UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended May 31, 2003
Commission File No. 0-24414
RF Monolithics, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 75-1638027 | |
| (State or other jurisdiction of incorporation of organization) |
(I.R.S. Employer Identification) | |
| 4441 Sigma Road, Dallas, Texas | 75244 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code (972) 233-2903
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No
As of June 30, 2003, 7,168,408 shares of the Registrant’s Common Stock, $.001 par value, were outstanding.
RF MONOLITHICS, INC.
FORM 10-Q
QUARTER ENDED MAY 31, 2003
| Item Number |
Page | |||
| PART I. CONDENSED CONSOLIDATED FINANCIAL INFORMATION | ||||
| 1. |
Condensed Consolidated Financial Statements: |
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|
Condensed Consolidated Balance Sheets |
2 | |||
| 3 | ||||
|
Condensed Consolidated Statements of Cash Flows—Unaudited |
4 | |||
| 5 | ||||
| 2. |
Management’s Discussion and Analysis of Financial |
11 | ||
| 3. |
26 | |||
| 4. |
26 | |||
| PART II. OTHER INFORMATION |
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| 6. |
27 | |||
| SIGNATURES |
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| CERTIFICATIONS |
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| INDEX TO EXHIBITS |
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1
PART I. CONDENSED CONSOLIDATED FINANCIAL INFORMATION
| ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
RF MONOLITHICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
| May 31, 2003 |
August 31, 2002 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ | 237 | $ | 273 | ||||
| Trade receivables—net |
6,524 | 7,374 | ||||||
| Inventories |
7,460 | 10,642 | ||||||
| Prepaid expenses and other |
383 | 429 | ||||||
| Total current assets |
14,604 | 18,718 | ||||||
| PROPERTY AND EQUIPMENT—Net |
9,742 | 11,353 | ||||||
| OTHER ASSETS—Net |
332 | 439 | ||||||
| TOTAL |
$ | 24,678 | $ | 30,510 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| CURRENT LIABILITIES: |
||||||||
| Current portion of long-term debt |
$ | 3,071 | $ | 3,600 | ||||
| Accounts payable—trade |
1,734 | 2,238 | ||||||
| Accrued expenses and other current liabilities |
1,515 | 1,603 | ||||||
| Total current liabilities |
6,320 | 7,441 | ||||||
| LONG-TERM DEBT—Less current portion |
1,472 | 2,844 | ||||||
| OTHER LIABILITIES |
205 | 216 | ||||||
| STOCKHOLDERS’ EQUITY: |
||||||||
| Common stock: 7,168 and 7,131 shares issued |
7 | 7 | ||||||
| Additional paid-in capital |
33,068 | 32,969 | ||||||
| Common stock warrants |
842 | 800 | ||||||
| Treasury stock, 36 common shares at cost |
(227 | ) | (227 | ) | ||||
| Accumulated deficit |
(16,800 | ) | (13,209 | ) | ||||
| Unearned compensation |
(209 | ) | (331 | ) | ||||
| Total stockholders’ equity |
16,681 | 20,009 | ||||||
| TOTAL |
$ | 24,678 | $ | 30,510 | ||||
See notes to condensed consolidated financial statements.
