RF INDUSTRIES, LTD.
7610 Miramar Road
Building 7200
San Diego, CA 92126-4202
NOTICE IS HEREBY GIVEN that the ANNUAL MEETING OF SHAREHOLDERS
WILL BE HELD ON March 31, 1998
An Annual Meeting of Shareholders of RF Industries, Ltd., a Nevada
corporation (the "Company"), will be held at the office of the Company at 7610
Miramar Road, Building 7200, San Diego, CA 92126-4202 on Tuesday, March 31,
1998, at 2:00 p.m., Pacific Standard Time, for the following purposes:
1. To elect five directors of the Company who shall serve until the 1999
Annual Meeting of Shareholders (and until the election and qualification of
their successors).
2. To ratify the selection of J. H. Cohn LLP as the Company's independent
public accountants for the fiscal year ending October 31, 1998.
3. To transact such other business as may properly come before the Annual
Meeting of Shareholders or any adjournment thereof.
The Board of Directors has fixed the close of business on February 11, 1998
as the record date for determination of shareholders entitled to notice of and
to vote at the Annual Meeting of Shareholders or any adjournment thereof. A
complete list of such shareholders will be available at the executive offices of
the Company for ten (10) days before the meeting.
All shareholders are cordially invited to attend the Annual Meeting of
Shareholders in person. Regardless of whether you plan to attend the meeting,
please sign and date the enclosed Proxy and return it promptly in the
accompanying envelope, postage for which has been provided if mailed in the
United States. The prompt return of Proxies will ensure a quorum and save the
Company the expense of further solicitation. Any shareholder returning the
enclosed Proxy may revoke it prior to its exercise by voting in person at the
meeting or by filing with the Secretary of the Company a written revocation or a
duly executed Proxy bearing a later date.
By Order of the Board of Directors
Terrie A. Gross,
Corporate Secretary
Chief Financial Officer
San Diego, California
February 20, 1998
<PAGE>
RF INDUSTRIES, LTD.
7610 Miramar Road
San Diego, CA 92126-4202
---------------
PROXY STATEMENT
---------------
General
- -------
The enclosed Proxy is solicited on behalf of the Board of Directors of
RF Industries, Ltd., a Nevada corporation (the "Company"), for use at the Annual
Meeting of Shareholders ("Annual Meeting") to be held on Tuesday, March 31,
1998, at 2:00 p.m., local time, or at any adjournment or postponement thereof.
The Annual Meeting will be held at the office of the Company at 7610 Miramar
Road, Building 7200, San Diego, CA 92126-4202. This Proxy Statement and the
accompanying Proxy and annual report were mailed to shareholders on or about
February 20, 1998.
Voting
- ------
Only shareholders of record at the close of business on February 11, 1998,
will be entitled to vote at the Annual Meeting. On February 11, 1998, there were
approximately 1,755 shares of Common Stock outstanding. The Company is
incorporated in Nevada, and is not required by Nevada corporation law or its
Articles of Incorporation to permit cumulative voting in the election of
directors.
On each or any other matter properly presented and submitted to a vote at
the Annual Meeting, each share will have one vote and an affirmative vote of a
majority of the shares represented at the Annual Meeting and entitled to vote
(where the holders of a majority of the shares entitled to vote are present in
person or by Proxy) will be necessary to approve the matter.
Revocability of Proxies
- -----------------------
When the enclosed Proxy is properly executed and returned, the shares it
represents will be voted at the Annual Meeting in accordance with any directions
noted thereon, and if no directions are indicated, the shares it represents will
be voted in favor of the proposals set forth in the notice attached hereto. Any
person giving a Proxy in the form accompanying this statement has the power to
revoke it any time before its exercise. It may be revoked by filing with the
Secretary of the Company's principal executive office, 7610 Miramar Road,
Building 7200, San Diego, CA 92126-4202, an instrument of revocation or a duly
executed Proxy bearing a later date, or it may be revoked by attending the
Annual Meeting and voting in person.
Solicitation
- ------------
The Company will bear the entire cost of the solicitation of Proxies,
including the preparation, assembly, printing, and mailing of this Proxy
Statement, the Proxy, and any additional material furnished to shareholders.
