Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2019 | Dec. 13, 2019 | Apr. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Oct. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | R F INDUSTRIES LTD | ||
Entity Central Index Key | 0000740664 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 47.1 | ||
Trading Symbol | RFIL | ||
Entity Common Stock, Shares Outstanding | 9,614,617 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 12,540 | $ 16,334 |
Trade accounts receivable, net of allowance for doubtful accounts of $32 and $88, respectively | 12,190 | 4,255 |
Inventories | 8,245 | 7,113 |
Other current assets | 685 | 828 |
TOTAL CURRENT ASSETS | 33,660 | 28,530 |
Property and equipment: | ||
Equipment and tooling | 3,602 | 3,210 |
Furniture and office equipment | 998 | 822 |
Property, Plant and Equipment, Gross | 4,600 | 4,032 |
Less accumulated depreciation | 3,761 | 3,473 |
Total property and equipment | 839 | 559 |
Goodwill | 1,340 | 1,340 |
Amortizable intangible assets, net | 1,092 | 1,367 |
Non-amortizable intangible assets | 657 | 657 |
Other assets | 112 | 49 |
TOTAL ASSETS | 37,700 | 32,502 |
CURRENT LIABILITIES | ||
Accounts payable | 2,406 | 1,342 |
Accrued expenses | 3,653 | 3,377 |
Income taxes payable | 21 | 0 |
TOTAL CURRENT LIABILITIES | 6,080 | 4,719 |
Other long-term liabilities | 87 | 0 |
TOTAL LIABILITIES | 6,167 | 4,719 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock - authorized 20,000,000 shares of $0.01 par value; 9,462,267 and 9,291,201 shares issued and outstanding at October 31, 2019 and October 31, 2018, respectively | 95 | 93 |
Additional paid-in capital | 21,949 | 20,974 |
Retained earnings | 9,489 | 6,716 |
TOTAL STOCKHOLDERS' EQUITY | 31,533 | 27,783 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 37,700 | $ 32,502 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Trade accounts receivable, allowance for doubtful accounts | $ 23 | $ 88 |
Common stock, authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 9,462,267 | 9,291,201 |
Common stock, shares outstanding | 9,462,267 | 9,291,201 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net sales | $ 55,325 | $ 50,196 |
Cost of sales | 39,688 | 33,096 |
Gross profit | 15,637 | 17,100 |
Operating expenses: | ||
Engineering | 1,468 | 1,480 |
Selling and general | 9,710 | 8,173 |
Total operating expenses | 11,178 | 9,653 |
Operating income | 4,459 | 7,447 |
Other income | 98 | 47 |
Income from continuing operations before provision for income taxes | 4,557 | 7,494 |
Provision for income taxes | 1,036 | 1,468 |
Income from continuing operations | 3,521 | 6,026 |
Loss from discontinued operations, net of tax | 0 | (180) |
Consolidated net income | $ 3,521 | $ 5,846 |
Earnings (loss) per share | ||
Continuing operations | $ 0.38 | $ 0.66 |
Discontinued operations | 0 | (0.02) |
Net income per share | 0.38 | 0.64 |
Earnings (loss) per share | ||
Continuing operations | 0.36 | 0.63 |
Discontinued operations | 0 | (0.02) |
Net income per share | $ 0.36 | $ 0.61 |
Weighted average shares outstanding | ||
Basic | 9,358,836 | 9,105,406 |
Diluted | 9,854,604 | 9,593,066 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Total |
Balance at Oct. 31, 2017 | $ 89 | $ 19,654 | $ 1,600 | $ 21,343 |
Balance (in shares) at Oct. 31, 2017 | 8,872,246 | |||
Exercise of stock options | $ 4 | 1,109 | 0 | 1,113 |
Exercise of stock options (in shares) | 418,955 | |||
Stock-based compensation expense | $ 0 | 211 | 0 | 211 |
Dividends | 0 | 0 | (730) | (730) |
Net Income | 0 | 0 | 5,846 | 5,846 |
Balance at Oct. 31, 2018 | $ 93 | 20,974 | 6,716 | 27,783 |
Balance (in shares) at Oct. 31, 2018 | 9,291,201 | |||
Exercise of stock options | $ 2 | 658 | 0 | 660 |
Exercise of stock options (in shares) | 171,066 | |||
Stock-based compensation expense | $ 0 | 317 | 0 | 317 |
Dividends | 0 | 0 | (748) | (748) |
Net Income | 0 | 0 | 3,521 | 3,521 |
Balance at Oct. 31, 2019 | $ 95 | $ 21,949 | $ 9,489 | $ 31,533 |
Balance (in shares) at Oct. 31, 2019 | 9,462,267 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
OPERATING ACTIVITIES: | ||
Consolidated net income | $ 3,521,000 | $ 5,846,000 |
Loss from discontinued operations | 0 | (180,000) |
Income from continuing operations | 3,521,000 | 6,026,000 |
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities: | ||
Bad debt expense | 21,000 | 8,000 |
Depreciation and amortization | 563,000 | 513,000 |
Gain on sale of fixed assets | 0 | (1,000) |
Stock-based compensation expense | 317,000 | 211,000 |
Deferred income taxes | (43,000) | (79,000) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (6,640,000) | (1,360,000) |
Inventories | (657,000) | (1,570,000) |
Other current assets | 218,000 | (321,000) |
Other long-term assets | (1,000) | 21,000 |
Accounts payable | 106,000 | 306,000 |
Accrued expenses | (211,000) | 1,516,000 |
Income tax payable | 21,000 | 0 |
Other long-term liabilities | 75,000 | 0 |
Net cash provided by (used in) operating activities from continuing operations | (2,710,000) | 5,270,000 |
Net cash provided by operating activities from discontinued operations | 0 | 945,000 |
INVESTING ACTIVITIES: | ||
Proceeds from landlord for tenant improvements | 0 | 34,000 |
Proceeds from sale of fixed assets | 0 | 1,000 |
Capital expenditures | (538,000) | (266,000) |
Proceeds from sale of Comnet | 0 | 4,200,000 |
Purchase of C Enterprises, net of cash acquired ($143) | (458,000) | 0 |
Net cash provided by (used in) investing activities from continuing operations | (996,000) | 3,969,000 |
Net cash used in investing activities from discontinued operations | 0 | (272,000) |
FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 660,000 | 1,113,000 |
Dividends paid | (748,000) | (730,000) |
Net cash provided by (used in) financing activities | (88,000) | 383,000 |
Net increase (decrease) in cash and cash equivalents | (3,794,000) | 10,295,000 |
Cash and cash equivalents of continuing operations, beginning of year | 16,334,000 | 5,208,000 |
Cash and cash equivalents of discontinued operations, beginning of year | 0 | 831,000 |
Cash and cash equivalents, beginning of year | 16,334,000 | 6,039,000 |
Cash and cash equivalents, end of year | 12,540,000 | 16,334,000 |
Supplemental cash flow information - income taxes paid | 739,000 | 1,826,000 |
Supplemental schedule of noncash investing and financing activities: | ||
Disposal of fully depreciated property and equipment | 0 | (90,000) |
Write off of deferred rent from sale of Comnet | $ 0 | $ 9,000 |
Business activities and summary
Business activities and summary of significant accounting policies | 12 Months Ended |
Oct. 31, 2019 | |
Business activities and summary of significant accounting policies | |
Business activities and summary of significant accounting policies | Note 1 - Business activities and summary of significant accounting policies Business activities RF Industries, Ltd., together with its three wholly-owned subsidiaries (collectively, hereinafter the “Company”), 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, 2019, the Company classified its operations into the following four 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; and (iv) C Enterprises, Inc., the subsidiary that designs and manufactures quality connectivity solutions to telecommunications and data communications distributors. The Cables Unlimited and C Enterprises divisions are Corning Cables Systems CAH Connections SM Gold Program members that are authorized to manufacture fiber optic cable assemblies that are backed by Corning Cables Systems’ extended warranty. Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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”), and C Enterprises, Inc. (“C Enterprises”), wholly-owned subsidiaries of RF Industries, Ltd. All intercompany balances and transactions have been eliminated in consolidation. Cash equivalents The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Revenue recognition On November 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”) applying the modified retrospective method. The core principle of ASC 606 is that revenue should be recorded in an amount that reflects the consideration to which we expect to be entitled in exchange for goods or services promised to customers. Under ASC 606, the Company follows a five-step model to: (1) identify the contract with our customer; (2) identify our performance obligations in our contract; (3) determine the transaction price for our contract; (4) allocate the transaction price to our performance obligations; and (5) recognize revenue when (or as) each performance obligation is satisfied. In accordance with this accounting principle, the Company recognizes revenue using the output method at a point in time when finished goods have been transferred to the customer and there are no other obligations to customers after the title of the goods have transferred. Title of goods are transferred based on shipping terms for each customer – for shipments with terms of FOB Shipping Point, title is transferred upon shipment; for shipments with terms of FOB Destination, title is transferred upon delivery. 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 3 to 5 years) using the straight-line method. Expenditures for repairs and maintenance are charged to operations in the period incurred. 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 the Company performs 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. If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount or if we elect not to perform a qualitative assessment, we perform a quantitative assessment, or two-step impairment test, to determine whether a goodwill impairment exists at the reporting unit. The first step in our quantitative assessment identifies potential impairments by comparing the estimated fair value of the reporting unit to its carrying value, including goodwill (“Step 1”). If the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment (“Step 2”). No instances of goodwill impairment were identified as of October 31, 2019 and 2018. On June 15, 2011, the Company completed its acquisition of Cables Unlimited. Goodwill related to this acquisition is included within the Cables Unlimited reporting unit. As of May 19, 2015, the Company completed its 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, the Company completed its acquisition of Rel-Tech. Goodwill related to this acquisition is included within the Rel-Tech reporting unit. On March 15, 2019, the Company completed its acquisition of C Enterprises; however, no goodwill resulted from this transaction. Long-lived assets The Company assesses 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. The Company measures 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. The Company has made no material adjustments to our long-lived assets in any of the years presented. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. In addition, the Company tests our trademarks and indefinite-lived asset for impairment at least annually or more frequently if events or changes in circumstances indicate that these assets may be impaired. No instances of impairment were identified as of October 31, 2019 or 2018. Fair value measurement The Company measures at fair value certain financial assets and liabilities. U.S. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1— Quoted prices for identical instruments in active markets; Level 2— Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3— Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. As of October 31, 2019 and 2018, the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximated their carrying value due to their short-term nature. Intangible assets Intangible assets consist of the following as of October 31, 2019 and 2018 (in thousands): 2019 2018 Amortizable intangible assets: Customer relationships (estimated lives 7 - 15 years) $ 2,879 $ 2,879 Accumulated amortization (1,884) (1,619) 995 1,260 Patents (estimated life 14 years) 142 142 Accumulated amortization (45) (35) 97 107 Totals $ 1,092 $ 1,367 Non-amortizable intangible assets: Trademarks $ 657 $ 657 Amortization expense was $275,000 for the years ended October 31, 2019 and 2018. The weighted-average amortization period for the amortizable intangible assets is 10.98 years. There was no impairment to trademarks for the years ended October 31, 2019 and 2018. Estimated amortization expense related to finite lived intangible assets is as follows (in thousands): Year ending October 31, Amount 2020 $ 275 2021 136 2022 89 2023 79 2024 79 Thereafter 434 Total $ 1,092 Advertising The Company expenses the cost of advertising and promotions as incurred. Advertising costs charged to operations were approximately $231,000 and $236,000 in 2019 and 2018, respectively. Research and development Research and development costs are expensed as incurred. The Company’s 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, 2019 and 2018, the Company recognized $1,468,000 and $1,480,000 in engineering expenses, respectively. Income taxes The Company accounts 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. The Company had adopted the provisions of ASC 740‑10, which clarifies the accounting for uncertain tax positions. ASC 740‑10 requires that the Company 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. The Company’s recognizes 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 the Company’s consolidated balance sheets. See Note 9 for more information on the Company’s accounting for uncertain tax positions. Stock options For stock option grants to employees, the Company recognizes 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. The Company issues previously unissued common shares upon the exercise of stock options. For the fiscal years ended October 31, 2019 and 2018, charges related to stock-based compensation amounted to approximately $317,000 and $211,000, respectively. For the fiscal years ended October 31, 2019 and 2018, all stock-based compensation is classified in selling and general and engineering expense. Earnings per share Basic earnings per share is calculated by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally those issuable upon the exercise of stock options, were issued and the treasury stock method had been applied during the period. The greatest number of shares potentially issuable by the Company upon the exercise of stock options in any period for the years ended October 31, 2019 and 2018, that were not included in the computation because they were anti-dilutive, totaled 124,097 and 133,220, respectively. The following table summarizes the computation of basic and diluted earnings per share: 2019 2018 Numerators: Consolidated net income (A) $ 3,521,000 $ 5,846,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 9,358,836 9,105,406 Add effects of potentially dilutive securities - assumed exercise of stock options 495,768 487,660 Weighted average shares outstanding for diluted earnings per share (C) 9,854,604 9,593,066 Basic earnings per share (A)/(B) $ 0.38 $ 0.64 Diluted earnings per share (A)/(C) $ 0.36 $ 0.61 Recent accounting standards Recently issued accounting pronouncements not yet adopted: In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. This ASU requires lessees to recognize lease assets and lease liabilities for those leases classified as operating leases under the current GAAP. Recognition of these assets and liabilities will have a material impact to our consolidated balance sheets upon adoption. Under ASU 2016-02, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients. We adopted the standard as of November 1, 2019, the beginning of our fiscal 2020. We elected the package of practical expedients permitted under the transition guidance with the new standard, which among other things, allows us to carryforward the historical lease classification. We elected the policy which allows us to combine the nonlease components with its related lease components rather than separating, and the policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. We estimate that the adoption of the standard will result in recognition of additional right-of-use assets and lease liabilities of approximately $2.3 million and $2.4 million, respectively, as of November 1, 2019. We do not believe the standard will materially affect our consolidated net earnings, nor do we believe the new standard will have a notable impact on our liquidity. In January 2017, the FASB issued ASU No. 2017‑04, Intangibles-Goodwill and Other, which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if “the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.” The guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. Recently issued accounting pronouncements adopted: In May 2014, the FASB issued ASC 606. This guidance superseded Topic 605, Revenue Recognition, in addition to other industry-specific guidance. The new standard requires a company to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, as a revision to ASU 2014-09, which revised the effective date to fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption was permitted but not prior to periods beginning after December 15, 2016 (i.e., the original adoption date per ASU 2014-09). In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations, which clarifies certain aspects of the principal-versus-agent guidance, including how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether it recognizes revenue over time or at a point in time. The amendments also clarify when a promised good or service is separately identifiable (i.e., distinct within the context of the contract) and allow entities to disregard items that are immaterial in the context of a contract. On November 1, 2018, the Company adopted ASC 606 applying the modified retrospective method. The Company has performed a review of ASC 606 as compared to its previous accounting policies for our product revenue and did not identify any material impact to revenue recognized. Therefore, there was no adjustment to retained earnings for a cumulative effect. The necessary changes to business processes and controls to effectively review and account for any new contracts under this standard have been implemented. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Oct. 31, 2019 | |
Business Acquisition | |
Business Acquisition | Note 2 – Business Acquisition On March 15, 2019, through C Enterprises, Inc. (“C Enterprises”), its newly formed subsidiary, the Company purchased the business and assets of C Enterprises L.P., a California based designer and manufacturer of quality connectivity solutions to telecommunications and data communications distributors. In consideration for the C Enterprises business and assets, the Company paid $600,000 in cash and assumed certain liabilities. The acquisition was determined not to be material and was accounted for in accordance with the acquisition method of accounting, and the acquired assets and assumed liabilities were recorded by the Company at their estimated fair values in accordance with ASC 805, Business Combinations. There were no intangible assets identified as part of the acquisition. The results of C Enterprises’ operations subsequent to March 15, 2019 have been included in the results of the Custom Cabling Manufacturing and Assembly segment (“Custom Cabling segment”) as well as in the Company’s consolidated statements of operations. Costs related to the acquisition of C Enterprises were approximately $100,000 and have been expensed as incurred and categorized in selling and general expenses. For the year ended October 31, 2019, C Enterprises, Inc. contributed $7.2 million of revenue. The following unaudited pro forma financial information presents the combined operating results of the Company and C Enterprises 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. Pro forma financial information is presented in the following table: October 31, October 31, 2019 2018 Revenue $ 59,250 $ 58,658 Net income 3,370 5,419 Earnings per share Basic $ 0.36 $ 0.60 Diluted $ 0.34 $ 0.56 |
Discontinued operations
Discontinued operations | 12 Months Ended |
Oct. 31, 2019 | |
Business Acquisition | |
Discontinued operations | Note 3 - Discontinued operations On October 31, 2018, the Company sold all of the assets and liabilities of its subsidiary, Comnet Telecom Supply (“Comnet Telecom”). The Company and RAP Acquisition Inc. (“RAP Acquisition”), a New Jersey corporation, entered into a stock purchase agreement under which RAP Acquisition agreed to purchase 100% of the issued and outstanding shares of Comnet Telecom for a purchase price of $4,200,000 in cash. Comnet Telecom is a New Jersey-based manufacturer and supplier of telecommunications and data products, including fiber optic cables, cabling technologies, custom patch cord assemblies, data center consoles and other data center equipment. This division was one of the three subsidiaries of the “Custom Cabling Manufacturing and Assembly” segment. Comnet Telecom was acquired by the Company in January 2015 from Robert Portera, and has been a wholly-owned subsidiary of the Company since that time. Mr. Portera served as the President of Comnet Telecom during the period that Comnet Telecom was owned by the Company, and is the founder and principal of RAP Acquisition. For the year ended October 31, 2018, the Company recognized pretax loss of $221,000 from the discontinued operations of the Comnet Telecom division, and an income tax benefit of $41,000. The major line items constituting the loss of discontinued operations of Comnet are as follows (in thousands): 2018 Major line items constituting pretax income from discontinued operations: Net sales $ 8,343 Cost of sales (6,199) Gross profit 2,144 Selling, general and administrative expense (1,569) Pretax income from discontinued operations 575 Pretax loss on sale of Comnet (796) Total pretax income (loss) from discontinued operations (221) Provision (benefit) for income taxes (41) Income (loss) from discontinued operations $ (180) |
