Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jan. 31, 2018 | Mar. 08, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jan. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | R F INDUSTRIES LTD | |
Entity Central Index Key | 740,664 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | RFIL | |
Entity Common Stock, Shares Outstanding | 8,974,297 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 5,880 | $ 6,039 |
Trade accounts receivable, net of allowance for doubtful accounts of $71 and $73, respectively | 5,397 | 3,901 |
Inventories | 6,797 | 6,109 |
Other current assets | 755 | 744 |
TOTAL CURRENT ASSETS | 18,829 | 16,793 |
Property and equipment: | ||
Equipment and tooling | 3,324 | 3,302 |
Furniture and office equipment | 837 | 871 |
Property, Plant and Equipment, Gross | 4,161 | 4,173 |
Less accumulated depreciation | 3,535 | 3,462 |
Total property and equipment | 626 | 711 |
Goodwill | 3,219 | 3,219 |
Amortizable intangible assets, net | 2,891 | 3,030 |
Non-amortizable intangible assets | 1,237 | 1,237 |
Other assets | 49 | 70 |
TOTAL ASSETS | 26,851 | 25,060 |
CURRENT LIABILITIES | ||
Accounts payable | 2,101 | 1,356 |
Accrued expenses | 2,697 | 2,242 |
Income tax payable | 96 | 0 |
TOTAL CURRENT LIABILITIES | 4,894 | 3,598 |
Deferred tax liabilities | 104 | 119 |
TOTAL LIABILITIES | 4,998 | 3,717 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock - authorized 20,000,000 shares of $0.01 par value; 8,974,297 and 8,872,246 shares issued and outstanding at January 31, 2018 and October 31, 2017, respectively | 90 | 89 |
Additional paid-in capital | 19,885 | 19,654 |
Retained earnings | 1,878 | 1,600 |
TOTAL STOCKHOLDERS' EQUITY | 21,853 | 21,343 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 26,851 | $ 25,060 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Trade accounts receivable, allowance for doubtful accounts | $ 71 | $ 73 |
Common stock, authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 8,974,297 | 8,872,246 |
Common stock, shares outstanding | 8,974,297 | 8,872,246 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Net sales | $ 10,341 | $ 6,617 |
Cost of sales | 7,268 | 4,760 |
Gross profit | 3,073 | 1,857 |
Operating expenses: | ||
Engineering | 326 | 224 |
Selling and general | 2,193 | 1,992 |
Total operating expense | 2,519 | 2,216 |
Operating income (loss) | 554 | (359) |
Other income | 3 | 20 |
Income (loss) from continuing operations before provision (benefit) for income taxes | 557 | (339) |
Provision (benefit) for income taxes | 103 | (101) |
Income (loss) from continuing operations | 454 | (238) |
Income from discontinued operations, net of tax | 0 | 44 |
Consolidated net income (loss) | $ 454 | $ (194) |
Earnings (loss) per share Basic | ||
Continuing operations | $ 0.05 | $ (0.03) |
Discontinued operations | 0 | 0.01 |
Net income (loss) per share | 0.05 | (0.02) |
Earnings (loss) per share Diluted | ||
Continuing operations | 0.05 | (0.03) |
Discontinued operations | 0 | 0.01 |
Net income (loss) per share | $ 0.05 | $ (0.02) |
Weighted average shares outstanding | ||
Basic | 8,880,384 | 8,834,747 |
Diluted | 9,099,301 | 8,834,747 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ 454 | $ (194) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Bad debt expense | (2) | 2 |
Depreciation and amortization | 212 | 220 |
Stock-based compensation expense | 75 | 51 |
Deferred income taxes | (15) | 24 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (1,494) | 383 |
Inventories | (688) | (532) |
Other current assets | (11) | (107) |
Other long-term assets | 21 | 20 |
Accounts payable | 745 | 235 |
Income tax payable | 96 | 0 |
Accrued expenses | 455 | (761) |
Other long-term liabilities | 0 | (40) |
Net cash used in operating activities | (152) | (699) |
INVESTING ACTIVITIES: | ||
Proceeds from landlord for tenant improvements | 34 | 0 |
Capital expenditures | (22) | (6) |
Net cash provided by (used in) investing activities | 12 | (6) |
FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 157 | 0 |
Excess tax benefit from cancelled stock options | 0 | (23) |
Dividends paid | (176) | (176) |
Net cash used in financing activities | (19) | (199) |
Net decrease in cash and cash equivalents | (159) | (904) |
Cash and cash equivalents, beginning of period | 6,039 | 5,258 |
Cash and cash equivalents, end of period | 5,880 | 4,354 |
Supplemental cash flow information - income taxes paid | $ 3 | $ 13 |
Unaudited interim condensed con
Unaudited interim condensed consolidated financial statements | 3 Months Ended |