Copies of solicitation material will be furnished to brokerage houses,
fiduciaries, and custodians holding shares in their names that are beneficially
owned by others to forward to such beneficial owners. In addition, the Company
may reimburse such persons for their cost of forwarding the solicitation
material to such beneficial owners. The solicitation of Proxies by mail may be
supplemented by telephone, telegram, and/or personal solicitation by directors,
officers, or employees of the Company. No additional compensation will be paid
for any such services. Except as described above, the Company does not intend to
solicit Proxies other than by mail.
<PAGE>
PROPOSAL 1:
NOMINATION AND ELECTION OF DIRECTORS
Each director to be elected will hold office until the next Annual Meeting
and until his or her successor is elected and has qualified, or until his or her
death, resignation, or removal. Five directors are to be elected at the Annual
Meeting. Three of the nominees for director, Mr.Benz, Mr. Hill & Mr. Ehret were
elected by the shareholders at the Company's 1995 annual meeting of share-
holders, while Mr.Jacobs and Mr. Hooper were appointed by the current directors
in 1997 & 1998, respectively.
The five candidates receiving the highest number of affirmative votes cast
at the Annual Meeting shall be elected as directors of the Company. Each person
nominated for election has agreed to serve if elected. If any of such nominees
shall become unavailable or refuse to serve as a director (an event that is not
anticipated), the Proxy holders will vote for substitute nominees at their
discretion. Unless otherwise instructed, the Proxy holders will vote the Proxies
received by them for the fiv nominees named below.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE
Nominees
- --------
Set forth below is information regarding the nominees, including
information furnished by them as to their principal occupations for the last
five years, and their ages as of October 31, 1997.
Name Age Director Since
- ----- ----- ----------------
Jack A. Benz 64 1990
John R. Ehret 60 1991
Howard F. Hill 57 1979
Henry E. Hooper 44 1998
Robert Jacobs 45 1997
Jack A. Benz is an electronics engineer by education, holding a degree from
Milwaukee School of Engineering. He has been involved in the sales and marketing
end of the electronics and communications industry for over 40 years. He has
owned businesses in the manufacturers representative and export field. He
managed RF Industries, Ltd. when it operated as a separate company in Florida
prior to its acquisition in 1987 by Celltronics, the predecessor company to RF
Industries.
John R. Ehret holds a B.S. degree in Industrial Management from the
University of Baltimore. He is Vice-President, Chief Financial Officer, and
co-owner of TPL Electronics of Los Angeles, California. He has been in the
electronics industry for over 30 years.
Howard F. Hill, a founder of the Company in 1979, has degrees in
Manufacturing Engineering, Quality Engineering and Industrial Management. He
took over the presidency of the Company in July of 1993. He has held various
positions in the electronics industry over the past 30 years.
Henry E. Hooper has a bachelor's and master's degree from Yale University.
He serves as the Director of Technical Knowledge Support at TESSCO Technologies,
a distributor of wireless communications products and services. Before TESSCO,
Mr. Hooper served as a VP of sales and marketing with a textile manufacturing
company. Mr. Hooper has been in the telecommunications industry for over 10
years.
Robert Jacobs is RF Industries' Account Executive at Neil Berkman
Associates and coordinates the Company's investor relations. He holds an MBA
from the University of Southern California and has been in the investor
relations industry for over 16 years.
Terrie Gross joined the Company in January 1992 as Accounting Manager. She
was elected to Corporate Secretary in February 1995, and elected to Chief
Financial Officer in May 1997.
<PAGE>
Board Committees and Meetings
- -----------------------------
During the fiscal year ended October 31, 1997, the Board of Directors held
2 meetings. The Board of Directors is in the process of forming an Audit
Committee and Compensation Committee. All members of the Board of Directors hold
office until the next annual meeting of shareholders or the election and
qualification of their successors. The directors do not receive any compensation
for each Board of Director's meeting personally attended. Executive officers
serve at the discretion of the Board of Directors.
During the fiscal year ended October 31, 1997, each Board of Directors
member attended at least 75% of the aggregate of the meetings of the Board of
Directors on which he served.
Executive Compensation
- ----------------------
SUMMARY OF CASH AND OTHER COMPENSATION. The following table sets forth
compensation for services rendered in all capacities to the Company during the
fiscal year ended October 31, 1997, by the named executive officer for whom
disclosure is required.
