,025  

  

 

 

 

RF INDUSTRIES, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

   October 31, 
   2015   2014 
   (audited) 
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents  $7,595   $14,718 
Trade accounts receivable, net   3,980    2,428 
Inventories   6,928    5,259 
Other current assets   728    618 
Deferred tax assets   426    416 
TOTAL CURRENT ASSETS   19,657    23,439 
           
Property and equipment, net   921    829 
Goodwill   5,913    3,076 
Amortizable intangible assets, net   4,268    1,187 
Non-amortizable intangible assets   1,387    410 
Note receivable from stockholder   67    67 
Other assets   39    21 
TOTAL ASSETS  $32,252   $29,029 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
CURRENT LIABILITIES          
Accounts payable  $1,493   $867 
Accrued expenses   2,868    1,422 
Customer deposit   --    73 
TOTAL CURRENT LIABILITIES   4,361    2,362 
           
Deferred tax liabilities   1,143    811 
Other long-term liabilities   377    -- 
TOTAL LIABILITIES   5,881    3,173 
           
COMMITTMENTS AND CONTINGENCIES          
           
STOCKHOLDERS' EQUITY          
Common stock, authorized 20,000,000 shares of $0.01          
par value; 8,713,664 and 8,255,979 shares issued and          
outstanding at October 31, 2015 and 2014, respectively   87    83 
Additional paid-in capital   19,129    17,230 
Retained earnings   7,155    8,543 
           
TOTAL STOCKHOLDERS' EQUITY   26,371    25,856 
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $32,252   $29,029 

 

 

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