Jan. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Unaudited interim condensed consolidated financial statements | Note 1 - Unaudited interim condensed consolidated financial statements The accompanying unaudited condensed consolidated financial statements of RF Industries, Ltd. and its divisions and three wholly-owned subsidiaries (collectively, hereinafter the “Company”) 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-Q. 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, which are normal and recurring, have been included in order to make the information not misleading. Information included in the consolidated balance sheet as of October 31, 2017 has been derived from, and certain terms used herein are defined in, the audited consolidated financial statements of the Company as of October 31, 2017 included in the Company’s Annual Report on Form 10-K (“Form 10-K”) for the year ended October 31, 2017 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the three month ended January 31, 2018 are not necessarily indicative of the results that may be expected for the year ending October 31, 2018. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2017. Principles of consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of RF Industries, Ltd., Cables Unlimited, Inc. (“Cables Unlimited”), Comnet Telecom Supply, Inc. (“Comnet”), and Rel-Tech Electronics, Inc. (“Rel-Tech”), wholly-owned subsidiaries of RF Industries, Ltd. All intercompany balances and transactions have been eliminated in consolidation. Revenue recognition Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company recognizes revenue from product sales after purchase orders are received that contain a fixed price and for shipments with terms of FOB Shipping Point, revenue is recognized upon shipment, for shipments with terms of FOB Destination, revenue is recognized upon delivery and revenue from services is recognized when services are performed, and the recovery of the consideration is considered probable. Recent accounting standards Recently issued accounting pronouncements not yet adopted: In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases. This ASU requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The ASU also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This guidance will supersede Topic 605, Revenue Recognition, in addition to other industry-specific guidance, once effective. The new standard requires a company to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, as a revision to ASU 2014-09, which revised the effective date to fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted but not prior to periods beginning after December 15, 2016 (i.e., the original adoption date per ASU 2014-09). In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations, which clarifies certain aspects of the principal-versus-agent guidance, including how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether it recognizes revenue over time or at a point in time. The amendments also clarify when a promised good or service is separately identifiable (i.e., distinct within the context of the contract) and allow entities to disregard items that are immaterial in the context of a contract. The Company continues to assess the impact this new standard may have on its ongoing financial reporting. The Company has identified its revenue streams both by contract and product type and is assessing each for potential impacts. For the revenue streams assessed, the Company does not anticipate a material impact in the timing or amount of revenue recognized. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles-Goodwill and Other, which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if “the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.” The guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. Recently issued accounting pronouncements adopted: In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation Stock Compensation. The new standard modified several aspects of the accounting and reporting for employee share-based payments and related tax accounting impacts, including the presentation in the statements of operations and cash flows of certain tax benefits or deficiencies and employee tax withholdings, as well as the accounting for award forfeitures over the vesting period. One provision within this pronouncement requires that excess income tax benefits and tax deficiencies related to share-based payments be recognized within income tax expense in the statement of income, rather than within additional paid-in capital on the balance sheet. The Company adopted this provision in the first quarter of fiscal 2018. The adoption of this provision was applied prospectively. The impact to the Company's results of operations related to this provision in the first quarter of fiscal 2018 was an increase in the benefit for income taxes of $ 19,000 3.5 |
Discontinued operations
Discontinued operations | 3 Months Ended |
Jan. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued operations | Note 2 - Discontinued operations For the three months ended January 31, 2018 and January 31, 2017, the Company recognized approximately $0 and $62,000 of royalty income, respectively, for RadioMobile, which amount has been included within discontinued operations. During March 2016, the Company announced the shutdown of its Bioconnect division, which comprised the entire operations of the Medical Cabling and Interconnect segment. The closure is part of the Company’s ongoing plan to close or dispose of underperforming divisions that are not part of the Company’s core operations. For the three months ended January 31, 2017, the Company recognized approximately $10,000 of income from sale of equipment for the Bioconnect division, which has been included within discontinued operations. |