Annual Compensation Long-Term Compensation Awards
------------------- -----------------------------
Securities Restricted
Underlying Stock Awards
Salary Options/SARs ($)
Name and Principal Position Year ($) ($) -----
- --------------------------- ---- ------ -----
Howard F Hill, President 1997 85, 000 4, 000 -0-
Chief Executive
Officer and Director 1996 85, 000 4, 000 -0-
OPTION GRANTS. The following table contains information concerning the
stock option grants to the Company's Chief Executive Officer for the fiscal year
ended October 31, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Securities % of Total
Underlying Options Granted Exercise or
Options to Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date
- ---- -------------- -------------- ------------ -------
<S> <C> <C> <C> <C>
Howard F. Hill, President
Incentive Stock Option 2, 000 7% 2.50 October, 2007
Non-Qualified Option 2, 000 9% 2.13 October, 2007
</TABLE>
<PAGE>
OPTION EXERCISES AND HOLDINGS. The following table sets forth information
concerning option exercises and option holdings under the 1990 Employee Stock
Plan and the Employee Agreement for the year ended October 31, 1997, with
respect to the Company's Chief Executive Officer:
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
Number of Unexercised Value of Unexercised
Options/SARs at Fiscal In-the-Money Options/SARs
Year-End (#) at Fiscal Year end ($)
Value Realized
Shares Market Price at
Acquired Exercise Less
Name Exercise (#) Exercise Price ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------------ ----------- ------------- ----------- -------------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Howard F. Hill, 20, 000 100, 000 349, 333 166, 667 797, 079 400, 000
President
</TABLE>
Employment Agreement
- --------------------
The Company has no employment or severance agreements for payments of more
than $100,000. The Company entered into a six year, renewable employment
agreement on June 1, 1994, with Mr. Hill providing for annual compensation of
$85,000 plus a bonus to be determined by the Board of Directors. The employment
agreement granted Mr. Hill options to acquire 500,000 shares of common stock at
$.10 per share. Such options vest ratably over the six year term of the
employment agreement.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of
the Company's Common Stock as of March 31, 1997 by: ( i ) each director and
nominee for director; (ii) the executive officer named in the Summary
Compensation Table in Executive Compensation; (iii) all executive officers and
directors of the Company as a group; and (iv) all those known by the Company to
be beneficial owners of more than 5% of the Common Stock.
Number of
Shares (1) Percentage (1)
Title of Name and Address Beneficially Beneficially
Class of Beneficial Owner Owned Owned
- --------- ------------------- ------------ --------------
Common Stock Jack A. Benz 52,000 (2) 1.7%
7610 Miramar Road
Building 6000
San Diego, CA 92126-4202
Common Stock Howard H. Hill 374, 830 (3) 12.2%
7610 Miramar Road
Building 6000
San Diego, CA 92126-4202
Common Stock John R. Ehret 25, 000 (4) 0.8%
7610 Miramar Road
Building 6000
San Diego, CA 92126-4202
Common Stock Robert Jacobs 51, 000 (5) 1.6%
7610 Miramar Road
Building 6000
San Diego, CA 92126-4202
Common Stock Henry E. Hooper 500 0.01%
7610 Miramar Road
Building 6000
San Diego, CA 92126-4202
Common Stock Terrie Gross 20,000 (6) 0.6%
7610 Miramar Road
Building 6000
San Diego, CA 92126-4202
All Directors and Officers 523,330 (7) 17.0%
as a Group (5 Persons)
Common Stock Mr. & Mrs. Stuart Schapiro 167,200 5.4%
Rock Associates
41 Winged Foot Drive
Larchmont, NY 10538
Common Stock Hytek International, Ltd. 1,227,167 40.0%
690 West 28th Street
Hialeah, FL 33010
(1) Shares available through outstanding options which are exercisable within
60 days of this report are treated as outstanding for purposes of computing
the number and percentage of shares each stockholder beneficially owns.
(2) Includes 12,000 shares which Mr.Benz has the right to acquire upon exercise
of options exercisable within 60 days after the Record Date.
(3) Includes 349,333 shares which Mr Hill has the right to acquire upon
exercise of options exercisable within 60 days after the Record Date.
(4) Includes 8,000 shares which Mr. Ehret has the right to acquire upon
exercise of options exercisable within 60 days after the Record Date.
(5) Includes 30,000 shares which Neil Berkman Associates has the right to
acquire upon exercise of options exercisable within 60 days after the
Record Date.
(6) Includes 14,500 shares which Terrie Gross has the right to acquire upon
exercise of options exercisable within 60 days after the Record Date.
