RF Industries, Ltd. (RFIL, Financial) filed Quarterly Report for the period ended 2012-07-31.
Rf Industries, Ltd. has a market cap of $27.2 million; its shares were traded at around $4.41 with a P/E ratio of 23.3 and P/S ratio of 1.4. The dividend yield of Rf Industries, Ltd. stocks is 5.1%. Rf Industries, Ltd. had an annual average earning growth of 4.6% over the past 10 years.
Net sales in the fiscal quarter ended July 31, 2012, increased 51% or $2,524,660 to $7,472,413 from $4,947,753 in the comparable fiscal quarter of prior year due to an increase in sales at all four of the Company’s segments. The largest contributor to the increase in net sales was Cables Unlimited. Since Cables Unlimited was acquired on June 15, 2011, the three month period ended July 31, 2011 included only six weeks of Cables Unlimited sales. Sales recognized from Cables Unlimited also increased as a result of the new sales generated by that subsidiary from the sale of its new OptiFlexTM Hybrid Custom Fiber Optic & DC Power Cabling solution that was commercially released in June 2012. As a result of both the longer period of operations and the increased sales from the OptiFlexTM Hybrid Custom Fiber Optic & DC Power Cabling solution sales of the Cables Unlimited segment increased by $1,818,514 to $2,727,791 in the three month period ended July 31, 2012 compared with sales of $909,277 of the prior year comparable period. Sales of the RF Connector and Cable segment increased by 18% or $597,667 from the prior year’s comparable period ended July 31, 2011 due to increases in sales at all three of that segment’s divisions. As a result of the Company’s continued success in marketing its larger selection of medical cabling products, sales of the Medical Cabling and Interconnect segment increased by 12% or $60,241 from the prior year comparable period. Sales of the RF Wireless segment increased by 19% or $49,238 compared to the three month period ended July, 2011 due in part to revenues recognized relating to the $2.6 million LA County Fire Department contract that the RF Wireless segment received in November 2011, as well as increased sales of RF Neulink wireless products. Most of the revenues from the Los Angeles County Fire Department contract are expected to be recognized in the last remaining quarter of the current fiscal year and in the first fiscal quarter of the next fiscal year. As a result of increased sales at all three of the Company’s segments and the addition of the Cables Unlimited business, the percentage of total sales generated by the RF Connector and Cable assembly segment decreased to 52% of total sales in the three month period ended July 31, 2012, from 66% of total sales in the comparable quarter of prior year.
The Company’s gross profit as a percentage of sales decreased to 45% during the current fiscal quarter ended July 31, 2012 compared to 49% in the comparable quarter of prior fiscal year. The decrease in the Company’s gross profit percentage reflects the impact of lower margins at the Cables Unlimited segment (which contributed 37% of net sales during the current fiscal quarter ended July 31, 2012 compared to 18% in the same quarter last year). Before its acquisition, Cables Unlimited had historically operated at an average gross margin of 32%. Since its acquisition and subsequent business improvements being implemented, this segment has averaged a gross margin of approximately 34%. The gross margins at the Company’s RF Cable and Connector division were 54%, which is approximately the gross margin it has previously maintained. However, because third quarter fiscal 2012 sales at Cables Unlimited grew to 37% of total Company sales compared to 18% of net sales last year, the Company’s overall gross margin percentage was negatively impacted. Furthermore, the gross profit margin of the Medical Cabling and Interconnector segment decreased by 2% to 39% compared to 41% in the comparable fiscal quarter of prior year due to rising costs of certain of its raw materials. Also, the gross margin of the RF Wireless segment decreased 13% to 26% compared to 39% in the comparable fiscal quarter of prior year due primarily to delays on shipment of product relating to the LA County Fire Department contract.
Net sales in the nine month period ended July 31, 2012 increased significantly by $6,223,744 to $19,703,354 from $13,479,610 in the comparable period of the prior fiscal year due to an increase in sales at all four of the Company’s segments. Sales of the Cables Unlimited segment contributed $6,007,569 to total Company sales for the nine months ended July 31, 2012 compared to $909,277 for the comparable period of the prior fiscal year. During the nine-month period of fiscal 2011, the Company owned Cables Unlimited for only six weeks, which resulted in the comparatively smaller revenue contribution by that new subsidiary. Although the addition of Cables Unlimited was the largest contributor to the increase in net sales for the current fiscal period, net sales also increased due to increased net sales at all of the Company’s other operating segments. Sales of the Company’s RF Connector and Cable segment increased by $247,046 compared to the comparable fiscal period in 2011. This increase was due to a $560,497 increase in sales at the Connector division, which was partially offset by decreases of $258,467 and $54,984 at the Aviel and Oddcables divisions, respectively. The Company is continuing recent increased efforts designed to improve sales at these underperforming divisions. Sales of the Medical Cabling and Interconnect segment increased by $203,164 from the prior period and sales at the RF Wireless segment increased by $675,242 from the prior comparable period ended July 31, 2011. Sales of the RF Wireless segment increased primarily due to revenues recognized under the LA County Fire Department contract to upgrade is wireless system that was awarded in November 2011, as well as a significant increase in sales of radio modems at the Neulink division.