Inventories and major vendors
Inventories and major vendors | 3 Months Ended |
Jan. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories and major vendors | Note 3 - Inventories and major vendors Inventories, consisting of materials, labor and manufacturing overhead, are stated at the lower of cost or market. Cost has been determined using the weighted average cost method. Inventories consist of the following (in thousands): January 31, 2018 October 31, 2017 Raw materials and supplies $ 2,932 $ 2,520 Work in process 367 194 Finished goods 3,498 3,395 Totals $ 6,797 $ 6,109 One vendor accounted for 23 10 |
Other current assets
Other current assets | 3 Months Ended |
Jan. 31, 2018 | |
Other current assets [Abstract] | |
Other current assets | Note 4 - Other current assets Other current assets consist of the following (in thousands): January 31, 2018 October 31, 2017 Prepaid taxes $ - $ 20 Prepaid expense 472 526 Notes receivable, current portion 83 83 Other 200 115 Totals $ 755 $ 744 Long-term portion of notes receivable of $0 and $21,000 is recorded in other assets at January 31, 2018 and October 31, 2017, respectively. |
Accrued expenses and other long
Accrued expenses and other long-term liabilities | 3 Months Ended |
Jan. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other long-term liabilities | Note 5 - Accrued expenses and other long-term liabilities Accrued expenses consist of the following (in thousands): January 31, 2018 October 31, 2017 Wages payable $ 935 $ 855 Accrued receipts 1,036 695 Earn-out liability 206 236 Other current liabilities 520 456 Totals $ 2,697 $ 2,242 Accrued receipts represent purchased inventory for which invoices have not been received. The Company measures at fair value certain financial assets and liabilities. U. S. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1 - Quoted prices for identical instruments in active markets; Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The contingent consideration liability represents future earn-out liability that we may be required to pay in conjunction with the acquisition of Rel-Tech and Comnet. The Company estimates the fair value of the earn-out liability using a probability-weighted scenario of estimated qualifying earn-out gross profit related to Rel-Tech and EBITDA related to Comnet calculated at net present value (level 3 of the fair value hierarchy). The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2018 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 206 The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2017 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 236 The following table summarizes the Level 3 transactions for the three months ended January 31, 2018 and for the year ended October 31, 2017 (in thousands): Level 3 January 31, 2018 October 31, 2017 Beginning balance $ 236 $ 835 Payments - (578) Change in value (30) (21) Ending Balance $ 206 $ 236 |
Earnings per share
Earnings per share | 3 Months Ended |
Jan. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share | Note 6 - Earnings per share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied. Potentially dilutive securities totaling 771,973 1,024,188 The following table summarizes the computation of basic and diluted weighted average shares outstanding: Three Months Ended January 31, 2018 2017 Weighted average shares outstanding for basic earnings (loss) per share 8,880,384 8,834,747 Add effects of potentially dilutive securities-assumed exercise of stock options 218,917 - Weighted average shares outstanding for diluted earnings (loss) per share 9,099,301 8,834,747 |
Stock-based compensation and eq
Stock-based compensation and equity transactions | 3 Months Ended |
Jan. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation and equity transactions | Note 7 - Stock-based compensation and equity transactions The Company’s current stock incentive plan provides for the granting of qualified and nonqualified options to the Company’s officers, directors and employees. The Company satisfies the exercise of options by issuing previously unissued common shares. On December 13, 2017, the Company granted 80,000 8,000 8,000 The weighted average fair value of employee and non-employee directors’ stock options granted by the Company during the three months ended January 31, 2018 and 2017 was estimated to be $ 2.44 1.50 2018 2017 Risk-free interest rate 1.87 % 0.98 % Dividend yield 3.28 % 5.33 % Expected life of the option 4.54 years 3.50 years Volatility factor 46.83 % 42.37 % Expected volatilities are based on historical volatility of the Company’s stock price and other factors. The Company