(7) Includes 413,833 shares which all Directors and Officers, as a group, have
the right to acquire upon exercise of options exercisable within 60 days of
the date of this report.
There is no arrangement known to the Company, the operation of which may at a
subsequent date result in a change of control of the Company.
Compliance With Section 16(a) of the Exchange Act
- -------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Executive officers, directors and greater than 10% stockholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of reporting forms received by the
Company, the Company believes that during its most recent fiscal year ended
October 31, 1997, that its officers and directors complied with the filing
requirements under Section 16(a).
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE BOARD NOMINEES.
PROPOSAL 2:
SELECTION OF AUDITORS
Subject to stockholder approval at the Annual Meeting, the Board has selected
J.H. Cohn and Company to continue as the Company's independent auditors for the
fiscal year ending October 31, 1997. A representative of J.H. Cohn and Company
is expected to be present at the Annual Meeting. The representative will have an
opportunity to make a statement and will be available to respond to appropriate
questions from stockholders.
Stockholder ratification of the selection of J.H. Cohn and Company as the
Company's independent accountants is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of J.H. Cohn and
Company to the stockholders for ratification as a matter of good corporate
practice. If the stockholders fail to ratify the selection, the Board will
reconsider whether or not to retain that firm. Even if the selection is
ratified, the Board in its discretion may direct the appointment of a different
independent accounting firm at any time during the year if the Board determines
that such a changes would be in the best interests of the Company and its
stockholders.
The affirmative vote of the holders of a majority of the shares represented and
voting at the meeting will be required to ratify the selection of J.H. Cohn and
Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2
STOCKHOLDERS' PROPOSALS
Stockholders who intend to submit proposals at the 1999 Annual Meeting must
submit such proposals to the Company no later than February 1, 1998 in order for
them to be included in the Proxy Statement and the form of Proxy to be
distributed by the Board of Directors in connection with that meeting.
Stockholders proposals should be submitted to RF Industries, Ltd., 7610 Miramar
Road, Building 7200, San Diego, CA 92126-4202
ANNUAL REPORTS
The Company's 1997 Annual Report on Form 10-KSB which includes audited
financial statements for the Company's fiscal year ended October 31, 1997, is
being mailed with the Proxy Statement to stockholder of record on or about
February 11, 1998.
OTHER MATTERS
The Board of Directors knows of no other matters which will be brought before
the Annual Meeting. However,if any other matter properly comes before the Annual
Meeting of any adjournment thereof, it is intended that the persons named in the
enclosed form of Proxy will vote on such matters in accordance with their best
judgment.
Terrie A. Gross,
Corporate Secretary
Chief Financial Officer
San Diego, California
February 20, 1998
<PAGE>
President's Letter to Shareholders
February 10, 1998
Fellow Shareholders:
Fiscal 1997 was a good year for RF Industries. We have now achieved four
consecutive years of increasing revenues and profits. Since 1993, sales have
grown 235%, equal to a compound annual average growth rate of 39%.
Net sales for the fiscal year ended October 31, 1997 increased 13% to
$6,831,000, compared to sales of $6,084,000 in 1996. Net income increased 8% to
a record $601,000; or $.19 per share, compared to $561,000, or $.19 per share,
last year. Earnings per share were affected by an increase in the weighted
average number of shares outstanding to 3,233,936 compared to 2,994,016 at the
end of fiscal 1996.
At October 31, 1997, RF Industries' order backlog was approximately $4,219,000,
compared to a backlog of $3,123,000 at October 31, 1996. Our balance sheet is
still debt free, with cash and short term investments of $1,520,000, working
capital of $4,493,000, or $1.47 per share, a current ratio of 11 to 1, total
assets of $5,156,000 and stockholders equity of $4,706,000, or $1.54 per share.
RF CONNECTORS DIVISION
Our record fiscal 1997 results reflect the excellent performance of the RF
Connectors Division, where sales increased 24% to a record $5,009,000.
Connectors' strong growth accounted for RF Industries' entire fiscal 1997
operating profits. This strong performance is due to the recent addition of a
number of large national and international distributors, which have only
recently begun to ramp up their connector sales. Connectors' sales and earnings
should benefit as these distributors penetrate the market and gain acceptance
for RFI's connector products. Earnings may also benefit in the short term from
temporary weakness in materials prices and competitive pressures affecting our
Asian suppliers.
