Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Jan. 16, 2024 | Mar. 31, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Oct. 31, 2023 | ||
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 | 16868 Via Del Campo Court, Suite 200 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92127 | ||
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 | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 37.1 | ||
Entity Common Stock, Shares Outstanding (in shares) | 10,343,223 | ||
Auditor Firm ID | 596 | ||
Auditor Name | CohnReznick LLP | ||
Auditor Location | Tysons, Virginia | ||
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 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4,897 | $ 4,532 |
Trade accounts receivable, net of allowance for doubtful accounts of $271 and $126, respectively | 10,277 | 14,812 |
Inventories | 18,730 | 21,054 |
Other current assets | 2,136 | 5,849 |
TOTAL CURRENT ASSETS | 36,040 | 46,247 |
Property and equipment: | ||
Equipment and tooling | 4,796 | 4,497 |
Furniture and office equipment | 5,631 | 3,447 |
Property, Plant and Equipment, Gross | 10,427 | 7,944 |
Less accumulated depreciation | 5,503 | 4,771 |
Total property and equipment, net | 4,924 | 3,173 |
Operating lease right of use assets, net | 15,689 | 13,480 |
Goodwill | 8,085 | 8,085 |
Amortizable intangible assets, net | 13,595 | 15,296 |
Non-amortizable intangible assets | 1,174 | 1,174 |
Deferred tax assets | 2,494 | 1,816 |
Other assets | 277 | 295 |
TOTAL ASSETS | 82,278 | 89,566 |
CURRENT LIABILITIES | ||
Accounts payable | 3,201 | 5,652 |
Accrued expenses | 4,572 | 8,814 |
Revolving credit facility | 1,000 | 0 |
Current portion of Term Loan | 2,424 | 2,424 |
Current portion of operating lease liabilities | 1,314 | 1,887 |
Income taxes payable | 0 | 759 |
TOTAL CURRENT LIABILITIES | 12,511 | 19,536 |
Operating lease liabilities | 19,284 | 15,025 |
Term Loan, net of debt issuance cost | 10,721 | 13,136 |
TOTAL LIABILITIES | 42,516 | 47,697 |
Commitments and Contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Common stock - authorized 20,000,000 shares of $0.01 par value; 10,290,377 and 10,193,287 shares issued and outstanding at April 30, 2023 and October 31, 2022, respectively | 104 | 102 |
Additional paid-in capital | 26,087 | 25,118 |
Retained earnings | 13,571 | 16,649 |
TOTAL STOCKHOLDERS' EQUITY | 39,762 | 41,869 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 82,278 | $ 89,566 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
Accounts Receivable, Allowance for Credit Loss, Current | $ 244 | $ 126 |
Common Stock, Shares Authorized (in shares) | 20,000,000 | 20,000,000 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares, Issued (in shares) | 10,343,223 | 10,193,287 |
Common Stock, Shares, Outstanding (in shares) | 10,343,223 | 10,193,287 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Net sales | $ 72,168,000 | $ 85,254,000 |
Cost of sales | 52,631,000 | 60,705,000 |
Gross profit | 19,537,000 | 24,549,000 |
Operating expenses: | ||
Engineering | 3,151,000 | 2,913,000 |
Selling and general | 20,183,000 | 19,448,000 |
Total operating expenses | 23,334,000 | 22,361,000 |
Operating loss | (3,797,000) | 2,188,000 |
Other (expense) income | (453,000) | (601,000) |
Loss before provision for income taxes | (4,250,000) | 1,587,000 |
Benefit from income taxes | (1,172,000) | 139,000 |
Consolidated net loss | $ (3,078,000) | $ 1,448,000 |
(Loss) earnings per share: | ||
Basic (in dollars per share) | $ (0.3) | $ 0.14 |
Diluted (in dollars per share) | $ (0.3) | $ 0.14 |
Weighted average shares outstanding: | ||
Basic (in shares) | 10,283,449 | 10,120,254 |
Diluted (in shares) | 10,283,449 | 10,242,417 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
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 | |||
Issuance of restricted stock | $ 0 | 0 | 0 | 0 |
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 | 1,448,000 | 1,448,000 | ||
Issuance of restricted stock | $ 0 | 0 | 0 | 0 |
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 |
Exercise of stock options (in shares) | 45,000 | 45,000 | ||
Exercise of stock options | $ 0 | 85,000 | $ 85,000 | |
Stock-based compensation expense | 898,000 | 898,000 | ||
Issuance of restricted stock (in shares) | 107,424 | |||
Issuance of restricted stock | $ 2,000 | 2,000 | ||
Tax withholding related to vesting of restricted stock (in shares) | (2,488) | |||
Tax withholding related to vesting of restricted stock | (12,000) | (12,000) | ||
Net income | (3,078,000) | (3,078,000) | ||
Stock-based compensation expense (in shares) | 0 | |||
Issuance of restricted stock | $ (2,000) | (2,000) | ||
Balance (in shares) at Oct. 31, 2023 | 10,343,223 | |||
Balance at Oct. 31, 2023 | $ 104,000 | $ 26,087,000 | $ 13,571,000 | $ 39,762,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
OPERATING ACTIVITIES: | ||
Consolidated net loss | $ (3,078,000) | $ 1,448,000 |
Adjustments to reconcile consolidated net (loss) income to net cash provided by (used in) operating activities: | ||
Bad debt expense | 102,000 | 15,000 |
Depreciation and amortization | 2,433,000 | 1,690,000 |
Stock-based compensation expense | 898,000 | 689,000 |
Amortization of debt issuance cost | 9,000 | 6,000 |
Tax payments related to shares cancelled for vested restricted stock awards | (12,000) | (21,000) |
Deferred income taxes | (677,000) | (1,427,000) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 4,433,000 | 1,496,000 |
Inventories | 2,323,000 | (6,150,000) |
Other current assets | 3,713,000 | (2,894,000) |
Right of use assets | 1,477,000 | 3,378,000 |
Other long-term assets | (18,000) | 225,000 |
Accounts payable | (2,451,000) | 1,065,000 |
Accrued expenses | (4,244,000) | 3,063,000 |
Income taxes payable | (759,000) | 759,000 |
Net cash provided by operating activities | 4,185,000 | 2,892,000 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (2,483,000) | (2,675,000) |
Purchase of Microlab, net of cash acquired ($33) | 0 | (24,442,000) |
Net cash used in investing activities | (2,483,000) | (27,117,000) |
FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 87,000 | 150,000 |
Debt issuance cost | 0 | (32,000) |
Line of credit payments | 1,000,000 | 0 |
Revolving credit facility | 2,000,000 | 0 |
Term Loan payments | (2,424,000) | (1,414,000) |
Term Loan | 0 | 17,000,000 |
Net cash (used in) provided by financing activities | (1,337,000) | 15,704,000 |
Net decrease in cash and cash equivalents | 365,000 | (8,521,000) |
Cash and cash equivalents, beginning of period | 4,532,000 | 13,053,000 |
Cash and cash equivalents, end of period | 4,897,000 | 4,532,000 |
Supplemental cash flow information – income taxes paid | $ 642,000 | $ (314,000) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) $ in Thousands | 12 Months Ended |
Oct. 31, 2023 USD ($) | |
Cash Acquired from Acquisition | $ 33 |
Note 1 - Business Activities an
Note 1 - Business Activities and Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2023 | |
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, 2023, 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. Liquidity As of October 31, 2023, the Company was in compliance with the covenants contained in the Loan Agreement. In January 2024, given the economic conditions and the associated impact on earnings, the Company amended the Loan Agreement to modify the financial covenants in order to avoid a potential covenant violation during the fiscal quarter ending January 31, 2024. The amendments effect changes to certain provisions and covenants as noted in Note 11. As of October 31, 2023, the Company was in compliance with all financial covenants contained in the Loan Agreement. The Company expects to maintain compliance with the financial covenants contained in the Loan Agreement, as amended in January 2024, for at least one year from the issuance of these financial statements based on its current expectations and forecasts. If economic conditions worsen and the Company’s earnings and operating cash flows do not start to recover as currently estimated by management, this could impact the Company’s ability to maintain compliance with the amended financial covenants and require the Company to seek additional amendments to the Loan Agreement. If the Company is not able to obtain such necessary additional amendments, this would lead to an event of default and, if not cured timely, the lender could require the Company to repay its outstanding debt. In that situation, the Company may not be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay the lenders and may affect our ability to continue as a going concern. 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. We test our goodwill, trademarks and indefinite-lived assets for impairment at least annually or more frequently if events or changes in circumstances indicate these assets may be impaired. These events or circumstances require significant judgment and could include a significant change in the business climate, legal factors, operating performance indicators, competition and sale or disposition of all or a portion of a division. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital. As of October 31, 2023, we performed an impairment test analysis for Microlab and as of July 31, 2023, we performed an impairment test analysis for Schrofftech. As noted, we test our goodwill, trademarks, and indefinite-lived intangible assets for impairment at least annually, which we have traditionally done in the fourth quarter, or on an interim basis when events or changes in circumstances suggest these assets may be impaired. Impairment is measured as the excess of the carrying value of the goodwill or indefinite-lived intangible asset over its fair value. No instances of goodwill impairment were identified as of October 31, 2023 and 2022. 