Concentrations of credit risk
Concentrations of credit risk | 12 Months Ended |
Oct. 31, 2019 | |
Concentrations of credit risk | |
Concentrations of credit risk | Note 4 - Concentrations of credit risk Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At October 31, 2019, the Company had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $11.6 million. Two customers, a distributor and a wireless carrier, accounted for approximately 19% and 23% of the Company’s net sales for the fiscal year ended October 31, 2019. This distributor accounted for approximately 62% of the Company’s net sales for the year ended October 31, 2018. The wireless carrier's accounts receivable balance accounted for approximately 56% of the total net accounts receivable balance at October 31, 2019. The distributor’s accounts receivable balance accounted for approximately 48% of the total net accounts receivable balance at October 31, 2018. Although these customers have been on-going major customers of the Company continuously in the past, the written agreement with these customers do not have any minimum purchase obligations and they could stop buying the Company’s 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 the Company’s future revenues and profits. |
Inventories and major vendors
Inventories and major vendors | 12 Months Ended |
Oct. 31, 2019 | |
Inventories and major vendors | |
Inventories and major vendors | Note 5 - 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): 2019 2018 Raw materials and supplies $ 3,576 $ 2,711 Work in process 791 603 Finished goods 3,878 3,799 Totals $ 8,245 $ 7,113 Two vendors accounted for 13% and 19% of inventory purchases during the fiscal year ended October 31, 2019, compared to one vendor who accounted for 40% of inventory purchases for the fiscal year ended October 31, 2018. The Company has arrangements with their vendors to purchase product based on purchase orders periodically issued by the Company. |
Other current assets
Other current assets | 12 Months Ended |
Oct. 31, 2019 | |
Other current assets | |
Other current assets | Note 6 - Other current assets Other current assets consist of the following (in thousands): 2019 2018 Prepaid taxes $ — $ 335 Prepaid expense 346 228 Notes receivable, current portion — 20 Other 339 245 Totals $ 685 $ 828 |
Accrued expenses and other long
Accrued expenses and other long-term liabilities | 12 Months Ended |
Oct. 31, 2019 | |
Accrued expenses and other long-term liabilities | |
Accrued expenses and other long-term liabilities | Note 7 - Accrued expenses and other long-term liabilities Accrued expenses consist of the following (in thousands): 2019 2018 Wages payable $ 1,591 $ 1,705 Accrued receipts 1,683 1,271 Other current liabilities 379 401 Totals $ 3,653 $ 3,377 Accrued receipts represent purchased inventory for which invoices have not been received. |
Segment information
Segment information | 12 Months Ended |
Oct. 31, 2019 | |
Segment information | |
Segment information | Note 8 - Segment information The Company aggregates operating divisions into operating segments which have similar economic characteristics primarily in the following areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer for their products and services; (4) the methods used to distribute their products or services; and (5) if applicable, the nature of the regulatory environment. Based upon this evaluation, as of October 31, 2019, the Company had two reportable segments – RF Connector and Cable Assembly (RF Connector) and Custom Cabling Manufacturing and Assembly (Custom Cabling). During fiscal 2019, the RF Connector segment was comprised of one division, while the Custom Cabling segment was comprised of three divisions. The four divisions that met the quantitative thresholds for segment reporting the were RF Connector and Cable Assembly division, Cables Unlimited, Rel-Tech, and C Enterprises. While each segment had similar products and services, with one major exception, there was little overlapping of these services to their customer base. In addition, sales or product and services for the RF Connector segment was primarily through the distribution channel while the Custom Cabling sales was through a combination of distribution and direct to the end customer. Management identifies the Company’s segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the RF Connector and Cable Assembly division constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, and C Enterprises divisions constitute the Custom Cabling segment. As reviewed by the Company’s chief operating decision maker, the CEO, the Company evaluates the performance of each segment based on income or loss before income taxes. The Company charges depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, goodwill and intangible assets are the only assets identified by segment. Except as discussed above, the accounting policies for segment reporting are the same for the Company as a whole. Substantially all of the Company’s operations are conducted in the United States; however, the Company derives a portion of its revenue from export sales. The Company attributes sales to geographic areas based on the location of the customers. The following table presents the sales of the Company by geographic area for the years ended October 31, 2019 and 2018 (in thousands): 2019 2018 United States $ 54,365 $ 49,534 Foreign Countries: Canada 592 547 Mexico 109 39 All Other 259 76 960 662 Totals $ 55,325 $ 50,196 Net sales, income from continuing operations before provision for income taxes and other related segment information for the years ended October 31, 2019 and 2018 are as follows (in thousands): RF Connector Custom Cabling and Manufacturing and Cable Assembly Assembly Corporate Total 2019 Net sales $ 13,704 $ 41,621 $ — $ 55,325 Income from continuing operations before provision for income taxes 868 3,591 98 4,557 Depreciation and amortization 170 393 — 563 Total assets 7,081 17,282 13,337 37,700 2018 Net sales $ 11,846 $ 38,350 $ — $ 50,196 Income from continuing operations before provision for income taxes 107 7,340 47 7,494 Depreciation and amortization 172 341 — 513 Total assets 6,529 8,763 17,210 32,502 |
Income tax provision
Income tax provision | 12 Months Ended |
Oct. 31, 2019 | |
Income tax provision | |
Income tax provision | Note 9 - Income tax provision Reconciliation of provision (benefit) for income taxes for the years ended October 31, 2019 and 2018 are as follows (in thousands): 2019 2018 Continuing operations $ 1,036 $ 1,468 Discontinued operations — (41) Net income $ 1,036 $ 1,427 The provision (benefit) for income taxes for the fiscal years ended October 31, 2019 and 2018 consists of the following (in thousands): 2019 2018 Current: Federal $ 859 $ 1,344 State 220 236 1,079 1,580 Deferred: Federal (25) (112) State (18) — (43) (112) $ 1,036 $ 1,468 Income tax at the federal statutory rate is reconciled to the Company’s actual net provision for income taxes as follows (in thousands, except percentages): 2019 2018 % of Pretax % of Pretax Amount Income Amount Income Income taxes at federal statutory rate $ 957 21.0 % $ 1,737 38.1 % State tax provision, net of federal tax benefit 160 3.5 % 170 3.7 % Nondeductible differences: Rel-Tech earn-out — 0.0 % (6) (0.1) % Qualified domestic production activities deduction — 0.0 % (141) (3.1) % Stock options 21 0.5 % (204) (4.5) % Meals and entertainment 8 0.2 % 8 0.2 % R&D credits (119) (2.6) % (111) (2.4) % ASC 740-10 Liability 21 0.5 % 54 1.2 % Tax Cut and Jobs Act — 0.0 % (34) (0.7) % Other (12) (0.3) % (5) (0.1) % $ 1,036 22.8 % $ 1,468 32.3 % The Company’s total deferred tax assets and deferred tax liabilities at October 31, 2019 and 2018 are as follows (in thousands): 2019 2018 Deferred Tax Assets: Reserves $ 172 $ 276 Accrued vacation 97 116 Stock-based compensation awards 87 113 Uniform capitalization 64 78 Other 55 93 Total deferred tax assets 475 676 Deferred Tax Liabilities: Amortization / intangible assets (307) (544) Depreciation / equipment and furnishings (125) (132) Total deferred tax liabilities (432) (676) Total net deferred tax assets (liabilities) $ 43 $ — On December 22, 2017, the U.S. President signed the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other things, lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, we previously recorded a provisional estimate of the effect of the Tax Act in our financial statements. In the first quarter of 2019, we completed our analysis to determine the effect of the Tax Act and recorded no additional adjustments as of December 22, 2018. 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. The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined it is more likely than not that the assets will be realized in future tax years. The provision for income taxes from continuing operations was $1.0 million or 22.7% and $1.5 million or 19.6% of income before income taxes for fiscal 2019 and 2018, respectively. The increase in the effective income tax rate from year to year is primarily driven by the elimination of the benefit from the domestic production activities deduction, the one-time benefit recorded in the prior year related to the reduction in the Company’s deferred tax liability due to the change in the federal tax rate, both as a result of the Tax Act, and the impact of share-based compensation excess tax benefits recognized which vary from year to year depending on the Company’s share price in each period. The Company recorded income from discontinued operations, net of tax, for fiscal 2018 as disclosed in Note 3. The Company’s adjustments to its uncertain tax positions in fiscal years ended October 31, 2019 and 2018 are as follows: 2019 2018 Balance, at beginning of year $ 59 $ — Increase for tax positions related to the current year 23 24 Increase for tax positions related to prior years 3 29 Increase for interest and penalties 2 6 Statute of Limitations Expirations (7) — Balance, at end of year $ 80 $ 59 The Company had gross unrecognized tax benefits of $72,000 and $53,000 attributable to its U.S. federal and California research tax credits as of October 31, 2019 and 2018, respectively. During fiscal 2019, the increase in the Company’s gross unrecognized tax benefit was primarily related to claiming additional federal and California research tax credits. The uncertain tax benefit is recorded as income taxes payable in the Company’s consolidated balance sheet. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company recognized expense of approximately $2,000 and $6,000 during the years ended October 31, 2019 and 2018, respectively. The Company believes 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 the Company does not anticipate that its accrual for uncertain tax positions will change by a material amount over the next twelve-month period. The Company is subject to taxation in the United States and state jurisdictions. The Company’s tax years for October 31, 2015 and forward are subject to examination by the United States and October 31, 2014 and forward with state tax authorities. |
