Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2022 | Jan. 02, 2023 | Apr. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Oct. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 0-13301 | ||
Entity Registrant Name | R F INDUSTRIES LTD | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 88-0168936 | ||
Entity Address, Address Line One | 7610 Miramar Road, Bldg. 6000 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92126-4202 | ||
City Area Code | 858 | ||
Local Phone Number | 549-6340 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | RFIL | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 59.9 | ||
Entity Common Stock, Shares Outstanding (in shares) | 10,193,287 | ||
Auditor Name | CohnReznick LLP | ||
Auditor Location | Tysons, Virginia | ||
Auditor Firm ID | 596 | ||
Entity Central Index Key | 0000740664 | ||
Current Fiscal Year End Date | --10-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4,532 | $ 13,053 |
Trade accounts receivable, net of allowance for doubtful accounts of $207 and $87, respectively | 14,812 | 13,523 |
Inventories | 21,054 | 11,179 |
Other current assets | 5,849 | 2,893 |
TOTAL CURRENT ASSETS | 46,247 | 40,648 |
Property and equipment: | ||
Equipment and tooling | 4,497 | 3,986 |
Furniture and office equipment | 3,447 | 1,086 |
Property, Plant and Equipment, Gross, Ending Balance | 7,944 | 5,072 |
Less accumulated depreciation | 4,771 | 4,364 |
Total property and equipment, net | 3,173 | 708 |
Operating lease right of use assets, net | 13,480 | 1,453 |
Goodwill | 8,085 | 2,467 |
Amortizable intangible assets, net | 15,296 | 2,739 |
Non-amortizable intangible assets | 1,174 | 1,174 |
Deferred tax assets | 1,816 | 389 |
Other assets | 295 | 70 |
TOTAL ASSETS | 89,566 | 49,648 |
CURRENT LIABILITIES | ||
Accounts payable | 5,652 | 3,504 |
Accrued expenses | 8,814 | 5,034 |
Current portion of Term Loan | 2,424 | 0 |
Current portion of operating lease liabilities | 1,887 | 832 |
Income taxes payable | 759 | 0 |
TOTAL CURRENT LIABILITIES | 19,536 | 9,370 |
Operating lease liabilities | 15,025 | 675 |
Term Loan, net of debt issuance cost | 13,136 | 0 |
TOTAL LIABILITIES | 47,697 | 10,045 |
Commitments and Contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Common stock - authorized 20,000,000 shares of $0.01 par value; 10,198,700 and 10,058,571 shares issued and outstanding at October 31, 2022 and October 31, 2021, respectively | 102 | 101 |
Additional paid-in capital | 25,118 | 24,301 |
Retained earnings | 16,649 | 15,201 |
TOTAL STOCKHOLDERS' EQUITY | 41,869 | 39,603 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 89,566 | $ 49,648 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
Accounts Receivable, Allowance for Credit Loss, Current | $ 126 | $ 87 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 10,193,287 | 10,058,571 |
Common stock, shares outstanding (in shares) | 10,193,287 | 10,058,571 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Net sales | $ 85,254,000 | $ 57,424,000 |
Cost of sales | 60,705,000 | 39,656,000 |
Gross profit | 24,549,000 | 17,768,000 |
Operating expenses | ||
Engineering | 2,913,000 | 1,479,000 |
Selling and general | 19,448,000 | 11,874,000 |
Total operating expenses | 22,361,000 | 13,353,000 |
Operating income | 2,188,000 | 4,415,000 |
Other (expense) income | (601,000) | 2,802,000 |
Income before provision for income taxes | 1,587,000 | 7,217,000 |
Provision for income taxes | 139,000 | 1,036,000 |
Consolidated net income | $ 1,448,000 | $ 6,181,000 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.14 | $ 0.62 |
Diluted (in dollars per share) | $ 0.14 | $ 0.61 |
Weighted average shares outstanding | ||
Basic (in shares) | 10,120,254 | 9,978,683 |
Diluted (in shares) | 10,242,417 | 10,154,239 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance (in shares) at Oct. 31, 2020 | 9,814,118 | |||
Balance at Oct. 31, 2020 | $ 98,000 | $ 22,946,000 | $ 9,020,000 | $ 32,064,000 |
Exercise of stock options (in shares) | 195,528 | 195,528 | ||
Exercise of stock options | $ 2,000 | 603,000 | $ 605,000 | |
Stock-based compensation expense | 769,000 | 769,000 | ||
Issuance of restricted stock (in shares) | 56,941 | |||
Issuance of restricted stock | $ 1,000 | |||
Issuance of restricted stock | (1,000) | |||
Forfeiture of restricted stock (in shares) | (5,182) | |||
Tax withholding related to vesting of restricted stock (in shares) | (2,834) | |||
Tax withholding related to vesting of restricted stock | (16,000) | (16,000) | ||
Net income (loss) | 6,181,000 | 6,181,000 | ||
Balance (in shares) at Oct. 31, 2021 | 10,058,571 | |||
Balance at Oct. 31, 2021 | $ 101,000 | 24,301,000 | 15,201,000 | $ 39,603,000 |
Exercise of stock options (in shares) | 60,854 | 60,854 | ||
Exercise of stock options | $ 1,000 | 149,000 | $ 150,000 | |
Stock-based compensation expense | 689,000 | 689,000 | ||
Issuance of restricted stock (in shares) | 77,091 | |||
Tax withholding related to vesting of restricted stock (in shares) | (3,229) | |||
Tax withholding related to vesting of restricted stock | (21,000) | (21,000) | ||
Net income (loss) | 1,448,000 | 1,448,000 | ||
Balance (in shares) at Oct. 31, 2022 | 10,193,287 | |||
Balance at Oct. 31, 2022 | $ 102,000 | $ 25,118,000 | $ 16,649,000 | $ 41,869,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
OPERATING ACTIVITIES: | ||
Consolidated net income | $ 1,448,000 | $ 6,181,000 |
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities: | ||
Bad debt expense | 15,000 | 29,000 |
Depreciation and amortization | 1,690,000 | 770,000 |
Stock-based compensation expense | 689,000 | 769,000 |
Amortization of debt issuance cost | 6,000 | 0 |
Tax payments related to shares cancelled for vested restricted stock awards | (21,000) | (16,000) |
Deferred income taxes | (1,427,000) | 445,000 |
PPP Loan and interest forgiveness | 0 | (2,807,000) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 1,496,000 | (7,882,000) |
Inventories | (6,150,000) | (2,592,000) |
Other current assets | (2,894,000) | (2,079,000) |
Right of use assets | 3,378,000 | (35,000) |
Other long-term assets | (225,000) | (1,000) |
Accounts payable | 1,065,000 | 2,030,000 |
Accrued expenses | 3,063,000 | 2,479,000 |
Income taxes payable | 759,000 | (43,000) |
Other long-term liabilities | 0 | (370,000) |
Net cash provided by (used in) operating activities | 2,892,000 | (3,122,000) |
INVESTING ACTIVITIES: | ||
Capital expenditures | (2,675,000) | (227,000) |
Net cash used in investing activities | (27,117,000) | (227,000) |
FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 150,000 | 605,000 |
Debt issuance cost | (32,000) | 0 |
Term Loan payments | (1,414,000) | 0 |
Term Loan | 17,000,000 | 0 |
Net cash provided by financing activities | 15,704,000 | 605,000 |
Net decrease in cash and cash equivalents | (8,521,000) | (2,744,000) |
Cash and cash equivalents, beginning of period | 13,053,000 | 15,797,000 |
Cash and cash equivalents, end of period | 4,532,000 | 13,053,000 |
Supplemental cash flow information – income taxes paid | (314,000) | 949,000 |
Schrofftech [Member] | ||
INVESTING ACTIVITIES: | ||
Purchase of Microlab, net of cash acquired ($33) | $ (24,442,000) | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parentheticals) $ in Thousands | 12 Months Ended |
Oct. 31, 2022 USD ($) | |
Schrofftech [Member] | |
Purchase of company, cash acquired | $ 33 |
Note 1 - Business Activities an
Note 1 - Business Activities and Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Basis of Presentation and Significant Accounting Policies [Text Block] | Note 1 Business activities and summary of significant accounting policies Business activities RF Industries, Ltd., together with its five wholly-owned subsidiaries (collectively, hereinafter the “Company”, ”we”, “us”, or “our”), primarily engages in the design, manufacture, and marketing of interconnect products and systems, including coaxial and specialty cables, fiber optic cables and connectors, and electrical and electronic specialty cables. For internal operating and reporting purposes, and for marketing purposes, as of the end of the fiscal year ended October 31, 2022, we classified our operations into the following five divisions/subsidiaries: (i) The RF Connector and Cable Assembly division designs, manufactures and distributes coaxial connectors and cable assemblies that are integrated with coaxial connectors; (ii) Cables Unlimited, Inc., the subsidiary that manufactures custom and standard cable assemblies, complex hybrid fiber optic power solution cables, adapters, and electromechanical wiring harnesses for communication, computer, LAN, automotive and medical equipment; (iii) Rel-Tech Electronics, Inc., the subsidiary that designs and manufacturers cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation and military customers; (iv) C Enterprises, Inc., the subsidiary that designs and manufactures quality connectivity solutions to telecommunications and data communications distributors; (v) Schroff Technologies International, Ltd., the subsidiary that manufactures and markets intelligent thermal control systems used by telecommunications companies across the U.S. and Canada, and shrouds for small cell integration and installation, and (vi) Microlab, the subsidiary that designs and manufactures high-performance RF and Microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. The Cables Unlimited and C Enterprises divisions are Corning Cables Systems CAH Connections SM Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from those estimates. Principles of consolidation The accompanying consolidated financial statements include the accounts of RF Industries, Ltd., Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Ltd. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”), wholly-owned subsidiaries of RF Industries, Ltd. All intercompany balances and transactions have been eliminated in consolidation. Cash equivalents The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Revenue recognition On November 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined using the weighted average cost of accounting. