Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2017 | Jan. 22, 2018 | Apr. 30, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Oct. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | R F INDUSTRIES LTD | ||
Entity Central Index Key | 740,664 | ||
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 | Smaller Reporting Company | ||
Entity Public Float | $ 9.3 | ||
Trading Symbol | RFIL | ||
Entity Common Stock, Shares Outstanding | 8,872,246 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 6,039 | $ 5,258 |
Trade accounts receivable, net of allowance for doubtful accounts of $73 and $62, respectively | 3,901 | 4,077 |
Inventories | 6,109 | 6,022 |
Other current assets | 744 | 1,436 |
TOTAL CURRENT ASSETS | 16,793 | 16,793 |
Property and equipment: | ||
Equipment and tooling | 3,302 | 3,203 |
Furniture and office equipment | 871 | 799 |
Property, Plant and Equipment, Gross | 4,173 | 4,002 |
Less accumulated depreciation | 3,462 | 3,174 |
Total property and equipment | 711 | 828 |
Goodwill | 3,219 | 3,219 |
Amortizable intangible assets, net | 3,030 | 3,619 |
Non-amortizable intangible assets | 1,237 | 1,237 |
Other assets | 70 | 141 |
TOTAL ASSETS | 25,060 | 25,837 |
CURRENT LIABILITIES | ||
Accounts payable | 1,356 | 1,138 |
Accrued expenses | 2,242 | 2,770 |
TOTAL CURRENT LIABILITIES | 3,598 | 3,908 |
Deferred tax liabilities, net | 119 | 409 |
Other long-term liabilities | 0 | 128 |
TOTAL LIABILITIES | 3,717 | 4,445 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock - authorized 20,000,000 shares of $0.01 par value; 8,872,246 and 8,835,483 shares issued and outstanding at October 31, 2017 and 2016, respectively | 89 | 88 |
Additional paid-in capital | 19,654 | 19,379 |
Retained earnings | 1,600 | 1,925 |
TOTAL STOCKHOLDERS' EQUITY | 21,343 | 21,392 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 25,060 | $ 25,837 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Trade accounts receivable, allowance for doubtful accounts | $ 73 | $ 62 |
Common stock, authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 8,872,246 | 8,835,483 |
Common stock, shares outstanding | 8,872,246 | 8,835,483 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Net sales | $ 30,964 | $ 30,241 |
Cost of sales | 22,242 | 21,778 |
Gross profit | 8,722 | 8,463 |
Operating expenses: | ||
Engineering | 845 | 747 |
Selling and general | 7,506 | 9,560 |
Goodwill and other intangible asset impairment | 0 | 2,844 |
Total operating expense | 8,351 | 13,151 |
Operating income (loss) | 371 | (4,688) |
Other income | 29 | 5 |
Income (loss) from continuing operations before provision (benefit) for income taxes | 400 | (4,683) |
Provision (benefit) for income taxes | 134 | (652) |
Income (loss) from continuing operations | 266 | (4,031) |
Income (loss) from discontinued operations, net of tax | 116 | (58) |
Consolidated net income (loss) | $ 382 | $ (4,089) |
Earnings (loss) per share Basic | ||
Continuing operations | $ 0.03 | $ (0.46) |
Discontinued operations | 0.01 | (0.01) |
Net income (loss) per share | 0.04 | (0.47) |
Earnings (loss) per share Diluted | ||
Continuing operations | 0.03 | (0.46) |
Discontinued operations | 0.01 | (0.01) |
Net income (loss) per share | $ 0.04 | $ (0.47) |
Weighted average shares outstanding | ||
Basic | 8,840,895 | 8,786,510 |
Diluted | 8,915,764 | 8,786,510 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings |
Balance at Oct. 31, 2015 | $ 26,371 | $ 87 | $ 19,129 | $ 7,155 |
Balance (in shares) at Oct. 31, 2015 | 8,713,664 | |||
Exercise of stock options | 49 | $ 2 | 47 | 0 |
Exercise of stock options (in shares) | 180,067 | |||
Excess tax benefit from exercise of stock options | 154 | $ 0 | 154 | 0 |
Stock-based compensation expense | 206 | 0 | 206 | 0 |
Dividends | (1,141) | 0 | 0 | (1,141) |
Treasury stock purchased and retired | (158) | $ (1) | (157) | 0 |
Treasury stock purchased and retired (in shares) | (58,248) | |||
Net Income (loss) | (4,089) | $ 0 | 0 | (4,089) |
Balance at Oct. 31, 2016 | 21,392 | $ 88 | 19,379 | 1,925 |
Balance (in shares) at Oct. 31, 2016 | 8,835,483 | |||
Exercise of stock options | 56 | $ 1 | 55 | 0 |
Exercise of stock options (in shares) | 36,763 | |||
Excess tax benefit from exercise of stock options | 6 | $ 0 | 6 | 0 |
Stock-based compensation expense | 214 | 0 | 214 | 0 |
Dividends | (707) | 0 | 0 | (707) |
Net Income (loss) | 382 | 0 | 0 | 382 |
Balance at Oct. 31, 2017 | $ 21,343 | $ 89 | $ 19,654 | $ 1,600 |
Balance (in shares) at Oct. 31, 2017 | 8,872,246 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
OPERATING ACTIVITIES: | ||
Consolidated net income (loss) | $ 382 | $ (4,089) |
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used in) operating activities: | ||
Bad debt expense | 11 | 9 |
Depreciation and amortization | 877 | 1,036 |
Goodwill and other intangible asset impairment | 0 | 2,844 |
Inventory write-downs | 0 | 168 |
Gain (loss) on disposal of fixed assets | 0 | 68 |
Stock-based compensation expense | 214 | 206 |
Deferred income taxes | (290) | (307) |
Excess tax benefit from stock-based compensation | (6) | (154) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 165 | (107) |
Inventories | (87) | 417 |
Other current assets | 698 | (554) |
Other long-term assets | 71 | (102) |
Accounts payable | 218 | (355) |
Accrued expenses | (528) | (98) |
Other long-term liabilities | (128) | (249) |
Net cash provided by (used in) operating activities | 1,597 | (1,267) |
INVESTING ACTIVITIES: | ||
Proceeds from notes receivable from stockholder | 0 | 67 |
Proceeds from sale of fixed assets | 0 | 22 |
Proceeds from sale of inventory | 0 | 321 |
Capital expenditures | (171) | (384) |
Net cash (used in) provided by investing activities | (171) | 26 |
FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 56 | 49 |
Purchases of treasury stock | 0 | (158) |
Excess tax benefit from exercise of stock options | 6 | 154 |
Dividends paid | (707) | (1,141) |
Net cash used in financing activities | (645) | (1,096) |
Net increase (decrease) in cash and cash equivalents | 781 | (2,337) |
Cash and cash equivalents, beginning of year | 5,258 | 7,595 |
Cash and cash equivalents, end of year | 6,039 | 5,258 |
Supplemental cash flow information - income taxes paid | 349 | 208 |
Supplemental schedule of noncash investing and financing activities: | ||
Retirement of treasury stock | $ 0 | $ 157 |
Business activities and summary
Business activities and summary of significant accounting policies | 12 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
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, 2017 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) Comnet Telecom Supply, Inc., the subsidiary that manufactures and sells fiber optics cable, distinctive cabling technologies and custom patch cord assemblies, as well as other data center products; and (iv) Rel-Tech Electronics, Inc., the subsidiary that designs and manufacturers of cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation and military customers. Both the Cables Unlimited division and the Comnet Telecom division 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. During the fiscal year ended October 31, 2016, RF Industries, Ltd. sold the Aviel Electronics division that designed, manufactured and distributed specialty and custom RF connectors, and discontinued the Bioconnect division that manufactured and distributed cabling and interconnect products to the medical monitoring market. 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”), Comnet Telecom Supply, Inc. (“Comnet”), and Rel-Tech Electronics, Inc. (“Rel-Tech”), 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 Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company recognizes revenue from product sales after purchase orders are received which contain a fixed price and for shipments with terms of FOB Shipping Point, revenue is recognized upon shipment, for shipments with terms of FOB Destination, revenue is recognized upon delivery and revenue from services is recognized when services are performed, and the recovery of the consideration is considered probable. Inventories Inventories are stated at the lower of cost or market, 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. In June 2015, the Company acquired Rel-Tech, a company that valued its inventories using specific identification (last purchase price) on a FIFO basis. As of July 31, 2016, Rel-Tech prospectively values its inventories cost using the weighted average cost of accounting. 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”). For the fiscal year 2016, Cables Unlimited did not meet its sales volume and revenue goals, and the mix of product sold had lower margins than planned. These results, along with changes in the competitive marketplace and an evaluation of business priorities, led to a shift in strategic direction and reduced future revenue and profitability expectations for the business. The results of these changes and circumstances lead to the determination that Cables Unlimited did not pass our qualitative assessment and therefore a quantitative assessment was required. Upon completion of our Step 1 test, we found that the results indicated that Cables Unlimited’s carrying value exceeded its estimated fair value, and as a result, the Step 2 test was performed specific to Cables Unlimited. Under Step 2, the fair value of all assets and liabilities were estimated, including customer list and backlog, for the purpose of deriving an estimate of the fair value of goodwill. The fair value of the goodwill was then compared to the recorded goodwill to determine the amount of the impairment. Assumptions used in measuring the value of these assets and liabilities included the discount rates used in valuing the intangible assets, and consideration of the market environment in valuing the tangible assets. Upon completion of our Step 2 test, our Cables Unlimited division’s goodwill was determined to be impaired. As of October 31, 2016, the Company recorded a $2.6 million impairment charge to goodwill. Cables Unlimited’s goodwill is included in the Custom Cabling Manufacturing and Assembly segment. No other instances of impairment were identified as of October 31, 2016 and no instances of goodwill impairment were identified during the year ended October 31, 2017. 