used the historical method to calculate the expected life of the 2018 and 2017 option grants. The expected life represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury rate with a maturity date corresponding to the options’ expected life. The dividend yield is based upon the historical dividend yield. Company stock option plans Descriptions of the Company’s stock option plans are included in Note 9 of the Company’s Annual Report on Form 10-K for the year ended October 31, 2017. Weighted Average Shares Exercise Price Outstanding at November 1, 2017 1,159,771 $ 3.19 Options granted 269,635 $ 2.44 Options canceled or expired (163,769) $ 4.86 Options outstanding at January 31, 2018 1,265,637 $ 3.08 Options exercisable at January 31, 2018 817,913 $ 3.10 Options vested and expected to vest at January 31, 2018 1,261,614 $ 3.08 Weighted average remaining contractual life of options outstanding as of January 31, 2018: 4.63 Weighted average remaining contractual life of options exercisable as of January 31, 2018: 3.21 Weighted average remaining contractual life of options vested and expected to vest as of January 31, 2018: 4.62 Aggregate intrinsic value of options outstanding at January 31, 2018: $ 1,012,000 Aggregate intrinsic value of options exercisable at January 31, 2018: $ 736,000 Aggregate intrinsic value of options vested and expected to vest at January 31, 2018: $ 1,007,000 As of January 31, 2018, $ 418,000 5.04 Non-employee directors receive $ 50,000 37,927 25,000 0.659 Stock option expense During the three months ended January 31, 2018 and 2017, stock-based compensation expense totaled $ 75 51 3 75 48 |
Concentrations of credit risk
Concentrations of credit risk | 3 Months Ended |
Jan. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations of credit risk | Note 8 - Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At January 31, 2018, the Company had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $ 5.3 One customer accounted for approximately 36 32 15 10 15 13 |
Segment information
Segment information | 3 Months Ended |
Jan. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment information | Note 9 - Segment information The Company aggregates operating divisions into operating segments that have similar economic characteristics primarily in the following areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer for their products and services; (4) the methods used to distribute their products or services; (5) if applicable, the nature of the regulatory environment. As of January 31, 2018, the Company had two segments: 1) RF Connector and Cable Assembly and 2) Custom Cabling Manufacturing and Assembly based upon this evaluation. The RF Connector and Cable Assembly segment consisted of one division and the Custom Cabling Manufacturing and Assembly segment was composed of three divisions. The four divisions that met the quantitative thresholds for segment reporting are Connector and Cable Assembly, Cables Unlimited, Comnet and Rel-Tech. The specific customers are different for each division; however, there is some overlapping of product sales to them. The methods used to distribute products are similar within each division aggregated. Management identifies the Company’s segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the Connector and Cable Assembly division constitutes the RF Connector and Cable Assembly segment, and the Cables Unlimited, Comnet and Rel-Tech divisions constitute the Custom Cabling Manufacturing and Assembly segment. As reviewed by the Company’s chief operating decision maker, the Company evaluates the performance of each segment based on income or loss before income taxes. The Company charges depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, goodwill and intangible assets are the only assets identified by segment. Except as discussed above, the accounting policies for segment reporting are the same for the Company as a whole. Substantially all of the Company’s operations are conducted in the United States; however, the Company derives a portion of its revenue from export sales. The Company attributes sales to geographic areas based on the location of the customers. 2018 2017 United States $ 10,138 $ 6,536 Foreign Countries: Canada 153 46 Mexico 39 7 All Other 11 28 203 81 Totals $ 10,341 $ 6,617 RF Connector Custom Cabling and Manufacturing and Cable Assembly Assembly Corporate Total 2018 Net sales $ 2,630 $ 7,711 $ - $ 10,341 Income (loss) from continuing operations before provision (benefit) for income taxes (12) 566 3 557 Depreciation and amortization 44 168 - 212 2017 Net sales $ 2,535 $ 4,082 $ - $ 6,617 Loss from continuing operations before benefit for income taxes (18) (341) 20 (339) Depreciation and amortization 47 173 - 220 |
Income taxes
Income taxes | 3 Months Ended |
Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 10 - Income taxes On December 22, 2017, the President signed the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other things, lowered the U.S. corporate income tax rate from 35 41,000 The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its quarterly provision (benefit) for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The provision ( benefit) for income taxes was 18 30 41,000 19,000 The total amount of unrecognized tax benefits was $ 0 0 |
Intangible assets
Intangible assets | 3 Months Ended |
Jan. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | Note 11 - Intangible assets January 31, 2018 October 31, 2017 Amortizable intangible assets: Customer relationships (estimated lives 7 - 15 years) 5,099 5,099 Accumulated amortization (2,323) (2,186) 2,776 2,913 Patents (estimated life 14 years) 142 142 Accumulated amortization (27) (25) 116 117 Totals $ 2,891 $ 3,030 Non-amortizable intangible assets: Trademarks $ 1,237 $ 1,237 |
Commitments
Commitments | 3 Months Ended |
Jan. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 12 - Commitments The Company currently leases its corporate headquarters and RF connector and cable assembly manufacturing facilities in San Diego, California. On June 5, 2017, the Company entered into a fifth amendment to its lease for its facility in San Diego, California. As a result, the Company now leases a total of approximately 21,908 July 31, 2022 22,721 (i) On June 9, 2017, the Cables Unlimited division entered into an amendment to its lease with K & K Unlimited, as landlord, under which Cables Unlimited leases its 12,000 June 30, 2018 13,000 (ii) On June 25, 2017, the Comnet Telecom division entered into an amendment to its lease for approximately 15,000 8,542 (iii) On July 25, 2017, the Rel-Tech Electronic division entered into a lease for approximately 13,750 8,707 The aggregate monthly rental for all of the Company’s facilities currently is approximately $ 53,000 |
Cash dividend and declared divi
Cash dividend and declared dividends | 3 Months Ended |
Jan. 31, 2018 | |
Cash Dividend And Dividends Declaration [Abstract] | |
Cash dividend and declared dividends | Note 13 - Cash dividend and declared dividends The Company paid dividends of $ 0.02 176,000 |
Subsequent events
Subsequent events | 3 Months Ended |
Jan. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 14 - Subsequent events On March 8, 2018, the Board of Directors of the Company declared a quarterly cash dividend of $ 0.02 March 31, 2018 |
Inventories and major vendors (
Inventories and major vendors (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories consist of the following (in thousands): January 31, 2018 October 31, 2017 Raw materials and supplies $ 2,932 $ 2,520 Work in process 367 194 Finished goods 3,498 3,395 Totals $ 6,797 $ 6,109 |
Other current assets (Tables)
Other current assets (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Other current assets [Abstract] | |
Schedule of other current assets | Other current assets consist of the following (in thousands): January 31, 2018 October 31, 2017 Prepaid taxes $ - $ 20 Prepaid expense 472 526 Notes receivable, current portion 83 83 Other 200 115 Totals $ 755 $ 744 |
Accrued expenses and other lo22
Accrued expenses and other long-term liabilities (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Accrued expenses consist of the following (in thousands): January 31, 2018 October 31, 2017 Wages payable $ 935 $ 855 Accrued receipts 1,036 695 Earn-out liability 206 236 Other current liabilities 520 456 Totals $ 2,697 $ 2,242 |
Schedule of Fair Value, Assets and Liabilities | The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2018 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 206 The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2017 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 236 |
Fair Value, Liabilities Measured on Recurring Basis | The following table summarizes the Level 3 transactions for the three months ended January 31, 2018 and for the year ended October 31, 2017 (in thousands): Level 3 January 31, 2018 October 31, 2017 Beginning balance $ 236 $ 835 Payments - (578) Change in value (30) (21) Ending Balance $ 206 $ 236 |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Weighted Average Shares Outstanding | The following table summarizes the computation of basic and diluted weighted average shares outstanding: Three Months Ended January 31, 2018 2017 Weighted average shares outstanding for basic earnings (loss) per share 8,880,384 8,834,747 Add effects of potentially dilutive securities-assumed exercise of stock options 218,917 - Weighted average shares outstanding for diluted earnings (loss) per share 9,099,301 8,834,747 |
Stock-based compensation and 24
Stock-based compensation and equity transactions (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Computation of Weighted Average Fair Value of Employee Stock Options using Black-Scholes Option Pricing Model Assumptions | Black-Scholes option pricing model with the following assumptions: 2018 2017 Risk-free interest rate 1.87 % 0.98 % Dividend yield 3.28 % 5.33 % Expected life of the option 4.54 years 3.50 years Volatility factor 46.83 % 42.37 % |