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. If our review indicates a reduction in utility below carrying value due to damage, physical deterioration, obsolescence, changes in price levels, or other causes, we reduce our inventory to a new cost basis through a charge to cost of sales in the period in which it occurs. The determination of market value and the estimated volume of demand used in the lower of cost or market analysis requires significant judgment. Property and equipment Equipment, tooling and furniture are recorded at cost and depreciated over their estimated useful lives (generally three five Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. Goodwill is not amortized, but is subject to impairment analysis at least once annually, which we perform in October, or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. We assess whether a goodwill impairment exists using both qualitative and quantitative assessments at the reporting level. Our qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this qualitative assessment we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, we will not perform a quantitative assessment. Under the amendments of this update, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. No instances of goodwill impairment were identified as of October 31, 2022 and 2021. We considered the impact of the COVID-19 related economic slowdown on our evaluation of goodwill impairment indicators as of October 31, 2022 as well as consideration of positive factors including backlog and sell-through subsequent to October 31, 2022. Although no goodwill impairment indicators were identified, it is possible that impairments could emerge as the impact of the crisis becomes clearer, and those impairment losses could be material. On June 15, 2011, we completed the acquisition of Cables Unlimited. Goodwill related to this acquisition is included within the Cables Unlimited reporting unit. As of May 19, 2015, we completed the acquisition of the CompPro product line. Goodwill related to this acquisition is included within the RF Connector and Cable Assembly Division. Effective June 1, 2015, we completed the acquisition of Rel-Tech. Goodwill related to this acquisition is included within the Rel-Tech reporting unit. On March 15, 2019, we completed the acquisition of C Enterprises; however, no goodwill resulted from this transaction. On November 4, 2019, we completed the acquisition of Schrofftech. Goodwill related to this acquisition is included within the Schrofftech reporting unit. On March 1, 2022, we completed the acquisition of Microlab. Goodwill related to this acquisition is included within the Microlab reporting unit. Long-lived assets We assess property, plant and equipment and intangible assets, which are considered definite-lived assets for impairment. Definite-lived assets are reviewed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. We have made no material adjustments to our long-lived assets in any of the years presented. We amortize our intangible assets with definite useful lives over their estimated useful lives and review these assets for impairment. In addition, we test our trademarks and indefinite-lived asset for impairment at least annually or more frequently if events or changes in circumstances indicate that these assets may be impaired. No instances of impairment were identified as of October 31, 2022 or 2021. Fair value measurement We measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. 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 our 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. As of October 31, 2022 and 2021, the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature. Intangible assets Intangible assets consist of the following as of October 31, 2022 and 2021 (in thousands): 2022 2021 Amortizable intangible assets: Non-compete agreement (estimated life 5 years) $ 423 $ 423 Accumulated amortization (334 ) (289 ) 89 134 Customer relationships (estimated lives 7 - 15 years) 6,058 5,058 Accumulated amortization (3,074 ) (2,711 ) 2,984 2,347 Backlog (estimated life 1 - 2 years) 327 287 Accumulated amortization (313 ) (287 ) 14 - Patents (estimated life 10 - 14 years) 368 368 Accumulated amortization (143 ) (110 ) 225 258 Tradename (estimated life 15 years) 1,700 - Accumulated amortization (76 ) - 1,624 - Proprietary Technology (estimated life 10 years) 11,100 - Accumulated amortization (740 ) - 10,360 - Totals $ 15,296 $ 2,739 Non-amortizable intangible assets: Trademarks $ 1,174 $ 1,174 Amortization expense was $1,282,000 and $442,000 for the years ended October 31, 2022 and 2021, respectively. The weighted-average amortization period for the amortizable intangible assets is 9.48 years. There was no Estimated amortization expense related to finite-lived intangible assets is as follows (in thousands): Year ending October 31, Amount 2023 $ 1,701 2024 1,688 2025 1,643 2026 1,643 2027 1,643 Thereafter 6,978 Total $ 15,296 Advertising We expense the cost of advertising and promotions as incurred. Advertising costs charged to operations were approximately $333,000 and $314,000 in 2022 and 2021, respectively. Research and development Research and development costs are expensed as incurred. Our research and development expenses relate to its engineering activities, which consist of the design and development of new products for specific customers, as well as the design and engineering of new or redesigned products for the industry in general. During the years ended October 31, 2022 and 2021, we recognized $2,913,000 and $1,479,000 in engineering expenses, respectively. Income taxes We account for income taxes under the asset and liability method, based on the income tax laws and rates in the jurisdictions in which operations are conducted and income is earned. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Developing the provision (benefit) for income taxes requires significant judgment and expertise in federal, international and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Management’s judgments and tax strategies are subject to audit by various taxing authorities. We had adopted the provisions of ASC 740-10, which clarifies the accounting for uncertain tax positions. ASC 740-10 requires that we recognize the impact of a tax position in the financial statements if the position is not more likely than not to be sustained upon examination based on the technical merits of the position. We recognize interest and penalties related to certain uncertain tax positions as a component of income tax expense and the accrued interest and penalties are included in deferred and income taxes payable in our consolidated balance sheets. See Note 8 to the Consolidated Financial Statements included in this Report for more information on the Company’s accounting for uncertain tax positions. Stock options For stock option grants to employees, we recognize compensation expense based on the estimated fair value of the options at the date of grant. Stock-based employee compensation expense is recognized on a straight-line basis over the requisite service period. We issue previously unissued common shares upon the exercise of stock options. For the fiscal years ended October 31, 2022 and 2021, charges related to stock-based compensation amounted to approximately $689,000 and $769,000, respectively. For the fiscal years ended October 31, 2022 and 2021, all stock-based compensation is classified in selling and general and engineering expense. Earnings per share Basic earnings per share is calculated by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally those issuable upon the exercise of stock options, were issued and the treasury stock method had been applied during the period. The greatest number of shares potentially issuable upon the exercise of stock options in any period for the years ended October 31, 2022 and 2021, that were not included in the computation because they were anti-dilutive, totaled 508,889 and 386,364, respectively. The following table summarizes the computation of basic and diluted earnings per share: 2022 2021 Numerators: Consolidated net income (A) $ 1,448,000 $ 6,181,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 10,120,254 9,978,683 Add effects of potentially dilutive securities - assumed exercise of stock options 122,163 175,556 Weighted average shares outstanding for diluted earnings per share (C) 10,242,417 10,154,239 Basic earnings per share (A)/(B) $ 0.14 $ 0.62 Diluted earnings per share (A)/(C) $ 0.14 $ 0.61 Recent accounting standards Recently issued accounting pronouncements not yet adopted: In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments—Credit Losses Financial Instruments—Credit Losses Recently issued accounting pronouncements adopted: In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Note 2 - Business Acquisition
