<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended May 31, 1997
Commission File No. 0-24414
RF MONOLITHICS, INC.
(Exact name of registrant as specified in its charter)
---------------------------
DELAWARE 75-1638027
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification)
4441 SIGMA ROAD, DALLAS, TEXAS 75244
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 233-2903
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
[X] YES [ ] NO
AS OF JUNE 30, 1997, 5,508,337 SHARES OF THE REGISTRANT'S COMMON STOCK, $.001
PAR VALUE, WERE OUTSTANDING.
<PAGE>
RF MONOLITHICS, INC.
FORM 10-Q
QUARTER ENDED MAY 31, 1997
TABLE OF CONTENTS
ITEM
NUMBER PAGE
------ ----
PART I. CONDENSED FINANCIAL INFORMATION
1. Condensed Financial Statements:
Condensed Balance Sheets
May 31, 1997 (Unaudited), and August 31, 1996 1
Condensed Statements of Income - Unaudited
Three Months Ended May 31, 1997 and 1996,
and Nine Months Ended May 31, 1997 and 1996 2
Condensed Statements of Cash Flows - Unaudited
Nine Months Ended May 31, 1997 and 1996 3
Notes to Condensed Financial Statements 4
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. OTHER INFORMATION
1. Legal Proceedings 11
2. Changes in Securities 11
3. Defaults Upon Senior Securities 11
4. Submission of Matters to a Vote of Security Holders 12
5. Other Information 12
6. Exhibits and Reports on Form 8-K 12
SIGNATURES
<PAGE>
PART I. CONDENSED FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
(In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
May 31, August 31,
ASSETS 1997 1996
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,687 $ 1,029
Short-term investments 5,146 5,031
Trade receivables - net 9,031 6,703
Inventories 4,358 3,935
Prepaid expenses and other 722 536
Deferred income tax benefits 674 675
-------- --------
Total current assets 21,618 17,909
PROPERTY AND EQUIPMENT - Net 12,364 10,321
DEFERRED INCOME TAX BENEFITS 768 1,614
OTHER ASSETS - Net 660 727
-------- --------
TOTAL $ 35,410 $ 30,571
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt
and line of credit $ 1,218 $ 1,829
Accounts payable - trade 2,536 1,033
Accounts payable - construction
and equipment 273 142
Accrued expenses and other liabilities 2,777 1,950
Income taxes payable 60 54
Dividends payable on convertible
preferred stock 22 22
-------- --------
Total current liabilities 6,886 5,030
LONG-TERM DEBT 2,324 2,413
STOCKHOLDERS' EQUITY:
Common stock: 5,450 and 5,314 shares
issued and outstanding 5 5
Additional paid-in capital 25,134 24,547
Retained earnings (accumulated deficit) 1,219 (1,214)
Unearned compensation (160) (210)
Unrealized gain on short-term investments 2 0
-------- --------
Total stockholders' equity 26,200 23,128
-------- --------
TOTAL $ 35,410 $ 30,571
======== ========
</TABLE>
See notes to condensed financial statements.
-1-
<PAGE>
RF MONOLITHICS, INC.
CONDENSED STATEMENTS OF INCOME - UNAUDITED
(In Thousands, Except Per-Share Amounts)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
May 31, May 31,
-------------------- --------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
SALES $ 12,841 $ 9,029 $ 33,613 $ 25,684
COST OF SALES 7,527 5,625 20,039 16,312
-------- -------- -------- --------
GROSS PROFIT 5,314 3,404 13,574 9,372
OPERATING EXPENSES:
Research and development 1,060 896 2,943 2,387
Sales and marketing 1,497 1,078 4,285 3,148
General and administrative 987 687 2,465 2,046
-------- -------- -------- --------
Total operating expenses 3,544 2,661 9,693 7,581
-------- -------- -------- --------
INCOME FROM OPERATIONS 1,770 743 3,881 1,791
OTHER INCOME (EXPENSE):
Interest income 83 98 230 256
Interest expense (86) (134) (264) (380)
Other expense (6) 109 (15) 130
-------- -------- -------- --------
Total (9) 73 (49) 6
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 1,761 816 3,832 1,797
INCOME TAX EXPENSE 612 211 1,399 604
-------- -------- -------- --------
NET INCOME $ 1,149 $ 605 $ 2,433 $ 1,193
======== ======== ======== ========
EARNINGS PER SHARE $ 0.20 $ 0.11 $ 0.43 $ 0.22
======== ======== ======== ========
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING 5,774 5,461 5,688 5,407
======== ======== ======== ========
</TABLE>
See notes to condensed financial statements.