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 amortize our intangible assets with definite useful lives over their estimated useful lives and review these assets for impairment. We test our goodwill, trademarks and indefinite-lived assets for impairment at least annually or more frequently if events or changes in circumstances indicate these assets may be impaired. These events or circumstances require significant judgment and could include a significant change in the business climate, legal factors, operating performance indicators, competition and sale or disposition of all or a portion of a division. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital. As of October 31, 2023, we performed an impairment test analysis for Microlab and as of July 31, 2023, we performed an impairment test analysis for Schrofftech. As noted above, we test our goodwill, trademarks, and indefinite-lived intangible assets for impairment at least annually, which we have traditionally done in the fourth quarter, or on an interim basis when events or changes in circumstances suggest these assets may be impaired. Impairment is measured as the excess of the carrying value of the goodwill or indefinite-lived intangible asset over its fair value. Impairment may result from a number of factors, including performance deterioration, negative cash flows from operations and/or changes in anticipated future cash flows, changes in business plans, adverse economic or market conditions, or other factors beyond our control. The amount of any impairment must be expensed as a charge to operations. Microlab’s results for the fiscal year ended October 31, 2023 triggered an impairment analysis. Schrofftech’s three and nine-months results ended July 31, 2023 triggered an impairment analysis. Microlab was acquired in March 1, 2022 for a total purchase price of $24.5 million. Schrofftech was acquired on November 4, 2019 for a total purchase price of $5.3 million, consisting of cash consideration of $4.0 million and $1.3 million in earn-out, of which none was earned. As of October 31, 2023, Microlab has a carrying value of $17.2 million, of which includes $5.6 million in goodwill, $11.6 million in net amortizable intangible assets. As of October 31, 2023, Schrofftech has a carrying value of $3.1 million, of which includes $1.1 million in goodwill, $0.5 million in non-amortizable intangible assets and $1.5 million in net amortizable intangible assets. The analyses performed included a blend of the income approach (discounted cash flow method) and market approach (guideline public company method) to reach a fair value of equity in excess of the fair value to the carrying amount. The analyses performed in blending the income approach and the market approach incorporates several significant judgments and assumptions about projected revenue growth, future operating margins and discount rates. There are inherent uncertainties related to these assumptions and our judgment in applying them to the impairment analysis. Changes in certain events or circumstances could result in changes to our estimated fair values, and may result in future write-downs to the carrying values of these assets. Impairment charges could adversely affect our financial results, financial ratios and could limit our ability to obtain financing in the future. No 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, 2023 and 2022, 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, 2023 and 2022 (in thousands): 2023 2022 Amortizable intangible assets: Non-compete agreement (estimated life 5 years) $ 423 $ 423 Accumulated amortization (378 ) (334 ) 45 89 Customer relationships (estimated lives 7 - 15 years) 6,058 6,058 Accumulated amortization (3,461 ) (3,074 ) 2,597 2,984 Backlog (estimated life 1 - 2 years) 327 327 Accumulated amortization (327 ) (313 ) - 14 Patents (estimated life 10 - 14 years) 368 368 Accumulated amortization (176 ) (143 ) 192 225 Tradename (estimated life 15 years) 1,700 1,700 Accumulated amortization (189 ) (76 ) 1,511 1,624 Proprietary technology (estimated life 10 years) 11,100 11,100 Accumulated amortization (1,850 ) (740 ) 9,250 10,360 Totals $ 13,595 $ 15,296 Non-amortizable intangible assets: Trademarks $ 1,174 $ 1,174 Amortization expense was $1,701,000 and $1,282,000 for the years ended October 31, 2023 and 2022, respectively. The weighted-average amortization period for the amortizable intangible assets is 8.55 years. There was no Estimated amortization expense related to finite-lived intangible assets is as follows (in thousands): Year ending October 31, Amount 2024 $ 1,688 2025 1,643 2026 1,643 2027 1,643 2028 1,643 Thereafter 5,335 Total $ 13,595 Advertising We expense the cost of advertising and promotions as incurred. Advertising costs charged to operations were approximately $76,000 and $333,000 in 2023 and 2022, 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, 2023 and 2022, we recognized $3,151,000 and $2,913,000 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, 2023 and 2022, charges related to stock-based compensation amounted to approximately $898,000 and $689,000, respectively. For the fiscal years ended October 31, 2023 and 2022, 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 (loss) 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, 2023 and 2022, that were not included in the computation because they were anti-dilutive, totaled 811,135 and 508,889, respectively. The following table summarizes the computation of basic and diluted earnings per share: 2023 2022 Numerators: Consolidated net (loss) income (A) $ (3,078,000 ) $ 1,448,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 10,283,449 10,120,254 Add effects of potentially dilutive securities - assumed exercise of stock options - 122,163 Weighted average shares outstanding for diluted earnings per share (C) 10,283,449 10,242,417 Basic (loss) earnings per share (A)/(B) $ (0.30 ) $ 0.14 Diluted (loss) earnings per share (A)/(C) $ (0.30 ) $ 0.14 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 (Topic 326), Recently issued accounting pronouncements adopted: 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, 2023 | |
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 radio frequency 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 condensed 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 The following table summarizes the components of the purchase price at fair value 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 Noninterest-bearing liabilities (1,800,000 ) Net assets acquired at fair value $ 24,475,000 The following unaudited pro forma financial information presents the combined operating results of the Company and Microlab as if the acquisition 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: October 31, 2023 2022 Revenue $ 72,168 $ 91,358 Net (loss) income (3,078 ) 1,959 (Loss) earnings per share Basic $ (0.30 ) $ 0.19 Diluted $ (0.30 ) $ 0.19 Basic 10,283,449 10,120,254 Diluted 10,283,449 10,242,417 |
Note 3 - Concentrations of Cred
Note 3 - Concentrations of Credit Risk | 12 Months Ended |
Oct. 31, 2023 | |
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, 2023, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $3.4 million. Sales from each customer that were 10% or greater of net sales were as follows: October 31, 2023 2022 Wireless provider 10 % 20 % Distributor A 10 % * * Less than 10% For the year ended October 31, 2023, a wireless carrier customer accounted for approximately 10% of total sales and had no accounts receivable. Another distributor customer accounted for approximately 10% of total sales and for 11% of the total net accounts receivable, while another distributor customer accounted for 10% of the total net accounts receivable and less than 10% of total sales. For the year ended October 31, 2022, the same wireless carrier accounted for approximately 20% of total sales, and a distributor accounted for less than 10% of total sales. These two customers’ accounts receivable balances each accounted for approximately 14% and 19% of the total net accounts receivable balance at October 31, 2022. Although the distributors have been on-going major customers of the Company and the wireless carrier is a newer customer to the Company, the written agreements with these customers do not have any minimum purchase obligations and they could stop buying our products at any time and for any reason. A reduction, delay, or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits. |
Note 4 - Inventories and Major
Note 4 - Inventories and Major Vendors | 12 Months Ended |
Oct. 31, 2023 | |
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): 2023 2022 Raw materials and supplies $ 12,957 $ 15,238 Work in process 439 439 Finished goods 5,334 5,377 Totals $ 18,730 $ 21,054 One vendor accounted for 15% of inventory purchases during the fiscal year ended October 31, 2023, and one vendor accounted for 27% of inventory purchases for the fiscal year ended October 31, 2022. We have arrangements with our vendors to purchase products based on purchase orders that we periodically issue. |
Note 5 - Other Current Assets
Note 5 - Other Current Assets | 12 Months Ended |
Oct. 31, 2023 | |
Notes to Financial Statements | |
Other Current Assets [Text Block] | Note 5 Other current assets Other current assets consist of the following (in thousands): 2023 2022 Employee retention credit ("ERC") $ 145 $ 1,636 Prepaid taxes 642 - Prepaid expense 953 972 Reimbursement for tenant improvements - 2,810 Other 396 431 Totals $ 2,136 $ 5,849 Pursuant to the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 (“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 Internal Revenue Service. The period assessed for eligibility of the ERC is on a calendar year basis. As of October 31, 2023, 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, 2023 | |