Note 2 - Business Acquisition | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | Note 2 Business acquisition On March 1, 2022, the Company completed its purchase (the “Purchase Transaction”) of 100% of the issued and outstanding membership interests of Microlab, a New Jersey limited liability company, from Wireless Telecom Group, Inc, a New Jersey corporation (the “Seller”) pursuant to the Membership Interest Purchase Agreement (the “Purchase Agreement”) dated December 16, 2021, with the Seller. The consideration for the Purchase Transaction was $24,250,000, subject to certain post-closing adjustments as set forth in the Purchase Agreement. The purchase price was paid in cash at the closing. The Company funded $17 million of the cash purchase price from the funds obtained under the Term Loan (as defined in Note 11) and paid the remaining amount of the cash purchase price with cash on hand. During the three months ended July 31, 2022, we paid an additional $225,000 in purchase consideration as a result of certain post-closing adjustments relating to net working capital. The acquisition was accounted for with the acquisition method of accounting. The acquired assets and assumed liabilities have been recorded at their estimated fair values. We determined the estimated fair values with the assistance of appraisals or valuations performed by an independent third-party specialist. Microlab designs and manufactures high-performance RF and Microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. The Microlab acquisition further diversifies and strengthens the portfolio of products that we offer to the market and allows us to provide a more complete solution to our customers in key market segments. All manufacturing operations are performed at Microlab’s facilities in New Jersey. The acquisition closed on March 1, 2022, accordingly, subsequent to March 1, 2022, Microlab’s financial results have been included in the results of the RF Connector and Cable Assembly (“RF Connector”) segment as well as in the consolidated statements of operations. The Company expects the goodwill recorded to be deductible for income tax purposes. Acquired amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives ranging from one 15 The following table summarizes the components of the purchase price at fair values at March 1, 2022: Cash consideration paid at closing $ 24,250,000 Post-closing adjustment 225,000 Total consideration transferred $ 24,475,000 The following table summarizes the allocation of the preliminary purchase price at fair value at March 1, 2022: Current assets $ 6,620,000 Property and equipment 198,000 Intangible assets 13,840,000 Goodwill 5,617,000 Non-interest bearing liabilities (1,800,000 ) Net assets acquired at fair value $ 24,475,000 The current purchase price allocation is preliminary. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition dates during the measurement periods. Any adjustments to the preliminary purchase price allocation identified during the measurement period, which will not exceed one year from the acquisition date, will be accounted for prospectively. The following unaudited pro forma financial information presents the combined operating results of the Company and Microlab as if both acquisitions had occurred as of the beginning of the earliest period presented. Pro forma data is subject to various assumptions and estimates and is presented for informational purposes only. This pro forma data does not purport to represent or be indicative of the consolidated operating results that would have been reported had the transaction been completed as described herein, and the data should not be taken as indicative of future consolidated operating results. Unaudited pro forma financial information assuming the acquisition of Microlab as of November 1, 2021 is presented in the following table: Twelve Months Ended October 31, 2022 2021 Revenue $ 91,358 $ 73,727 Net income 1,959 7,537 Earnings per share Basic $ 0.19 $ 0.75 Diluted $ 0.19 $ 0.74 Basic 10,120,254 9,978,683 Diluted 10,242,417 10,154,239 |
Note 3 - Concentrations of Cred
Note 3 - Concentrations of Credit Risk | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | Note 3 Concentrations of credit risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We maintain our cash and cash equivalents with high-credit quality financial institutions. At October 31, 2022, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $3.1 million. Sales from each customer that were 10% or greater of net sales were as follows: October 31, 2022 2021 Wireless provider 20 % 21 % Distributor A * 11 % * Less than 10% For the year ended October 31, 2022, a wireless carrier customer accounted for approximately 20% of total sales. The same customer had accounts receivable balances that accounted for 14% of the total net accounts receivable balance at October 31, 2022. Another distributor customer accounted for less than 10% of total sales and for 19% of the total net accounts receivable. For the year ended October 31, 2021, the same wireless carrier accounted for approximately 21% of total sales, and a distributor accounted for 11% of total sales. These two customers’ accounts receivable balances each accounted for approximately 28% and 8% |
Note 4 - Inventories and Major
Note 4 - Inventories and Major Vendors | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | Note 4 Inventories and major vendors Inventories, consisting of materials, labor and manufacturing overhead, are stated at the lower of cost or net realizable value. Cost has been determined using the weighted average cost method. Inventories consist of the following (in thousands): 2022 2021 Raw materials and supplies $ 15,238 $ 6,422 Work in process 439 381 Finished goods 5,377 4,376 Totals $ 21,054 $ 11,179 One one |
Note 5 - Other Current Assets
Note 5 - Other Current Assets | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Other Current Assets [Text Block] | Note 5 Other current assets Other current assets consist of the following (in thousands): 2022 2021 Employee retention credit ("ERC") $ 1,636 $ 1,774 Prepaid taxes - 314 Prepaid expense 972 439 Reimbursement for tenant improvments 2,810 - Other 431 366 Totals $ 5,849 $ 2,893 Pursuant to the CARES Act, eligible employers are able to claim an ERC, which is a refundable tax credit against certain employment taxes. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS. The period assessed for eligibility of the ERC is on a calendar year basis. As of October 31, 2022, the remaining portion of the ERC that we have not yet received is included as other receivables in other current assets. |
Note 6 - Accrued Expenses and O
Note 6 - Accrued Expenses and Other Long-term Liabilities | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Noncurrent [Text Block] | Note 6 Accrued expenses and other long-term liabilities Accrued expenses consist of the following (in thousands): 2022 2021 Wages payable $ 3,634 $ 2,607 Accrued receipts 2,136 1,711 Other accrued expenses 1,847 716 Tenant improvements payable 1,197 - Totals $ 8,814 $ 5,034 Accrued receipts represent purchased inventory for which invoices have not been received. |
Note 7 - Segment Information
Note 7 - Segment Information | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | Note 7 Segment information We aggregate operating divisions into two reporting 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; and (5) if applicable, the nature of the regulatory environment. Based upon this evaluation, as of October 31, 2022, we had two reportable segments – RF Connector and Cable Assembly (“RF Connector”) segment and Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment. The RF Connector segment consists of two divisions and the Custom Cabling segment consists of four divisions. The six divisions that met the quantitative thresholds for segment reporting are the RF Connector and Cable Assembly division (“RF Connector division”), Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech, and Microlab. While each segment has similar products and services, there was little overlapping of these services to their customer base. The biggest difference in segments is in the channels of sales: sales or product and services for the RF Connector segment were primarily through the distribution channel, while the Custom Cabling segment sales were through a combination of distribution and direct to the end customer. Management identifies 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 RF Connector and Microlab divisions constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech divisions constitute the Custom Cabling segment. As reviewed by our chief operating decision maker, we evaluate the performance of each segment based on income or loss before income taxes. We charge depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, right of use assets, 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. All of our operations are conducted in the United States; however, we derive a portion of our revenue from export sales. We attribute sales to geographic areas based on the location of the customers. The following table presents the sales by geographic area for the years ended October 31, 2022 and 2021 (in thousands): 2022 2021 United States $ 74,919 $ 54,960 Foreign Countries: Canada 6,765 1,856 Italy 1,670 - Mexico 106 130 All Other 1,794 478 10,335 2,464 Totals $ 85,254 $ 57,424 Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the years ended October 31, 2022 and 2021 are as follows (in thousands): RF Connector Custom Cabling and Manufacturing and 2022 Cable Assembly Assembly Corporate Total Net sales $ 31,157 $ 54,097 $ - $ 85,254 Income (loss) before benefit from income taxes 2,421 2,303 (3,137 ) 1,587 Depreciation and amortization 1,109 581 - 1,690 Total assets 49,468 27,606 12,492 89,566 2021 Net sales $ 15,622 $ 41,802 $ - $ 57,424 Income (loss) before benefit from income taxes 2,494 1,921 2,802 7,217 Depreciation and amortization 141 629 - 770 Total assets 7,367 25,875 16,406 49,648 * For the 12 months ended October 31, 2021, other income consists of the $2.8M PPP Loans that were forgiven. |
Note 8 - Income Tax Provision