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. Effective November 1, 2014, the Company also completed its acquisition of Comnet. Goodwill related to this acquisition is included within the Comnet 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 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. 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. In 2016, upon completion of our Step 2 test (see “Goodwill” above), our Cables Unlimited division’s trademark was determined to be impaired. As of October 31, 2016, the Company recorded a $150,000 impairment charge to its trademark. Cables Unlimited’s trademark is included in the Custom Cabling Manufacturing and Assembly segment. No instances of impairment were identified as of October 31, 2017 and no other instances of impairment were identified as of October 31, 2016. Earn-out liability The purchase agreement for the Rel-Tech acquisition provides for earn-out payments of up to $800,000 in the aggregate, last installment of which is payable May 31, 2018. The initial earn-out liability was valued at its fair value using the Monte Carlo simulation and is included as a component of the total purchase price. The earn-out was and will continue to be revalued quarterly using a present value approach and any resulting increase or decrease will be recorded into selling and general expenses. Any changes in the assumed timing and amount of the probability of payment scenarios could impact the fair value. Significant judgment is employed in determining the appropriateness of the assumptions used in calculating the fair value of the earn-out as of the acquisition date. Accordingly, significant variances between actual and forecasted results or changes in the assumptions can materially impact the amount of contingent consideration expense we record in future periods. 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. The contingent consideration liability represents future earn-out liability that we may be required to pay in conjunction with the acquisition of Rel-Tech and Comnet. The Company estimates the fair value of the earn-out liability using a probability-weighted scenario of estimated qualifying earn-out gross profit related to Rel-Tech and EBITDA related to Comnet calculated at net present value (level 3 of the fair value hierarchy). The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2017 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 236 The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2016 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 835 The following table summarizes the Level 3 transactions for the years ended October 31, 2017 and 2016 (in thousands): Level 3 2017 2016 Beginning balance $ 835 $ 1,527 Payments (578) (790) Change in value (21) 98 Ending Balance $ 236 $ 835 Intangible assets Intangible assets consist of the following as of October 31 (in thousands): 2017 2016 Amortizable intangible assets: Non-compete agreements (estimated lives 3 - 5 years) $ 310 $ 310 Accumulated amortization (310) (273) - 37 Customer relationships (estimated lives 7 - 15 years) 5,099 5,099 Accumulated amortization (2,186) (1,644) 2,913 3,455 Patents (estimated life 14 years) 142 142 Accumulated amortization (25) (15) 117 127 Totals $ 3,030 $ 3,619 Non-amortizable intangible assets: Trademarks $ 1,237 $ 1,237 Amortization expense for the years ended October 31, 2017 and 2016 was $589,000 and $649,000, respectively. Impairment to trademarks for the years ended October 31, 2017 and 2016 was $0 and $150,000, respectively. Estimated amortization expense related to finite lived intangible assets is as follows (in thousands): Year ending October 31, Amount 2018 $ 553 2019 553 2020 553 2021 413 2022 413 Thereafter 545 Total $ 3,030 Advertising The Company expenses the cost of advertising and promotions as incurred. Advertising costs charged to operations were approximately $130,000 and $156,000 in 2017 and 2016, 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, 2017 and 2016, the Company recognized $845,000 and $747,000 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 recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. 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, 2017 and 2016, charges related to stock-based compensation amounted to approximately $214,000 and $206,000, respectively. For the fiscal years ended October 31, 2017 and 2016, stock-based compensation classified in cost of sales amounted to $13,000 and $28,000 and stock-based compensation classified in selling and general and engineering expense amounted to $201,000 and $178,000, respectively. Earnings (loss) per share Basic earnings (loss) per share is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings (loss) per share is similar to that of basic earnings (loss) 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, 2017 and 2016, that were not included in the computation because they were anti-dilutive, totaled 737,512 and 824,441, respectively. The following table summarizes the computation of basic and diluted earnings (loss) per share: 2017 2016 Numerators: Consolidated net income (loss) (A) $ 382,000 $ (4,089,000) Denominators: Weighted average shares outstanding for basic earnings (loss) per share (B) 8,840,895 8,786,510 Add effects of potentially dilutive securities - assumed exercise of stock options 74,869 - Weighted average shares outstanding for diluted earnings (loss) per share (C) 8,915,764 8,786,510 Basic earnings (loss) per share (A)/(B) $ 0.04 $ (0.47) Diluted earnings (loss) per share (A)/(C) $ 0.04 $ (0.47) Recent accounting standards Recently issued accounting pronouncements not yet adopted: In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The new standard will change the classification of certain cash payments and receipts within the cash flow statement. Specifically, payments for debt prepayment or debt extinguishment costs, including third-party costs, premiums paid, and other fees paid to lenders that are directly related to the debt prepayment or debt extinguishment, excluding accrued interest, will now be classified as financing activities. Previously, these payments were classified as operating expenses. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, with early adoption permitted, and will be applied retrospectively. The Company does not expect that the adoption of this new standard will have a material impact on its Consolidated Financial Statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. This ASU requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The ASU also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation Stock Compensation. The new standard will modify several aspects of the accounting and reporting for employee share-based payments and related tax accounting impacts, including the presentation in the statements of operations and cash flows of certain tax benefits or deficiencies and employee tax withholdings, as well as the accounting for award forfeitures over the vesting period. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements effective for the quarter ending January 31, 2018. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This guidance will supersede Topic 605, Revenue Recognition, in addition to other industry-specific guidance, once effective. 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 is 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. The Company continues to assess the impact this new standard may have on its ongoing financial reporting. The Company has identified its revenue streams both by contract and product type and is assessing each for potential impacts. For the revenue streams assessed, the Company does not anticipate a material impact in the timing or amount of revenue recognized. In January 2017, the FASB issued Accounting Standards Update 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. |
Discontinued operations
Discontinued operations | 12 Months Ended |