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): 2023 2022 Wages payable $ 2,461 $ 3,634 Accrued receipts 1,131 2,136 Other accrued expenses 980 1,847 Tenant improvements payable - 1,197 Totals $ 4,572 $ 8,814 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, 2023 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | Note 7 Segment information We aggregate operating divisions into two two On August 1, 2023, C Enterprises moved and transitioned its physical operations into the RF Connector office in San Diego, CA. Given the synergies in consolidating both the operating divisions into one building, C Enterprises has now been included in the RF Connector segment. Further, since the acquisition of C Enterprises in 2019, the customer base for the division has shifted more towards distribution as opposed to direct to end customer which is more aligned with the RF Connector segment. The segment change of including C Enterprise as part of the RF Connector segment was made retroactive to the beginning of our fiscal year starting November 1, 2022 and reclassified for fiscal 2022 for comparative purposes. Prior to the transition, C Enterprises was included in the Custom Cabling segment. The RF Connector segment consists of three divisions and the Custom Cabling segment consists of three 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, C Enterprises and Microlab divisions constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, 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, 2023 and 2022 (in thousands): 2023 2022 United States $ 65,781 $ 74,919 Foreign Countries: Canada 2,183 6,765 Italy 1,802 1,670 Mexico 4 106 All Other 2,398 1,794 6,387 10,335 Totals $ 72,168 $ 85,254 Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the years ended October 31, 2023 and 2022 are as follows (in thousands): RF Connector Custom Cabling and Manufacturing and 2023 Cable Assembly Assembly Corporate Total Net sales $ 45,941 $ 26,227 $ - $ 72,168 Loss before benefit from income taxes (1,463 ) (1,479 ) (1,307 ) (4,250 ) Depreciation and amortization 1,932 501 - 2,433 Total assets 55,466 17,009 9,803 82,278 2022 Net sales $ 43,521 $ 41,733 $ - $ 85,254 (Loss) income before provision (benefit) from income taxes (195 ) 4,919 (3,137 ) 1,587 Depreciation and amortization 1,191 499 - 1,690 Total assets 55,006 22,068 12,492 89,566 |
Note 8 - Income Tax Provision (
Note 8 - Income Tax Provision (Benefit) | 12 Months Ended |
Oct. 31, 2023 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 8 Income tax provision (benefit) The provision (benefit) for income taxes for the fiscal years ended October 31, 2023 and 2022 consists of the following (in thousands): 2023 2022 Current: Federal $ (501 ) $ 1,252 State 6 225 (495 ) 1,477 Deferred: Federal (438 ) (1,054 ) State (239 ) (284 ) (677 ) (1,338 ) $ (1,172 ) $ 139 Income tax at the federal statutory rate is reconciled to our actual net provision (benefit) for income taxes as follows (in thousands, except percentages): 2023 2022 % of Pretax % of Pretax Amount Loss Amount Income Income taxes at federal statutory rate $ (893 ) 21.0 % $ 333 21.0 % State tax provision, net of federal tax benefit (212 ) 5.0 % 60 3.8 % Nondeductible differences: Stock options 88 -2.1 % 19 1.2 % Permanent differences 15 -0.4 % 5 0.3 % R&D credits (238 ) 5.6 % (219 ) -13.6 % Foreign derived intangible income - 0.0 % (68 ) -4.3 % ASC 740-10 Liability 13 -0.3 % (7 ) -0.4 % Section 481(a) adjustment - 0.0 % 142 8.9 % Return-to-provision adjustments (69 ) 1.6 % (126 ) -7.9 % Other 124 -2.9 % - 0.0 % $ (1,172 ) 27.5 % $ 139 9.2 % Our total deferred tax assets and deferred tax liabilities at October 31, 2023 and 2022 are as follows (in thousands): 2023 2022 Deferred Tax Assets: Reserves $ 497 $ 404 Accrued vacation 275 294 Stock-based compensation awards 213 168 Uniform capitalization 208 173 Lease liability 5,177 4,169 State taxes 21 72 Other - 36 Capitalized Section 174 Costs 864 - Credits 128 - 163(j) interest carryforward 118 - Net operating loss carryforwards 73 - Total deferred tax assets 7,574 5,316 Deferred Tax Liabilities: Amortization / intangible assets (192 ) (29 ) Change in right-of-use assets (3,942 ) (3,335 ) Depreciation / equipment and furnishings (822 ) (136 ) Total deferred tax liabilities (4,956 ) (3,500 ) Valuation allowance (124 ) - Total net deferred tax assets (liabilities) $ 2,494 $ 1,816 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 federal and combined state deferred tax assets will be realized in future tax years, but it is not more likely than not that the separate state deferred tax assets will be realized in future tax years. As such, a valuation allowance has been recorded against the separate state deferred tax assets. The change in valuation allowance was $0.1 million and $0.0 million for fiscal 2023 and 2022, respectively. At October 31, 2023, the Company has gross United States federal and state net operating loss (NOL) carryforwards of $0.3 million and $0.2 million, respectively. The federal NOL carryforwards will carry forward indefinitely. The state NOL carryforwards of $0.2 million will begin to expire in 2043 unless previously utilized. At October 31, 2023, the Company also has IRC 163(j) interest carryforwards of $0.6 million, which will carry forward indefinitely. At October 31, 2023, the Company also has state research and development credit carryforwards of $0.2 million. The state credit carryforwards of $0.2 million will begin to expire in 2029 unless previously utilized and the remainder will carry forward indefinitely. The provision (benefit) for income taxes was ($1.2) million or 27.5% and $0.1 million or 9.2% of income before income taxes for fiscal 2023 and 2022, respectively. The fiscal 2023 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, the change in valuation allowance and state taxes. 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, 2023 and 2022 are as follows: 2023 2022 Balance, at beginning of year $ 121 $ 128 Increase for tax positions related to the current year 78 50 Increase (decrease) for tax positions related to prior years 2 (29 ) Increase for interest and penalties - - Statute of Limitations Expirations (23 ) (28 ) Balance, at end of year $ 178 $ 121 We had gross unrecognized tax benefits of $178,000 and $121,000 attributable to U.S. federal and California research tax credits as of October 31, 2023 and 2022 respectively. During fiscal 2023, the increase in our gross unrecognized tax benefit was primarily related to increased federal and California research tax credits being generated. The uncertain tax benefit of $40,000 is recorded as a reduction to deferred tax assets and the remainder is recorded in 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 $20,000 and $13,000 during the years ended October 31, 2023 and 2022 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 twelve-month period. We are subject to taxation in the United States and state jurisdictions. Our tax years for October 31, 2020 and forward are subject to examination by the United States and October 31, 2019 and forward with state tax authorities. |
Note 9 - Stock Options
Note 9 - Stock Options | 12 Months Ended |
Oct. 31, 2023 | |
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, 2023, 703,252 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 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 10 On January 11, 2023, we granted a total of 54,092 shares of restricted stock and 108,181 incentive stock options to one manager and three officers, respectively. The shares of restricted stock and incentive stock options vest over four one On August 29, 2023, we granted one employee 10,000 incentive stock options. These options vested with respect to 2,500 shares on the date of grant, and the remaining shares vests in equal installments thereafter on each of the next three anniversaries of August 29, 2023. The options expire 10 years from the date of grant. No other shares or options were granted to Company employees during fiscal 2023. The fair value of each option granted in 2023 and 2022 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: 2023 2022 Weighted average volatility 54.27 % 53.36 % Expected dividends 0.00 % 0.00 % Expected term (in years) 7.0 7.0 Risk-free interest rate 3.78 % 1.47 % Weighted average fair value of options granted during the year $ 3.15 $ 3.77 Weighted average fair value of options vested during the year $ 2.80 $ 2.32 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 2023 and 2022 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, 2023 and 2022 and changes in outstanding stock options in 2023 and 2022 follows: 2023 2022 Shares or Weighted Shares or Weighted Price Per Average Price Per Average Share Exercise Price Share Exercise Price Outstanding at beginning of year 691,005 $ 5.87 618,858 $ 5.33 Options granted 168,181 $ 5.36 145,001 $ 6.94 Options exercised (45,000 ) $ 1.90 (60,854 ) $ 2.45 Options canceled or expired (60,000 ) $ 5.33 (12,000 ) $ 7.58 Options outstanding at end of year 754,186 $ 6.04 691,005 $ 5.87 Options exercisable at end of year 479,588 $ 6.10 366,714 $ 6.13 Options vested and expected to vest at end of year 748,358 $ 6.13 685,154 $ 5.88 Option price range at end of year $1.90 - $8.69 $1.90 - $8.69 Aggregate intrinsic value of options exercised during year $ 144,005 $ 245,420 Weighted average remaining contractual life of options outstanding as of October 31, 2023: 6.29 years Weighted average remaining contractual life of options exercisable as of October 31, 2023: 5.46 years Weighted average remaining contractual life of options vested and expected to vest as of October 31, 2023: 6.29 years Aggregate intrinsic value of options outstanding at October 31, 2023: $58,000 Aggregate intrinsic value of options exercisable at October 31, 2023: $40,000 Aggregate intrinsic value of options vested and expected to vest at October 31, 2023: $57,000 As of October 31, 2023, $642,000 and $612,000 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 2.34 and 0.96 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, 2022, the Board determined that the compensation payable to directors as Board fees for the next year ending with the 2023 annual meeting of stockholders will be $90,000 ($40,000 in cash and $50,000 in restricted stock). In addition, effective September 8, 2022, the Board determined that additional chair fees and committee member fees would be paid in cash as follows: Chair Member Board $ 25,000 Audit Committee $ 8,000 $ 5,000 Compensation Committee $ 6,000 $ 5,000 Nominating and Corporate Governance Committee $ 4,000 $ 4,000 Strategic Planning and Capital Allocation Committee $ 4,000 $ 4,000 The restricted stock fees vest on the earlier of (i) one year from the date of grant, or (ii) the Company’s next annual meeting of stockholders. The number of restricted shares granted to each director was 7,485 determined by dividing the amount of the fee by the closing price of the Company’s common stock from the date of grant ($6.68). Accordingly, on September 8, 2022, Mr. Holdsworth, Ms. Cefali, Mr. Cohenour, Mr. Garland, and Ms. Tidwell were each granted 7,485 shares of restricted stock. The cash fees vests in four equal quarterly installments paid in arrears commencing November 1, 2022. |