2
RF MONOLITHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS—UNAUDITED
(In Thousands, Except Per-Share Amounts)
| Three Months Ended May 31, |
Nine Months Ended May 31, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| SALES |
$ | 10,818 | $ | 10,439 | $ | 31,845 | $ | 31,969 | ||||||||
| COST OF SALES |
10,418 | 7,873 | 25,826 | 24,604 | ||||||||||||
| GROSS PROFIT |
400 | 2,566 | 6,019 | 7,365 | ||||||||||||
| OPERATING EXPENSES: |
||||||||||||||||
| Research and development |
833 | 805 | 2,394 | 2,294 | ||||||||||||
| Sales and marketing |
1,230 | 1,222 | 3,609 | 3,547 | ||||||||||||
| General and administrative |
683 | 660 | 1,987 | 2,090 | ||||||||||||
| Restructuring and impairment |
1,216 | — | 1,216 | — | ||||||||||||
| Total operating expenses |
3,962 | 2,687 | 9,206 | 7,931 | ||||||||||||
| INCOME (LOSS) FROM OPERATIONS |
(3,562 | ) | (121 | ) | (3,187 | ) | (566 | ) | ||||||||
| OTHER INCOME (EXPENSE): |
||||||||||||||||
| Interest income |
— | 1 | 3 | 5 | ||||||||||||
| Interest expense |
(141 | ) | (242 | ) | (458 | ) | (896 | ) | ||||||||
| Other |
9 | (6 | ) | 71 | (18 | ) | ||||||||||
| Total other income (expense) |
(132 | ) | (247 | ) | (384 | ) | (909 | ) | ||||||||
| INCOME (LOSS) BEFORE INCOME TAXES |
(3,694 | ) | (368 | ) | (3,571 | ) | (1,475 | ) | ||||||||
| INCOME TAX EXPENSE (BENEFIT) |
8 | (991 | ) | 20 | (991 | ) | ||||||||||
| NET INCOME (LOSS) |
$ | (3,702 | ) | $ | 623 | $ | (3,591 | ) | $ | (484 | ) | |||||
| EARNINGS PER SHARE |
||||||||||||||||
| Basic |
$ | (0.52 | ) | $ | 0.09 | $ | (0.50 | ) | $ | (0.07 | ) | |||||
| Diluted |
$ | (0.52 | ) | $ | 0.09 | $ | (0.50 | ) | $ | (0.07 | ) | |||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
||||||||||||||||
| Basic |
7,168 | 7,103 | 7,152 | 7,085 | ||||||||||||
| Diluted |
7,168 | 7,169 | 7,152 | 7,085 | ||||||||||||
See notes to condensed consolidated financial statements.
3
RF MONOLITHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—UNAUDITED
(In Thousands)
| Nine Months Ended May 31, |
||||||||
| 2003 |
2002 |
|||||||
| OPERATING ACTIVITIES: |
||||||||
| Net income (loss) |
$ | (3,591 | ) | $ | (484 | ) | ||
| Noncash items included in net (loss) income: |
||||||||
| Depreciation and amortization |
3,004 | 3,903 | ||||||
| Charge for inventory obsolescence, restructuring and impairment |
3,846 | — | ||||||
| Provision for trade receivable allowance |
25 | 69 | ||||||
| Amortization of unearned compensation |
134 | 186 | ||||||
| Gain on disposal of property and equipment |
(25 | ) | — | |||||
| Sub-total |
6,984 | 4,158 | ||||||
| Cash provided by (used in) operating working capital: |
||||||||
| Trade receivables |
825 | 962 | ||||||
| Inventories |
552 | 1,165 | ||||||
| Prepaid expenses and other |
46 | 310 | ||||||
| Accounts payable—trade |
(504 | ) | (1,744 | ) | ||||
| Accrued expenses and other liabilities |
(132 | ) | (284 | ) | ||||
| Income taxes payable/receivable |
— | (991 | ) | |||||
| Sub-total |
787 | (582 | ) | |||||
| Net cash provided by operating activities |
4,180 | 3,092 | ||||||
| INVESTING ACTIVITIES: |
||||||||
| Acquisition of property and equipment |
(2,530 | ) | (102 | ) | ||||
| Proceeds from disposition of property and equipment |
37 | 355 | ||||||
| Change in other assets |
49 | 29 | ||||||
| Net cash provided by (used in) investing activities |
(2,444 | ) | 282 | |||||
| FINANCING ACTIVITIES: |
||||||||
| Borrowings on building mortgage |
1,050 | — | ||||||
| Borrowings on line of credit |
30,797 | 31,270 | ||||||
| Repayments of notes payable |
(33,748 | ) | (34,689 | ) | ||||
| Repayments of capital lease obligations |
— | (49 | ) | |||||
| Repayments of accounts payable—construction and equipment |
— | (116 | ) | |||||
| Proceeds from common stock and warrants issued |
129 | 88 | ||||||
| Net cash used in financing activities |
(1,772 | ) | (3,496 | ) | ||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS |
(36 | ) | (122 | ) | ||||
| CASH AND CASH EQUIVALENTS: |
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