Oct. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued operations | Note 2 - Discontinued operations During 2013, the Company sold its RF Neulink and RadioMobile divisions, which together had comprised the Company’s RF Wireless segment. The divisions were sold pursuant to asset purchase agreements, whereby no purchase price was paid at the closing. Rather, the agreements stipulated royalty payments from each of the purchasers over a three-year period. For the years ended October 31, 2017 and 2016, the Company recognized approximately $174,000 and $57,000, respectively, of aggregate royalty income for RF Neulink and RadioMobile, which amounts have been included within discontinued operations. During March 2016, the Company announced the shutdown of its Bioconnect division, which comprised the entire operations of the Medical Cabling and Interconnect segment. The closure is part of the Company’s ongoing plan to close or dispose of underperforming divisions that are not part of the Company’s core operations. For the year ended October 31, 2017, the Company recognized approximately $10,000 of income related to the sale of equipment for the Bioconnect division, which amounts have been included within discontinued operations. For the year ended October 31, 2016, the Company recognized approximately $148,000 of loss for the Bioconnect division, which amounts have been included within discontinued operations. Included in the fiscal year 2016 loss, the Company recognized a $148,000 pretax write-down on Bioconnect division’s inventory and fixed assets. The following summarized financial information related to the RF Neulink, RadioMobile and Bioconnect divisions is segregated from continuing operations and reported as discontinued operations for the years ended October 31, 2017 and 2016 (in thousands): 2017 2016 Royalties $ 174 $ 57 Bioconnect 10 (148) Provision (benefit) for income taxes 68 (33) Income (loss) from discontinued operations, net of tax $ 116 $ (58) |
Concentrations of credit risk
Concentrations of credit risk | 12 Months Ended |
Oct. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentrations of credit risk | Note 3 - 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, 2017, the Company had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $5.2 million. Two customers accounted for approximately 20% and 11% of the Company’s net sales for the fiscal year ended October 31, 2017, and one customer accounted for approximately 15% of the Company’s net sales for the fiscal year ended October 31, 2016. At October 31, 2017 these customers’ accounts receivable balance accounted for approximately 27% and 5% of the Company’s total net accounts receivable balances, and at October 31, 2016, this customer’s accounts receivable balance accounted for approximately 20% of the Company’s total net accounts receivable balance. Although these customers have been on-going major customers of the Company continuously in the past, the written agreements with these customers do not have any minimum purchase obligations and the customers 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. There was no product line that was significant for the fiscal years ended October 31, 2017 and 2016. |
Inventories and major vendors
Inventories and major vendors | 12 Months Ended |
Oct. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories and major vendors | Note 4 - Inventories and major vendors Inventories, consisting of materials, labor and manufacturing overhead, are stated at the lower of cost or market. Cost has been determined using the weighted average cost method. In June 2015, the Company acquired Rel-Tech, a company that valued its inventories using specific identification (last purchase price) on a FIFO basis. As of July 31, 2016, Rel-Tech values its inventory cost using the weighted average cost of accounting. Inventories consist of the following (in thousands): 2017 2016 Raw materials and supplies $ 2,520 $ 2,642 Work in process 194 279 Finished goods 3,395 3,101 Totals $ 6,109 $ 6,022 Purchases of inventory from two major vendors during fiscal 2017 represented 7% and 5%, respectively, of total inventory purchases compared to two major vendors who represented 9% and 6%, respectively, of total inventory purchases in fiscal 2016. The Company has arrangements with these vendors to purchase product based on purchase orders periodically issued by the Company. |
Other current assets
Other current assets | 12 Months Ended |
Oct. 31, 2017 | |
Other current assets [Abstract] | |
Other current assets | Note 5 - Other current assets Other current assets consist of the following (in thousands): 2017 2016 Prepaid taxes $ 20 $ 871 Prepaid expense 526 347 Notes receivable, current portion 83 83 Other 115 135 Totals $ 744 $ 1,436 Long-term portion of notes receivable of zero and $21,000 is recorded in other assets as of October 31, 2017 and 2016, respectively. |
Accrued expenses and other long
Accrued expenses and other long-term liabilities | 12 Months Ended |
Oct. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Note 6 - Accrued expenses and other long-term liabilities Accrued expenses consist of the following (in thousands): 2017 2016 Wages payable $ 855 $ 941 Accrued receipts 695 578 Earn-out liability 236 707 Other current liabilities 456 544 Totals $ 2,242 $ 2,770 Accrued receipts represent purchased inventory for which invoices have not been received. The non-current portion of the earn-out liability of $128,000 is recorded in other long-term liabilities as of October 31, 2016 |
Segment information
Segment information | 12 Months Ended |
Oct. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment information | Note 7 - 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. As of October 31, 2017, the Company had two segments - RF Connector and Cable Assembly , The RF Connector and Cable Assembly segment is comprised of one division, while the Custom Cabling Manufacturing and Assembly segment comprised of three divisions. The four divisions that met the quantitative thresholds for segment reporting are Connector and Cable Assembly, Cables Unlimited, Comnet and Rel-Tech. The specific customers are different for each division; however, there is some overlapping of product sales to them. The methods used to distribute products are similar within each division aggregated. 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 and Cable Assembly segment , and constitute As reviewed by the Company’s chief operating decision maker, 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, 2017 and 2016 (in thousands): 2017 2016 United States $ 30,232 $ 29,257 Foreign Countries: Canada 483 509 Israel - 63 Mexico 78 234 All Other 171 178 732 984 Totals $ 30,964 $ 30,241 Net sales, income (loss) from continuing operations before provision (benefit) for income taxes and other related segment information for the years ended October 31, 2017 and 2016 are as follows (in thousands): RF Connector Custom Cabling and Manufacturing and Cable Assembly Assembly Corporate Total 2017 Net sales $ 11,456 $ 19,508 $ - $ 30,964 Income (loss) from continuing operations before provision (benefit) for income taxes 382 (11) 29 400 Depreciation and amortization 177 700 - 877 Total assets 6,297 11,910 6,853 25,060 2016 Net sales $ 9,352 $ 20,889 $ - $ 30,241 Loss from continuing operations before provision (benefit) for income taxes (1,358) (3,232) (93) (4,683) Depreciation and amortization 194 842 - 1,036 Total assets 5,902 13,100 6,835 25,837 |
Income tax provision
Income tax provision | 12 Months Ended |
Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income tax provision | Note 8 - Income tax provision The provision (benefit) for income taxes for the fiscal years ended October 31, 2017 and 2016 consists of the following (in thousands): 2017 2016 Current: Federal $ 400 $ (332) State 24 (13) 424 (345) Deferred: Federal (293) (179) State 3 (128) (290) (307) $ 134 $ (652) Income tax at the federal statutory rate is reconciled to the Company’s actual net provision (benefit) for income taxes as follows (in thousands, except percentages): 2017 2016 % of Pretax % of Pretax Amount Income Amount Income Income taxes at federal statutory rate $ 136 34.0 % $ (1,592) 34.0 % State tax provision, net of federal tax benefit 16 4.0 % (53) 1.1 % Nondeductible differences: Goodwill and other intangible asset impairment - 0.0 % 916 -19.6 % Rel-Tech earn-out (9) -2.3 % 52 -1.1 % Qualified domestic production activities deduction (66) -16.5 % 46 -1.0 % ISO stock options 33 8.3 % 52 -1.1 % Meals and entertainment 21 5.3 % 29 -0.6 % Temporary true-ups 26 6.4 % - 0.0 % State tax refunds, net of federal expense (4) -0.8 % (38) 0.8 % R&D credits (37) -9.3 % (46) 1.0 % Other 18 4.4 % (18) 0.4 % $ 134 33.5 % $ (652) 13.9 % The Company’s total deferred tax assets and deferred tax liabilities at October 31, 2017 and 2016 are as follows (in thousands): 2017 2016 Deferred Tax Assets: Reserves $ 375 $ 216 Accrued vacation 122 134 Stock-based compensation awards 184 159 Uniform capitalization 130 148 Other 70 43 Total deferred tax assets 881 700 Deferred Tax Liabilities: Amortization / intangible assets (805) (864) Depreciation / equipment and furnishings (195) (211) Other - (34) Total deferred tax liabilities (1,000) (1,109) Total net deferred tax assets (liabilities) $ (119) $ (409) 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 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 practice is to recognize interest and penalties related to income tax matters in income from continuing operations. The Company has no material unrecognized tax benefits as of October 31, 2017. The Company is subject to taxation in the United States and state jurisdictions. The Company’s tax years for October 31, 2014 and forward are subject to examination by the United States and October 31, 2013 and forward with state tax authorities. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into United States tax law, which among other provisions will lower the corporate tax rate to 21%. Given this date of enactment, our consolidated as of and |