Note 10 - Retirement Plan
Note 10 - Retirement Plan | 12 Months Ended |
Oct. 31, 2023 | |
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, 2023 and 2022, we contributed and recognized as an expense $567,000 and $488,000, respectively, which amounts represented 3% of eligible employee earnings under the Company’s Safe Harbor Non-elective Employer Contribution Plan. |
Note 11 - Term Loan and Line of
Note 11 - Term Loan and Line of Credit | 12 Months Ended |
Oct. 31, 2023 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | Note 11 Term Loan and Line of credit In February 2022, we entered into a loan agreement (the “Loan Agreement”) providing 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”) with Bank of America, N.A. (the “Bank”). 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. 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 are subject to 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 ended January 31, 2022. In addition, the Credit Facility contains customary affirmative and negative covenants. As of July 31, 2023, we were not in compliance with the consolidated debt to EBITDA ratio nor were we in compliance with the consolidated fixed charge coverage ratio covenants (the “Defaults”). On September 12, 2023, we entered into Amendment No. 1 and Waiver to the Loan Agreement (“Loan Amendment No. 1”) with the Bank, which, among other matters, provided for a temporary waiver of (i) the Defaults, and (ii) compliance with the consolidated debt to EBITDA ratio and the consolidated fixed charge coverage ratio minimum covenants for the quarterly periods ending October 31, 2023, January 31, 2024, April 30, 2024 and July 31, 2024. Further, pursuant to Loan Amendment No. 1, we were required to maintain (i) (a) until September 21, 2023, minimum liquidity (week-end cash balance plus availability from the Revolving Credit Facility) of $4.0 million, and (b) from September 22, 2023 and thereafter, liquidity equal to the greater of (1) $4.0 million or (2) 80% of the liquidity that had been forecast for this date at the fourth week of the forecast and (ii) minimum EBITDA of ($400,000), $500,000, $1.0 million, and $1.0 million for the quarters ending October 31, 2023, January 31, 2024, April 30, 2024, and July 31, 2024, respectively. On January 26, 2024, we entered into Amendment No. 2 to the Loan Agreement (“Loan Amendment No. 2”) with the Bank. Loan Amendment No. 2, among other matters, eliminated the requirement to maintain minimum EBITDA of $500,000 for the quarter ending January 31, 2024. Under Loan Amendment No. 2, the line of credit available to the Company under the Revolving Credit Facility was lowered from $3.0 million to $500,000. Further, Loan Amendment No. 2 requires that we maintain from September 22, 2023 and thereafter, liquidity of at least $2.0 million, rather than the greater of $4.0 million or 80% of the forecast liquidity as was required under Loan Amendment No. 1. Under Loan Amendment No. 2, the Company will be charged an additional fee equal to 1% of the collective outstanding principal balances of the Revolving Credit Facility and Term Loan if the Credit Facility is not repaid in full on or before March 1, 2024. This additional fee, if applicable, will be due on March 2, 2024. Further, Loan Amendment No. 2 requires that the Company make an additional principal payment of $1.0 million on the Term Loan on March 1, 2024, in addition to the existing monthly payments due on the Term Loan. In connection with Loan Amendment No. 2, we paid the Bank a $500,000 paydown on the Revolving Credit Facility, thereby reducing the outstanding balance from $1.0 million to $500,000. As of October 31, 2023, we have borrowed $13,162,000 under the Term Loan and $1.0 million from the Revolving Credit Facility. The foregoing summary description of Loan Amendment No. 2 is qualified in its entirety by reference to the complete text of Loan Amendment No. 2, a copy of which is included as Exhibit 10.36 and is incorporated herein by reference. |
Note 12 - Related Party Transac
Note 12 - Related Party Transactions | 12 Months Ended |
Oct. 31, 2023 | |
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, 2023, we paid a total of $208,000 under the leases. During fiscal 2023, 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, 2023, we paid a total of $24,000 of royalty payments to Elmec. The expenses related to these transactions are included in cost of goods sold. |
Note 14 - Cash Dividend and Dec
Note 14 - Cash Dividend and Declared Dividends | 12 Months Ended |
Oct. 31, 2023 | |
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, 2023 | |
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, 2023 were as follows (in thousands): Fiscal Year Ended October 31, 2023 Operating lease cost $ 2,872 Short-term lease cost 1 Other information related to leases was as follows (in thousands): October 31, 2023 October 31, 2022 Supplemental Cash Flows Information Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 6,479 $ 13,352 Weighted Average Remaining Lease Term Operating leases (in months) 114.26 113.72 Weighted Average Discount Rate Operating leases 6.96 % 3.75 % Future minimum lease payments under non-cancellable leases as of October 31, 2023 were as follows (in thousands): Year ended October 31, Operating Leases 2024 $ 2,404 2024 2,827 2025 2,877 2027 2,929 Thereafter 17,874 Total future minimum lease payments 28,911 Less imputed interest (8,313 ) Total $ 20,598 Reported as of October 31, 2023 Operating Leases Other current liabilities $ 1,314 Operating lease liabilities 19,284 Total $ 20,598 As of October 31, 2023, operating lease right-of-use asset was $15.7 million and operating lease liability totaled $20.6 million, of which $1.3 million is classified as current. There were no |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Business Combinations Policy [Policy Text Block] | 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, 2023, 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, Policy [Policy Text Block] | 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. |
Consolidation, Policy [Policy Text Block] | 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 and Cash Equivalents, Policy [Policy Text Block] | 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 [Policy Text Block] | Revenue recognition On November 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) |
Inventory, Policy [Policy Text Block] | 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, Plant and Equipment, Policy [Policy Text Block] | Property and equipment Equipment, tooling and furniture are recorded at cost and depreciated over their estimated useful lives (generally three five |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | 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. We test our goodwill, trademarks and indefinite-lived assets for impairment at least annually or more frequently if events or changes in circumstances indicate these assets may be impaired. These events or circumstances require significant judgment and could include a significant change in the business climate, legal factors, operating performance indicators, competition and sale or disposition of all or a portion of a division. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital. As of October 31, 2023, we performed an impairment test analysis for Microlab and as of July 31, 2023, we performed an impairment test analysis for Schrofftech. As noted, we test our goodwill, trademarks, and indefinite-lived intangible assets for impairment at least annually, which we have traditionally done in the fourth quarter, or on an interim basis when events or changes in circumstances suggest these assets may be impaired. Impairment is measured as the excess of the carrying value of the goodwill or indefinite-lived intangible asset over its fair value. No instances of goodwill impairment were identified as of October 31, 2023 and 2022. 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. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | 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 amortize our intangible assets with definite useful lives over their estimated useful lives and review these assets for impairment. We test our goodwill, trademarks and indefinite-lived assets for impairment at least annually or more frequently if events or changes in circumstances indicate these assets may be impaired. These events or circumstances require significant judgment and could include a significant change in the business climate, legal factors, operating performance indicators, competition and sale or disposition of all or a portion of a division. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital. As of October 31, 2023, we performed an impairment test analysis for Microlab and as of July 31, 2023, we performed an impairment test analysis for Schrofftech. As noted above, we test our goodwill, trademarks, and indefinite-lived intangible assets for impairment at least annually, which we have traditionally done in the fourth quarter, or on an interim basis when events or changes in circumstances suggest these assets may be impaired. Impairment is measured as the excess of the carrying value of the goodwill or indefinite-lived intangible asset over its fair value. Impairment may result from a number of factors, including performance deterioration, negative cash flows from operations and/or changes in anticipated future cash flows, changes in business plans, adverse economic or market conditions, or other factors beyond our control. The amount of any impairment must be expensed as a charge to operations. Microlab’s results for the fiscal year ended October 31, 2023 triggered an impairment analysis. Schrofftech’s three and nine-months results ended July 31, 2023 triggered an impairment analysis. Microlab was acquired in March 1, 2022 for a total purchase price of $24.5 million. Schrofftech was acquired on November 4, 2019 for a total purchase price of $5.3 million, consisting of cash consideration of $4.0 million and $1.3 million in earn-out, of which none was earned. As of October 31, 2023, Microlab has a carrying value of $17.2 million, of which includes $5.6 million in goodwill, $11.6 million in net amortizable intangible assets. As of October 31, 2023, Schrofftech has a carrying value of $3.1 million, of which includes $1.1 million in goodwill, $0.5 million in non-amortizable intangible assets and $1.5 million in net amortizable intangible assets. The analyses performed included a blend of the income approach (discounted cash flow method) and market approach (guideline public company method) to reach a fair value of equity in excess of the fair value to the carrying amount. The analyses performed in blending the income approach and the market approach incorporates several significant judgments and assumptions about projected revenue growth, future operating margins and discount rates. There are inherent uncertainties related to these assumptions and our judgment in applying them to the impairment analysis. Changes in certain events or circumstances could result in changes to our estimated fair values, and may result in future write-downs to the carrying values of these assets. Impairment charges could adversely affect our financial results, financial ratios and could limit our ability to obtain financing in the future. No |
Fair Value Measurement, Policy [Policy Text Block] | 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, 2023 and 2022, 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. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangible assets Intangible assets consist of the following as of October 31, 2023 and 2022 (in thousands): 2023 2022 Amortizable intangible assets: Non-compete agreement (estimated life 5 years) $ 423 $ 423 Accumulated amortization (378 ) (334 ) 45 89 Customer relationships (estimated lives 7 - 15 years) 6,058 6,058 Accumulated amortization (3,461 ) (3,074 ) 2,597 2,984 Backlog (estimated life 1 - 2 years) 327 327 Accumulated amortization (327 ) (313 ) - 14 Patents (estimated life 10 - 14 years) 368 368 Accumulated amortization (176 ) (143 ) 192 225 Tradename (estimated life 15 years) 1,700 1,700 Accumulated amortization (189 ) (76 ) 1,511 1,624 Proprietary technology (estimated life 10 years) 11,100 11,100 Accumulated amortization (1,850 ) (740 ) 9,250 10,360 Totals $ 13,595 $ 15,296 Non-amortizable intangible assets: Trademarks $ 1,174 $ 1,174 Amortization expense was $1,701,000 and $1,282,000 for the years ended October 31, 2023 and 2022, respectively. The weighted-average amortization period for the amortizable intangible assets is 8.55 years. There was no Estimated amortization expense related to finite-lived intangible assets is as follows (in thousands): Year ending October 31, Amount 2024 $ 1,688 2025 1,643 2026 1,643 2027 1,643 2028 1,643 Thereafter 5,335 Total $ 13,595 |
Advertising Cost [Policy Text Block] | Advertising We expense the cost of advertising and promotions as incurred. Advertising costs charged to operations were approximately $76,000 and $333,000 in 2023 and 2022, respectively. |
Research and Development Expense, Policy [Policy Text Block] | 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, 2023 and 2022, we recognized $3,151,000 and $2,913,000 in engineering expenses, respectively. |
Income Tax, Policy [Policy Text Block] | 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. |
Share-Based Payment Arrangement [Policy Text Block] | 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, 2023 and 2022, charges related to stock-based compensation amounted to approximately $898,000 and $689,000, respectively. For the fiscal years ended October 31, 2023 and 2022, all stock-based compensation is classified in selling and general and engineering expense. |
Earnings Per Share, Policy [Policy Text Block] | Earnings per share Basic earnings per share is calculated by dividing net (loss) 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, 2023 and 2022, that were not included in the computation because they were anti-dilutive, totaled 811,135 and 508,889, respectively. The following table summarizes the computation of basic and diluted earnings per share: 2023 2022 Numerators: Consolidated net (loss) income (A) $ (3,078,000 ) $ 1,448,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 10,283,449 10,120,254 Add effects of potentially dilutive securities - assumed exercise of stock options - 122,163 Weighted average shares outstanding for diluted earnings per share (C) 10,283,449 10,242,417 Basic (loss) earnings per share (A)/(B) $ (0.30 ) $ 0.14 Diluted (loss) earnings per share (A)/(C) $ (0.30 ) $ 0.14 |
New Accounting Pronouncements, Policy [Policy Text Block] | 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 (Topic 326), Recently issued accounting pronouncements adopted: In December 2019, the FASB issued ASU 2019-12, 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, 2023 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 2023 2022 Amortizable intangible assets: Non-compete agreement (estimated life 5 years) $ 423 $ 423 Accumulated amortization (378 ) (334 ) 45 89 Customer relationships (estimated lives 7 - 15 years) 6,058 6,058 Accumulated amortization (3,461 ) (3,074 ) 2,597 2,984 Backlog (estimated life 1 - 2 years) 327 327 Accumulated amortization (327 ) (313 ) - 14 Patents (estimated life 10 - 14 years) 368 368 Accumulated amortization (176 ) (143 ) 192 225 Tradename (estimated life 15 years) 1,700 1,700 Accumulated amortization (189 ) (76 ) 1,511 1,624 Proprietary technology (estimated life 10 years) 11,100 11,100 Accumulated amortization (1,850 ) (740 ) 9,250 10,360 Totals $ 13,595 $ 15,296 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 2024 $ 1,688 2025 1,643 2026 1,643 2027 1,643 2028 1,643 Thereafter 5,335 Total $ 13,595 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 2023 2022 Numerators: Consolidated net (loss) income (A) $ (3,078,000 ) $ 1,448,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 10,283,449 10,120,254 Add effects of potentially dilutive securities - assumed exercise of stock options - 122,163 Weighted average shares outstanding for diluted earnings per share (C) 10,283,449 10,242,417 Basic (loss) earnings per share (A)/(B) $ (0.30 ) $ 0.14 Diluted (loss) earnings per share (A)/(C) $ (0.30 ) $ 0.14 |
Note 2 - Business Acquisition (
Note 2 - Business Acquisition (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
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 Noninterest-bearing liabilities (1,800,000 ) Net assets acquired at fair value $ 24,475,000 |
Business Acquisition, Pro Forma Information [Table Text Block] | October 31, 2023 2022 Revenue $ 72,168 $ 91,358 Net (loss) income (3,078 ) 1,959 (Loss) earnings per share Basic $ (0.30 ) $ 0.19 Diluted $ (0.30 ) $ 0.19 Basic 10,283,449 10,120,254 Diluted 10,283,449 10,242,417 |
Note 3 - Concentrations of Cr_2
Note 3 - Concentrations of Credit Risk (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Notes Tables | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | October 31, 2023 2022 Wireless provider 10 % 20 % Distributor A 10 % * |
Note 4 - Inventories and Majo_2
Note 4 - Inventories and Major Vendors (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | 2023 2022 Raw materials and supplies $ 12,957 $ 15,238 Work in process 439 439 Finished goods 5,334 5,377 Totals $ 18,730 $ 21,054 |
Note 5 - Other Current Assets (
Note 5 - Other Current Assets (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Notes Tables | |
Schedule of Other Current Assets [Table Text Block] | 2023 2022 Employee retention credit ("ERC") $ 145 $ 1,636 Prepaid taxes 642 - Prepaid expense 953 972 Reimbursement for tenant improvements - 2,810 Other 396 431 Totals $ 2,136 $ 5,849 |
Note 6 - Accrued Expenses and_2
Note 6 - Accrued Expenses and Other Long-term Liabilities (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | 2023 2022 Wages payable $ 2,461 $ 3,634 Accrued receipts 1,131 2,136 Other accrued expenses 980 1,847 Tenant improvements payable - 1,197 Totals $ 4,572 $ 8,814 |
Note 7 - Segment Information (T
Note 7 - Segment Information (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Notes Tables | |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | 2023 2022 United States $ 65,781 $ 74,919 Foreign Countries: Canada 2,183 6,765 Italy 1,802 1,670 Mexico 4 106 All Other 2,398 1,794 6,387 10,335 Totals $ 72,168 $ 85,254 |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | RF Connector Custom Cabling and Manufacturing and 2023 Cable Assembly Assembly Corporate Total Net sales $ 45,941 $ 26,227 $ - $ 72,168 Loss before benefit from income taxes (1,463 ) (1,479 ) (1,307 ) (4,250 ) Depreciation and amortization 1,932 501 - 2,433 Total assets 55,466 17,009 9,803 82,278 2022 Net sales $ 43,521 $ 41,733 $ - $ 85,254 (Loss) income before provision (benefit) from income taxes (195 ) 4,919 (3,137 ) 1,587 Depreciation and amortization 1,191 499 - 1,690 Total assets 55,006 22,068 12,492 89,566 |
Note 8 - Income Tax Provision_2