Stock options
Stock options | 12 Months Ended |
Oct. 31, 2019 | |
Stock options | |
Stock options | Note 10 - Stock options Incentive and non-qualified stock option plans On March 9, 2010, the Company’s Board of Directors adopted the RF Industries, Ltd. 2010 Stock Incentive Plan (the “2010 Plan”). In June 2010, the Company’s stockholders approved the 2010 Plan by vote as required by NASDAQ. An aggregate of 1,000,000 shares of common stock was set aside and reserved for issuance under the 2010 Plan. The Company’s stockholders approved the issuance of an additional 500,000 shares of common stock at its annual meeting held on September 5, 2014, another 500,000 shares of common stock at its annual meeting held September 4, 2015 and another 1,000,000 shares of common stock at its annual meeting held September 8, 2017. As of October 31, 2019, 1,405,741 shares of common stock were remaining for future grants of stock options under the 2010 Plan. Additional disclosures related to stock option plans On December 13, 2017, the Company granted 80,000 incentive stock options to an employee. These options vested 8,000 shares on the date of grant, and the balance vests as to 8,000 shares per year thereafter on each of the next nine anniversaries of December 13, 2017, and expire ten years from date of grant. On December 3, 2018, the Company granted each of two employees 25,000 incentive stock options. These options vested 5,000 each on the date of grant, and the balance vests as to 5,000 shares each per year thereafter on each of the next four anniversaries of December 3, 2018, and expire ten years from the date of grant. On December 3, 2018, the Company also granted one employee 10,000 incentive stock options. These options vested 2,000 shares on the date of grant, and the balance vests as to 2,000 shares per year thereafter on each of the next four anniversaries of December 3, 2018, and expire ten years from the date of grant. On March 8, 2019, the Company granted one employee 25,000 incentive stock options. These options vested 5,000 on the date of grant, and the balance vests as to 5,000 shares per year thereafter on each of the next four anniversaries of March 8, 2019, and expire ten years from the date of grant. No other options were granted to Company employees during fiscal 2019. The fair value of each option granted in 2019 and 2018 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: 2019 2018 Weighted average volatility 55.42 % 46.83 % Expected dividends 0.98 % 3.28 % Expected term (in years) 5.9 4.5 Risk-free interest rate 2.86 % 1.87 % Weighted average fair value of options granted during the year $ 3.98 $ 0.82 Weighted average fair value of options vested during the year $ 6.03 $ 2.64 Expected volatilities are based on historical volatility of the Company’s stock price and other factors. The Company used the historical method to calculate the expected life of the 2019 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 the Company’s outstanding stock options at October 31, 2019 and 2018 and changes in outstanding stock options in 2019 and 2018 follows: 2019 2018 Shares or Weighted Shares or Weighted Price Per Average Price Per Average Share Exercise Price Share Exercise Price Outstanding at beginning of year 942,366 $ 3.09 1,159,771 $ 3.19 Options granted 124,097 $ 8.16 269,635 $ 2.44 Options exercised (171,066) $ 3.86 (418,955) $ 2.66 Options canceled or expired (5,250) $ 6.82 (68,085) $ 4.98 Options outstanding at end of year 890,147 $ 3.62 942,366 $ 3.09 Options exercisable at end of year 599,981 $ 3.25 675,033 $ 3.01 Options vested and expected to vest at end of year 889,088 $ 3.63 940,144 $ 3.09 Option price range at end of year $1.90 - $8.69 — $1.90 - $5.88 Aggregate intrinsic value of options exercised during year $ 317,827 — $ 1,207,148 Weighted average remaining contractual life of options outstanding as of October 31, 2019: 4.16 years Weighted average remaining contractual life of options exercisable as of October 31, 2019: 2.62 years Weighted average remaining contractual life of options vested and expected to vest as of October 31, 2019: 4.15 years Aggregate intrinsic value of options outstanding at October 31, 2019: $2,340,000 Aggregate intrinsic value of options exercisable at October 31, 2019: $1,735,000 Aggregate intrinsic value of options vested and expected to vest at October 31, 2019: $2,330,000 As of October 31, 2019, $439,000 of expense with respect to nonvested share-based arrangements has yet to be recognized, which is expected to be recognized over a weighted average period of 5.25 years. Non-employee directors receive $50,000 annually, which is paid one-half in cash and one-half through the grant of non-qualified stock options to purchase shares of the Company’s common stock. During the quarter ended January 31, 2019, the Company granted each of its five non-employee directors 7,203 non-qualified stock options. The options have an exercise price of $8.07 per share. The number of stock options granted to each director was determined by dividing $25,000 by the fair value of a stock option grant using the Black-Scholes model ($3.471 per share). These options vest ratably over fiscal year 2019 and expire five years from the date of grant. Effective November 1, 2018, in addition to the compensation received for serving on the Board of Directors, the Chairman of each committee of the Board will receive $15,000 per year in cash for services rendered as Chairman. On June 7, 2019, a new director joined the Board. The Company granted the new director 3,082 non-qualified stock options with an exercise price of $7.50 per share. The number of stock options granted to this director was determined by dividing $10,000 of compensation (prorated for the period as an active director) by the fair value of a stock option grant using the Black-Scholes model ($3.245 per share). These options vest ratably over fiscal year 2019 and expire five years from the date of grant. No other non-qualified stock options were granted during the fiscal year ended October 31, 2019. |
Retirement plan
Retirement plan | 12 Months Ended |
Oct. 31, 2019 | |
Retirement plan | |
Retirement plan | Note 11 - Retirement plan The Company has a 401(K) plan available to its employees. For the years ended October 31, 2019 and 2018, the Company contributed and recognized as an expense $181,000 and $159,000, respectively, which amount represented 3% of eligible employee earnings under its Safe Harbor Non-elective Employer Contribution Plan. |
Related party transactions
Related party transactions | 12 Months Ended |
Oct. 31, 2019 | |
Related party transactions | |
Related party transactions | Note 12 - Related party transactions On June 15, 2011, the Company purchased Cables Unlimited, Inc., a New York corporation, from Darren Clark, the sole shareholder of Cables Unlimited, Inc. In connection with the purchase of Cables Unlimited, the Company entered into a lease for the New York facilities from which Cables Unlimited conducts its operations. Cables Unlimited’s monthly rent expense under the lease is $13,000 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, 2019, the Company paid the landlord a total of $156,000 under the lease. The owner and landlord of the facility is a company controlled by Darren Clark, the former owner of Cables Unlimited and the current President of this subsidiary of the Company. On October 31, 2018, the Company sold its Comnet Telecom Supply, Inc.(“Comnet”) subsidiary to RAP Acquisition, Inc. for $4.2 million in cash. RAP Acquisition, Inc. is an affiliate of Robert A. Portera, the founder of Comnet and its President. |
Cash dividend and declared divi
Cash dividend and declared dividends | 12 Months Ended |
Oct. 31, 2019 | |
Cash dividend and declared dividends | |
Cash dividend and declared dividends | Note 13 - Cash dividend and declared dividends The Company paid quarterly dividends of $0.02 per share during fiscal year 2019 for a total of $748,000. The Company paid quarterly dividends of $0.02 per share during fiscal year 2018 for a total of $730,000. |
Commitments
Commitments | 12 Months Ended |
Oct. 31, 2019 | |
Commitments | |
Commitments | Note 14 - Commitments For the year ended October 31, 2019, the Company leased its facilities in San Diego, California, Yaphank, New York, Milford, Connecticut and Vista, California under non-cancelable operating leases. Deferred rent, included in accrued expenses and other long-term liabilities, was $102,000 as of October 31, 2019 and $93,000 as of October 31, 2018. The San Diego and Vista leases also require the payment of the Company’s pro rata share of the real estate taxes and insurance, maintenance and other operating expenses related to the facilities. Rent expense under all operating leases totaled approximately $853,000 and $546,000 in 2019 and 2018, respectively. Minimum lease payments under these non-cancelable operating leases in each of the years subsequent to October 31, 2019 are as follows (in thousands): Year ending October 31, Amount 2020 $ 829 2021 744 2022 465 2023 155 2024 — Total $ 2,193 |
Subsequent events
Subsequent events | 12 Months Ended |
Oct. 31, 2019 | |
Subsequent events | |
Subsequent event | Note 15 - Subsequent events On November 4, 2019, the Company purchased 100% of the voting equity interest of Schroff Technologies International, Inc. ("Schrofftech"), a Rhode Island-based manufacturer and marketer of intelligent thermal control systems used by telecommunications companies across the U.S. and Canada, and shrouds for small cell integration and installation. The Company paid $4,000,000 in cash at the closing, of which $900,000 was deposited into two separate escrow accounts for a period of one year and two years, respectively, as security for any indemnification claims the Company may have against the seller. In addition to the cash paid at the closing, the Company agreed to pay up to an additional $2,400,000 as an earn-out payment if Schrofftech achieves certain adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets during the two-year period following the closing. The acquisition is in line with the Company's business strategy to diversify products and solution offerings and customer base. On November 27, 2019, the Company entered into an agreement for a line of credit ("LOC") in the amount of $5.0 million. Amounts outstanding under the LOC shall bear interest at a rate of 2.0% plus LIBOR Daily Floating Rate ("base interest rate"), with interest payable on the last day of each month. Borrowings under the LOC are secured by a security interest in certain assets of the Company. The LOC contains certain loan covenants as described in the agreement. Failure to maintain the loan covenants shall constitute an event of default resulting in all outstanding amounts of principal and interest becoming immediately due and payable. On December 13, 2019, the Board of Directors of the Company declared a quarterly dividend of $0.02 per share payable on January 15, 2020 to stockholders of record on December 31, 2019. |