Note 8 - Income Tax Provision | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 8 Income tax provision The provision (benefit) for income taxes for the fiscal years ended October 31, 2022 and 2021 consists of the following (in thousands): 2022 2021 Current: Federal $ 1,252 $ 401 State 225 189 1,477 590 Deferred: Federal (1,054 ) 323 State (284 ) 123 (1,338 ) 446 $ 139 $ 1,036 Income tax at the federal statutory rate is reconciled to our actual net provision (benefit) for income taxes as follows (in thousands, except percentages): 2022 2021 % of Pretax % of Pretax Amount Income Amount Income Income taxes at federal statutory rate $ 333 21.0 % $ 1,516 21.0 % State tax provision, net of federal tax benefit 60 3.8 % 246 3.4 % Nondeductible differences: Stock options 19 1.2 % (86 ) -1.2 % PPP loan forgiveness - 0.0 % (588 ) -8.1 % Permanent differences 5 0.3 % 5 0.1 % R&D credits (219 ) -13.6 % (51 ) -0.7 % Foreign derived intangible income (68 ) -4.3 % (15 ) -0.2 % ASC 740-10 Liability (7 ) -0.4 % 29 0.4 % Section 481(a) adjustment 142 8.9 % - 0.0 % Return-to-provision adjustments (126 ) -7.9 % - 0.0 % Other - -0.0 % (20 ) -0.3 % $ 139 9.2 % $ 1,036 14.4 % Our total deferred tax assets and deferred tax liabilities at October 31, 2022 and 2021 are as follows (in thousands): 2022 2021 Deferred Tax Assets: Reserves $ 404 $ 383 Accrued vacation 294 241 Stock-based compensation awards 168 144 Uniform capitalization 173 134 Lease liability 4,169 366 State Taxes 72 52 Other 36 25 Total deferred tax assets 5,316 1,345 Deferred Tax Liabilities: Amortization / intangible assets (29 ) (487 ) Change in ROU assets (3,335 ) (357 ) Depreciation / equipment and furnishings (136 ) (112 ) Total deferred tax liabilities (3,500 ) (956 ) Total net deferred tax assets (liabilities) $ 1,816 $ 389 Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined it is more likely than not that the assets will be realized in future tax years. The provision (benefit) for income taxes was $0.1 million or 9.2% and $1.0 million or 14.4% of income before income taxes for fiscal 2022 and 2021, respectively. The fiscal 2022 effective tax rate differed from the statutory federal rate of 21% primarily as a result of the tax benefit from research and development tax credits and foreign derived intangible income deduction and the tax expense associated with tax accounting method changes. The Company recognizes the benefit of tax positions taken or expected to be taken in its tax returns in the consolidated financial statements when it is more likely than not that the position will be sustained upon examination by authorities. Recognized tax positions are measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. A reconciliation of the beginning and ending balance to total uncertain tax positions in fiscal years ended October 31, 2022 and 2021 are as follows: 2022 2021 Balance, at beginning of year $ 141 $ 107 Increase for tax positions related to the current year 50 44 Increase for tax positions related to prior years (29 ) (1 ) Increase for interest and penalties - 2 Statute of Limitations Expirations (28 ) (11 ) Balance, at end of year $ 134 $ 141 We had gross unrecognized tax benefits of $121,000 and $128,000 attributable to U.S. federal and California research tax credits as of October 31, 2022 and 2021, respectively. During fiscal 2022, the decrease in our gross unrecognized tax benefit was primarily related to statute expirations and adjustments for prior year federal and California research tax credits. The uncertain tax benefit is recorded as income taxes payable in our consolidated balance sheet and if recognized in the future would impact our effective tax rate. We recognize interest and penalties related to uncertain tax positions in income tax expense. We recognized expense of approximately $13,000 and $13,000 during the years ended October 31, 2022 and 2021, respectively. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, it is possible that certain changes may occur within the next twelve months, but we do not anticipate that our accrual for uncertain tax positions will change by a material amount over the next 12-month period. We are subject to taxation in the United States and state jurisdictions. Our tax years for October 31, 2019 2018 |
Note 9 - Stock Options
Note 9 - Stock Options | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | Note 9 Stock options Incentive and non-qualified stock option plans On July 22, 2020, the Company’s Board of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”). In September 2020, the Company’s stockholders approved the 2020 Plan by vote as required by NASDAQ. An aggregate of 1,250,000 shares of common stock was set aside and reserved for issuance under the 2020 Plan. As of October 31, 2022, 916,369 shares of common stock were remaining for future grants of stock options under the 2020 Plan. Additional disclosures related to stock option plans On January 12, 2021, we granted a total of 33,500 shares of restricted stock and 67,000 incentive stock options to one manager and three officers. The shares of restricted stock and incentive stock options vest over four one-quarter three ten On July 16, 2021, our Chief Executive Officer was granted incentive stock options to purchase 50,000 shares. These options immediately vested on the date of grant, and expire ten On January 10, 2022, we granted a total of 39,666 shares of restricted stock and 106,001 incentive stock options to one manager and three officers. The shares of restricted stock and incentive stock options vest over four one-quarter ten On May 2, 2022, we granted a total of 39,000 incentive stock options to the following: ● One employee was granted 12,000 incentive stock options. These options vested with respect to 3,000 shares on the date of grant, and the remaining shares vests in equal installments thereafter on each of the next three ten ● Three employees were each granted 5,000 incentive stock options. These options will vest in two ten ● Two employees were each granted 6,000 incentive stock options. These options will vest in three ten No other shares or options were granted to Company employees during fiscal 2022. The fair value of each option granted in 2022 and 2021 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: 2022 2021 Weighted average volatility 53.36 % 52.34 % Expected dividends 0.00 % 0.00 % Expected term (in years) 7.0 7.0 Risk-free interest rate 1.47 % 0.58 % Weighted average fair value of options granted during the year $ 3.77 $ 3.38 Weighted average fair value of options vested during the year $ 2.32 $ 3.41 Expected volatilities are based on historical volatility of our stock price and other factors. We used the historical method to calculate the expected life of the 2022 and 2021 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. Additional information regarding all of our outstanding stock options at October 31, 2022 and 2021 and changes in outstanding stock options in 2022 and 2021 follows: 2022 2021 Shares or Weighted Shares or Weighted Price Per Average Price Per Average Share Exercise Price Share Exercise Price Outstanding at beginning of year 618,858 $ 5.33 789,179 $ 4.66 Options granted 145,001 $ 6.94 117,000 $ 6.57 Options exercised (60,854 ) $ 2.45 (195,528 ) $ 3.10 Options canceled or expired (12,000 ) $ 7.58 (91,793 ) $ 5.88 Options outstanding at end of year 691,005 $ 5.87 618,858 $ 5.33 Options exercisable at end of year 366,714 $ 6.13 313,381 $ 5.95 Options vested and expected to vest at end of year 685,154 $ 5.88 618,522 $ 5.35 Option price range at end of year $1.90 - $8.69 $1.90 - $8.69 $ Aggregate intrinsic value of options exercised during year $ 245,420 $ 642,181 Weighted average remaining contractual life of options outstanding as of October 31, 2022: 6.61 years Weighted average remaining contractual life of options exercisable as of October 31, 2022: 5.91 years Weighted average remaining contractual life of options vested and expected to vest as of October 31, 2022: 6.62 years Aggregate intrinsic value of options outstanding at October 31, 2022: $518,000 Aggregate intrinsic value of options exercisable at October 31, 2022: $265,000 Aggregate intrinsic value of options vested and expected to vest at October 31, 2022: $513,000 As of October 31, 2022, $685,000 and $594,000 of expense with respect to nonvested stock options and restricted shares, respectively, has yet to be recognized but is expected to be recognized over a weighted average period of 2.19 and 0.95 years, respectively. Under the compensation policies adopted by the Compensation Committee, directors who also are officers and/or employees of the Company do not receive any compensation for serving on the Board. On September 8, 2021, the Board of Directors determined that the compensation payable to directors as Board fees for the next year ending with the 2022 annual meeting of stockholders was the same as they received in 2021 (i.e., $50,000). In addition, effective September 8, 2021, the Board determined that both Board fees and additional chair fees would be paid half in cash and half in restricted stock, and, in light of the additional work required by the chairs, revised the chair fees as follows, $25,000 for the Chairman of the Board, $25,000 for the Audit Committee Chair, $20,000 for the Compensation Committee Chair, $20,000 for the Strategic Planning and Capital Allocation Chair, and $10,000 for the Nominating & Governance Chair. The cash and restricted stock fees vest in four equal quarterly installments commencing on December 8, 2021, with the restricted stock portion determined by dividing the amount of the fee by the 20-day average trailing closing price of the Company’s common stock from the date of grant ($8.21). |
Note 10 - Retirement Plan
Note 10 - Retirement Plan | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Retirement Benefits [Text Block] | Note 10 Retirement plan We have a 401(k) plan available to our employees. For the years ended October 31, 2022 and 2021, we contributed and recognized as an expense $488,000 and $413,000, respectively, which amounts represented 3% of eligible employee earnings under the Company’s Safe Harbor Non-elective Employer Contribution Plan. |
Note 11 - Term Loan, Line of Cr
Note 11 - Term Loan, Line of Credit and PPP Loans | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | Note 11 Term Loan, Line of credit and PPP loans In February 2022, we entered into an agreement for a revolving line of credit (the “Revolving Credit Facility”) in the amount of $3.0 million and a $17.0 million term loan (the “Term Loan”, and together with the Revolving Credit Facility, the “Credit Facility”). Amounts outstanding under the Revolving Credit Facility shall bear interest at a rate of 2.0% plus the Bloomberg Short-Term Bank Yield Index Rate (“base interest rate”). The maturity date of the Revolving Credit Facility is March 1, 2024. The Company drew down the entire amount of the Term Loan on March 1, 2022. The primary interest rate for Term Loan is 3.76% per annum. The maturity date of the Term Loan is March 1, 2027. Borrowings under the Credit Facility are secured by a security interest in certain assets of the Company and contains certain loan covenants. The Credit Facility requires the maintenance of certain financial covenants, including: (i) consolidated debt to EBITDA ratio not to exceed 3.00 to 1.00; (ii) consolidated fixed charge coverage ratio of at least 1.25 to 1.00; and (iii) consolidated minimum EBITDA of at least $600,000 for the discrete quarter ending January 31, 2022. In addition, the Credit Facility contains customary affirmative and negative covenants. As of October 31, 2022, we have borrowed $15,586,000 under the Term Loan while we have not In May 2020, we applied for and received loans under the PPP of the CARES Act totaling approximately $2.8 million. The funds from the PPP Loans were used to retain employees, maintain payroll and benefits, and make lease and utility payments. Without the PPP Loans, we would have made material reductions in our workforce (particularly at our New York Facility). As of April 30, 2021, the full amount of the PPP Loans has been forgiven and considered paid in full (including applicable interest). |