Summary of Status of Options Granted under Stock Option Plans and Changes in Options Outstanding | A summary of the status of the options granted under the Company’s stock option plans as of January 31, 2018 and the changes in options outstanding during the three months then ended is presented in the table that follows: Weighted Average Shares Exercise Price Outstanding at November 1, 2017 1,159,771 $ 3.19 Options granted 269,635 $ 2.44 Options canceled or expired (163,769) $ 4.86 Options outstanding at January 31, 2018 1,265,637 $ 3.08 Options exercisable at January 31, 2018 817,913 $ 3.10 Options vested and expected to vest at January 31, 2018 1,261,614 $ 3.08 |
Segment information (Tables)
Segment information (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Segment Reporting [Abstract] | |
Sales by Geographic Area | The following table presents the sales of the Company by geographic area for the three months ended January 31, 2018 and 2017 (in thousands): 2018 2017 United States $ 10,138 $ 6,536 Foreign Countries: Canada 153 46 Mexico 39 7 All Other 11 28 203 81 Totals $ 10,341 $ 6,617 |
Net Sales, Income (Loss) Before Provision for Income Taxes and Other Related Segment Information | Net sales, income (loss) from continuing operations before provision (benefit) for income and other related segment information for the three months ended January 31, 2018 and 2017 are as follows (in thousands): RF Connector Custom Cabling and Manufacturing and Cable Assembly Assembly Corporate Total 2018 Net sales $ 2,630 $ 7,711 $ - $ 10,341 Income (loss) from continuing operations before provision (benefit) for income taxes (12) 566 3 557 Depreciation and amortization 44 168 - 212 2017 Net sales $ 2,535 $ 4,082 $ - $ 6,617 Loss from continuing operations before benefit for income taxes (18) (341) 20 (339) Depreciation and amortization 47 173 - 220 |
Intangible assets (Tables)
Intangible assets (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | Intangible assets consist of the following (in thousands): January 31, 2018 October 31, 2017 Amortizable intangible assets: Customer relationships (estimated lives 7 - 15 years) 5,099 5,099 Accumulated amortization (2,323) (2,186) 2,776 2,913 Patents (estimated life 14 years) 142 142 Accumulated amortization (27) (25) 116 117 Totals $ 2,891 $ 3,030 Non-amortizable intangible assets: Trademarks $ 1,237 $ 1,237 |
Unaudited interim condensed c27
Unaudited interim condensed consolidated financial statements - Additional Information (Detail) | 3 Months Ended |
Jan. 31, 2018USD ($) | |
Increase (Decrease) in Income Taxes | $ 19,000 |
Effective Income Tax Rate Reconciliation, Deduction, Other, Percent | 3.50% |
Discontinued operations - Addit
Discontinued operations - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | $ 0 | $ 44,000 |
Radio Mobile, Inc [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Royalty revenue | $ 0 | 62,000 |
Bioconnect division [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | $ 10,000 |
Inventories and major vendors -
Inventories and major vendors - Components of Inventories (Detail) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Inventory [Line Items] | ||
Raw materials and supplies | $ 2,932 | $ 2,520 |
Work in process | 367 | 194 |
Finished goods | 3,498 | 3,395 |
Totals | $ 6,797 | $ 6,109 |
Inventories and major vendors30
Inventories and major vendors - Additional Information (Detail) - Supplier Concentration Risk [Member] | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Inventory [Line Items] | ||
Purchases of connector products, percentage | 10.00% | |
Vendor One | ||
Inventory [Line Items] | ||
Purchases of connector products, percentage | 23.00% |
Other current assets (Detail)
Other current assets (Detail) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Prepaid taxes | $ 0 | $ 20 |
Prepaid expense | 472 | 526 |
Notes receivable, current portion | 83 | 83 |
Other | 200 | 115 |
Totals | $ 755 | $ 744 |
Other current assets - Addition
Other current assets - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Jan. 31, 2018 | Oct. 31, 2017 | Jan. 31, 2017 | |
Increase (Decrease) In Other Noncurrent Assets | $ (21,000) | $ (20,000) | |
Notes Receivable [Member] | |||
Increase (Decrease) In Other Noncurrent Assets | $ 0 | $ 21,000 |
Accrued expenses and other lo33
Accrued expenses and other long-term liabilities (Detail) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Schedule Of Accrued Liabilities [Line Items] | ||
Wages payable | $ 935 | $ 855 |
Accrued receipts | 1,036 | 695 |
Earn-out liability | 206 | 236 |
Other current liabilities | 520 | 456 |
Totals | $ 2,697 | $ 2,242 |
Accrued expenses and other lo34
Accrued expenses and other long-term liabilities (Detail 1) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Level 1 | ||
Liabilities, Fair Value Disclosure, Recurring | $ 0 | $ 0 |
Level 2 | ||
Liabilities, Fair Value Disclosure, Recurring | 0 | 0 |
Level 3 | ||