Business activities and summa_2
Business activities and summary of significant accounting policies (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
Business activities and summary of significant accounting policies | |
Business activities | Business activities RF Industries, Ltd., together with its three wholly-owned subsidiaries (collectively, hereinafter the “Company”), 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, 2019, the Company classified its operations into the following four 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; and (iv) C Enterprises, Inc., the subsidiary that designs and manufactures quality connectivity solutions to telecommunications and data communications distributors. The Cables Unlimited and C Enterprises divisions are Corning Cables Systems CAH Connections SM Gold Program members that are authorized to manufacture fiber optic cable assemblies that are backed by Corning Cables Systems’ extended warranty. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from those estimates. |
Principles of consolidation | 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”), and C Enterprises, Inc. (“C Enterprises”), wholly-owned subsidiaries of RF Industries, Ltd. All intercompany balances and transactions have been eliminated in consolidation. |
Cash equivalents | 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 | Revenue recognition On November 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”) applying the modified retrospective method. The core principle of ASC 606 is that revenue should be recorded in an amount that reflects the consideration to which we expect to be entitled in exchange for goods or services promised to customers. Under ASC 606, the Company follows a five-step model to: (1) identify the contract with our customer; (2) identify our performance obligations in our contract; (3) determine the transaction price for our contract; (4) allocate the transaction price to our performance obligations; and (5) recognize revenue when (or as) each performance obligation is satisfied. In accordance with this accounting principle, the Company recognizes revenue using the output method at a point in time when finished goods have been transferred to the customer and there are no other obligations to customers after the title of the goods have transferred. Title of goods are transferred based on shipping terms for each customer – for shipments with terms of FOB Shipping Point, title is transferred upon shipment; for shipments with terms of FOB Destination, title is transferred upon delivery. |
Inventories | 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 | Property and equipment Equipment, tooling and furniture are recorded at cost and depreciated over their estimated useful lives (generally 3 to 5 years) using the straight-line method. Expenditures for repairs and maintenance are charged to operations in the period incurred. |
Goodwill | 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 the Company performs 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. If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount or if we elect not to perform a qualitative assessment, we perform a quantitative assessment, or two-step impairment test, to determine whether a goodwill impairment exists at the reporting unit. The first step in our quantitative assessment identifies potential impairments by comparing the estimated fair value of the reporting unit to its carrying value, including goodwill (“Step 1”). If the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment (“Step 2”). No instances of goodwill impairment were identified as of October 31, 2019 and 2018. On June 15, 2011, the Company completed its acquisition of Cables Unlimited. Goodwill related to this acquisition is included within the Cables Unlimited reporting unit. As of May 19, 2015, the Company completed its 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, the Company completed its acquisition of Rel-Tech. Goodwill related to this acquisition is included within the Rel-Tech reporting unit. On March 15, 2019, the Company completed its acquisition of C Enterprises; however, no goodwill resulted from this transaction. |
Long-lived assets | Long-lived assets The Company assesses 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. The Company measures 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. The Company has made no material adjustments to our long-lived assets in any of the years presented. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. In addition, the Company tests our trademarks and indefinite-lived asset for impairment at least annually or more frequently if events or changes in circumstances indicate that these assets may be impaired. No instances of impairment were identified as of October 31, 2019 or 2018. |
Fair value measurement | Fair value measurement The Company measures at fair value certain financial assets and liabilities. U.S. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1— Quoted prices for identical instruments in active markets; Level 2— Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3— Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. As of October 31, 2019 and 2018, the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximated their carrying value due to their short-term nature. |
Intangible assets | Intangible assets Intangible assets consist of the following as of October 31, 2019 and 2018 (in thousands): 2019 2018 Amortizable intangible assets: Customer relationships (estimated lives 7 - 15 years) $ 2,879 $ 2,879 Accumulated amortization (1,884) (1,619) 995 1,260 Patents (estimated life 14 years) 142 142 Accumulated amortization (45) (35) 97 107 Totals $ 1,092 $ 1,367 Non-amortizable intangible assets: Trademarks $ 657 $ 657 Amortization expense was $275,000 for the years ended October 31, 2019 and 2018. The weighted-average amortization period for the amortizable intangible assets is 10.98 years. There was no impairment to trademarks for the years ended October 31, 2019 and 2018. Estimated amortization expense related to finite lived intangible assets is as follows (in thousands): Year ending October 31, Amount 2020 $ 275 2021 136 2022 89 2023 79 2024 79 Thereafter 434 Total $ 1,092 |
Advertising | Advertising The Company expenses the cost of advertising and promotions as incurred. Advertising costs charged to operations were approximately $231,000 and $236,000 in 2019 and 2018, respectively. |
Research and development | Research and development Research and development costs are expensed as incurred. The Company’s 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, 2019 and 2018, the Company recognized $1,468,000 and $1,480,000 in engineering expenses, respectively. |
Income taxes | Income taxes The Company accounts 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. The Company had adopted the provisions of ASC 740‑10, which clarifies the accounting for uncertain tax positions. ASC 740‑10 requires that the Company 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. The Company’s recognizes 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 the Company’s consolidated balance sheets. See Note 9 for more information on the Company’s accounting for uncertain tax positions. |
Stock options | Stock options For stock option grants to employees, the Company recognizes 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. The Company issues previously unissued common shares upon the exercise of stock options. For the fiscal years ended October 31, 2019 and 2018, charges related to stock-based compensation amounted to approximately $317,000 and $211,000, respectively. For the fiscal years ended October 31, 2019 and 2018, all stock-based compensation is classified in selling and general and engineering expense. |
Earnings per share | Earnings per share Basic earnings per share is calculated by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally those issuable upon the exercise of stock options, were issued and the treasury stock method had been applied during the period. The greatest number of shares potentially issuable by the Company upon the exercise of stock options in any period for the years ended October 31, 2019 and 2018, that were not included in the computation because they were anti-dilutive, totaled 124,097 and 133,220, respectively. The following table summarizes the computation of basic and diluted earnings per share: 2019 2018 Numerators: Consolidated net income (A) $ 3,521,000 $ 5,846,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 9,358,836 9,105,406 Add effects of potentially dilutive securities - assumed exercise of stock options 495,768 487,660 Weighted average shares outstanding for diluted earnings per share (C) 9,854,604 9,593,066 Basic earnings per share (A)/(B) $ 0.38 $ 0.64 Diluted earnings per share (A)/(C) $ 0.36 $ 0.61 |
Recent accounting standards | Recent accounting standards Recently issued accounting pronouncements not yet adopted: In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. This ASU requires lessees to recognize lease assets and lease liabilities for those leases classified as operating leases under the current GAAP. Recognition of these assets and liabilities will have a material impact to our consolidated balance sheets upon adoption. Under ASU 2016-02, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients. We adopted the standard as of November 1, 2019, the beginning of our fiscal 2020. We elected the package of practical expedients permitted under the transition guidance with the new standard, which among other things, allows us to carryforward the historical lease classification. We elected the policy which allows us to combine the nonlease components with its related lease components rather than separating, and the policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. We estimate that the adoption of the standard will result in recognition of additional right-of-use assets and lease liabilities of approximately $2.3 million and $2.4 million, respectively, as of November 1, 2019. We do not believe the standard will materially affect our consolidated net earnings, nor do we believe the new standard will have a notable impact on our liquidity. In January 2017, the FASB issued ASU No. 2017‑04, Intangibles-Goodwill and Other, which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if “the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.” The guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. Recently issued accounting pronouncements adopted: In May 2014, the FASB issued ASC 606. This guidance superseded Topic 605, Revenue Recognition, in addition to other industry-specific guidance. The new standard requires a company to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, as a revision to ASU 2014-09, which revised the effective date to fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption was permitted but not prior to periods beginning after December 15, 2016 (i.e., the original adoption date per ASU 2014-09). In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations, which clarifies certain aspects of the principal-versus-agent guidance, including how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether it recognizes revenue over time or at a point in time. The amendments also clarify when a promised good or service is separately identifiable (i.e., distinct within the context of the contract) and allow entities to disregard items that are immaterial in the context of a contract. On November 1, 2018, the Company adopted ASC 606 applying the modified retrospective method. The Company has performed a review of ASC 606 as compared to its previous accounting policies for our product revenue and did not identify any material impact to revenue recognized. Therefore, there was no adjustment to retained earnings for a cumulative effect. The necessary changes to business processes and controls to effectively review and account for any new contracts under this standard have been implemented. |