Note 12 - Related Party Transac
Note 12 - Related Party Transactions | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | Note 12 Related party transactions A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited. Cables Unlimited’s monthly rent expense under the lease is $16,000 per month, plus payments of all utilities, janitorial expenses, routine maintenance costs, and costs of insurance for Cables Unlimited’s business operations and equipment. During the fiscal year ended October 31, 2022, we paid a total of $180,000 under the leases. During fiscal 2022, we paid royalties to Elmec Ltd. (“Elmec”), a European-based company that owns the intellectual property that is used in Schrofftech’s products. One third of Elmec is jointly owned by David Therrien and Richard DeFelice, two of the former owners and current President and Vice President, respectively, of Schrofftech. For the year ended October 31, 2022, we paid a total of $19,000 of royalty payments to Elmec, and have accrued an additional $4,000 as of October 31, 2022. The expenses related to these transactions are included in cost of goods sold. |
Note 13 - Cash Dividend and Dec
Note 13 - Cash Dividend and Declared Dividends | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Cash Dividend and Declared Dividends [Text Block] | Note 13 Cash dividend and declared dividends We did not |
Note 14 - Commitments
Note 14 - Commitments | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Commitments Disclosure [Text Block] | Note 14 Commitments We adopted ASU 2016-02 on November 1, 2019, and elected the practical expedient modified retrospective method whereby the lease qualification and classification was carried over from the accounting for leases under ASC 840. The lease contracts for the corporate headquarters, RF Connector division manufacturing facilities, Cables Unlimited, Rel-Tech, and C Enterprises commenced prior to the effective date of November 1, 2019, and were determined to be operating leases. All other new contracts have been assessed for the existence of a lease and for the proper classification into operating leases. The rate implicit in the leases was undeterminable and, therefore, the discount rate used in all lease contracts is our incremental borrowing rate. We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one five We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ended October 31, 2022 were as follows (in thousands): Fiscal Year Ended October 31, 2022 Operating lease cost $ 1,833 Short-term lease cost 1 Other information related to leases was as follows (in thousands): October 31, 2022 Supplemental Cash Flows Information ROU assets obtained in exchange for lease obligations: Operating leases $ 13,352 Weighted Average Remaining Lease Term Operating leases (in months) 113.72 Weighted Average Discount Rate Operating leases 3.75 % Future minimum lease payments under non-cancellable leases as of October 31, 2022 were as follows (in thousands): Year ended October 31, Operating Leases 2023 $ 2,467 2024 1,991 2025 1,796 2026 1,835 Thereafter 12,306 Total future minimum lease payments 20,395 Less imputed interest (3,483 ) Total $ 16,912 Reported as of October 31, 2022 Operating Leases Other current liabilities $ 1,887 Operating lease liabilities 15,025 Finance lease liabilities - Total $ 16,912 As of October 31, 2022, operating lease ROU asset was $13.5 million and operating lease liability totaled $16.9 million, of which $1.9 million is classified as current. There were no |
Note 15 - Subsequent Event
Note 15 - Subsequent Event | 12 Months Ended |
Oct. 31, 2022 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | Note 15 Subsequent event In January 2023, we received a refund of $1.2 million related to the ERC, of which $1.6 million was in Other Current Assets as of October 31, 2022. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
Business Combinations Policy [Policy Text Block] | Business activities SM |
Use of Estimates, Policy [Policy Text Block] | Use of estimates |
Consolidation, Policy [Policy Text Block] | Principles of consolidation |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash equivalents |
Revenue [Policy Text Block] | Revenue recognition Revenue from Contracts with Customers (Topic 606) |
Inventory, Policy [Policy Text Block] | Inventories |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and equipment three five |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Goodwill |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-lived assets |
Fair Value Measurement, Policy [Policy Text Block] | Fair value measurement |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangible assets 2022 2021 Amortizable intangible assets: Non-compete agreement (estimated life 5 years) $ 423 $ 423 Accumulated amortization (334 ) (289 ) 89 134 Customer relationships (estimated lives 7 - 15 years) 6,058 5,058 Accumulated amortization (3,074 ) (2,711 ) 2,984 2,347 Backlog (estimated life 1 - 2 years) 327 287 Accumulated amortization (313 ) (287 ) 14 - Patents (estimated life 10 - 14 years) 368 368 Accumulated amortization (143 ) (110 ) 225 258 Tradename (estimated life 15 years) 1,700 - Accumulated amortization (76 ) - 1,624 - Proprietary Technology (estimated life 10 years) 11,100 - Accumulated amortization (740 ) - 10,360 - Totals $ 15,296 $ 2,739 Non-amortizable intangible assets: Trademarks $ 1,174 $ 1,174 no Year ending October 31, Amount 2023 $ 1,701 2024 1,688 2025 1,643 2026 1,643 2027 1,643 Thereafter 6,978 Total $ 15,296 |
Advertising Cost [Policy Text Block] | Advertising |
Research and Development Expense, Policy [Policy Text Block] | Research and development |
Income Tax, Policy [Policy Text Block] | Income taxes |
Share-Based Payment Arrangement [Policy Text Block] | Stock options |
Earnings Per Share, Policy [Policy Text Block] | Earnings per share 2022 2021 Numerators: Consolidated net income (A) $ 1,448,000 $ 6,181,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 10,120,254 9,978,683 Add effects of potentially dilutive securities - assumed exercise of stock options 122,163 175,556 Weighted average shares outstanding for diluted earnings per share (C) 10,242,417 10,154,239 Basic earnings per share (A)/(B) $ 0.14 $ 0.62 Diluted earnings per share (A)/(C) $ 0.14 $ 0.61 |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting standards Recently issued accounting pronouncements not yet adopted: Financial Instruments—Credit Losses Financial Instruments—Credit Losses Recently issued accounting pronouncements adopted: Intangibles—Goodwill and Other Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Note 1 - Business Activities _2
Note 1 - Business Activities and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 2022 2021 Amortizable intangible assets: Non-compete agreement (estimated life 5 years) $ 423 $ 423 Accumulated amortization (334 ) (289 ) 89 134 Customer relationships (estimated lives 7 - 15 years) 6,058 5,058 Accumulated amortization (3,074 ) (2,711 ) 2,984 2,347 Backlog (estimated life 1 - 2 years) 327 287 Accumulated amortization (313 ) (287 ) 14 - Patents (estimated life 10 - 14 years) 368 368 Accumulated amortization (143 ) (110 ) 225 258 Tradename (estimated life 15 years) 1,700 - Accumulated amortization (76 ) - 1,624 - Proprietary Technology (estimated life 10 years) 11,100 - Accumulated amortization (740 ) - 10,360 - Totals $ 15,296 $ 2,739 Non-amortizable intangible assets: Trademarks $ 1,174 $ 1,174 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Year ending October 31, Amount 2023 $ 1,701 2024 1,688 2025 1,643 2026 1,643 2027 1,643 Thereafter 6,978 Total $ 15,296 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 2022 2021 Numerators: Consolidated net income (A) $ 1,448,000 $ 6,181,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 10,120,254 9,978,683 Add effects of potentially dilutive securities - assumed exercise of stock options 122,163 175,556 Weighted average shares outstanding for diluted earnings per share (C) 10,242,417 10,154,239 Basic earnings per share (A)/(B) $ 0.14 $ 0.62 Diluted earnings per share (A)/(C) $ 0.14 $ 0.61 |
Note 2 - Business Acquisition (
Note 2 - Business Acquisition (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | Cash consideration paid at closing $ 24,250,000 Post-closing adjustment 225,000 Total consideration transferred $ 24,475,000 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Current assets $ 6,620,000 Property and equipment 198,000 Intangible assets 13,840,000 Goodwill 5,617,000 Non-interest bearing liabilities (1,800,000 ) Net assets acquired at fair value $ 24,475,000 |
Business Acquisition, Pro Forma Information [Table Text Block] | Twelve Months Ended October 31, 2022 2021 Revenue $ 91,358 $ 73,727 Net income 1,959 7,537 Earnings per share Basic $ 0.19 $ 0.75 Diluted $ 0.19 $ 0.74 Basic 10,120,254 9,978,683 Diluted 10,242,417 10,154,239 |
Note 3 - Concentrations of Cr_2
Note 3 - Concentrations of Credit Risk (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | October 31, 2022 2021 Wireless provider 20 % 21 % Distributor A * 11 % |
Note 4 - Inventories and Majo_2