Liabilities, Fair Value Disclosure, Recurring | $ 206 | $ 236 |
Accrued expenses and other lo35
Accrued expenses and other long-term liabilities (Detail 2) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Oct. 31, 2017 | |
Beginning balance | $ 236 | $ 835 |
Payments | 0 | (578) |
Change in value | (30) | (21) |
Ending Balance | $ 206 | $ 236 |
Earnings per share - Computatio
Earnings per share - Computation of Basic and Diluted Weighted Average Shares Outstanding (Detail) - shares | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Denominators: | ||
Weighted average shares outstanding for basic earnings per share | 8,880,384 | 8,834,747 |
Add effects of potentially dilutive securities-assumed exercise of stock options | 218,917 | 0 |
Weighted average shares outstanding for diluted earnings per share | 9,099,301 | 8,834,747 |
Earnings per share - Additional
Earnings per share - Additional Information (Detail) - shares | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 771,973 | 1,024,188 |
Stock-based compensation and 38
Stock-based compensation and equity transactions - Summary of fair value of employee and non-employee directors’ stock options (Detail) | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Risk-free interest rate | 1.87% | 0.98% |
Dividend yield | 3.28% | 5.33% |
Expected life of the option | 4 years 6 months 14 days | 3 years 6 months |
Volatility factor | 46.83% | 42.37% |
Stock-based compensation and 39
Stock-based compensation and equity transactions - Summary of status of options granted under stock option plans and changes in options outstanding (Detail) - Stock Option | 3 Months Ended |
Jan. 31, 2018$ / sharesshares | |
Shares | |
Options Outstanding at November 1, 2017 | shares | 1,159,771 |
Options granted | shares | 269,635 |
Options canceled or expired | shares | (163,769) |
Options outstanding at January 31, 2018 | shares | 1,265,637 |
Options exercisable at January 31, 2018 | shares | 817,913 |
Options vested and expected to vest at January 31, 2018 | shares | 1,261,614 |
Weighted Average Exercise Price | |
Options Outstanding at November 1, 2017 | $ / shares | $ 3.19 |
Options granted | $ / shares | 2.44 |
Options canceled or expired | $ / shares | 4.86 |
Options outstanding at January 31, 2018 | $ / shares | 3.08 |
Options exercisable at January 31, 2018 | $ / shares | 3.1 |
Options vested and expected to vest at January 31, 2018 | $ / shares | $ 3.08 |
Stock-based compensation and 40
Stock-based compensation and equity transactions - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | |
Dec. 13, 2017 | Jan. 31, 2018 | Jan. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average remaining life of options outstanding | 4 years 7 months 17 days | ||
Weighted average remaining contractual life of options exercisable | 3 years 2 months 16 days | ||
Weighted average life of options vested and expected to vest | 4 years 7 months 13 days | ||
Aggregate intrinsic value of options outstanding | $ 1,012,000 | ||
Aggregate intrinsic value of options exercisable | 736,000 | ||
Aggregate intrinsic value of options vested and expected to vest | 1,007,000 | ||
Non-vested stock-based arrangements yet to be recognized | $ 418,000 | ||
Stock based arrangements yet to be recognized, weighted average period expected to be recognized | 5 years 14 days | ||
Non-employee director annual grant | $ 50,000 | ||
Options granted for each non-employee director | 37,927 | ||
Value of stock option issued | $ 25,000 | ||
Fair value of stock option | $ 0.659 | ||
Stock based compensation expense | $ 75,000 | $ 51,000 | |
Incentive stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 80,000 | 8,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 8,000 | ||
Employee And Non-Employee Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of stock option | $ 2.44 | $ 1.50 | |
Cost of Sales | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation expense | $ 3,000 | $ 3,000 | |
Selling, General and Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation expense | $ 75,000 | $ 48,000 |
Concentrations of credit risk -
Concentrations of credit risk - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Concentration Risk [Line Items] | ||
Cash, FDIC insured amount | $ 5.3 | |
Sales Revenue, Goods, Net | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 36.00% | |
Sales Revenue, Goods, Net | Customer One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.00% | |
Sales Revenue, Goods, Net | Customer Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 32.00% | |
Accounts Receivable | Customer One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.00% | |
Accounts Receivable | Customer Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13.00% |
Sales by geographic area (Detai
Sales by geographic area (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Revenue, Major Customer [Line Items] | ||
Sales revenue | $ 10,341 | $ 6,617 |
United States | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 10,138 | 6,536 |