Business activities and summa_3
Business activities and summary of significant accounting policies (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Business activities and summary of significant accounting policies | |
Components of Intangible Assets | Intangible assets consist of the following as of October 31, 2019 and 2018 (in thousands): 2019 2018 Amortizable intangible assets: Customer relationships (estimated lives 7 - 15 years) $ 2,879 $ 2,879 Accumulated amortization (1,884) (1,619) 995 1,260 Patents (estimated life 14 years) 142 142 Accumulated amortization (45) (35) 97 107 Totals $ 1,092 $ 1,367 Non-amortizable intangible assets: Trademarks $ 657 $ 657 |
Estimated Amortization Expense Related To Finite Lived Intangible Assets | Estimated amortization expense related to finite lived intangible assets is as follows (in thousands): Year ending October 31, Amount 2020 $ 275 2021 136 2022 89 2023 79 2024 79 Thereafter 434 Total $ 1,092 |
Calculation of Basic And Diluted Earnings Per Share | The following table summarizes the computation of basic and diluted earnings per share: 2019 2018 Numerators: Consolidated net income (A) $ 3,521,000 $ 5,846,000 Denominators: Weighted average shares outstanding for basic earnings per share (B) 9,358,836 9,105,406 Add effects of potentially dilutive securities - assumed exercise of stock options 495,768 487,660 Weighted average shares outstanding for diluted earnings per share (C) 9,854,604 9,593,066 Basic earnings per share (A)/(B) $ 0.38 $ 0.64 Diluted earnings per share (A)/(C) $ 0.36 $ 0.61 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Business Acquisition | |
Schedule of pro forma financial information | October 31, October 31, 2019 2018 Revenue $ 59,250 $ 58,658 Net income 3,370 5,419 Earnings per share Basic $ 0.36 $ 0.60 Diluted $ 0.34 $ 0.56 |
Discontinued operations (Tables
Discontinued operations (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Business Acquisition | |
Summary Constituting the income (loss) of Discontinued Operations | The major line items constituting the loss of discontinued operations of Comnet are as follows (in thousands): 2018 Major line items constituting pretax income from discontinued operations: Net sales $ 8,343 Cost of sales (6,199) Gross profit 2,144 Selling, general and administrative expense (1,569) Pretax income from discontinued operations 575 Pretax loss on sale of Comnet (796) Total pretax income (loss) from discontinued operations (221) Provision (benefit) for income taxes (41) Income (loss) from discontinued operations $ (180) |
Inventories and major vendors (
Inventories and major vendors (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Inventories and major vendors | |
Components of Inventories | Inventories consist of the following (in thousands): 2019 2018 Raw materials and supplies $ 3,576 $ 2,711 Work in process 791 603 Finished goods 3,878 3,799 Totals $ 8,245 $ 7,113 |
Other current assets (Tables)
Other current assets (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Other current assets | |
Schedule of other current assets | Other current assets consist of the following (in thousands): 2019 2018 Prepaid taxes $ — $ 335 Prepaid expense 346 228 Notes receivable, current portion — 20 Other 339 245 Totals $ 685 $ 828 |
Accrued expenses and other lo_2
Accrued expenses and other long-term liabilities (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Accrued expenses and other long-term liabilities | |
Accrued expenses | Accrued expenses consist of the following (in thousands): 2019 2018 Wages payable $ 1,591 $ 1,705 Accrued receipts 1,683 1,271 Other current liabilities 379 401 Totals $ 3,653 $ 3,377 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Segment information | |
Sales by Geographic Area | The following table presents the sales of the Company by geographic area for the years ended October 31, 2019 and 2018 (in thousands): 2019 2018 United States $ 54,365 $ 49,534 Foreign Countries: Canada 592 547 Mexico 109 39 All Other 259 76 960 662 Totals $ 55,325 $ 50,196 |
Net Sales, Income Before Provision for Income Taxes and Other Related Segment Information | Net sales, income from continuing operations before provision for income taxes and other related segment information for the years ended October 31, 2019 and 2018 are as follows (in thousands): RF Connector Custom Cabling and Manufacturing and Cable Assembly Assembly Corporate Total 2019 Net sales $ 13,704 $ 41,621 $ — $ 55,325 Income from continuing operations before provision for income taxes 868 3,591 98 4,557 Depreciation and amortization 170 393 — 563 Total assets 7,081 17,282 13,337 37,700 2018 Net sales $ 11,846 $ 38,350 $ — $ 50,196 Income from continuing operations before provision for income taxes 107 7,340 47 7,494 Depreciation and amortization 172 341 — 513 Total assets 6,529 8,763 17,210 32,502 |
Income tax provision (Tables)
Income tax provision (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Income tax provision | |
Summary of Reconciliation Provision (Benefit) for Income taxes | Reconciliation of provision (benefit) for income taxes for the years ended October 31, 2019 and 2018 are as follows (in thousands): 2019 2018 Continuing operations $ 1,036 $ 1,468 Discontinued operations — (41) Net income $ 1,036 $ 1,427 |
Schedule of components of income tax expense (benefit) | The provision (benefit) for income taxes for the fiscal years ended October 31, 2019 and 2018 consists of the following (in thousands): 2019 2018 Current: Federal $ 859 $ 1,344 State 220 236 1,079 1,580 Deferred: Federal (25) (112) State (18) — (43) (112) $ 1,036 $ 1,468 |
Schedule of Effective Income Tax Rate and Amount Reconciliation | Income tax at the federal statutory rate is reconciled to the Company’s actual net provision for income taxes as follows (in thousands, except percentages): 2019 2018 % of Pretax % of Pretax Amount Income Amount Income Income taxes at federal statutory rate $ 957 21.0 % $ 1,737 38.1 % State tax provision, net of federal tax benefit 160 3.5 % 170 3.7 % Nondeductible differences: Rel-Tech earn-out — 0.0 % (6) (0.1) % Qualified domestic production activities deduction — 0.0 % (141) (3.1) % Stock options 21 0.5 % (204) (4.5) % Meals and entertainment 8 0.2 % 8 0.2 % R&D credits (119) (2.6) % (111) (2.4) % ASC 740-10 Liability 21 0.5 % 54 1.2 % Tax Cut and Jobs Act — 0.0 % (34) (0.7) % Other (12) (0.3) % (5) (0.1) % $ 1,036 22.8 % $ 1,468 32.3 % |
Schedule of deferred tax assets and liabilities | The Company’s total deferred tax assets and deferred tax liabilities at October 31, 2019 and 2018 are as follows (in thousands): 2019 2018 Deferred Tax Assets: Reserves $ 172 $ 276 Accrued vacation 97 116 Stock-based compensation awards 87 113 Uniform capitalization 64 78 Other 55 93 Total deferred tax assets 475 676 Deferred Tax Liabilities: Amortization / intangible assets (307) (544) Depreciation / equipment and furnishings (125) (132) Total deferred tax liabilities (432) (676) Total net deferred tax assets (liabilities) $ 43 $ — |
Summary of Income Tax Contingencies [Table Text Block] | The Company’s adjustments to its uncertain tax positions in fiscal years ended October 31, 2019 and 2018 are as follows: 2019 2018 Balance, at beginning of year $ 59 $ — Increase for tax positions related to the current year 23 24 Increase for tax positions related to prior years 3 29 Increase for interest and penalties 2 6 Statute of Limitations Expirations (7) — Balance, at end of year $ 80 $ 59 |
Stock options (Tables)
Stock options (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Stock options | |
Computation of Weighted Average Fair Value of Employee Stock Options using Black-Scholes Option Pricing Model Assumptions | The fair value of each option granted in 2019 and 2018 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: 2019 2018 Weighted average volatility 55.42 % 46.83 % Expected dividends 0.98 % 3.28 % Expected term (in years) 5.9 4.5 Risk-free interest rate 2.86 % 1.87 % Weighted average fair value of options granted during the year $ 3.98 $ 0.82 Weighted average fair value of options vested during the year $ 6.03 $ 2.64 |
Summary of Status of Options Granted under Stock Option Plans and Changes in Options Outstanding | Additional information regarding all of the Company’s outstanding stock options at October 31, 2019 and 2018 and changes in outstanding stock options in 2019 and 2018 follows: 2019 2018 Shares or Weighted Shares or Weighted Price Per Average Price Per Average Share Exercise Price Share Exercise Price Outstanding at beginning of year 942,366 $ 3.09 1,159,771 $ 3.19 Options granted 124,097 $ 8.16 269,635 $ 2.44 Options exercised (171,066) $ 3.86 (418,955) $ 2.66 Options canceled or expired (5,250) $ 6.82 (68,085) $ 4.98 Options outstanding at end of year 890,147 $ 3.62 942,366 $ 3.09 Options exercisable at end of year 599,981 $ 3.25 675,033 $ 3.01 Options vested and expected to vest at end of year 889,088 $ 3.63 940,144 $ 3.09 Option price range at end of year $1.90 - $8.69 — $1.90 - $5.88 Aggregate intrinsic value of options exercised during year $ 317,827 — $ 1,207,148 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Commitments | |
Minimum Lease Payments, Operating Leases | Minimum lease payments under these non-cancelable operating leases in each of the years subsequent to October 31, 2019 are as follows (in thousands): Year ending October 31, Amount 2020 $ 829 2021 744 2022 465 2023 155 2024 — Total $ 2,193 |