Note 4 - Inventories and Major Vendors (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | 2022 2021 Raw materials and supplies $ 15,238 $ 6,422 Work in process 439 381 Finished goods 5,377 4,376 Totals $ 21,054 $ 11,179 |
Note 5 - Other Current Assets (
Note 5 - Other Current Assets (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedule of Other Current Assets [Table Text Block] | 2022 2021 Employee retention credit ("ERC") $ 1,636 $ 1,774 Prepaid taxes - 314 Prepaid expense 972 439 Reimbursement for tenant improvments 2,810 - Other 431 366 Totals $ 5,849 $ 2,893 |
Note 6 - Accrued Expenses and_2
Note 6 - Accrued Expenses and Other Long-term Liabilities (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | 2022 2021 Wages payable $ 3,634 $ 2,607 Accrued receipts 2,136 1,711 Other accrued expenses 1,847 716 Tenant improvements payable 1,197 - Totals $ 8,814 $ 5,034 |
Note 7 - Segment Information (T
Note 7 - Segment Information (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | 2022 2021 United States $ 74,919 $ 54,960 Foreign Countries: Canada 6,765 1,856 Italy 1,670 - Mexico 106 130 All Other 1,794 478 10,335 2,464 Totals $ 85,254 $ 57,424 |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | RF Connector Custom Cabling and Manufacturing and 2022 Cable Assembly Assembly Corporate Total Net sales $ 31,157 $ 54,097 $ - $ 85,254 Income (loss) before benefit from income taxes 2,421 2,303 (3,137 ) 1,587 Depreciation and amortization 1,109 581 - 1,690 Total assets 49,468 27,606 12,492 89,566 2021 Net sales $ 15,622 $ 41,802 $ - $ 57,424 Income (loss) before benefit from income taxes 2,494 1,921 2,802 7,217 Depreciation and amortization 141 629 - 770 Total assets 7,367 25,875 16,406 49,648 |
Note 8 - Income Tax Provision (
Note 8 - Income Tax Provision (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | 2022 2021 Current: Federal $ 1,252 $ 401 State 225 189 1,477 590 Deferred: Federal (1,054 ) 323 State (284 ) 123 (1,338 ) 446 $ 139 $ 1,036 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 2022 2021 % of Pretax % of Pretax Amount Income Amount Income Income taxes at federal statutory rate $ 333 21.0 % $ 1,516 21.0 % State tax provision, net of federal tax benefit 60 3.8 % 246 3.4 % Nondeductible differences: Stock options 19 1.2 % (86 ) -1.2 % PPP loan forgiveness - 0.0 % (588 ) -8.1 % Permanent differences 5 0.3 % 5 0.1 % R&D credits (219 ) -13.6 % (51 ) -0.7 % Foreign derived intangible income (68 ) -4.3 % (15 ) -0.2 % ASC 740-10 Liability (7 ) -0.4 % 29 0.4 % Section 481(a) adjustment 142 8.9 % - 0.0 % Return-to-provision adjustments (126 ) -7.9 % - 0.0 % Other - -0.0 % (20 ) -0.3 % $ 139 9.2 % $ 1,036 14.4 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 2022 2021 Deferred Tax Assets: Reserves $ 404 $ 383 Accrued vacation 294 241 Stock-based compensation awards 168 144 Uniform capitalization 173 134 Lease liability 4,169 366 State Taxes 72 52 Other 36 25 Total deferred tax assets 5,316 1,345 Deferred Tax Liabilities: Amortization / intangible assets (29 ) (487 ) Change in ROU assets (3,335 ) (357 ) Depreciation / equipment and furnishings (136 ) (112 ) Total deferred tax liabilities (3,500 ) (956 ) Total net deferred tax assets (liabilities) $ 1,816 $ 389 |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | 2022 2021 Balance, at beginning of year $ 141 $ 107 Increase for tax positions related to the current year 50 44 Increase for tax positions related to prior years (29 ) (1 ) Increase for interest and penalties - 2 Statute of Limitations Expirations (28 ) (11 ) Balance, at end of year $ 134 $ 141 |
Note 9 - Stock Options (Tables)
Note 9 - Stock Options (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 2022 2021 Weighted average volatility 53.36 % 52.34 % Expected dividends 0.00 % 0.00 % Expected term (in years) 7.0 7.0 Risk-free interest rate 1.47 % 0.58 % Weighted average fair value of options granted during the year $ 3.77 $ 3.38 Weighted average fair value of options vested during the year $ 2.32 $ 3.41 |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | 2022 2021 Shares or Weighted Shares or Weighted Price Per Average Price Per Average Share Exercise Price Share Exercise Price Outstanding at beginning of year 618,858 $ 5.33 789,179 $ 4.66 Options granted 145,001 $ 6.94 117,000 $ 6.57 Options exercised (60,854 ) $ 2.45 (195,528 ) $ 3.10 Options canceled or expired (12,000 ) $ 7.58 (91,793 ) $ 5.88 Options outstanding at end of year 691,005 $ 5.87 618,858 $ 5.33 Options exercisable at end of year 366,714 $ 6.13 313,381 $ 5.95 Options vested and expected to vest at end of year 685,154 $ 5.88 618,522 $ 5.35 Option price range at end of year $1.90 - $8.69 $1.90 - $8.69 $ Aggregate intrinsic value of options exercised during year $ 245,420 $ 642,181 |
Note 14 - Commitments (Tables)
Note 14 - Commitments (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Notes Tables | |
Lease, Cost [Table Text Block] | Fiscal Year Ended October 31, 2022 Operating lease cost $ 1,833 Short-term lease cost 1 |
Lessee, Leases, Other Information [Table Text Block] | October 31, 2022 Supplemental Cash Flows Information ROU assets obtained in exchange for lease obligations: Operating leases $ 13,352 Weighted Average Remaining Lease Term Operating leases (in months) 113.72 Weighted Average Discount Rate Operating leases 3.75 % |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Year ended October 31, Operating Leases 2023 $ 2,467 2024 1,991 2025 1,796 2026 1,835 Thereafter 12,306 Total future minimum lease payments 20,395 Less imputed interest (3,483 ) Total $ 16,912 |
Note 1 - Business Activities _3
Note 1 - Business Activities and Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Amortization of Intangible Assets, Total | $ 1,282,000 | $ 442,000 |
Advertising Expense | 333,000 | 314,000 |
Research and Development Expense, Total | 2,913,000 | 1,479,000 |
Stock-based compensation expense | $ 689,000 | $ 769,000 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 508,889 | 386,364 |
Trademarks [Member] | ||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 0 | $ 0 |
Minimum [Member] | ||
Property, Plant and Equipment, Useful Life (Year) | 3 years | |
Maximum [Member] | ||
Property, Plant and Equipment, Useful Life (Year) | 5 years | |
Weighted Average [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 9 years 5 months 23 days |
Note 1 - Business Activities _4
Note 1 - Business Activities and Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
Amortizable intangible assets, net | $ 15,296 | $ 2,739 |
Non-amortizable intangible assets | 1,174 | 1,174 |
Trademarks [Member] | ||
Non-amortizable intangible assets | 1,174 | 1,174 |
Noncompete Agreements [Member] | ||
Amortizable intangible assets, gross | 423 | 423 |
Accumulated amortization | (334) | (289) |
Amortizable intangible assets, net | 89 | 134 |
Customer Relationships [Member] | ||
Amortizable intangible assets, gross | 6,058 | 5,058 |
Accumulated amortization | (3,074) | (2,711) |
Amortizable intangible assets, net | 2,984 | 2,347 |
Order or Production Backlog [Member] | ||
Amortizable intangible assets, gross | 327 | 287 |
Accumulated amortization | (313) | (287) |
Amortizable intangible assets, net | 14 | 0 |
Patents [Member] | ||
Amortizable intangible assets, gross | 368 | 368 |
Accumulated amortization | (143) | (110) |
Amortizable intangible assets, net | 225 | 258 |
Trade Names [Member] | ||
Amortizable intangible assets, gross | 1,700 | 0 |
Accumulated amortization | (76) | 0 |
Amortizable intangible assets, net | 1,624 | 0 |
Technology-Based Intangible Assets [Member] | ||
Amortizable intangible assets, gross | 11,100 | 0 |
Accumulated amortization | (740) | 0 |
Amortizable intangible assets, net | $ 10,360 | $ 0 |
Note 1 - Business Activities _5
Note 1 - Business Activities and Summary of Significant Accounting Policies - Intangible Assets (Details) (Parentheticals) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Noncompete Agreements [Member] | ||
Amortizable intangible assets, estimated life (Year) | 5 years | 5 years |
Customer Relationships [Member] | Minimum [Member] | ||
Amortizable intangible assets, estimated life (Year) | 7 years | 7 years |
Customer Relationships [Member] | Maximum [Member] | ||
Amortizable intangible assets, estimated life (Year) | 15 years | 15 years |
Order or Production Backlog [Member] | Minimum [Member] | ||
Amortizable intangible assets, estimated life (Year) | 1 year | 1 year |
Order or Production Backlog [Member] | Maximum [Member] | ||
Amortizable intangible assets, estimated life (Year) | 2 years | 2 years |
Patents [Member] | Minimum [Member] | ||
Amortizable intangible assets, estimated life (Year) | 10 years | 10 years |
Patents [Member] | Maximum [Member] | ||
Amortizable intangible assets, estimated life (Year) | 14 years | 14 years |
Trade Names [Member] | ||
Amortizable intangible assets, estimated life (Year) | 15 years | |
Patented Technology [Member] | ||
Amortizable intangible assets, estimated life (Year) | 10 years |
Note 1 - Business Activities _6
Note 1 - Business Activities and Summary of Significant Accounting Policies - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
2023 | $ 1,701 | |
2024 | 1,688 | |
2025 | 1,643 | |
2026 | 1,643 | |
2027 | 1,643 | |
Thereafter | 6,978 | |
Total | $ 15,296 | $ 2,739 |
Note 1 - Business Activities _7
Note 1 - Business Activities and Summary of Significant Accounting Policies - Basic and Diluted Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Consolidated net income (A) | $ 1,448,000 | $ 6,181,000 |
Weighted average shares outstanding for basic earnings per share (B) (in shares) | 10,120,254 | 9,978,683 |
Add effects of potentially dilutive securities - assumed exercise of stock options (in shares) | 122,163 | 175,556 |
Weighted average shares outstanding for diluted earnings per share (C) (in shares) | 10,242,417 | 10,154,239 |
Basic earnings per share (A)/(B) (in dollars per share) | $ 0.14 | $ 0.62 |
Diluted earnings per share (A)/(C) (in dollars per share) | $ 0.14 | $ 0.61 |
Note 2 - Business Acquisition_2
Note 2 - Business Acquisition (Details Textual) - USD ($) | 3 Months Ended | 8 Months Ended | ||