Stock options
Stock options | 12 Months Ended |
Oct. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation and equity transactions | Note 9 - 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, 2017, 1,726,138 shares of common stock were remaining for future grants of stock options under the 2010 Plan. Additional disclosures related to stock option plans The fair value of each option granted in 2017 and 2016 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: 2017 2016 Weighted average volatility 43.3 % 28.7 % Expected dividends 5.0 % 2.4 % Expected term (in years) 4.3 3.0 Risk-free interest rate 1.20 % 0.70 % Weighted average fair value of options granted during the year $ 0.39 $ 0.66 Weighted average fair value of options vested during the year $ 1.95 $ 4.36 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 2017 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, 2017 and 2016 and changes in outstanding stock options in 2017 and 2016 follows: 2017 2016 Shares or Weighted Shares or Weighted Price Per Average Price Per Average Share Exercise Price Share Exercise Price Options outstanding at beginning of year 1,007,851 $ 4.07 1,240,100 $ 3.64 Options granted 449,068 $ 1.61 104,936 $ 3.36 Options exercised (36,763) $ 1.50 (180,067) $ 0.27 Options forfeited (260,385) $ 4.10 (157,118) $ 4.53 Options outstanding at end of year 1,159,771 $ 3.19 1,007,851 $ 4.07 Options exercisable at end of year 926,272 $ 3.08 724,457 $ 3.93 Options vested and expected to vest at end of year 1,159,002 $ 3.19 1,002,522 $ 4.07 Option price range at end of year $ 1.07 - $6.91 $ 2.30 - $6.91 Aggregate intrinsic value of options exercised during year $ 55,000 $ 456,000 Weighted average remaining contractual life of options outstanding as of October 31, 2017: 4.19 years Weighted average remaining contractual life of options exercisable as of October 31, 2017: 3.18 years Weighted average remaining contractual life of options vested and expected to vest as of October 31, 2017: 4.19 years Aggregate intrinsic value of options outstanding at October 31, 2017: $552,000 Aggregate intrinsic value of options exercisable at October 31, 2017: $503,000 Aggregate intrinsic value of options vested and expected to vest at October 31, 2017: $552,000 As of October 31, 2017, $275,000 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 6.33 years. Effective for the fiscal year ending October 31, 2017, 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. Previously, for the fiscal year ended October 31, 2016, non-employee directors received $30,000 annually. During the quarter ended January 31, 2017, the Company granted each of its four non-employee directors 77,339 options. 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 ($0.32 per share). These options vest ratably over fiscal year 2017. On June 9, 2017, the Company’s Board of Directors appointed Gerald Garland to serve as a director. Mr. Garland received a prorated portion of the compensation paid by the Company. The number of stock options granted to Mr. Garland was determined by dividing $9,863 (the portion of his director fee for the year ending October 31, 2017) by the fair value of a stock option grant using the Black-Scholes model ($0.40 per share). These options vest ratably over the remaining portion of fiscal year 2017. On April 6, 2016, Howard Hill, the Company’s former Chief Operating Officer, retired from the Company. On becoming a non-employee member of the Board on April 7, 2016, Mr. Hill was granted 33,744 options, representing the director compensation payable to him for his services for the remainder of the 2016 fiscal year. The number of stock options granted was determined by dividing his pro-rata portion of his stock based compensation for serving on the Board of $8,750 by the fair value of a stock option grant using the Black-Scholes model ($0.26). These options vested ratably over fiscal 2016. |
Retirement plan
Retirement plan | 12 Months Ended |
Oct. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement plan | Note 10 - Retirement plan The Company has a 401(K) plan available to its employees. For the years ended October 31, 2017 and 2016, the Company contributed and recognized as an expense $166,000 and $182,000, 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, 2017 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 11 - Related party transactions During fiscal 2016 the Company had a note receivable from stockholder of $67,000 that was due from a former Chief Executive Officer of the Company, earned interest at 6% per annum (which interest was payable annually), and had no specific due date. The note was collateralized by property owned by the former Chief Executive Officer. During fiscal 2016, the former Chief Executive Officer resigned as an employee of the Company and, in connection with his resignation, repaid the foregoing promissory note in full. 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, 2017, 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. |
Cash dividend and declared divi
Cash dividend and declared dividends | 12 Months Ended |
Oct. 31, 2017 | |
Cash Dividend And Dividends Declaration [Abstract] | |
Cash dividend and declared dividends | Note 12 - Cash dividend and declared dividends The Company paid quarterly dividends of $0.02 per share during fiscal year 2017 for a total of $707,000. The Company paid quarterly dividends of $0.02, $0.02, $0.02 and $0.07 per share during the three months ended October, 31, 2016, July 31, 2016, April 30, 2016 and January 31, 2016, respectively, for a total of $1.1 million. |
Commitments
Commitments | 12 Months Ended |
Oct. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 13 - Commitments As of October 31, 2017, the Company leases its facilities in San Diego, California, Yaphank, New York, Milford, Connecticut and East Brunswick, New Jersey under non-cancelable operating leases. Deferred rents, included in accrued expenses and other long-term liabilities, were $95,000 as of October 31, 2017 and $3,000 as of October 31, 2016. The San Diego lease also requires 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 $644,000 and $628,000 in 2017 and 2016, respectively. Minimum lease payments under these non-cancelable operating leases in each of the years subsequent to October 31, 2017 are as follows (in thousands): Year ending October 31, Amount 2018 $ 645 2019 516 2020 441 2021 440 2022 359 Total $ 2,401 |
Line of credit
Line of credit | 12 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
Line of credit | Note 14 - Line of credit From May 2015 until September 2016, the Company had a $5 million line of credit available to it from its bank. The Company did not use the line of credit and, effective September 8, 2016, the Company terminated the line of credit. |
Subsequent events
Subsequent events | 12 Months Ended |
Oct. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 15 - Subsequent events On December 13, 2017, the Board of Directors of the Company declared a quarterly dividend of $0.02 per share that was paid on January 15, 2018 to stockholders of record on December 31, 2017. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into United States tax law, which among other provisions will lower the corporate tax rate to 21%. Given this date of enactment, our financial statements for the year ended October 31, 2017 do not reflect the impact of the Act. The Company is in the process of analyzing the potential aggregate impact of the Act and will reflect any such impact in the quarterly report for the period in which the law was enacted. |
Business activities and summa22
Business activities and summary of significant accounting policies (Policies) | 12 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
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, 2017 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) Comnet Telecom Supply, Inc., the subsidiary that manufactures and sells fiber optics cable, distinctive cabling technologies and custom patch cord assemblies, as well as other data center products; and (iv) Rel-Tech Electronics, Inc., the subsidiary that designs and manufacturers of cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation and military customers. Both the Cables Unlimited division and the Comnet Telecom division 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. During the fiscal year ended October 31, 2016, RF Industries, Ltd. sold the Aviel Electronics division that designed, manufactured and distributed specialty and custom RF connectors, and discontinued the Bioconnect division that manufactured and distributed cabling and interconnect products to the medical monitoring market. |
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”), Comnet Telecom Supply, Inc. (“Comnet”), and Rel-Tech Electronics, Inc. (“Rel-Tech”), 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 Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company recognizes revenue from product sales after purchase orders are received which contain a fixed price and for shipments with terms of FOB Shipping Point, revenue is recognized upon shipment, for shipments with terms of FOB Destination, revenue is recognized upon delivery and revenue from services is recognized when services are performed, and the recovery of the consideration is considered probable. |