Business activities and summa_4
Business activities and summary of significant accounting policies - Intangible assets (Detail) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Intangible Assets [Line Items] | ||
Amortizable intangible assets, net | $ 1,092 | $ 1,367 |
Non-amortizable intangible assets, Trademarks | 657 | 657 |
Customer relationships (estimated lives 7 - 15 years) | ||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 2,879 | 2,879 |
Amortizable intangible assets, Accumulated amortization | (1,884) | (1,619) |
Amortizable intangible assets, net | 995 | 1,260 |
Patents (estimated life 14 years) | ||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 142 | 142 |
Amortizable intangible assets, Accumulated amortization | (45) | (35) |
Amortizable intangible assets, net | $ 97 | $ 107 |
Business activities and summa_5
Business activities and summary of significant accounting policies - Intangible assets (Parenthetical) (Detail) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Customer relationships (estimated lives 7 - 15 years) | Maximum [Member] | ||
Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | 15 years |
Customer relationships (estimated lives 7 - 15 years) | Minimum [Member] | ||
Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 7 years | 7 years |
Patents (estimated life 14 years) | ||
Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 14 years | 14 years |
Business activities and summa_6
Business activities and summary of significant accounting policies - Estimated amortization expense related to finite lived intangible assets (Detail) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Business activities and summary of significant accounting policies | ||
2020 | $ 275 | |
2021 | 136 | |
2022 | 89 | |
2023 | 79 | |
2024 | 79 | |
Thereafter | 434 | |
Total | $ 1,092 | $ 1,367 |
Business activities and summa_7
Business activities and summary of significant accounting policies - Computation of Basic and Diluted Weighted Average Shares Outstanding (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Numerators: | ||
Consolidated net income (A) | $ 3,521 | $ 5,846 |
Denominators: | ||
Weighted average shares outstanding for basic earnings per share (B) | 9,358,836 | 9,105,406 |
Add effects of potentially dilutive securities - assumed exercise of stock options | 495,768 | 487,660 |
Weighted average shares outstanding for diluted earnings per share (C) | 9,854,604 | 9,593,066 |
Basic earnings per share (A)/(B) | $ 0.38 | $ 0.64 |
Diluted earnings per share (A)/(C) | $ 0.36 | $ 0.61 |
Business activities and summa_8
Business activities and summary of significant accounting policies - Estimated Impact on adoption of ASU 2016-02: Leases (Detail) - Accounting Standards Update No. 2016-02: Leases $ in Millions | Nov. 01, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Forecast | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease, Practical Expedients, Package | true |
Lease, Practical Expedient, Lessor Single Lease Component | true |
Lessor, Combined Component, Topic | Topic 842 |
Forecast Adjustment | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Net lease asset | $ 2.3 |
Lease liabilities | $ 2.4 |
Business activities and summa_9
Business activities and summary of significant accounting policies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Mar. 15, 2019 | |
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Amortization of Intangible Assets | $ 275,000 | $ 275,000 | |
Advertising Expense | 231,000 | 236,000 | |
Research and Development Expense | 1,468,000 | 1,480,000 | |
Stock based compensation expense | $ 317,000 | $ 211,000 | |
Shares excluded from computation of diluted per share amount | 124,097 | 133,220 | |
Present Value of Future Insurance Profits, Weighted Average Amortization Period | 10 years 11 months 23 days | ||
Income Tax Expense (Benefit) | $ 1,036,000 | $ 1,468,000 | |
Goodwill from business Acquisition | $ 1,340,000 | $ 1,340,000 | |
C Enterprises Inc [Member] | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Goodwill from business Acquisition | $ 0 | ||
Maximum [Member] | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Minimum [Member] | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years |
Business Acquisition - Addition
Business Acquisition - Additional Information (Details) - USD ($) | Mar. 15, 2019 | Oct. 31, 2019 | Oct. 31, 2018 |
Revenues | $ 55,325,000 | $ 50,196,000 | |
C Enterprises Inc [Member] | |||
Payments to Acquire Businesses, Gross | $ 600,000 | ||
Revenues | $ 7,200,000 | ||
Selling And General Expenses [Member] | C Enterprises Inc [Member] | |||
Business Combination, Acquisition Related Costs | $ 100,000 |
Business Acquisition - Pro form
Business Acquisition - Pro forma financial information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Business Acquisition | ||
Revenue | $ 59,250 | $ 58,658 |
Net income | $ 3,370 | $ 5,419 |
Earnings per share | ||
Basic | $ 0.36 | $ 0.60 |
Diluted | $ 0.34 | $ 0.56 |
Discontinued operations - Conti
Discontinued operations - Continuing operations and reported as discontinued operations (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Major line items constituting pretax income from discontinued operations: | ||
Pretax income from discontinued operations | $ 221,000 | |
Provision for income taxes | $ 0 | 41,000 |
Comnet Telecom Division [Member] | ||
Major line items constituting pretax income from discontinued operations: | ||
Net sales | 8,343,000 | |
Cost of sales | (6,199,000) | |
Gross profit | 2,144,000 | |
Selling, general and administrative expenses | (1,569,000) | |
Pretax income from discontinued operations | 575,000 | |
Pretax loss on sale of Comnet | (796,000) | |
Pretax income from discontinued operations | (221,000) | |
Provision for income taxes | (41,000) | |
Income from discontinued operations | $ (180,000) |
Discontinued operations - Addit
Discontinued operations - Additional Information (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Business Acquisition | ||
Business Combination, Consideration Transferred | $ 4,200,000 | |
Discontinued Operation, Tax Effect of Discontinued Operation | $ 0 | 41,000 |
Discontinued Operation, Amount of Adjustment to Prior Period Gain (Loss) on Disposal, before Income Tax | $ 221,000 | |
Issued And Outstanding Shares Percentage for sold of subsidiary | 100.00% |
Concentrations of credit risk (
Concentrations of credit risk (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Concentration Risk [Line Items] | ||
Cash, FDIC insured amount | $ 11.6 | |
Revenue from Contract with Customer Benchmark [Member] | Distributor | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 19.00% | 62.00% |
Revenue from Contract with Customer Benchmark [Member] | Wireless Carrier | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 23.00% | |
Accounts Receivable | Distributor | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 48.00% | |
Accounts Receivable | Wireless Carrier | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 56.00% |
Inventories and major vendors -
Inventories and major vendors - Components of Inventories (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Inventories and major vendors | ||
Raw materials and supplies | $ 3,576 | $ 2,711 |
Work in process | 791 | 603 |
Finished goods | 3,878 | 3,799 |
Totals | $ 8,245 | $ 7,113 |
Inventories and major vendors_2
Inventories and major vendors - Additional Information (Details) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Vendor One | ||
Inventory [Line Items] | ||
Concentration risk, percentage | 13.00% | |
Vendor Two | ||
Inventory [Line Items] | ||
Concentration risk, percentage | 19.00% | |
Two Vendors [Member] | ||
Inventory [Line Items] | ||
Concentration risk, percentage | 40.00% |
Other current assets (Details)
Other current assets (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Other current assets | ||
Prepaid taxes | $ 0 | $ 335 |
Prepaid expense | 346 | 228 |
Notes receivable, current portion | 0 | 20 |
Other | 339 | 245 |
Totals | $ 685 | $ 828 |
Accrued expenses and other lo_3
Accrued expenses and other long-term liabilities (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Accrued expenses and other long-term liabilities | ||
Wages payable | $ 1,591 | $ 1,705 |
Accrued receipts | 1,683 | 1,271 |
Other current liabilities | 379 | 401 |
Totals | $ 3,653 | $ 3,377 |
Segment information - Sales by
Segment information - Sales by geographic area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Revenue, Major Customer [Line Items] | ||
Sales revenue | $ 55,325 | $ 50,196 |
United States | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 54,365 | 49,534 |
Foreign countries, total | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 960 | 662 |
Canada | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 592 | 547 |
Mexico | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 109 | 39 |
All other | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | $ 259 | $ 76 |
Segment information - Net sales
Segment information - Net sales, income (loss) before provision for income taxes and other related segment information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 55,325 | $ 50,196 |
Income from continuing operations before provision for income taxes | 4,557 | 7,494 |
Depreciation and amortization | 563 | 513 |
Total assets | 37,700 | 32,502 |
RF Connector and Cable Assembly | ||
Segment Reporting Information [Line Items] | ||
Net sales | 13,704 | 11,846 |
Income from continuing operations before provision for income taxes | 868 | 107 |
Depreciation and amortization | 170 | 172 |
Total assets | 7,081 | 6,529 |
Custom Cabling Manufacturing and Assembly | ||
Segment Reporting Information [Line Items] | ||
Net sales | 41,621 | 38,350 |
Income from continuing operations before provision for income taxes | 3,591 | 7,340 |
Depreciation and amortization | 393 | 341 |
Total assets | 17,282 | 8,763 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | 0 |
Income from continuing operations before provision for income taxes | 98 | 47 |
Depreciation and amortization | 0 | 0 |
Total assets | $ 13,337 | $ 17,210 |
Income tax provision - (Compone
Income tax provision - (Components Of Income Tax Expense Benefit) (Detail) - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Income tax provision | ||
Continuing operations | $ 1,036,000 | $ 1,468,000 |
Discontinued operations | 0 | (41,000) |
Net income | $ 1,036,000 | $ 1,427,000 |
Income tax provision - Provisio
Income tax provision - Provision (benefit) for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Current: | ||
Federal | $ 859 | $ 1,344 |
State | 220 | 236 |
Current income tax expense (benefit) | 1,079 | 1,580 |
Deferred: | ||
Federal | (25) | (112) |
State | (18) | 0 |