Mar. 01, 2022 | Jul. 31, 2022 | Oct. 31, 2022 | Feb. 28, 2022 | |
Bank of America, N.A. [Member] | ||||
Debt Instrument, Face Amount | $ 17,000,000 | |||
Microlab/FXR LLC [Member] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 100% | |||
Business Combination, Consideration Transferred, Total | $ 24,250,000 | |||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | $ 225,000 | |||
Microlab/FXR LLC [Member] | Selling, General and Administrative Expenses [Member] | ||||
Business Combination, Acquisition Related Costs | $ 1,300,000 | |||
Microlab/FXR LLC [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 1 year | |||
Microlab/FXR LLC [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years |
Note 2 - Business Acquisition -
Note 2 - Business Acquisition - Components of the Purchase Price of Schroff Technologies International, Inc. (Details) - Schrofftech [Member] | Mar. 01, 2022 USD ($) |
Cash consideration paid at closing | $ 24,250,000 |
Post-closing adjustment | 225,000 |
Total consideration transferred | $ 24,475,000 |
Note 2 - Business Acquisition_3
Note 2 - Business Acquisition - Allocation of Estimated Purchase Price of Schroff Technologies International, Inc. (Details) - USD ($) | Oct. 31, 2022 | Mar. 01, 2022 | Oct. 31, 2021 |
Goodwill | $ 8,085,000 | $ 2,467,000 | |
Schrofftech [Member] | |||
Current assets | $ 6,620,000 | ||
Property and equipment | 198,000 | ||
Intangible assets | 13,840,000 | ||
Goodwill | 5,617,000 | ||
Non-interest bearing liabilities | (1,800,000) | ||
Net assets acquired at fair value | $ 24,475,000 |
Note 2 - Business Acquisition_4
Note 2 - Business Acquisition - Unaudited Pro Forma Financial Information (Details) - Microlab/FXR LLC [Member] - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Revenue | $ 91,358 | $ 73,727 |
Net income | $ 1,959 | $ 7,537 |
Basic (in dollars per share) | $ 0.19 | $ 0.75 |
Diluted (in dollars per share) | $ 0.19 | $ 0.74 |
Basic (in shares) | 10,120,254 | 9,978,683 |
Diluted (in shares) | 10,242,417 | 10,154,239 |
Note 3 - Concentrations of Cr_3
Note 3 - Concentrations of Credit Risk (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Cash, Uninsured Amount | $ 3.1 | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Wireless Carrier [Member] | ||
Concentration Risk, Percentage | 20% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | One Distributor [Member] | ||
Concentration Risk, Percentage | 21% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Distributor Two [Member] | ||
Concentration Risk, Percentage | 11% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Wireless Carrier [Member] | ||
Concentration Risk, Percentage | 14% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributor One [Member] | ||
Concentration Risk, Percentage | 19% | 28% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributor Two [Member] | ||
Concentration Risk, Percentage | 8% |
Note 3 - Concentrations of Cr_4
Note 3 - Concentrations of Credit Risk - Sales (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Wireless Provider [Member] | ||
Concentration Risk, Percentage | 20% | 21% |
Distributor A [Member] | ||
Concentration Risk, Percentage | 11% |
Note 4 - Inventories and Majo_3
Note 4 - Inventories and Major Vendors (Details Textual) - Supplier Concentration Risk [Member] - Inventory Purchases [Member] | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Number of Major Vendors | 1 | 1 |
One Vendor [Member] | ||
Concentration Risk, Percentage | 27% | 26% |
Note 4 - Inventories and Majo_4
Note 4 - Inventories and Major Vendors - Inventories (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
Raw materials and supplies | $ 15,238 | $ 6,422 |
Work in process | 439 | 381 |
Finished goods | 5,377 | 4,376 |
Totals | $ 21,054 | $ 11,179 |
Note 5 - Other Current Assets -
Note 5 - Other Current Assets - Other Current Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
Employee retention credit ("ERC") | $ 1,636 | $ 1,774 |
Prepaid taxes | 0 | 314 |
Prepaid expense | 972 | 439 |
Reimbursement for tenant improvments | 2,810 | 0 |
Other | 431 | 366 |
Totals | $ 5,849 | $ 2,893 |
Note 6 - Accrued Expenses and_3
Note 6 - Accrued Expenses and Other Long-term Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
Wages payable | $ 3,634 | $ 2,607 |
Accrued receipts | 2,136 | 1,711 |
Other accrued expenses | 1,847 | 716 |
Tenant improvements payable | 1,197 | 0 |
Totals | $ 8,814 | $ 5,034 |
Note 7 - Segment Information (D
Note 7 - Segment Information (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Gain (Loss) on Extinguishment of Debt, Total | $ 0 | $ 2,807 |
Paycheck Protection Program CARES Act [Member] | Other Income [Member] | ||
Gain (Loss) on Extinguishment of Debt, Total | $ 2,800 |
Note 7 - Segment Information -
Note 7 - Segment Information - Sales by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Net sales | $ 85,254 | $ 57,424 |
UNITED STATES | ||
Net sales | 74,919 | 54,960 |
CANADA | ||
Net sales | 6,765 | 1,856 |
ITALY | ||
Net sales | 1,670 | 0 |
All Other Foreign Countries [Member] | ||
Net sales | 1,794 | 478 |
Non-US [Member] | ||
Net sales | $ 10,335 | $ 2,464 |
Note 7 - Segment Information _2
Note 7 - Segment Information - Net Sales, Income Before Provision for Income Taxes and Other Related Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Net sales | $ 85,254 | $ 57,424 |
Income (loss) before provision for income taxes | 1,587 | 7,217 |
Depreciation and amortization | 1,690 | 770 |
Total assets | 89,566 | 49,648 |
Operating Segments [Member] | RF Connector and Cable Assembly [Member] | ||
Net sales | 31,157 | 15,622 |
Income (loss) before provision for income taxes | 2,421 | 2,494 |
Depreciation and amortization | 1,109 | 141 |
Total assets | 49,468 | 7,367 |
Operating Segments [Member] | Custom Cabling Manufacturing and Assembly [Member] | ||
Net sales | 54,097 | 41,802 |
Income (loss) before provision for income taxes | 2,303 | 1,921 |
Depreciation and amortization | 581 | 629 |
Total assets | 27,606 | 25,875 |
Corporate, Non-Segment [Member] | ||
Net sales | 0 | 0 |
Income (loss) before provision for income taxes | (3,137) | 2,802 |
Depreciation and amortization | 0 | 0 |
Total assets | $ 12,492 | $ 16,406 |
Note 8 - Income Tax Provision_2
Note 8 - Income Tax Provision (Details Textual) - USD ($) | 12 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2020 | |
Income Tax Expense (Benefit), Total | $ 139,000 | $ 1,036,000 | |
Effective Income Tax Rate Reconciliation, Percent, Total | 9.20% | 14.40% | |
Income taxes at federal statutory rate, percentage | 21% | 21% | |
Unrecognized Tax Benefits, Ending Balance | $ 134,000 | $ 141,000 | $ 107,000 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total | 13,000 | 13,000 | |
Domestic Tax Authority [Member] | |||
Unrecognized Tax Benefits, Ending Balance | $ 121,000 | $ 128,000 | |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | |||
Open Tax Year | 2019 2020 2021 2022 | ||
State and Local Jurisdiction [Member] | |||
Open Tax Year | 2018 2019 2020 2021 |
Note 8 - Income Tax Provision -
Note 8 - Income Tax Provision - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Federal | $ 1,252 | $ 401 |
State | 225 | 189 |
Current Income Tax Expense (Benefit), Total | 1,477 | 590 |
Federal | (1,054) | 323 |
State | (284) | 123 |
Deferred Federal, State and Local, Tax Expense (Benefit), Total | (1,338) | 446 |
Income Tax Expense (Benefit), Total | $ 139 | $ 1,036 |
Note 8 - Income Tax Provision_3
Note 8 - Income Tax Provision - Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Income taxes at federal statutory rate | $ 333 | $ 1,516 |
Income taxes at federal statutory rate, percentage | 21% | 21% |
State tax provision, net of federal tax benefit | $ 60 | $ 246 |
State tax provision, net of federal tax benefit, percentage | 3.80% | 3.40% |
Stock options | $ 19 | $ (86) |
Stock options, Percent | 1.20% | (1.20%) |
PPP loan forgiveness | $ 0 | $ (588) |
Effective Income Tax Rate Reconciliation, Tax Exempt Income, Percent | 0% | (8.10%) |
Permanent differences | $ 5 | $ 5 |
Permanent differences, percentage | 0.30% | 0.10% |
R&D credits | $ (219) | $ (51) |
R&D credits, percentage | (13.60%) | (0.70%) |
Foreign derived intangible income | $ (68) | $ (15) |
Foreign derived intangible income, percentage | (4.30%) | (0.20%) |
ASC 740-10 Liability | $ (7) | $ 29 |
ASC 740-10 Liability, percentage | (0.40%) | 0.40% |
Section 481(a) adjustment | $ 142 | $ 0 |
Section 481(a) adjustment, percentage | 8.90% | 0% |
Return-to-provision adjustments | $ (126) | $ 0 |
Return-to-provision adjustments, percentage | (7.90%) | 0% |
Other | $ 0 | $ (20) |
Other, percentage | (0.00%) | (0.30%) |
Income Tax Expense (Benefit), Total | $ 139 | $ 1,036 |
Effective Income Tax Rate Reconciliation, Percent, Total | 9.20% | 14.40% |
Note 8 - Income Tax Provision_4
Note 8 - Income Tax Provision - Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
Reserves | $ 404 | $ 383 |
Accrued vacation | 294 | 241 |
Stock-based compensation awards | 168 | 144 |
Uniform capitalization | 173 | 134 |
Lease liability | 4,169 | 366 |
State Taxes | 72 | 52 |
Other | 36 | 25 |
Total deferred tax assets | 5,316 | 1,345 |
Amortization / intangible assets | (29) | (487) |
Change in ROU assets | (3,335) | (357) |
Depreciation / equipment and furnishings | (136) | (112) |
Total deferred tax liabilities | (3,500) | (956) |
Total net deferred tax assets (liabilities) | $ 1,816 | $ 389 |
Note 8 - Income Tax Provision_5
Note 8 - Income Tax Provision - Adjustments to Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Balance, at beginning of year | $ 141 | $ 107 |
Increase for tax positions related to the current year | 50 | 44 |
Increase for tax positions related to prior years | (29) | (1) |
Increase for interest and penalties | 0 | 2 |
Statute of Limitations Expirations | (28) | (11) |
Balance, at end of year | $ 134 | $ 141 |
Note 9 - Stock Options (Details
Note 9 - Stock Options (Details Textual) - USD ($) | 12 Months Ended | ||||||||
