Executive Contact:
Richard Vasek
Chief Financial Officer Rockford Corporation (480) 517-3169
Tempe, Arizona, April 10, 2012--Rockford Corporation (OTC
Pink: ROFO.PK)
today announced financial results for the three months ended
March 31, 2012.
Net income for the three months ended March 31, 2012 was $3.0
million compared to $1.3 million for the same period in
2011.
Net sales for the three months ended March 31, 2012,
increased 23.9% to $20.5 million compared to net sales of
$16.6 million for the same period in 2011. The increase in
net sales for the three month period was primarily due to
increases in Rockford's core aftermarket and international
sales channels. OEM royalty revenue for the quarter ended
March 31, 2012, was $0.4 million compared to $0.8 million for
the same period in 2011.
As a percent of net sales, gross margin for the three months
ended March 31,
2012 increased to 40.2% compared to 39.7% for the same period
in 2011. Operating expenses for the three months ended March
31, 2012, were flat at $5.3 million compared to $5.3 million
for the same period in 2011.
William R. Jackson, Rockford's Chief Executive Officer and
President, commented, "We are very pleased with the first
quarter of 2012. All of our brands and distribution channels
performed well. The Rockford Fosgate brand continues to gain
strength and momentum. In January we launched several new
products and began
shipping them in the first quarter. We are seeing good
results and sell through at the retail level. Our other
brands, Lightning Audio, Renegade, Brax and Helix are also
growing and gaining market share. The car audio market
remains challenging. However, the strength of our products
and brands allows our retailers and distributors to compete
in a difficult market place."
Mr. Jackson stated: "In addition, we are very excited about
our recently announced agreement with Sanctiond Car Care
products. We see this as a natural product opportunity for
our retailers."
Mr. Jackson concluded: "Our marketing efforts for the year
are aggressive and designed to build brand awareness and
dealer traffic. In summary, we remain cautiously optimistic
about the future and remain committed to growing our business
with our partners."
Rockford's cash used by operations was $1.5 million for the
three months ended March 31, 2012 as compared to $1.4 million
during the comparable period in 2011. Net income of $3.0
million was the primary source of cash from operations and an
increase in account receivable of $6.3 million was the
primary use of cash from operations.
Rockford's asset-based credit facility with Wells Fargo
Capital Financial continues to have the terms described in
Rockford's annual report for the year ended December 31,
2011. Under the agreement, pricing options based on LIBOR
rates are available to Rockford. The interest rate was
approximately 4.5% at March 31, 2012. As of March 31, 2012,
Rockford was in compliance with all applicable covenants.
Availability under the credit facility at March 31, 2012 was
approximately $8.3 million in excess of the outstanding
balance of $1.7 million.
Rockford anticipates, based on its operating plans and cash
flow forecast, that cash flow from operations for 2012 and
2013, and available borrowings under its credit facility,
will be adequate to meet Rockford's requirements for current
capital expenditures, working capital and interest payments
for the next twelve months.
Rockford announced on January 25, 2012, that its Board of Directors approved a program to purchase up to 765,000 shares, or approximately 10%, of Rockford's Common Stock in the open market or through privately negotiated transactions. From January 25, 2012, to date Rockford has repurchased approximately 146,000 shares under this stock buyback program. After these repurchases Rockford has approximately 7.5 million shares outstanding. The program will expire on March 31, 2013, but may be suspended or discontinued at any time.
About Rockford Corporation
Setting the standard for excellence in the audio industry,
the Rockford Corporation markets and distributes
high-performance audio systems for the mobile audio
aftermarket and OEM market. Headquartered in Tempe, Arizona,
Rockford Corporation distributes its products under six
brands: Rockford Fosgate®, Rockford Acoustic Design®,
Lightning Audio®, Brax™, Helix™ and Renegade®. For more
information, please visit: www.rockfordfosgate.com
, www.rockfordacousticdesign.com
, www.lightningaudio.com
, www.braxhifi.com , www.helixhifi.comand
www.renegadecaraudio.com
,
We make forward-looking statements in this press release
including but not limited to statements about our results of
operations. These statements may be identified by the use of
forward-looking terminology such as "may," "will," "believe,"
"expect," "anticipate," "estimate," "continue," or other
similar words.
Forward-looking statements are subject to many risks and
uncertainties. Rockford cautions you not to place undue
reliance on these forward-looking statements, which speak
only as of the date on which they are made. Actual results
may differ materially from those anticipated in our
forward-looking statements. Rockford disclaims any obligation
or undertaking to update these forward-looking statements to
reflect changes in our expectations or changes in events,
conditions, or circumstances on which our expectations are
based.
When considering our forward-looking statements, you should
keep in mind the risk factors discussed in our press releases
and earnings reports, as well as the risk factors generally
applicable to a small business such as ours. We particularly
call your attention to the risk factors and other cautionary
statements identified on our investor relations
web-site, http://www.rockfordcorp.com/RiskFactorstitled "Risk Factors That May Affect Rockford's
Operating Results, Business Prospects and Stock Price" (the
"Risk Disclosure"). We updated the Risk Disclosure as of
March 31, 2011. Our business is subject to the risk factors
noted in the Risk Disclosure, other risk factors identified
above and other risk factors we have not anticipated or
discussed. These risk factors could
cause our actual results to differ significantly from those
anticipated in our forward- looking statements.
Rockford Corporation
Condensed Consolidated Statements of Operations (unaudited) For the Three Months Ended March 31, 2012 and 2011
($000s omitted except per share amounts)
Three months ended
March 31, 2012 2011Net sales $ 20,535 $ 16,570
Cost of goods sold | 12,283 | 9,995 | ||
Gross profit | 8,252 | 6,575 | ||
Operating expenses: | ||||
Sales and marketing | 2,850 | 2,810 | ||
General and administrative | 1,959 | 1,954 | ||
Research and development | 469 | 503 | ||
Total operating expenses | 5,278 | 5,267 | ||
Operating income | 2,974 | 1,308 | ||
Interest and other expense, net | 4 | 8 | ||
Income before income taxes | 2,970 | 1,300 | ||
Income tax benefit | - | - | ||
Net income | $ 2,970 | $ 1,300 | ||
Net income per common share: Basic | $ 0.39 | $ 0.15 | ||
Diluted | $ 0.34 | $ 0.14 | ||
Weighted average shares: Basic | 7,624 | 8,727 | ||
Diluted | 8,610 | 9,483 | ||
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Rockford Corporation
Condensed Consolidated Balance Sheets (unaudited) At March 31, 2012 and December 31, 2011
(In thousands)
ASSETS
March 31, December 31,
2012 2011
Current assets:
Cash $ - $ 1,762
Accounts receivable, net 15,857 9,659
Inventories 6,629 8,031
Prepaid expenses and other current assets 749473
Total current assets 23,235 19,925
Property and equipment, net 1,365 1,370
Other assets 204220
Total assets $ 24,804$ 21,515
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,739 $ 6,800
Accrued salaries and incentives 933 921
Accrued warranty and returns 490 450
Accrued customer programs 965 644
Other accrued liabilities 1,648 1,549
Asset based credit facility 1,681-
Total current liabilities 12,456 10,364
Other long-term liabilities 2026
Total liabilities 12,476 10,390
Shareholders' equity:
Common stock | 96 | 96 |
Additional paid-in-capital | 39,094 | 39,038 |
Retained deficit | (21,790) | (24,760) |
Treasury stock | (5,072) | (3,249) |
Total shareholders' equity | 12,328 | 11,125 |
Total liabilities and shareholders' equity | $ 24,804 | $ 21,515 |
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