Deferred Federal, State and Local, Tax Expense (Benefit), Total | (43) | (112) |
Income Tax Expense (Benefit), Total | $ 1,036 | $ 1,468 |
Income tax provision - Income t
Income tax provision - Income tax at the federal statutory rate is reconciled (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Dec. 31, 2017 | |
Income tax provision | |||
Income taxes at federal statutory rate | $ 957 | $ 1,737 | |
State tax provision, net of federal tax benefit | 160 | 170 | |
Nondeductible differences: | |||
Rel-Tech earn-out | 0 | (6) | |
Qualified domestic production activities deduction | 0 | (141) | |
Stock options | 21 | (204) | |
Meals and entertainment | 8 | 8 | |
R& D credits | (119) | (111) | |
ASC 740-10 Liability | 21 | 54 | |
Tax Cut and Jobs Act | 0 | (34) | |
Other | (12) | (5) | |
Net provision (benefit) for income taxes | $ 1,036 | $ 1,468 | |
Income taxes at federal statutory rate (% of Pretax Income) | 21.00% | 38.10% | 35.00% |
State tax provision, net of federal tax benefit (% of Pretax Income) | 3.50% | 3.70% | |
Nondeductible differences: (% of Pretax Income) | |||
Rel-Tech earn-out (% of Pretax Income) | 0.00% | (0.10%) | |
Qualified domestic production activities deduction (% of Pretax Income) | (0.00%) | (3.10%) | |
Stock compensation (% of Pretax Income) | 0.50% | (4.50%) | |
Meals and entertainment (% of Pretax Income) | 0.20% | 0.20% | |
R& D credits (% of Pretax Income) | (2.60%) | (2.40%) | |
ASC 740-10 Liability (% of Pretax Income) | 0.50% | 1.20% | |
Tax Cut and Jobs Act (% of Pretax Income) | (0.00%) | (0.70%) | |
Other (% of Pretax Income) | (0.30%) | (0.10%) | |
Net provision (benefit) for income taxes (% of Pretax Income) | 22.80% | 32.30% |
Income tax provision - Total of
Income tax provision - Total of deferred tax assets and deferred tax liabilities (Detail) - USD ($) $ in Thousands | Oct. 31, 2019 | Oct. 31, 2018 |
Deferred Tax Assets: | ||
Reserves | $ 172 | $ 276 |
Accrued vacation | 97 | 116 |
Stock-based compensation awards | 87 | 113 |
Uniform capitalization | 64 | 78 |
Other | 55 | 93 |
Total deferred tax assets | 475 | 676 |
Deferred Tax Liabilities: | ||
Amortization / intangible assets | (307) | (544) |
Depreciation / equipment and furnishings | (125) | (132) |
Total deferred tax liabilities | (432) | (676) |
Total net deferred tax assets (liabilities) | $ 43 | $ 0 |
Income tax provision (Summary O
Income tax provision (Summary Of Income Tax Contingencies) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Income tax provision | ||
Unrecognized Tax Benefits, Beginning Balance | $ 59 | $ 0 |
Increase for tax positions related to the current year | 23 | 24 |
Increase for tax positions related to prior years | 3 | 29 |
Increase for interest and penalties | 2 | 6 |
Statute of Limitations Expirations | (7) | 0 |
Unrecognized Tax Benefits, Ending Balance | $ 80 | $ 59 |
Income tax provision - Addition
Income tax provision - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Oct. 31, 2019 | Oct. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | |
Income Taxes [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 38.10% | 35.00% | |
Unrecognized tax benefits, inclusive of interest and penalties | $ 2,000 | $ 6,000 | ||
Unrecognized tax benefits | $ 80,000 | $ 59,000 | $ 0 | |
Provision For Income Tax Expense Percent | 22.70% | 19.60% | ||
Income Tax Expense (Benefit) | $ 1,036,000 | $ 1,468,000 | ||
US federal and California [Member] | ||||
Income Taxes [Line Items] | ||||
Unrecognized tax benefits | $ 72,000 | $ 53,000 |
Stock options - Computation of
Stock options - Computation of weighted average fair value of employee stock options using black-scholes option pricing model assumptions (Detail) - $ / shares | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Stock options | ||
Weighted average volatility | 55.42% | 46.83% |
Expected dividends | 0.98% | 3.28% |
Expected term (in years) | 5 years 10 months 24 days | 4 years 6 months |
Risk-free interest rate | 2.86% | 1.87% |
Weighted average fair value of options granted during the year | $ 3.98 | $ 0.82 |
Weighted average fair value of options vested during the year | $ 6.03 | $ 2.64 |
Stock options - Summary of stat
Stock options - Summary of status of options granted under stock option plans and changes in options outstanding (Detail) - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Shares | ||
Option price lower range | $ 1.90 | $ 1.90 |
Option price upper range | $ 8.69 | $ 5.88 |
Stock Option | ||
Shares | ||
Outstanding at beginning of year | 942,366 | 1,159,771 |
Options granted | 124,097 | 269,635 |
Options exercised | (171,066) | (418,955) |
Options canceled or expired | (5,250) | (68,085) |
Options outstanding at end of year | 890,147 | 942,366 |
Options exercisable at January 31, 2019 | 599,981 | 675,033 |
Options vested and expected to vest at end of year | 889,088 | 940,144 |
Aggregate intrinsic value of options exercised during year | $ 317,827 | $ 1,207,148 |
Weighted Average Exercise Price | ||
Outstanding at beginning of year | $ 3.09 | $ 3.19 |
Options granted | 8.16 | 2.44 |
Options exercised | 3.86 | 2.66 |
Options canceled or expired | 6.82 | 4.98 |
Options outstanding at end of year | 3.62 | 3.09 |
Options exercisable at end of year | 3.25 | 3.01 |
Options vested and expected to vest at end of year | $ 3.63 | $ 3.09 |
Stock options - Additional Info
Stock options - Additional Information (Detail) - USD ($) | Jun. 07, 2019 | Mar. 08, 2019 | Dec. 03, 2018 | Dec. 13, 2017 | Dec. 13, 2017 | Sep. 08, 2017 | Sep. 04, 2015 | Sep. 05, 2014 | Jan. 31, 2019 | Oct. 31, 2019 | Oct. 31, 2018 | Nov. 01, 2018 | Mar. 09, 2010 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Weighted average remaining life of options outstanding | 4 years 1 month 28 days | ||||||||||||
Weighted average remaining contractual life of options exercisable | 2 years 7 months 13 days | ||||||||||||
Weighted average life of options vested and expected to vest | 4 years 1 month 24 days | ||||||||||||
Aggregate intrinsic value of options outstanding | $ 2,340,000 | ||||||||||||
Aggregate intrinsic value of options exercisable | 1,735,000 | ||||||||||||
Aggregate intrinsic value of options vested and expected to vest | 2,330,000 | ||||||||||||
Non-vested stock-based arrangements yet to be recognized | $ 439,000 | ||||||||||||
Stock based arrangements yet to be recognized, weighted average period expected to be recognized | 5 years 3 months | ||||||||||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 7,203 | ||||||||||||
Non-employee director annual grant | $ 50,000 | ||||||||||||
Fair value of stock option per share | $ 3.471 | ||||||||||||
Stock based compensation expense | $ 317,000 | $ 211,000 | |||||||||||
Share Based Goods And Non Employee Services Transaction Value Of Stock Option Issued | $ 25,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,000,000 | ||||||||||||
Nonqualified Plan [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Fair value of stock option per share | $ 3.245 | ||||||||||||
Share Based Goods And Non Employee Services Transaction Value Of Stock Option Issued | $ 10,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 5 years | ||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 7.50 | $ 8.07 | |||||||||||
Share-based Goods and Nonemployee Services Transaction, Quantity of Securities Issued | 3,082 | ||||||||||||
Nonqualified Plan [Member] | Board of Directors Chairman [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Amount Payable Annually for Services Rendered | $ 15,000 | ||||||||||||
Incentive stock options | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 80,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 8,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 8,000 | ||||||||||||
Incentive stock options | One Employee [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 25,000 | 10,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 5,000 | 2,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | 10 years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 5,000 | 2,000 | |||||||||||
Incentive stock options | Two Employees [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 25,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 5,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 5,000 | ||||||||||||
Incentive stock options | Nonqualified Plan [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||||||||||||
2010 Stock Incentive Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,405,741 | ||||||||||||
Incentive and Non-Qualified Stock Option Plans | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Additiona shares of common stock issued | 1,000,000 | 500,000 | 500,000 |
Retirement plan (Details)
Retirement plan (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Retirement plan | ||
Pension and Other Postretirement Benefit Contributions | $ 181,000 | $ 159,000 |
Percentage Of Employee Contribution Paid | 3.00% |
Related party transactions (Det
Related party transactions (Details) - USD ($) | Jun. 15, 2011 | Oct. 31, 2019 | Oct. 31, 2018 |
Related Party Transaction [Line Items] | |||
Payments for Rent | $ 156,000 | ||
Proceeds from Sale of Intangible Assets | $ 0 | $ 4,200,000 | |
Cables [Member] | |||
Related Party Transaction [Line Items] | |||
Operating Leases, Rent Expense, Minimum Rentals | $ 13,000 |
Cash dividend and declared di_2
Cash dividend and declared dividends (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Cash dividend and declared dividends | ||
Dividends paid, per share | $ 0.02 | $ 0.02 |
Dividends paid | $ 748,000 | $ 730,000 |
Commitments (Details)
Commitments (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Commitments | ||
Accrued Liabilities and Other Liabilities | $ 102,000 | $ 93,000 |
Operating Leases, Rent Expense, Net | $ 853,000 | $ 546,000 |
Commitments - Minimum lease pay
Commitments - Minimum lease payments operating lease (Details) $ in Thousands | Oct. 31, 2019USD ($) |
Commitments | |
2020 | $ 829 |
2021 | 744 |
2022 | 465 |
2023 | 155 |
2024 | 0 |
Total | $ 2,193 |
Subsequent events (Detail)
Subsequent events (Detail) - Subsequent Event | Dec. 13, 2019$ / shares | Nov. 27, 2019USD ($) | Nov. 04, 2019USD ($)item |
Subsequent Event [Line Items] | |||
Dividends Payable, Amount Per Share | $ / shares | $ 0.02 | ||
Dividends payable, date to be paid | Jan. 15, 2020 | ||
Dividends payable, record date | Dec. 31, 2019 | ||
Line of credit, maximum borrowing capacity | $ 5,000,000 | ||
LIBOR Daily Floating Rate | |||
Subsequent Event [Line Items] | |||
Line of credit, interest rate (as a percent) | 2.00% | ||
Schrofftech | |||
Subsequent Event [Line Items] | |||
Voting interest acquired (as a percent) | 100.00% | ||
Payments in cash | $ 4,000,000 | ||
Deposited amount | $ 900,000 | ||
Number of escrow accounts | item | 2 | ||
Deposited amount, period one | 1 year | ||
Deposited amount, period two | 2 years | ||
Additional earn-out payment | $ 2,400,000 | ||
Earn-out payment, targeted period | 2 years |