May 02, 2022 | Jan. 10, 2022 | Jul. 16, 2021 | Jan. 12, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Sep. 08, 2021 | Sep. 15, 2020 | Jul. 22, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term (Year) | 6 years 7 months 9 days | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term (Year) | 5 years 10 months 28 days | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term (Year) | 6 years 7 months 13 days | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 518,000 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value | 265,000 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 513,000 | ||||||||
Share-Based Payment Arrangement, Nonemployee [Member] | |||||||||
Nonemployee Director, Annual Compensation | $ 50,000 | ||||||||
Restricted Stock [Member] | |||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 594,000 | ||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 11 months 12 days | ||||||||
Incentive Stock Options [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 39,000 | ||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 685,000 | ||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 2 months 8 days | ||||||||
One Manager and Three Officers [Member] | Restricted Stock [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 39,666 | 33,500 | |||||||
One Manager and Three Officers [Member] | Incentive Stock Options [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 106,001 | 67,000 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 4 years | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year) | 10 years | 10 years | |||||||
One Manager and Three Officers [Member] | Incentive Stock Options [Member] | Vesting on January 12, 2022 [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 25% | ||||||||
One Manager and Three Officers [Member] | Incentive Stock Options [Member] | Vesting Quarterly After January 12, 2022 [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 3 years | ||||||||
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 4 years | ||||||||
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 10, 2023 [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 25% | ||||||||
Chief Executive Officer [Member] | Incentive Stock Options [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 50,000 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year) | 10 years | ||||||||
One Employee [Member] | Incentive Stock Options [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 12,000 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 3 years | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year) | 10 years | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested, Number of Shares (in shares) | 3,000 | ||||||||
Three Employees [Member] | Incentive Stock Options [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 5,000 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 2 years | ||||||||
Incentive Stock Options [Member] | Three Employees [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year) | 10 years | ||||||||
Two Employees [Member] | Incentive Stock Options [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 6,000 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 3 years | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year) | 10 years | ||||||||
Non-employee Directors and Chairman of the Board [Member] | |||||||||
Annual Payable, Additional Compensation | 25,000 | ||||||||
Non-employee Directors and Compensation Committee Chair [Member] | |||||||||
Annual Payable, Additional Compensation | 20,000 | ||||||||
Non-employee Directors and Nominating & Governance Chair [Member] | |||||||||
Annual Payable, Additional Compensation | $ 10,000 | ||||||||
Non-employee Directors and Chairperson of Committee on Board [Member] | |||||||||
Share Price, 20 Day Average (in dollars per share) | $ 8.21 | ||||||||
The 2020 Plan [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 1,250,000 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 916,369 |
Note 9 - Stock Options - Assump
Note 9 - Stock Options - Assumptions (Details) - $ / shares | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Weighted average volatility | 53.36% | 52.34% |
Expected dividends | 0% | 0% |
Expected term (in years) (Year) | 7 years | 7 years |
Risk-free interest rate | 1.47% | 0.58% |
Weighted average fair value of options granted during the year (in dollars per share) | $ 3.77 | $ 3.38 |
Weighted average fair value of options vested during the year (in dollars per share) | $ 2.32 | $ 3.41 |
Note 9 - Stock Options - Option
Note 9 - Stock Options - Options Outstanding (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Outstanding at beginning of year (in shares) | 618,858 | 789,179 |
Outstanding at beginning of year, weighted average exercise price (in dollars per share) | $ 5.33 | $ 4.66 |
Options granted (in shares) | 145,001 | 117,000 |
Options granted, weighted average exercise price (in dollars per share) | $ 6.94 | $ 6.57 |
Options exercised (in shares) | (60,854) | (195,528) |
Options exercised, weighted average exercise price (in dollars per share) | $ 2.45 | $ 3.10 |
Options canceled or expired (in shares) | (12,000) | (91,793) |
Options canceled or expired, weighted average exercise price (in dollars per share) | $ 7.58 | $ 5.88 |
Options outstanding at end of year (in shares) | 691,005 | 618,858 |
Options outstanding at end of year, weighted average exercise price (in dollars per share) | $ 5.87 | $ 5.33 |
Options exercisable at end of year (in shares) | 366,714 | 313,381 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 6.13 | $ 5.95 |
Options vested and expected to vest at end of year (in shares) | 685,154 | 618,522 |
Options vested and expected to vest, weighted average exercise price (in dollars per share) | $ 5.88 | $ 5.35 |
Aggregate intrinsic value of options exercised during year | $ 245,420 | $ 642,181 |
Share-Based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit (in dollars per share) | $ 1.90 | $ 1.90 |
Share-Based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 8.69 | $ 8.69 |
Note 10 - Retirement Plan (Deta
Note 10 - Retirement Plan (Details Textual) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Defined Contribution Plan, Cost | $ 488,000 | $ 413,000 |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 3% |
Note 11 - Term Loan, Line of _2
Note 11 - Term Loan, Line of Credit and PPP Loans (Details Textual) | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2022 USD ($) | May 31, 2020 USD ($) | Oct. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) | Jan. 31, 2022 USD ($) | |
Proceeds from Issuance of Long-Term Debt, Total | $ 17,000,000 | $ 0 | |||
Paycheck Protection Program CARES Act [Member] | |||||
Proceeds from Issuance of Long-Term Debt, Total | $ 2,800,000 | ||||
Term Loan [Member] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.76% | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument, Basis Spread on Variable Rate | 2% | ||||
Long-Term Line of Credit, Total | $ 0 | ||||
Bank of America, N.A. [Member] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,000,000 | ||||
Debt Instrument, Face Amount | $ 17,000,000 | ||||
Debt Instrument, Covenant, Maximum EBITDA Ratio | 3 | ||||
Debt Instrument, Covenant, Fixed Charge Coverage Ratio | 1.25 | ||||
Dent Instrument, Covenant Required Ebitda | $ 600,000 | ||||
Term Loan [Member] | |||||
Long-Term Debt, Gross | $ 15,586,000 |
Note 12 - Related Party Trans_2
Note 12 - Related Party Transactions (Details Textual) | 12 Months Ended |
Oct. 31, 2022 USD ($) | |
K and K Unlimited [Member] | |
Lessee, Operating Lease, Monthly Rent | $ 16,000 |
Operating Lease, Expense | 180,000 |
Elmec [Member] | |
Accrued Royalties, Current | 4,000 |
Elmec [Member] | Royalty Payments [Member] | |
Related Party Transaction, Amounts of Transaction | $ 19,000 |
Note 13 - Cash Dividend and D_2
Note 13 - Cash Dividend and Declared Dividends (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Payments of Ordinary Dividends, Common Stock | $ 0 | $ 0 |
Note 14 - Commitments (Details
Note 14 - Commitments (Details Textual) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Operating Lease, Right-of-Use Asset | $ 13,480,000 | $ 1,453,000 |
Operating Lease, Liability, Total | 16,912,000 | |
Operating Lease, Liability, Current | 1,887,000 | $ 832,000 |
Finance Lease, Liability, Total | 0 | |
Other Current Liabilities [Member] | ||
Operating Lease, Liability, Current | 1,887,000 | |
K and K Unlimited [Member] | ||
Lessee, Operating Lease, Monthly Rent | $ 16,000 | |
Minimum [Member] | ||
Lessee, Operating Lease, Remaining Lease Term (Year) | 1 year | |
Maximum [Member] | ||
Lessee, Operating Lease, Remaining Lease Term (Year) | 5 years |
Note 14 - Commitments - Operati
Note 14 - Commitments - Operating Lease Expense (Details) $ in Thousands | 12 Months Ended |
Oct. 31, 2021 USD ($) | |
Operating lease cost | $ 1,833 |
Short-term lease cost | $ 1 |
Note 14 - Commitments - Other I
Note 14 - Commitments - Other Information Related to Leases (Details) $ in Thousands | 12 Months Ended |
Oct. 31, 2022 USD ($) | |
Right of use assets obtained in exchange for lease obligations operating leases | $ 13,352 |
Weighted Average Remaining Lease Term, Operating leases (months) (Month) | 113 months 21 days |
Weighted Average Discount Rate, Operating leases | 3.75% |
Note 14 - Commitments - Future
Note 14 - Commitments - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Oct. 31, 2021 |
2023 | $ 2,467 | |
2024 | 1,991 | |
2025 | 1,796 | |
2026 | 1,835 | |
Thereafter | 12,306 | |
Total future minimum lease payments | 20,395 | |
Less imputed interest | (3,483) | |
Total | 16,912 | |
Other current liabilities | 1,887 | $ 832 |
Operating lease liabilities | 15,025 | $ 675 |
Total | 16,912 | |
Other Current Liabilities [Member] | ||
Other current liabilities | $ 1,887 |
Note 15 - Subsequent Event (Det
Note 15 - Subsequent Event (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | ||
Jan. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Employee Retention Tax Credit Receivable | $ 1,636 | $ 1,774 | |
Other Current Assets [Member] | |||
Employee Retention Tax Credit Receivable | $ 1,600 | ||
Scenario, Adjustment [Member] | |||
Proceeds from Employee Retention Credit | $ 1,200 |