Inventories | Inventories Inventories are stated at the lower of cost or market, 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. In June 2015, the Company acquired Rel-Tech, a company that valued its inventories using specific identification (last purchase price) on a FIFO basis. As of July 31, 2016, Rel-Tech prospectively values its inventories cost using the weighted average cost of accounting. |
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”). For the fiscal year 2016, Cables Unlimited did not meet its sales volume and revenue goals, and the mix of product sold had lower margins than planned. These results, along with changes in the competitive marketplace and an evaluation of business priorities, led to a shift in strategic direction and reduced future revenue and profitability expectations for the business. The results of these changes and circumstances lead to the determination that Cables Unlimited did not pass our qualitative assessment and therefore a quantitative assessment was required. Upon completion of our Step 1 test, we found that the results indicated that Cables Unlimited’s carrying value exceeded its estimated fair value, and as a result, the Step 2 test was performed specific to Cables Unlimited. Under Step 2, the fair value of all assets and liabilities were estimated, including customer list and backlog, for the purpose of deriving an estimate of the fair value of goodwill. The fair value of the goodwill was then compared to the recorded goodwill to determine the amount of the impairment. Assumptions used in measuring the value of these assets and liabilities included the discount rates used in valuing the intangible assets, and consideration of the market environment in valuing the tangible assets. Upon completion of our Step 2 test, our Cables Unlimited division’s goodwill was determined to be impaired. As of October 31, 2016, the Company recorded a $2.6 million impairment charge to goodwill. Cables Unlimited’s goodwill is included in the Custom Cabling Manufacturing and Assembly segment. No other instances of impairment were identified as of October 31, 2016 and no instances of goodwill impairment were identified during the year ended October 31, 2017. 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. Effective November 1, 2014, the Company also completed its acquisition of Comnet. Goodwill related to this acquisition is included within the Comnet 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 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. |
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. In 2016, upon completion of our Step 2 test (see “Goodwill” above), our Cables Unlimited division’s trademark was determined to be impaired. As of October 31, 2016, the Company recorded a $150,000 impairment charge to its trademark. Cables Unlimited’s trademark is included in the Custom Cabling Manufacturing and Assembly segment. No instances of impairment were identified as of October 31, 2017 and no other instances of impairment were identified as of October 31, 2016. |
Earn-out liability | Earn-out liability The purchase agreement for the Rel-Tech acquisition provides for earn-out payments of up to $800,000 in the aggregate, last installment of which is payable May 31, 2018. The initial earn-out liability was valued at its fair value using the Monte Carlo simulation and is included as a component of the total purchase price. The earn-out was and will continue to be revalued quarterly using a present value approach and any resulting increase or decrease will be recorded into selling and general expenses. Any changes in the assumed timing and amount of the probability of payment scenarios could impact the fair value. Significant judgment is employed in determining the appropriateness of the assumptions used in calculating the fair value of the earn-out as of the acquisition date. Accordingly, significant variances between actual and forecasted results or changes in the assumptions can materially impact the amount of contingent consideration expense we record in future periods. 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. The contingent consideration liability represents future earn-out liability that we may be required to pay in conjunction with the acquisition of Rel-Tech and Comnet. The Company estimates the fair value of the earn-out liability using a probability-weighted scenario of estimated qualifying earn-out gross profit related to Rel-Tech and EBITDA related to Comnet calculated at net present value (level 3 of the fair value hierarchy). The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2017 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 236 The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2016 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 835 The following table summarizes the Level 3 transactions for the years ended October 31, 2017 and 2016 (in thousands): Level 3 2017 2016 Beginning balance $ 835 $ 1,527 Payments (578) (790) Change in value (21) 98 Ending Balance $ 236 $ 835 |
Intangible assets | Intangible assets Intangible assets consist of the following as of October 31 (in thousands): 2017 2016 Amortizable intangible assets: Non-compete agreements (estimated lives 3 - 5 years) $ 310 $ 310 Accumulated amortization (310) (273) - 37 Customer relationships (estimated lives 7 - 15 years) 5,099 5,099 Accumulated amortization (2,186) (1,644) 2,913 3,455 Patents (estimated life 14 years) 142 142 Accumulated amortization (25) (15) 117 127 Totals $ 3,030 $ 3,619 Non-amortizable intangible assets: Trademarks $ 1,237 $ 1,237 Amortization expense for the years ended October 31, 2017 and 2016 was $589,000 and $649,000, respectively. Impairment to trademarks for the years ended October 31, 2017 and 2016 was $0 and $150,000, respectively. Estimated amortization expense related to finite lived intangible assets is as follows (in thousands): Year ending October 31, Amount 2018 $ 553 2019 553 2020 553 2021 413 2022 413 Thereafter 545 Total $ 3,030 |
Advertising | Advertising The Company expenses the cost of advertising and promotions as incurred. Advertising costs charged to operations were approximately $130,000 and $156,000 in 2017 and 2016, 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, 2017 and 2016, the Company recognized $845,000 and $747,000 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 recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. |
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, 2017 and 2016, charges related to stock-based compensation amounted to approximately $214,000 and $206,000, respectively. For the fiscal years ended October 31, 2017 and 2016, stock-based compensation classified in cost of sales amounted to $13,000 and $28,000 and stock-based compensation classified in selling and general and engineering expense amounted to $201,000 and $178,000, respectively. |
Earnings per share | Earnings (loss) per share Basic earnings (loss) per share is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings (loss) per share is similar to that of basic earnings (loss) 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, 2017 and 2016, that were not included in the computation because they were anti-dilutive, totaled 737,512 and 824,441, respectively. The following table summarizes the computation of basic and diluted earnings (loss) per share: 2017 2016 Numerators: Consolidated net income (loss) (A) $ 382,000 $ (4,089,000) Denominators: Weighted average shares outstanding for basic earnings (loss) per share (B) 8,840,895 8,786,510 Add effects of potentially dilutive securities - assumed exercise of stock options 74,869 - Weighted average shares outstanding for diluted earnings (loss) per share (C) 8,915,764 8,786,510 Basic earnings (loss) per share (A)/(B) $ 0.04 $ (0.47) Diluted earnings (loss) per share (A)/(C) $ 0.04 $ (0.47) |
Recent accounting standards | Recent accounting standards Recently issued accounting pronouncements not yet adopted: In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The new standard will change the classification of certain cash payments and receipts within the cash flow statement. Specifically, payments for debt prepayment or debt extinguishment costs, including third-party costs, premiums paid, and other fees paid to lenders that are directly related to the debt prepayment or debt extinguishment, excluding accrued interest, will now be classified as financing activities. Previously, these payments were classified as operating expenses. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, with early adoption permitted, and will be applied retrospectively. The Company does not expect that the adoption of this new standard will have a material impact on its Consolidated Financial Statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. This ASU requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The ASU also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation Stock Compensation. The new standard will modify several aspects of the accounting and reporting for employee share-based payments and related tax accounting impacts, including the presentation in the statements of operations and cash flows of certain tax benefits or deficiencies and employee tax withholdings, as well as the accounting for award forfeitures over the vesting period. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements effective for the quarter ending January 31, 2018. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This guidance will supersede Topic 605, Revenue Recognition, in addition to other industry-specific guidance, once effective. 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 is 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. The Company continues to assess the impact this new standard may have on its ongoing financial reporting. The Company has identified its revenue streams both by contract and product type and is assessing each for potential impacts. For the revenue streams assessed, the Company does not anticipate a material impact in the timing or amount of revenue recognized. In January 2017, the FASB issued Accounting Standards Update 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. |