The Company’s gross profit as a percentage of sales decreased 6% to 45% during the nine month period ended July 31, 2012 compared to 51% in the comparable nine month period of prior year. The decrease in the Company’s gross profit percentage relates to the impact of the Cables Unlimited 35% gross margin on the overall Company gross margin for the nine month period ended July 31, 2012. Before its acquisition, Cables Unlimited had historically operated at a 32% gross margin. Since its acquisition and subsequent business improvements being implemented, this segment averaged a gross margin of approximately 35% during the nine months ended July 31, 2012. The gross margin of the RF Connector and Cable Assembly segment decreased by 2% to 52% from 54% in the comparable nine month period of prior year due to increased raw material costs and higher labor costs, while the gross profit margin of the Medical Cabling and Interconnector segment increased by 3% to 42% from 39% in the prior comparable period due to a higher volume of sales and its related effect on certain fixed costs of sales. The gross margin of the RF Wireless segment remained unchanged at 42% for the nine month period ended July 31, 2012 compared to the nine-month period ended July 31, 2011. As a result of increased sales and profits at the Cables Unlimited, Medical Cabling and Interconnector, and RF Wireless segments, sales of the RF Connector and Cable assembly segment accounted for only 61% of the Company’s total gross profit margin in the current nine month period, compared to 81% of the Company’s total sales in the comparable nine month period of prior year.
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Rf Industries, Ltd. has a market cap of $27.2 million; its shares were traded at around $4.41 with a P/E ratio of 23.3 and P/S ratio of 1.4. The dividend yield of Rf Industries, Ltd. stocks is 5.1%. Rf Industries, Ltd. had an annual average earning growth of 4.6% over the past 10 years.
Highlight of Business Operations:
The Company recognized net income of $1,454,846 for the nine months ended July 31, 2012 and had $2,249,949 of cash provided by operating activities. Cash from operations was greater than net income primarily due to an increase in outstanding accounts payable and income taxes payable. During the nine months ended July 31, 2012, the Company had an increase of $554,115 in accounts receivable, used $566,568 for the purchase of inventory, and used $106,420 for prepaid expenses and inventory deposits. These outlays were partially offset by a decrease of $572,642 in prepaid income taxes, increased accounts payable of $660,874, and increased accrued expenses of $111,450, which resulted in cash provided by operating activities of $2,249,949 during the nine months ended July 31, 2012. The Company increased its inventory purchases because of increased sales and because it received volume discounts from some of its inventory vendors.Net sales in the fiscal quarter ended July 31, 2012, increased 51% or $2,524,660 to $7,472,413 from $4,947,753 in the comparable fiscal quarter of prior year due to an increase in sales at all four of the Company’s segments. The largest contributor to the increase in net sales was Cables Unlimited. Since Cables Unlimited was acquired on June 15, 2011, the three month period ended July 31, 2011 included only six weeks of Cables Unlimited sales. Sales recognized from Cables Unlimited also increased as a result of the new sales generated by that subsidiary from the sale of its new OptiFlexTM Hybrid Custom Fiber Optic & DC Power Cabling solution that was commercially released in June 2012. As a result of both the longer period of operations and the increased sales from the OptiFlexTM Hybrid Custom Fiber Optic & DC Power Cabling solution sales of the Cables Unlimited segment increased by $1,818,514 to $2,727,791 in the three month period ended July 31, 2012 compared with sales of $909,277 of the prior year comparable period. Sales of the RF Connector and Cable segment increased by 18% or $597,667 from the prior year’s comparable period ended July 31, 2011 due to increases in sales at all three of that segment’s divisions. As a result of the Company’s continued success in marketing its larger selection of medical cabling products, sales of the Medical Cabling and Interconnect segment increased by 12% or $60,241 from the prior year comparable period. Sales of the RF Wireless segment increased by 19% or $49,238 compared to the three month period ended July, 2011 due in part to revenues recognized relating to the $2.6 million LA County Fire Department contract that the RF Wireless segment received in November 2011, as well as increased sales of RF Neulink wireless products. Most of the revenues from the Los Angeles County Fire Department contract are expected to be recognized in the last remaining quarter of the current fiscal year and in the first fiscal quarter of the next fiscal year. As a result of increased sales at all three of the Company’s segments and the addition of the Cables Unlimited business, the percentage of total sales generated by the RF Connector and Cable assembly segment decreased to 52% of total sales in the three month period ended July 31, 2012, from 66% of total sales in the comparable quarter of prior year.