Note 8 - Income Tax Provision (Benefit) (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Notes Tables | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | 2023 2022 Current: Federal $ (501 ) $ 1,252 State 6 225 (495 ) 1,477 Deferred: Federal (438 ) (1,054 ) State (239 ) (284 ) (677 ) (1,338 ) $ (1,172 ) $ 139 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 2023 2022 % of Pretax % of Pretax Amount Loss Amount Income Income taxes at federal statutory rate $ (893 ) 21.0 % $ 333 21.0 % State tax provision, net of federal tax benefit (212 ) 5.0 % 60 3.8 % Nondeductible differences: Stock options 88 -2.1 % 19 1.2 % Permanent differences 15 -0.4 % 5 0.3 % R&D credits (238 ) 5.6 % (219 ) -13.6 % Foreign derived intangible income - 0.0 % (68 ) -4.3 % ASC 740-10 Liability 13 -0.3 % (7 ) -0.4 % Section 481(a) adjustment - 0.0 % 142 8.9 % Return-to-provision adjustments (69 ) 1.6 % (126 ) -7.9 % Other 124 -2.9 % - 0.0 % $ (1,172 ) 27.5 % $ 139 9.2 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 2023 2022 Deferred Tax Assets: Reserves $ 497 $ 404 Accrued vacation 275 294 Stock-based compensation awards 213 168 Uniform capitalization 208 173 Lease liability 5,177 4,169 State taxes 21 72 Other - 36 Capitalized Section 174 Costs 864 - Credits 128 - 163(j) interest carryforward 118 - Net operating loss carryforwards 73 - Total deferred tax assets 7,574 5,316 Deferred Tax Liabilities: Amortization / intangible assets (192 ) (29 ) Change in right-of-use assets (3,942 ) (3,335 ) Depreciation / equipment and furnishings (822 ) (136 ) Total deferred tax liabilities (4,956 ) (3,500 ) Valuation allowance (124 ) - Total net deferred tax assets (liabilities) $ 2,494 $ 1,816 |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | 2023 2022 Balance, at beginning of year $ 121 $ 128 Increase for tax positions related to the current year 78 50 Increase (decrease) for tax positions related to prior years 2 (29 ) Increase for interest and penalties - - Statute of Limitations Expirations (23 ) (28 ) Balance, at end of year $ 178 $ 121 |
Note 9 - Stock Options (Tables)
Note 9 - Stock Options (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Notes Tables | |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 2023 2022 Weighted average volatility 54.27 % 53.36 % Expected dividends 0.00 % 0.00 % Expected term (in years) 7.0 7.0 Risk-free interest rate 3.78 % 1.47 % Weighted average fair value of options granted during the year $ 3.15 $ 3.77 Weighted average fair value of options vested during the year $ 2.80 $ 2.32 |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | 2023 2022 Shares or Weighted Shares or Weighted Price Per Average Price Per Average Share Exercise Price Share Exercise Price Outstanding at beginning of year 691,005 $ 5.87 618,858 $ 5.33 Options granted 168,181 $ 5.36 145,001 $ 6.94 Options exercised (45,000 ) $ 1.90 (60,854 ) $ 2.45 Options canceled or expired (60,000 ) $ 5.33 (12,000 ) $ 7.58 Options outstanding at end of year 754,186 $ 6.04 691,005 $ 5.87 Options exercisable at end of year 479,588 $ 6.10 366,714 $ 6.13 Options vested and expected to vest at end of year 748,358 $ 6.13 685,154 $ 5.88 Option price range at end of year $1.90 - $8.69 $1.90 - $8.69 Aggregate intrinsic value of options exercised during year $ 144,005 $ 245,420 |
Disclosure of Cash Compensation Payments [Text Block] | Chair Member Board $ 25,000 Audit Committee $ 8,000 $ 5,000 Compensation Committee $ 6,000 $ 5,000 Nominating and Corporate Governance Committee $ 4,000 $ 4,000 Strategic Planning and Capital Allocation Committee $ 4,000 $ 4,000 |
Note 14 - Commitments (Tables)
Note 14 - Commitments (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Notes Tables | |
Lease, Cost [Table Text Block] | Fiscal Year Ended October 31, 2023 Operating lease cost $ 2,872 Short-term lease cost 1 |
Lessee, Leases, Other Information [Table Text Block] | October 31, 2023 October 31, 2022 Supplemental Cash Flows Information Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 6,479 $ 13,352 Weighted Average Remaining Lease Term Operating leases (in months) 114.26 113.72 Weighted Average Discount Rate Operating leases 6.96 % 3.75 % |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Year ended October 31, Operating Leases 2024 $ 2,404 2024 2,827 2025 2,877 2027 2,929 Thereafter 17,874 Total future minimum lease payments 28,911 Less imputed interest (8,313 ) Total $ 20,598 Reported as of October 31, 2023 Operating Leases Other current liabilities $ 1,314 Operating lease liabilities 19,284 Total $ 20,598 |
Note 1 - Business Activities _3
Note 1 - Business Activities and Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | ||||
Mar. 01, 2022 | Nov. 04, 2019 | Oct. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2023 | |
Goodwill | $ 8,085,000 | $ 8,085,000 | |||
Asset Impairment Charges | 0 | 0 | |||
Amortization of Intangible Assets, Total | 1,701,000 | 1,282,000 | |||
Advertising Expense | 76,000 | 333,000 | |||
Research and Development Expense | 3,151,000 | 2,913,000 | |||
Stock-based compensation expense | $ 898,000 | $ 689,000 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 811,135 | 508,889 | |||
Trademarks [Member] | |||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 0 | $ 0 | |||
Microlab/FXR LLC [Member] | |||||
Business Combination, Consideration Transferred | $ 24,500,000 | ||||
Payments to Acquire Businesses, Gross | 24,250,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 17,200,000 | ||||
Goodwill | 5,600,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 11,600,000 | ||||
Schrofftech [Member] | |||||
Business Combination, Consideration Transferred | 24,475,000 | $ 5,300,000 | |||
Payments to Acquire Businesses, Gross | 24,250,000 | 4,000,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 24,475,000 | 3,100,000 | |||
Goodwill | 5,617,000 | 1,100,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 13,840,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | 500,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 1,500,000 | ||||
Schrofftech [Member] | Earn Out [Member] | |||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 1,300,000 | ||||
Minimum [Member] | |||||
Property, Plant and Equipment, Useful Life (Year) | 3 years | ||||
Minimum [Member] | Microlab/FXR LLC [Member] | |||||
Finite-Lived Intangible Asset, Useful Life (Year) | 1 year | ||||
Maximum [Member] | |||||
Property, Plant and Equipment, Useful Life (Year) | 5 years | ||||
Maximum [Member] | Microlab/FXR LLC [Member] | |||||
Finite-Lived Intangible Asset, Useful Life (Year) | 15 years | ||||
Weighted Average [Member] | |||||
Finite-Lived Intangible Asset, Useful Life (Year) | 8 years 6 months 18 days |
Note 1 - Business Activities _4
Note 1 - Business Activities and Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
Amortizable intangible assets, net | $ 13,595 | $ 15,296 |
Non-amortizable intangible assets | 1,174 | 1,174 |
Trademarks [Member] | ||
Non-amortizable intangible assets | $ 1,174 | 1,174 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 5 years | |
Amortizable intangible assets, gross | $ 423 | 423 |
Accumulated amortization | (378) | (334) |
Amortizable intangible assets, net | 45 | 89 |
Customer Relationships [Member] | ||
Amortizable intangible assets, gross | 6,058 | 6,058 |
Accumulated amortization | (3,461) | (3,074) |
Amortizable intangible assets, net | $ 2,597 | 2,984 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 7 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 15 years | |
Order or Production Backlog [Member] | ||
Amortizable intangible assets, gross | $ 327 | 327 |
Accumulated amortization | (327) | (313) |
Amortizable intangible assets, net | $ 0 | 14 |
Order or Production Backlog [Member] | Minimum [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 1 year | |
Order or Production Backlog [Member] | Maximum [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 2 years | |
Patents [Member] | ||
Amortizable intangible assets, gross | $ 368 | 368 |
Accumulated amortization | (176) | (143) |
Amortizable intangible assets, net | $ 192 | 225 |
Patents [Member] | Minimum [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 10 years | |
Patents [Member] | Maximum [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 14 years | |
Trade Names [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 15 years | |
Amortizable intangible assets, gross | $ 1,700 | 1,700 |
Accumulated amortization | (189) | (76) |
Amortizable intangible assets, net | $ 1,511 | 1,624 |
Patented Technology [Member] | ||
Finite-Lived Intangible Asset, Useful Life (Year) | 10 years | |
Amortizable intangible assets, gross | $ 11,100 | 11,100 |
Accumulated amortization | (1,850) | (740) |
Amortizable intangible assets, net | $ 9,250 | $ 10,360 |
Note 1 - Business Activities _5
Note 1 - Business Activities and Summary of Significant Accounting Policies - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
Finite-Lived Intangible Asset, Expected Amortization, Year One | $ 1,688 | |
Finite-Lived Intangible Asset, Expected Amortization, Year Two | 1,643 | |
Finite-Lived Intangible Asset, Expected Amortization, Year Three | 1,643 | |
Finite-Lived Intangible Asset, Expected Amortization, Year Four | 1,643 | |
Finite-Lived Intangible Asset, Expected Amortization, Year Five | 1,643 | |
Thereafter | 5,335 | |
Total | $ 13,595 | $ 15,296 |
Note 1 - Business Activities _6
Note 1 - Business Activities and Summary of Significant Accounting Policies - Basic and Diluted Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Net income | $ (3,078,000) | $ 1,448,000 |
Basic (in shares) | 10,283,449 | 10,120,254 |
Add effects of potentially dilutive securities - assumed exercise of stock options (in shares) | 0 | 122,163 |
Weighted average shares outstanding for diluted earnings per share (C) (in shares) | 10,283,449 | 10,242,417 |
Basic (in dollars per share) | $ (0.3) | $ 0.14 |
Diluted (in dollars per share) | $ (0.3) | $ 0.14 |