Business activities and summa23
Business activities and summary of significant accounting policies (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value, Assets and Liabilities | The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2017 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 236 The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2016 (in thousands): Description Level 1 Level 2 Level 3 Earn-out liability $ - $ - $ 835 |
Fair Value, Liabilities Measured on Recurring Basis | The following table summarizes the Level 3 transactions for the years ended October 31, 2017 and 2016 (in thousands): Level 3 2017 2016 Beginning balance $ 835 $ 1,527 Payments (578) (790) Change in value (21) 98 Ending Balance $ 236 $ 835 |
Components of Intangible Assets | Intangible assets consist of the following as of October 31 (in thousands): 2017 2016 Amortizable intangible assets: Non-compete agreements (estimated lives 3 - 5 years) $ 310 $ 310 Accumulated amortization (310) (273) - 37 Customer relationships (estimated lives 7 - 15 years) 5,099 5,099 Accumulated amortization (2,186) (1,644) 2,913 3,455 Patents (estimated life 14 years) 142 142 Accumulated amortization (25) (15) 117 127 Totals $ 3,030 $ 3,619 Non-amortizable intangible assets: Trademarks $ 1,237 $ 1,237 |
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 2018 $ 553 2019 553 2020 553 2021 413 2022 413 Thereafter 545 Total $ 3,030 |
Calculation of Basic And Diluted Earnings Per Share | The following table summarizes the computation of basic and diluted earnings (loss) per share: 2017 2016 Numerators: Consolidated net income (loss) (A) $ 382,000 $ (4,089,000) Denominators: Weighted average shares outstanding for basic earnings (loss) per share (B) 8,840,895 8,786,510 Add effects of potentially dilutive securities - assumed exercise of stock options 74,869 - Weighted average shares outstanding for diluted earnings (loss) per share (C) 8,915,764 8,786,510 Basic earnings (loss) per share (A)/(B) $ 0.04 $ (0.47) Diluted earnings (loss) per share (A)/(C) $ 0.04 $ (0.47) |
Discontinued operations (Tables
Discontinued operations (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary Financial Information Related to RF Neulink | The following summarized financial information related to the RF Neulink, RadioMobile and Bioconnect divisions is segregated from continuing operations and reported as discontinued operations for the years ended October 31, 2017 and 2016 (in thousands): 2017 2016 Royalties $ 174 $ 57 Bioconnect 10 (148) Provision (benefit) for income taxes 68 (33) Income (loss) from discontinued operations, net of tax $ 116 $ (58) |
Inventories and major vendors (
Inventories and major vendors (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories consist of the following (in thousands): 2017 2016 Raw materials and supplies $ 2,520 $ 2,642 Work in process 194 279 Finished goods 3,395 3,101 Totals $ 6,109 $ 6,022 |
Other current assets (Tables)
Other current assets (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Other current assets [Abstract] | |
Schedule of other current assets | Other current assets consist of the following (in thousands): 2017 2016 Prepaid taxes $ 20 $ 871 Prepaid expense 526 347 Notes receivable, current portion 83 83 Other 115 135 Totals $ 744 $ 1,436 |
Accrued expenses and other lo27
Accrued expenses and other long-term liabilities (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Accrued expenses consist of the following (in thousands): 2017 2016 Wages payable $ 855 $ 941 Accrued receipts 695 578 Earn-out liability 236 707 Other current liabilities 456 544 Totals $ 2,242 $ 2,770 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Segment Reporting [Abstract] | |
Sales by Geographic Area | The following table presents the sales of the Company by geographic area for the years ended October 31, 2017 and 2016 (in thousands): 2017 2016 United States $ 30,232 $ 29,257 Foreign Countries: Canada 483 509 Israel - 63 Mexico 78 234 All Other 171 178 732 984 Totals $ 30,964 $ 30,241 |
Net Sales, Income (Loss) Before Provision for Income Taxes and Other Related Segment Information | Net sales, income (loss) from continuing operations before provision (benefit) for income taxes and other related segment information for the years ended October 31, 2017 and 2016 are as follows (in thousands): RF Connector Custom Cabling and Manufacturing and Cable Assembly Assembly Corporate Total 2017 Net sales $ 11,456 $ 19,508 $ - $ 30,964 Income (loss) from continuing operations before provision (benefit) for income taxes 382 (11) 29 400 Depreciation and amortization 177 700 - 877 Total assets 6,297 11,910 6,853 25,060 2016 Net sales $ 9,352 $ 20,889 $ - $ 30,241 Loss from continuing operations before provision (benefit) for income taxes (1,358) (3,232) (93) (4,683) Depreciation and amortization 194 842 - 1,036 Total assets 5,902 13,100 6,835 25,837 |
Income tax provision (Tables)
Income tax provision (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | The provision (benefit) for income taxes for the fiscal years ended October 31, 2017 and 2016 consists of the following (in thousands): 2017 2016 Current: Federal $ 400 $ (332) State 24 (13) 424 (345) Deferred: Federal (293) (179) State 3 (128) (290) (307) $ 134 $ (652) |
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 (benefit) for income taxes as follows (in thousands, except percentages): 2017 2016 % of Pretax % of Pretax Amount Income Amount Income Income taxes at federal statutory rate $ 136 34.0 % $ (1,592) 34.0 % State tax provision, net of federal tax benefit 16 4.0 % (53) 1.1 % Nondeductible differences: Goodwill and other intangible asset impairment - 0.0 % 916 -19.6 % Rel-Tech earn-out (9) -2.3 % 52 -1.1 % Qualified domestic production activities deduction (66) -16.5 % 46 -1.0 % ISO stock options 33 8.3 % 52 -1.1 % Meals and entertainment 21 5.3 % 29 -0.6 % Temporary true-ups 26 6.4 % - 0.0 % State tax refunds, net of federal expense (4) -0.8 % (38) 0.8 % R&D credits (37) -9.3 % (46) 1.0 % Other 18 4.4 % (18) 0.4 % $ 134 33.5 % $ (652) 13.9 % |
Schedule of deferred tax assets and liabilities | The Company’s total deferred tax assets and deferred tax liabilities at October 31, 2017 and 2016 are as follows (in thousands): 2017 2016 Deferred Tax Assets: Reserves $ 375 $ 216 Accrued vacation 122 134 Stock-based compensation awards 184 159 Uniform capitalization 130 148 Other 70 43 Total deferred tax assets 881 700 Deferred Tax Liabilities: Amortization / intangible assets (805) (864) Depreciation / equipment and furnishings (195) (211) Other - (34) Total deferred tax liabilities (1,000) (1,109) Total net deferred tax assets (liabilities) $ (119) $ (409) |
Stock options (Tables)
Stock options (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
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 2017 and 2016 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: 2017 2016 Weighted average volatility 43.3 % 28.7 % Expected dividends 5.0 % 2.4 % Expected term (in years) 4.3 3.0 Risk-free interest rate 1.20 % 0.70 % Weighted average fair value of options granted during the year $ 0.39 $ 0.66 Weighted average fair value of options vested during the year $ 1.95 $ 4.36 |
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, 2017 and 2016 and changes in outstanding stock options in 2017 and 2016 follows: 2017 2016 Shares or Weighted Shares or Weighted Price Per Average Price Per Average Share Exercise Price Share Exercise Price Options outstanding at beginning of year 1,007,851 $ 4.07 1,240,100 $ 3.64 Options granted 449,068 $ 1.61 104,936 $ 3.36 Options exercised (36,763) $ 1.50 (180,067) $ 0.27 Options forfeited (260,385) $ 4.10 (157,118) $ 4.53 Options outstanding at end of year 1,159,771 $ 3.19 1,007,851 $ 4.07 Options exercisable at end of year 926,272 $ 3.08 724,457 $ 3.93 Options vested and expected to vest at end of year 1,159,002 $ 3.19 1,002,522 $ 4.07 Option price range at end of year $ 1.07 - $6.91 $ 2.30 - $6.91 Aggregate intrinsic value of options exercised during year $ 55,000 $ 456,000 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum Lease Payments, Operating Leases | Minimum lease payments under these non-cancelable operating leases in each of the years subsequent to October 31, 2017 are as follows (in thousands): Year ending October 31, Amount 2018 $ 645 2019 516 2020 441 2021 440 2022 359 Total $ 2,401 |
Schedule of Fair Value (Details
Schedule of Fair Value (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Level 1 | ||
Earn-out liability | $ 0 | $ 0 |