The Company’s gross profit as a percentage of sales decreased to 45% during the current fiscal quarter ended July 31, 2012 compared to 49% in the comparable quarter of prior fiscal year. The decrease in the Company’s gross profit percentage reflects the impact of lower margins at the Cables Unlimited segment (which contributed 37% of net sales during the current fiscal quarter ended July 31, 2012 compared to 18% in the same quarter last year). Before its acquisition, Cables Unlimited had historically operated at an average gross margin of 32%. Since its acquisition and subsequent business improvements being implemented, this segment has averaged a gross margin of approximately 34%. The gross margins at the Company’s RF Cable and Connector division were 54%, which is approximately the gross margin it has previously maintained. However, because third quarter fiscal 2012 sales at Cables Unlimited grew to 37% of total Company sales compared to 18% of net sales last year, the Company’s overall gross margin percentage was negatively impacted. Furthermore, the gross profit margin of the Medical Cabling and Interconnector segment decreased by 2% to 39% compared to 41% in the comparable fiscal quarter of prior year due to rising costs of certain of its raw materials. Also, the gross margin of the RF Wireless segment decreased 13% to 26% compared to 39% in the comparable fiscal quarter of prior year due primarily to delays on shipment of product relating to the LA County Fire Department contract.
Net sales in the nine month period ended July 31, 2012 increased significantly by $6,223,744 to $19,703,354 from $13,479,610 in the comparable period of the prior fiscal year due to an increase in sales at all four of the Company’s segments. Sales of the Cables Unlimited segment contributed $6,007,569 to total Company sales for the nine months ended July 31, 2012 compared to $909,277 for the comparable period of the prior fiscal year. During the nine-month period of fiscal 2011, the Company owned Cables Unlimited for only six weeks, which resulted in the comparatively smaller revenue contribution by that new subsidiary. Although the addition of Cables Unlimited was the largest contributor to the increase in net sales for the current fiscal period, net sales also increased due to increased net sales at all of the Company’s other operating segments. Sales of the Company’s RF Connector and Cable segment increased by $247,046 compared to the comparable fiscal period in 2011. This increase was due to a $560,497 increase in sales at the Connector division, which was partially offset by decreases of $258,467 and $54,984 at the Aviel and Oddcables divisions, respectively. The Company is continuing recent increased efforts designed to improve sales at these underperforming divisions. Sales of the Medical Cabling and Interconnect segment increased by $203,164 from the prior period and sales at the RF Wireless segment increased by $675,242 from the prior comparable period ended July 31, 2011. Sales of the RF Wireless segment increased primarily due to revenues recognized under the LA County Fire Department contract to upgrade is wireless system that was awarded in November 2011, as well as a significant increase in sales of radio modems at the Neulink division.
The Company’s gross profit as a percentage of sales decreased 6% to 45% during the nine month period ended July 31, 2012 compared to 51% in the comparable nine month period of prior year. The decrease in the Company’s gross profit percentage relates to the impact of the Cables Unlimited 35% gross margin on the overall Company gross margin for the nine month period ended July 31, 2012. Before its acquisition, Cables Unlimited had historically operated at a 32% gross margin. Since its acquisition and subsequent business improvements being implemented, this segment averaged a gross margin of approximately 35% during the nine months ended July 31, 2012. The gross margin of the RF Connector and Cable Assembly segment decreased by 2% to 52% from 54% in the comparable nine month period of prior year due to increased raw material costs and higher labor costs, while the gross profit margin of the Medical Cabling and Interconnector segment increased by 3% to 42% from 39% in the prior comparable period due to a higher volume of sales and its related effect on certain fixed costs of sales. The gross margin of the RF Wireless segment remained unchanged at 42% for the nine month period ended July 31, 2012 compared to the nine-month period ended July 31, 2011. As a result of increased sales and profits at the Cables Unlimited, Medical Cabling and Interconnector, and RF Wireless segments, sales of the RF Connector and Cable assembly segment accounted for only 61% of the Company’s total gross profit margin in the current nine month period, compared to 81% of the Company’s total sales in the comparable nine month period of prior year.
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