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 | Jan. 31, 2023 | 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% | ||||
Payments to Acquire Businesses, Gross | $ 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 (Year) | 1 year | ||||
Microlab/FXR LLC [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life (Year) | 15 years |
Note 2 - Business Acquisition -
Note 2 - Business Acquisition - Components of the Purchase Price of Schroff Technologies International, Inc. (Details) - Schrofftech [Member] - USD ($) | Mar. 01, 2022 | Nov. 04, 2019 |
Cash consideration paid at closing | $ 24,250,000 | $ 4,000,000 |
Post-closing adjustment | 225,000 | |
Total consideration transferred | $ 24,475,000 | $ 5,300,000 |
Note 2 - Business Acquisition_3
Note 2 - Business Acquisition - Allocation of Estimated Purchase Price of Schroff Technologies International, Inc. (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 | Mar. 01, 2022 |
Goodwill | $ 8,085,000 | $ 8,085,000 | |
Schrofftech [Member] | |||
Current assets | $ 6,620,000 | ||
Property and equipment | 198,000 | ||
Intangible assets | 13,840,000 | ||
Goodwill | 1,100,000 | 5,617,000 | |
Non-interest bearing liabilities | (1,800,000) | ||
Net assets acquired at fair value | $ 3,100,000 | $ 24,475,000 |
Note 2 - Business Acquisition_4
Note 2 - Business Acquisition - Unaudited Pro Forma Financial Information (Details) - Microlab/FXR LLC [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Revenue | $ 72,168 | $ 91,358 |
Net (loss) income | $ (3,078) | $ 1,959 |
Basic (in dollars per share) | $ (0.3) | $ 0.19 |
Diluted (in dollars per share) | $ (0.3) | $ 0.19 |
Basic (in shares) | 10,283,449 | 10,120,254 |
Diluted (in shares) | 10,283,449 | 10,242,417 |
Note 3 - Concentrations of Cr_3
Note 3 - Concentrations of Credit Risk (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Cash, Uninsured Amount | $ 3.4 | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Wireless Carrier [Member] | ||
Concentration Risk, Percentage | 10% | 20% |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | One Distributor [Member] | ||
Concentration Risk, Percentage | 10% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Wireless Carrier [Member] | ||
Concentration Risk, Percentage | 11% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributor Two [Member] | ||
Concentration Risk, Percentage | 10% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | New Customer 1 [Member] | ||
Concentration Risk, Percentage | 14% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | New Customer 2 [Member] | ||
Concentration Risk, Percentage | 19% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Distributor [Member] | Maximum [Member] | ||
Concentration Risk, Percentage | 10% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Distributor Two [Member] | Maximum [Member] | ||
Concentration Risk, Percentage | 10% |
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, 2023 | Oct. 31, 2022 | |
Wireless Provider [Member] | ||
Wireless provider | 10% | 20% |
Distributor A [Member] | ||
Wireless provider | 10% |
Note 4 - Inventories and Majo_3
Note 4 - Inventories and Major Vendors (Details Textual) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | One Vendor [Member] | ||
Concentration Risk, Percentage | 15% | 27% |
Note 4 - Inventories and Majo_4
Note 4 - Inventories and Major Vendors - Inventories (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
Raw materials and supplies | $ 12,957 | $ 15,238 |
Work in process | 439 | 439 |
Finished goods | 5,334 | 5,377 |
Totals | $ 18,730 | $ 21,054 |
Note 5 - Other Current Assets -
Note 5 - Other Current Assets - Other Current Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
Employee retention credit ("ERC") | $ 145 | $ 1,636 |
Prepaid taxes | 642 | 0 |
Prepaid expense | 953 | 972 |
Reimbursement for tenant improvements | 0 | 2,810 |
Other | 396 | 431 |
Totals | $ 2,136 | $ 5,849 |
Note 6 - Accrued Expenses and_3
Note 6 - Accrued Expenses and Other Long-term Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
Wages payable | $ 2,461 | $ 3,634 |
Accrued receipts | 1,131 | 2,136 |
Other accrued expenses | 980 | 1,847 |
Tenant improvements payable | 0 | 1,197 |
Totals | $ 4,572 | $ 8,814 |
Note 7 - Segment Information (D
Note 7 - Segment Information (Details Textual) | 12 Months Ended |
Oct. 31, 2023 | |
Number of Reportable Segments | 2 |
Note 7 - Segment Information -
Note 7 - Segment Information - Sales by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Net sales | $ 72,168 | $ 85,254 |
UNITED STATES | ||
Net sales | 65,781 | 74,919 |
CANADA | ||
Net sales | 2,183 | 6,765 |
ITALY | ||
Net sales | 1,802 | 1,670 |
MEXICO | ||
Net sales | 4 | 106 |
All Other Foreign Countries [Member] | ||
Net sales | 2,398 | 1,794 |
Non-US [Member] | ||
Net sales | $ 6,387 | $ 10,335 |
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, 2023 | Oct. 31, 2022 | |
Net sales | $ 72,168 | $ 85,254 |
Loss before benefit from income taxes | (4,250) | 1,587 |
Depreciation and amortization | 2,433 | 1,690 |
Total assets | 82,278 | 89,566 |
Income (loss) before provision for income taxes | (4,250) | 1,587 |
Operating Segments [Member] | RF Connector and Cable Assembly [Member] | ||
Net sales | 45,941 | 43,521 |
Loss before benefit from income taxes | (1,463) | (195) |
Depreciation and amortization | 1,932 | 1,191 |
Total assets | 55,466 | 55,006 |
Income (loss) before provision for income taxes | (1,463) | (195) |
Operating Segments [Member] | Custom Cabling Manufacturing and Assembly [Member] | ||
Net sales | 26,227 | 41,733 |
Loss before benefit from income taxes | (1,479) | 4,919 |
Depreciation and amortization | 501 | 499 |
Total assets | 17,009 | 22,068 |
Income (loss) before provision for income taxes | (1,479) | 4,919 |
Corporate, Non-Segment [Member] | ||
Net sales | 0 | 0 |
Loss before benefit from income taxes | (1,307) | (3,137) |
Depreciation and amortization | 0 | 0 |
Total assets | 9,803 | 12,492 |
Income (loss) before provision for income taxes | $ (1,307) | $ (3,137) |
Note 8 - Income Tax Provision_3
Note 8 - Income Tax Provision (Benefit) (Details Textual) - USD ($) | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 100,000 | $ 0 | |
Income Tax Expense (Benefit), Total | $ 1,172,000 | $ (139,000) | |
Effective Income Tax Rate Reconciliation, Percent, Total | 27.50% | 9.20% | |
Benefit from income taxes | $ (1,172,000) | $ 139,000 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | 21% | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total | $ 178,000 | $ 121,000 | $ 128,000 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 40,000 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 20,000 | $ 13,000 | |
General Business Tax Credit Carryforward [Member] | |||
Tax Credit Carryforward, Amount | 600,000 | ||
Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards | 300,000 | ||
State and Local Jurisdiction [Member] | |||
Operating Loss Carryforwards | 200,000 | ||
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | |||
Tax Credit Carryforward, Amount | $ 200,000 |
Note 8 - Income Tax Provision_4
Note 8 - Income Tax Provision (Benefit) - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Federal | $ (501) | $ 1,252 |
State | 6 | 225 |
Current Income Tax Expense (Benefit) | (495) | 1,477 |
Federal | (438) | (1,054) |
State | (239) | (284) |
Deferred Federal, State and Local, Tax Expense (Benefit) | (677) | (1,338) |
Income Tax Expense (Benefit) | $ (1,172) | $ 139 |
Note 8 - Income Tax Provision_5
Note 8 - Income Tax Provision (Benefit) - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income taxes at federal statutory rate | $ (893) | $ 333 |
Income taxes at federal statutory rate, percent | 21% | 21% |
State tax provision, net of federal tax benefit | $ (212) | $ 60 |
State tax provision, net of federal tax benefit, percent | 5% | 3.80% |
Stock options | $ 88 | $ 19 |
Stock options, percent | (2.10%) | 1.20% |
Permanent differences | $ 15 | $ 5 |
Permanent differences, percent | (0.40%) | 0.30% |
R&D credits | $ (238) | $ (219) |
R&D credits, percent | 5.60% | (13.60%) |
Foreign derived intangible income | $ 0 | $ (68) |
Foreign derived intangible income, percent | 0% | (4.30%) |
ASC 740-10 Liability | $ 13 | $ (7) |
ASC 740-10 Liability, percent | (0.30%) | (0.40%) |
Section 481(a) adjustment | $ 0 | $ 142 |
Section 481(a) adjustment, percent | 0% | 8.90% |
Return-to-provision adjustments | $ (69) | $ (126) |
Return-to-provision adjustments, percent | 1.60% | (7.90%) |
Other | $ 124 | $ 0 |
Other, percent | (2.90%) | 0% |
Income Tax Expense (Benefit) | $ (1,172) | $ 139 |
Effective Income Tax Rate Reconciliation, Percent | 27.50% | 9.20% |
Note 8 - Income Tax Provision_6
Note 8 - Income Tax Provision (Benefit) - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
Reserves | $ 497 | $ 404 |
Accrued vacation | 275 | 294 |
Stock-based compensation awards | 213 | 168 |
Uniform capitalization | 208 | 173 |
Lease liability | 5,177 | 4,169 |
State taxes | 21 | 72 |
Other | 0 | 36 |
Capitalized Section 174 Costs | 864 | 0 |
Credits | 128 | 0 |
163(j) interest carryforward | 118 | 0 |
Net operating loss carryforwards | 73 | 0 |
Total deferred tax assets | 7,574 | 5,316 |
Amortization / intangible assets | (192) | (29) |
Change in right-of-use assets | (3,942) | (3,335) |
Depreciation / equipment and furnishings | (822) | (136) |
Total deferred tax liabilities | (4,956) | (3,500) |
Valuation allowance | (124) | 0 |
Total net deferred tax assets (liabilities) | $ 2,494 | $ 1,816 |
Note 8 - Income Tax Provision_7
Note 8 - Income Tax Provision (Benefit) - Schedule of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Balance, at beginning of year | $ 121,000 | $ 128,000 |
Increase for tax positions related to the current year | 78,000 | 50,000 |
Increase for tax positions related to prior years | 2,000 | |
Decrease for tax positions related to prior years | (29,000) | |
Increase for interest and penalties | 0 | 0 |
Statute of Limitations Expirations | (23,000) | (28,000) |