Canada | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 153 | 46 |
Mexico | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 39 | 7 |
All other | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 11 | 28 |
Foreign countries, total | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | $ 203 | $ 81 |
Net sales, income (loss) before
Net sales, income (loss) before provision for income taxes and other related segment information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 10,341 | $ 6,617 |
Income (loss) from continuing operations before provision (benefit) for income taxes | 557 | (339) |
Depreciation and amortization | 212 | 220 |
RF Connector and Cable Assembly | ||
Segment Reporting Information [Line Items] | ||
Net sales | 2,630 | 2,535 |
Income (loss) from continuing operations before provision (benefit) for income taxes | (12) | (18) |
Depreciation and amortization | 44 | 47 |
Custom Cabling Manufacturing and Assembly | ||
Segment Reporting Information [Line Items] | ||
Net sales | 7,711 | 4,082 |
Income (loss) from continuing operations before provision (benefit) for income taxes | 566 | (341) |
Depreciation and amortization | 168 | 173 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | 0 |
Income (loss) from continuing operations before provision (benefit) for income taxes | 3 | 20 |
Depreciation and amortization | $ 0 | $ 0 |
Income taxes - Additional Infor
Income taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Jan. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Income Taxes [Line Items] | ||||
Provision for income tax as percentage of income (loss) before income taxes | 18.00% | 30.00% | ||
Unrecognized tax benefits | $ 0 | $ 0 | ||
Accrued interest and penalties related to uncertain tax positions | 0 | $ 0 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |||
Increase (Decrease) in Deferred Liabilities | 41,000 | |||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 41,000 | |||
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Amount | $ 19,000 | |||
Scenario, Plan [Member] | ||||
Income Taxes [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Intangible assets (Detail)
Intangible assets (Detail) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Intangible Assets [Line Items] | ||
Amortizable intangible assets, net | $ 2,891 | $ 3,030 |
Non-amortizable intangible assets, trade marks | 1,237 | 1,237 |
Non-compete agreements (estimated lives 3 - 5 years) | ||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, accumulated amortization | (2,323) | (2,186) |
Customer relationships (estimated lives 7 - 15 years) | ||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 5,099 | 5,099 |
Amortizable intangible assets, accumulated amortization | (27) | (25) |
Amortizable intangible assets, net | 2,776 | 2,913 |
Patents (estimated life 14 years) | ||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 142 | 142 |
Amortizable intangible assets, net | $ 116 | $ 117 |
Intangible assets (Parenthetica
Intangible assets (Parenthetical) (Detail) | 3 Months Ended |
Jan. 31, 2018 | |
Customer relationships (estimated lives 7 - 15 years) | Maximum [Member] | |
Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Customer relationships (estimated lives 7 - 15 years) | Minimum [Member] | |
Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 7 years |
Patents (estimated life 14 years) | |
Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 14 years |
Commitments - Additional Inform
Commitments - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | |||
Jul. 25, 2017USD ($)a | Jun. 25, 2017USD ($)a | Jun. 09, 2017USD ($)a | Jun. 05, 2017USD ($)a | Jan. 31, 2018USD ($) | |
Commitments And Contingencies [Line Items] | |||||
Lease Expiration Date | Jul. 31, 2022 | ||||
Operating Leases, Rent Expense | $ 22,721 | ||||
Operating Leases, Rent Expense, Minimum Rentals | $ 53,000 | ||||
Fifth Amendment [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Area of Land | a | 21,908 | ||||
East Brunswick [Member] | Commitments [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Area of Land | a | 15,000 | ||||
Operating Leases, Rent Expense | $ 8,542 | ||||
Milford [Member] | Commitments [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Area of Land | a | 13,750 | ||||
Operating Leases, Rent Expense | $ 8,707 | ||||
New York [Member] | Commitments [Member] | |||||
Commitments And Contingencies [Line Items] | |||||
Lease Expiration Date | Jun. 30, 2018 | ||||
Area of Land | a | 12,000 | ||||
Operating Leases, Rent Expense | $ 13,000 |
Cash dividend and declared di48
Cash dividend and declared dividends - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Dividends Payable [Line Items] | ||
Dividends paid, per share | $ 0.02 | $ 0.02 |
Dividends paid | $ 176 | $ 176 |
Subsequent events - Additional
Subsequent events - Additional Information (Detail) - Subsequent Event | Mar. 08, 2018$ / shares |
Subsequent Event [Line Items] | |
Dividends payable, record date | Mar. 31, 2018 |
Dividends Payable, Amount Per Share | $ 0.02 |