Level 2 | ||
Earn-out liability | 0 | 0 |
Level 3 | ||
Earn-out liability | $ 236 | $ 835 |
Fair Value, Liabilities Measure
Fair Value, Liabilities Measured on Recurring Basis (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Beginning balance | $ 835 | $ 1,527 |
Payments | (578) | (790) |
Change in value | (21) | 98 |
Ending Balance | $ 236 | $ 835 |
Intangible assets (Detail)
Intangible assets (Detail) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Intangible Assets [Line Items] | ||
Amortizable intangible assets, net | $ 3,030 | $ 3,619 |
Non-amortizable intangible assets, trade marks | 1,237 | 1,237 |
Non-compete agreements (estimated lives 3 - 5 years) | ||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 310 | 310 |
Amortizable intangible assets, accumulated amortization | (310) | (273) |
Amortizable intangible assets, net | 0 | 37 |
Customer relationships (estimated lives 7 - 15 years) | ||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 5,099 | 5,099 |
Amortizable intangible assets, accumulated amortization | (2,186) | (1,644) |
Amortizable intangible assets, net | 2,913 | 3,455 |
Patents (estimated life 14 years) | ||
Intangible Assets [Line Items] | ||
Amortizable intangible assets, gross | 142 | 142 |
Amortizable intangible assets, accumulated amortization | (25) | (15) |
Amortizable intangible assets, net | $ 117 | $ 127 |
Intangible assets (Parenthetica
Intangible assets (Parenthetical) (Detail) | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Non-compete agreements (estimated lives 3 - 5 years) | Maximum [Member] | ||
Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | 5 years |
Non-compete agreements (estimated lives 3 - 5 years) | Minimum [Member] | ||
Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years |
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 |
Estimated amortization expense
Estimated amortization expense related to finite lived intangible assets (Detail) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Estimated Amortization Expense Related To Finite Lived Intangible Assets [Line Items] | ||
2,018 | $ 553 | |
2,019 | 553 | |
2,020 | 553 | |
2,021 | 413 | |
2,022 | 413 | |
Thereafter | 545 | |
Total | $ 3,030 | $ 3,619 |
Computation of Basic and Dilute
Computation of Basic and Diluted Weighted Average Shares Outstanding (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Numerators: | ||
Consolidated net income (loss) (A) | $ 382 | $ (4,089) |
Denominators: | ||
Weighted average shares outstanding for basic earnings (loss) per share (B) | 8,840,895 | 8,786,510 |
Add effects of potentially dilutive securities - assumed exercise of stock options | 74,869 | 0 |
Weighted average shares outstanding for diluted earnings (loss) per share (C) | 8,915,764 | 8,786,510 |
Basic earnings (loss) per share (A)/(B) | $ 0.04 | $ (0.47) |
Diluted earnings (loss) per share (A)/(C) | $ 0.04 | $ (0.47) |
Business activities and summa38
Business activities and summary of significant accounting policies - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 31, 2018 | Oct. 31, 2017 | Oct. 31, 2016 | |
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Amortization of Intangible Assets | $ 589,000 | $ 649,000 | |
Advertising Expense | 130,000 | 156,000 | |
Research and Development Expense | 845,000 | 747,000 | |
Stock based compensation expense | $ 214,000 | $ 206,000 | |
Shares excluded from computation of diluted per share amount | 737,512 | 824,441 | |
Subsequent Event [Member] | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Earn-out Payment | $ 800,000 | ||
Trademarks [Member] | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Impairment of Intangible Assets, Finite-lived | $ 0 | $ 150,000 | |
Cables Unlimited Division [Member] | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Goodwill, Impairment Loss | 2,600,000 | ||
Cables Unlimited Division [Member] | Trademarks [Member] | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Impairment of Intangible Assets, Finite-lived | 150,000 | ||
Maximum | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Minimum | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Selling General and Engineering Expenses | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Stock based compensation expense | $ 201,000 | 178,000 | |
Cost of Sales | |||
Business Activities And Summary Of Significant Accounting Policies [Line Items] | |||
Stock based compensation expense | $ 13,000 | $ 28,000 |
Summary of financial informatio
Summary of financial information related to RF Neulink (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Royalties | $ 174 | $ 57 |
Provision (benefit) for income taxes | 68 | (33) |
Income (loss) from discontinued operations, net of tax | 116 | (58) |
Bioconnect division [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income (loss) from discontinued operations, net of tax | $ 10 | $ (148) |
Discontinued operations - Addit
Discontinued operations - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Royalty revenue | $ 174 | $ 57 |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 116 | (58) |
Inventory Write-down | 0 | 168 |
RF Neulink [Member] | Radio Mobile, Inc [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Royalty revenue | 174 | 57 |
Bioconnect division [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 10 | $ (148) |
Inventory Write-down | $ 148 |
Concentrations of credit risk -
Concentrations of credit risk - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Concentration Risk [Line Items] | ||
Cash, FDIC insured amount | $ 5.2 | |
Sales Revenue, Goods, Net | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.00% | |
Sales Revenue, Goods, Net | Customer One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 20.00% | |
Sales Revenue, Goods, Net | Customer Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.00% | |
Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 20.00% | |
Accounts Receivable | Customer One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 27.00% | |
Accounts Receivable | Customer Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 5.00% |
Inventories and major vendors -
Inventories and major vendors - Components of Inventories (Detail) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Inventory [Line Items] | ||
Raw materials and supplies | $ 2,520 | $ 2,642 |
Work in process | 194 | 279 |
Finished goods | 3,395 | 3,101 |
Totals | $ 6,109 | $ 6,022 |
Inventories and major vendors43
Inventories and major vendors - Additional Information (Detail) - Supplier Concentration Risk [Member] | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Vendor One | ||
Inventory [Line Items] | ||
Purchases of connector products, percentage | 7.00% | 9.00% |
Vendor Two | ||
Inventory [Line Items] | ||
Purchases of connector products, percentage | 5.00% | 6.00% |
Other current assets (Detail)
Other current assets (Detail) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Prepaid taxes | $ 20 | $ 871 |
Prepaid expense | 526 | 347 |
Notes receivable, current portion | 83 | 83 |
Other | 115 | 135 |
Totals | $ 744 | $ 1,436 |
Other current assets - Addition
Other current assets - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Increase (Decrease) In Other Noncurrent Assets | $ (71,000) | $ 102,000 |
Notes Receivable [Member] | ||
Increase (Decrease) In Other Noncurrent Assets | $ 0 | $ 21,000 |
Accrued expenses and other lo46
Accrued expenses and other long-term liabilities (Detail) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Schedule of Accrued Liabilities [Line Items] | ||
Wages payable | $ 855 | $ 941 |
Accrued receipts | 695 | 578 |
Earn-out liability | 236 | 707 |
Other current liabilities | 456 | 544 |
Totals | $ 2,242 | $ 2,770 |
Accrued expenses and other lo47
Accrued expenses and other long-term liabilities - Additional Information (Detail) | Oct. 31, 2016USD ($) |
Other Noncurrent Liabilities [Member] | |
Schedule Of Accrued Liabilities [Line Items] | |
Accrued Earn Out Liability Non Current | $ 128,000 |
Sales by geographic area (Detai
Sales by geographic area (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Revenue, Major Customer [Line Items] | ||
Sales revenue | $ 30,964 | $ 30,241 |
United States | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 30,232 | 29,257 |
Canada | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 483 | 509 |
Israel | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 0 | 63 |
Mexico | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 78 | 234 |
All other | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | 171 | 178 |
Foreign countries, total | ||
Revenue, Major Customer [Line Items] | ||
Sales revenue | $ 732 | $ 984 |
Net sales, income (loss) before
Net sales, income (loss) before provision for income taxes and other related segment information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 30,964 | $ 30,241 |
Income (loss) from continuing operations before provision (benefit) for income taxes | 400 | (4,683) |
Depreciation and amortization | 877 | 1,036 |
Total assets | 25,060 | 25,837 |
RF Connector and Cable Assembly | ||
Segment Reporting Information [Line Items] | ||
Net sales | 11,456 | 9,352 |
Income (loss) from continuing operations before provision (benefit) for income taxes | 382 | (1,358) |
Depreciation and amortization | 177 | 194 |
Total assets | 6,297 | 5,902 |
Custom Cabling Manufacturing and Assembly | ||