Balance, at end of year | $ 178,000 | $ 121,000 |
Note 9 - Stock Options (Details
Note 9 - Stock Options (Details Textual) - USD ($) | 10 Months Ended | 12 Months Ended | ||||||
Aug. 29, 2023 | Jan. 11, 2023 | Sep. 08, 2022 | Jan. 10, 2022 | Jan. 12, 2021 | Oct. 31, 2023 | Oct. 31, 2023 | Jul. 22, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 3 months 14 days | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 5 years 5 months 15 days | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 6 years 3 months 14 days | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 58,000 | $ 58,000 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value | 40,000 | 40,000 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 57,000 | 57,000 | ||||||
Share-Based Payment Arrangement, Nonemployee [Member] | ||||||||
Nonemployee Director, Annual Compensation | $ 90,000 | |||||||
Nonemployee Director, Annual Compensation in Cash | 40,000 | |||||||
Restricted Stock [Member] | ||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | 612,000 | $ 612,000 | ||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 11 months 15 days | |||||||
Restricted Stock [Member] | Share-Based Payment Arrangement, Nonemployee [Member] | ||||||||
Nonemployee Director, Annual Compensation | $ 50,000 | |||||||
Incentive Stock Options [Member] | ||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 642,000 | $ 642,000 | ||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 4 months 2 days | |||||||
Incentive Stock Options [Member] | Share-Based Payment Arrangement, Employee [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) | 10,000 | |||||||
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 | 2,500 | |||||||
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 (in shares) | 54,092 | 39,666 | ||||||
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 | 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 | 1% | |||||||
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 10, 2024 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 1% | |||||||
One Manager and Three Officers [Member] | Incentive Stock Options [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) | 108,181 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year) | 10 years | |||||||
Incentive Stock Options [Member] | One Manager and Three Officers [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) | 106,001 | |||||||
Another Manager [Member] | Restricted Stock and Incentive Stock Options [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year) | 10 years | |||||||
Another Manager [Member] | Incentive Stock Options [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) | 50,000 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 50,000 | |||||||
Director [Member] | Restricted Stock [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 7,485 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 6.68 | |||||||
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 | 703,252 | 703,252 |
Note 9 - Stock Options - Valuat
Note 9 - Stock Options - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Weighted average volatility | 54.27% | 53.36% |
Expected dividends | 0% | 0% |
Expected term (in years) (Year) | 7 years | 7 years |
Risk-free interest rate | 3.78% | 1.47% |
Weighted average fair value of options granted during the year (in dollars per share) | $ 3.15 | $ 3.77 |
Weighted average fair value of options vested during the year (in dollars per share) | $ 2.8 | $ 2.32 |
Note 9 - Stock Options - Stock
Note 9 - Stock Options - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Outstanding at beginning of year (in shares) | 691,005 | 618,858 |
Outstanding at beginning of year (in dollars per share) | $ 5.87 | $ 5.33 |
Options granted (in shares) | 168,181 | 145,001 |
Options granted, weighted average exercise price (in dollars per share) | $ 5.36 | $ 6.94 |
Options exercised (in shares) | (45,000) | (60,854) |
Options exercised, weighted average exercise price (in dollars per share) | $ 1.9 | $ 2.45 |
Options canceled or expired (in shares) | (60,000) | (12,000) |
Options canceled or expired, weighted average exercise price (in dollars per share) | $ 5.33 | $ 7.58 |
Options outstanding at end of year (in shares) | 754,186 | 691,005 |
Options outstanding at end of year (in dollars per share) | $ 6.04 | $ 5.87 |
Options exercisable at end of year (in shares) | 479,588 | 366,714 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 6.1 | $ 6.13 |
Options vested and expected to vest at end of year (in shares) | 748,358 | 685,154 |
Options vested and expected to vest, weighted average exercise price (in dollars per share) | $ 6.13 | $ 5.88 |
Share-Based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit (in dollars per share) | 1.9 | 1.9 |
Share-Based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 8.69 | $ 8.69 |
Aggregate intrinsic value of options exercised during year | $ 144,005 | $ 245,420 |
Note 9 - Stock Options - Cash C
Note 9 - Stock Options - Cash Compensation Payments (Details) | Sep. 08, 2022 USD ($) |
Board Payment [Member] | Board of Directors Chairman [Member] | |
Compensation awarded | $ 25,000 |
Audit Committee Payment [Member] | Board of Directors Chairman [Member] | |
Compensation awarded | 8,000 |
Audit Committee Payment [Member] | Director [Member] | |
Compensation awarded | 5,000 |
Compensation Committee Payment [Member] | Board of Directors Chairman [Member] | |
Compensation awarded | 6,000 |
Compensation Committee Payment [Member] | Director [Member] | |
Compensation awarded | 5,000 |
Nominating and Corporate Governance Committee Payment [Member] | Board of Directors Chairman [Member] | |
Compensation awarded | 4,000 |
Nominating and Corporate Governance Committee Payment [Member] | Director [Member] | |
Compensation awarded | 4,000 |
Strategic Planning and Capital Allocation Committee Payment [Member] | Board of Directors Chairman [Member] | |
Compensation awarded | 4,000 |
Strategic Planning and Capital Allocation Committee Payment [Member] | Director [Member] | |
Compensation awarded | $ 4,000 |
Note 10 - Retirement Plan (Deta
Note 10 - Retirement Plan (Details Textual) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Defined Contribution Plan, Cost | $ 567,000 | $ 488,000 |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 3% |
Note 11 - Term Loan and Line _2
Note 11 - Term Loan and Line of Credit (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Jan. 26, 2024 | Feb. 28, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2024 | Apr. 30, 2024 | Mar. 01, 2024 | Sep. 22, 2023 | Sep. 21, 2023 | |
Line of credit payments | $ 1,000,000 | $ 0 | |||||||
Term Loan [Member] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.76% | ||||||||
Long-Term Debt, Gross | 13,162,000 | ||||||||
Revolving Credit Facility [Member] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 2% | ||||||||
Long-Term Line of Credit | 1,000,000 | ||||||||
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 | ||||||||
Debt Instrument, Covenant Required Ebitda | $ 600,000 | 400,000 | |||||||
Debt Instrument, Covenant, Minimum Liquidity | $ 4,000,000 | $ 4,000,000 | |||||||
Debt Instrument, Covenant, Minimum Liquidity, Percentage Forecasted | 80% | 80% | |||||||
Long-Term Line of Credit | $ 1,000,000 | ||||||||
Bank of America, N.A. [Member] | Subsequent Event [Member] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000 | ||||||||
Debt Instrument, Covenant, Minimum Liquidity | 2,000,000 | ||||||||
Line of credit payments | 500,000 | ||||||||
Long-Term Line of Credit | $ 500,000 | ||||||||
Bank of America, N.A. [Member] | Forecast [Member] | |||||||||
Debt Instrument, Covenant Required Ebitda | $ 1,000,000 | $ 1,000,000 | |||||||
Debt Instrument, Additional Fee Percentage | 1% | ||||||||
Debt Instrument, Additional Payment Amount | $ 1,000,000 |
Note 12 - Related Party Trans_2
Note 12 - Related Party Transactions (Details Textual) | 12 Months Ended |
Oct. 31, 2023 USD ($) | |
K and K Unlimited [Member] | |
Lessee, Operating Lease, Monthly Rent | $ 16,000 |
Operating Lease, Expense | 208,000 |
Elmec [Member] | Royalty Payments [Member] | |
Related Party Transaction, Amounts of Transaction | $ 24,000 |
Note 14 - Cash Dividend and D_2
Note 14 - Cash Dividend and Declared Dividends (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Payments of Ordinary Dividends, Common Stock | $ 0 | $ 0 |
Note 14 - Commitments (Details
Note 14 - Commitments (Details Textual) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Operating Lease, Right-of-Use Asset | $ 15,689,000 | $ 13,480,000 |
Operating Lease, Liability | 20,598,000 | |
Operating Lease, Liability, Current | 1,314,000 | $ 1,887,000 |
Finance Lease, Liability, Total | 0 | |
Other Current Liabilities [Member] | ||
Operating Lease, Liability, Current | 1,314,000 | |
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) | 3 years |
Note 14 - Commitments - Operati
Note 14 - Commitments - Operating Lease Expense (Details) $ in Thousands | 12 Months Ended |
Oct. 31, 2023 USD ($) | |
Operating lease cost | $ 2,872 |
Short-term lease cost | $ 1 |
Note 14 - Commitments - Other I
Note 14 - Commitments - Other Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
ROU Assets Obtained in Exchange For Lease Obligations, Operating Leases | $ 6,479 | $ 13,352 |
Operating leases (in months) (Month) | 114 months 7 days | 113 months 21 days |
Weighted Average Discount Rate, Operating leases | 6.96% | 3.75% |
Note 14 - Commitments - Future
Note 14 - Commitments - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Oct. 31, 2022 |
2024 | $ 2,404 | |
Other current liabilities | 1,314 | $ 1,887 |
Lessee, Operating Lease, Liability, to be Paid, Year Two | 2,827 | |
Operating lease liabilities | 19,284 | $ 15,025 |
2025 | 2,877 | |
Total | 20,598 | |
2027 | 2,929 | |
Thereafter | 17,874 | |
Total future minimum lease payments | 28,911 | |
Less imputed interest | (8,313) | |
Total | 20,598 | |
Other Current Liabilities [Member] | ||
Other current liabilities | $ 1,314 |