We are continuing product development efforts and expect soon to introduce new
RF connector products for several applications including Personal Communications
Service (PCS), Geo Positioning Satellite (GEO) and Original Equipment
Manufacturer (OEM) defined requirements. A number of customized RF connector
products are also being designed to address specialized applications in the
rapidly growing wireless market.
RF Connectors' newly formed Cable Assembly operation has demonstrated excellent
start-up results. We believe that this operation, which provides customized and
small quantity cable and connector assemblies for our connector customers, will
contribute to RF Connectors' sales and earnings in fiscal 1998.
<PAGE>
President's Letter to Shareholders
February 10, 1998 Page 2
We anticipate increased sales of our special design large connectors due to
RFI=s expanded distribution base and the rapidly growing PCS digital
telecommunications industry. The outlook is also strong for increasing sales of
our subminiature connector product line, which accounted for 12% of connector
sales in fiscal 1997.
RF NEULINK DIVISION
Neulink's fiscal 1997 sales of $1,776,000 enabled the division to achieve
break-even results. The disappointing sales and earnings were due to order
delays from three of Neulink's major customers.
We are encouraged, however, with the recent reinstatement of our contract for
production of additional Emergency Alert System (EAS) products. Production of
EAS systems were put on hold in the second quarter of fiscal 1997 due to FCC
delays in mandating system integration for cable television companies. This
customer, a Fortune 100 company, is now projecting a larger market than
previously anticipated.
Neulink is continuing to ship Synthesized Digital Paging transmitters to our
Chinese distributor. In addition, we have also recently received new orders from
China and South America for Neulink 9600 wireless digital modems addressing UHF
and VHF frequencies.
Neulink's engineering efforts are directed toward the introduction of new, lower
cost products with improved performance. One of these products, a specialized
high-speed wireless data modem targeted for domestic and foreign military
applications, is being developed under a paid contract from a Fortune 500
company. Neulink will retain production and manufacturing rights for this
product, which has strong potential to achieve steady sales in numerous
applications for many years to come.
As we begin the new fiscal year, RF Industries is at the strongest point in its
history. Our dedicated and experienced management team, strong balance sheet and
excellent product offerings have positioned the company for continued growth.
I would like to take this opportunity to thank all RFI's valued employees for
their dedication and efforts in making fiscal 1997 our best year ever. A special
Thank You is due to our shareholders for their continued long-term support
throughout the years.
Sincerely,
Howard F. Hill
President/C.E.O.
<PAGE>
PROXY VOTE CARD
FRONT SIDE:
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this Proxy will be
voted for Proposals 1 and 2.
Please sign exactly as your name appears on your stock certificate. When shares
are held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If the
shares are owned by a Partnership, sign in the name of the Partnership name by
an authorized person. Please mark, sign, date and return the Proxy promptly
using the enclosed envelope. To assist you in voting your shares, you may also
vote by faxing a copy of this Proxy to (619) 549-6345. If you choose to fax this
Proxy you must also mail the original Proxy in the enclosed envelope no later
than March 31, 1998.
BACK SIDE:
PROXY
RF INDUSTRIES, LTD.
A Nevada Corporation
ANNUAL MEETING OF SHAREHOLDERS
March 31, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jack A. Benz, Howard F. Hill, John Ehret, Robert
Jacobs and Henry Hooper as proxies, each with the power to appoint his or her
substitutes, and hereby authorizes them to represent and vote as designated
below, all of the shares of Common Stock of RF Industries, Ltd. held of record
by the undersigned on February 11, 1998, at the Annual Meeting of Shareholders
to be held at the offices of the Company at 7610 Miramar Road, Building 7200,
San Diego, CA 92126-4202 of Tuesday, March 31, 1998, at 2:00 p.m. Pacific
Daylight Time, or any adjournments or postponement thereof.
1. For the election as directors of the nominees listed below, except to the
extent that authority is specifically withheld.
o FOR all nominees listed below o WITHOLD AUTHORITY
(except as marked contrary below) (except as marked contrary below)
Jack A. Benz, Howard F. Hill, John Ehret, Robert Jacobs and Henry Hooper
(INSTRUCTIONS: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.)
______________________________________________________________________
2. PROPOSAL TO RATIFY APPOINTMENT OF J.H. COHN AS INDEPENDENT AUDITORS.
o FOR o AGAINST o ABSTAIN
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting.
(Continued on reverse side)