Segment Reporting Information [Line Items] | ||
Net sales | 19,508 | 20,889 |
Income (loss) from continuing operations before provision (benefit) for income taxes | (11) | (3,232) |
Depreciation and amortization | 700 | 842 |
Total assets | 11,910 | 13,100 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | 0 |
Income (loss) from continuing operations before provision (benefit) for income taxes | 29 | (93) |
Depreciation and amortization | 0 | 0 |
Total assets | $ 6,853 | $ 6,835 |
Provision (benefit) for income
Provision (benefit) for income taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Current: | ||
Federal | $ 400 | $ (332) |
State | 24 | (13) |
Current income tax expense (benefit) | 424 | (345) |
Deferred: | ||
Federal | (293) | (179) |
State | 3 | (128) |
Deferred income tax expense (benefit) | (290) | (307) |
Provision for income taxes | $ 134 | $ (652) |
Income tax at the federal statu
Income tax at the federal statutory rate is reconciled (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Income taxes at federal statutory rate | $ 136 | $ (1,592) |
State tax provision, net of federal tax benefit | 16 | (53) |
Nondeductible differences: | ||
Goodwill and other intangible asset impairment | 0 | 916 |
Rel-Tech earn-out | (9) | 52 |
Qualified domestic production activities deduction | (66) | 46 |
ISO stock options | 33 | 52 |
Meals and entertainment | 21 | 29 |
Temporary true-ups | 26 | 0 |
State tax refunds, net of federal expense | (4) | (38) |
R& D credits | (37) | (46) |
Other | 18 | (18) |
Net provision (benefit) for income taxes | $ 134 | $ (652) |
Income taxes at federal statutory rate (% of Pretax Income) | 34.00% | 34.00% |
State tax provision, net of federal tax benefit (% of Pretax Income) | 4.00% | 1.10% |
Nondeductible differences: (% of Pretax Income) | ||
Goodwill and other intangible asset impairment (% of Pretax Income) | 0.00% | (19.60%) |
Rel-Tech earn-out (% of Pretax Income) | (2.30%) | (1.10%) |
Qualified domestic production activities deduction (% of Pretax Income) | (16.50%) | (1.00%) |
ISO stock options (% of Pretax Income) | 8.30% | (1.10%) |
Meals and entertainment (% of Pretax Income) | 5.30% | (0.60%) |
Temporary true-ups (% of Pretax Income) | 6.40% | 0.00% |
State tax refunds, net of federal expense (% of Pretax Income) | (0.80%) | 0.80% |
R& D credits (% of Pretax Income) | (9.30%) | 1.00% |
Other (% of Pretax Income) | 4.40% | 0.40% |
Net provision (benefit) for income taxes (% of Pretax Income) | 33.50% | 13.90% |
Total of deferred tax assets an
Total of deferred tax assets and deferred tax liabilities (Detail) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Deferred Tax Assets: | ||
Reserves | $ 375 | $ 216 |
Accrued vacation | 122 | 134 |
Stock-based compensation awards | 184 | 159 |
Uniform capitalization | 130 | 148 |
Other | 70 | 43 |
Total deferred tax assets | 881 | 700 |
Deferred Tax Liabilities: | ||
Amortization / intangible assets | (805) | (864) |
Depreciation / equipment and furnishings | (195) | (211) |
Other | 0 | (34) |
Total deferred tax liabilities | (1,000) | (1,109) |
Total net deferred tax assets (liabilities) | $ (119) | $ (409) |
Income tax provision - Addition
Income tax provision - Additional Information (Detail) | 1 Months Ended |
Dec. 22, 2017 | |
Subsequent Event [Member] | |
Income Taxes [Line Items] | |
Effective Income Tax Rate Reconciliation, Percent | 21.00% |
Computation of weighted average
Computation of weighted average fair value of employee stock options using black-scholes option pricing model assumptions (Detail) - $ / shares | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average volatility | 43.30% | 28.70% |
Expected dividends | 5.00% | 2.40% |
Expected term (in years) | 4 years 3 months 18 days | 3 years |
Risk-free interest rate | 1.20% | 0.70% |
Weighted average fair value of options granted during the year | $ 0.39 | $ 0.66 |
Weighted average fair value of options vested during the year | $ 1.95 | $ 4.36 |
Summary of status of options gr
Summary of status of options granted under stock option plans and changes in options outstanding (Detail) - USD ($) | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Shares | ||
Aggregate intrinsic value of options exercised during year | $ 552,000 | |
Stock Option | ||
Shares | ||
Options outstanding at beginning of year | 1,007,851 | 1,240,100 |
Options granted | 449,068 | 104,936 |
Options exercised | (36,763) | (180,067) |
Options forfeited | (260,385) | (157,118) |
Options outstanding at end of year | 1,159,771 | 1,007,851 |
Options exercisable at end of year | 926,272 | 724,457 |
Options vested and expected to vest at end of year | 1,159,002 | 1,002,522 |
Option price lower range | $ 1.07 | $ 2.30 |
Option price upper range | $ 6.91 | $ 6.91 |
Aggregate intrinsic value of options exercised during year | $ 55,000 | $ 456,000 |
Weighted Average Exercise Price | ||
Options outstanding at beginning of year | $ 4.07 | $ 3.64 |
Options granted | 1.61 | 3.36 |
Options exercised | 1.50 | 0.27 |
Options forfeited | 4.10 | 4.53 |
Options outstanding at end of year | 3.19 | 4.07 |
Options exercisable at end of year | 3.08 | 3.93 |
Options vested and expected to vest at end of year | $ 3.19 | $ 4.07 |
Stock options - Additional Info
Stock options - Additional Information (Detail) - USD ($) | Sep. 08, 2017 | Apr. 07, 2016 | Sep. 04, 2015 | Sep. 05, 2014 | Jan. 31, 2017 | Oct. 31, 2017 | Oct. 31, 2016 | Mar. 09, 2010 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Weighted average remaining life of options outstanding | 4 years 2 months 8 days | |||||||
Weighted average remaining contractual life of options exercisable | 3 years 2 months 5 days | |||||||
Weighted average life of options vested and expected to vest | 4 years 2 months 8 days | |||||||
Aggregate intrinsic value of options outstanding | $ 552,000 | |||||||
Aggregate intrinsic value of options exercisable | 503,000 | |||||||
Aggregate intrinsic value of options vested and expected to vest | 552,000 | |||||||
Non-vested stock-based arrangements yet to be recognized | $ 275,000 | |||||||
Stock based arrangements yet to be recognized, weighted average period expected to be recognized | 6 years 3 months 29 days | |||||||
Non-employee director annual grant | $ 30,000 | $ 50,000 | ||||||
Options granted for each non-employee director | 77,339 | |||||||
Value of stock option issued | $ 25,000 | |||||||
Fair value of stock option | $ 0.32 | |||||||
Chief Operating Officer | ||||||||
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 | 33,744 | |||||||
Stock Issued During Period, Value, Share-based Compensation, Gross | $ 8,750 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ 0.26 | |||||||
Mr. Garland [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Fair value of stock option | $ 0.40 | |||||||
Stock Issued During Period, Value, Share-based Compensation, Gross | $ 9,863 | |||||||
2000 Stock Option Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,000,000 | |||||||
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 | 1,726,138 | |||||||
Incentive and Non-Qualified Stock Option Plans | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Additional Shares Of Common Stock Issued | 1,000,000 | 500,000 | 500,000 |
Retirement plan - Additional In
Retirement plan - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Compensation And Retirement [Line Items] | ||
Pension and Other Postretirement Benefit Contributions | $ 166,000 | $ 182,000 |
Percentage Of Employee Contribution Paid | 3.00% |
Related party transactions - Ad
Related party transactions - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 15, 2011 | Oct. 31, 2017 | Oct. 31, 2016 | |
New York [Member] | |||
Related Party Transaction [Line Items] | |||
Operating Leases, Rent Expense | $ 13,000 | ||
Payments for Rent | $ 156,000 | ||
Chief Executive Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Due from Officers or Stockholders, Noncurrent | $ 67,000 | ||
Debt Instrument, Interest Rate During Period | 6.00% |
Cash dividend and declared di59
Cash dividend and declared dividends - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Dividends Payable [Line Items] | ||||||
Dividends paid, per share | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.07 | $ 0.02 | |
Dividends paid | $ 707 | $ 1,141 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Commitments And Contingencies [Line Items] | ||
Operating Leases, Rent Expense, Net, Total | $ 644,000 | $ 628,000 |
Accrued Liabilities and Other Liabilities, Total | $ 95,000 | $ 3,000 |
Minimum lease payments operatin
Minimum lease payments operating lease (Detail) $ in Thousands | Oct. 31, 2017USD ($) |
Commitments And Contingencies [Line Items] | |
2,018 | $ 645 |
2,019 | 516 |
2,020 | 441 |
2,021 | 440 |
2,022 | 359 |
Total | $ 2,401 |
Line of credit - Additional Inf
Line of credit - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2017 | Sep. 07, 2016 | |
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Expiration Date | Sep. 8, 2016 | |
Line of Credit Facility, Amount Outstanding | $ 5 |
Subsequent events - Additional
Subsequent events - Additional Information (Detail) - Subsequent Event - $ / shares | Dec. 13, 2017 | Dec. 22, 2017 |
Subsequent Event [Line Items] | ||
Dividends payable, amount per share | $ 0.02 | |
Dividends payable, date to be paid | Jan. 15, 2018 | |
Dividends payable, record date | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent | 21.00% |