-2-
<PAGE>
RF MONOLITHICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS - UNAUDITED
(In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended May 31,
-------------------------
1997 1996
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 2,433 $ 1,193
Noncash items included in net income:
Deferred taxes 847 333
Depreciation and amortization 2,104 1,868
Provision for doubtful accounts 135 147
Other 50 36
Cash from (used in) operating working capital:
Trade receivables (2,463) (105)
Inventories (423) (293)
Prepaid expenses and other (186) 93
Accounts payable - trade 1,503 (1,251)
Accrued expenses and other liabilities 827 (161)
Income taxes payable 6 (66)
------- -------
Net cash from operations 4,833 1,794
INVESTING ACTIVITIES:
Increase in short-term investments (3,893) (2,888)
Decrease in short-term investments 3,780 3,035
Acquisition of property and equipment (3,396) (1,594)
Proceeds from sale of assets 24 34
Decrease (increase) in other assets 15 (83)
------- -------
Net cash used in investing activities (3,470) (1,496)
FINANCING ACTIVITIES:
Borrowings on notes payable -- 2,384
Repayments of notes payable and line of credit (1,175) (1,595)
Repayments of capital leases (248) (224)
Borrowings (repayments) of accounts payable -
construction and equipment 131 (623)
Common stock issued for options exercised and
employee stock purchases 587 279
Dividends paid on preferred stock -- (4)
------- -------
Net cash from (used in) financing activities (705) 217
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 658 515
CASH AND CASH EQUIVALENTS:
Beginning of period 1,029 433
------- -------
End of period $ 1,687 $ 948
======= =======
SUPPLEMENTAL INFORMATION:
Interest paid $ 253 $ 386
======= =======
Income taxes paid $ 256 $ 120
======= =======
Property and equipment acquisitions by debt $ 723 $ 2
======= =======
</TABLE>
See notes to condensed financial statements.
-3-
<PAGE>
RF MONOLITHICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed financial statements include all adjustments,
consisting only of normal recurring adjustments and accruals, that in the
opinion of the management of RF Monolithics, Inc. (the "Company" or "RFM") are
necessary for a fair presentation of the Company's financial position as of May
31, 1997, and the results of operations and cash flows for the three and nine
months ended May 31, 1997 and May 31, 1996. These unaudited interim condensed
financial statements should be read in conjunction with the audited financial
statements of the Company and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended August 31, 1996, filed with the
Securities and Exchange Commission.
Operating results for the nine months ended May 31, 1997, are not necessarily
indicative of the results to be achieved for the full fiscal year ending August
31, 1997.
2. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
MAY 31, AUGUST 31,
1997 1996
<S> <C> <C>
Raw materials and supplies $2,205 $1,904
Work in process 955 763
Finished good 1,198 1,268
------ ------
Total $4,358 $3,935
====== ======
</TABLE>
3. PROPERTY AND EQUIPMENT
Property and equipment includes construction in progress of $3,200,000 at May
31, 1997, and $126,000 at August 31, 1996, which is composed of equipment and
other assets not yet placed in service primarily related to increasing the
capacity of the Company's manufacturing facilities.
4. CREDIT FACILITIES
In November 1996, the Company renewed the $3.5 million equipment operating lease
facility with a commercial bank, and extended the commitment date to December
18, 1997. During the year, the Company has leased approximately $.8 million,
leaving approximately $2.7 million available on this lease facility at June 30,
1997.
-4-
<PAGE>
5. ACCOUNTING FOR STOCK-BASED COMPENSATION
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation," which was effective for the Company beginning September 1, 1996.
SFAS No. 123 requires expanded disclosures of stock-based compensation
arrangements with employees and encourages (but does not require) compensation
cost to be measured based on the fair value of the equity instrument awarded.
Companies are permitted, however, to continue to apply APB Opinion No. 25, which
recognizes compensation cost based on the intrinsic value of the equity
instrument awarded. The Company will continue to apply APB Opinion No. 25 to its
stock-based compensation awards to employees and will disclose the required pro
forma effect on net income and earnings per share in its annual financial
statements.
-5-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion may be understood more fully by reference to the
financial statements, notes to the financial statements, and management's
discussion and analysis contained in the Company's Annual Report on Form 10-K
for the year ended August 31, 1996, filed with the Securities and Exchange
Commission.
GENERAL
RFM offers products in four product areas: low-power components, low-
power Virtual Wire(R) radio systems, frequency control modules and filters. The
Company sells to original equipment manufacturers in computer, automotive,
telecommunications, consumer and industrial market segments world-wide.
Except for the historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed here. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in this section, as well as in
the section entitled "Legal Proceedings" and those discussed in the Company's
Form 10-K for the year ended August 31, 1996.
RESULTS OF OPERATIONS
The following discussion relates to the financial statements of the
Company for the three and nine months ended May 31, 1997 (current quarter and
current year-to-date period), of the fiscal year ending August 31, 1997, in
comparison to the three and nine months ended May 31, 1996 (comparable quarter
of the prior year and comparable year-to-date period). In addition, certain
comparisons with the three months ended February 28, 1997 (previous quarter),
are provided where management believes it is useful to the understanding of
trends.
The selected financial data for the periods presented may not be
indicative of the Company's future financial condition or results of operations.
-6-
<PAGE>
The following table sets forth, for the three and nine months ended May
31, 1997 and May 31, 1996, (i) the percentage relationship of certain items from
the Company's statements of income to sales and (ii) the percentage change in
these items between the current periods and the comparable periods of the prior
year:
<TABLE>
<CAPTION>
Percentage of Total Sales
------------------------------ Percentage Change From
Three Months Nine Months ------------------------------
Ended May 31, Ended May 31, Three Months Nine Months
-------------- -------------- Ended May 31, Ended May 31,
1997 1996 1997 1996 1996 to 1997 1996 to 1997
------ ------ ------ ------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Sales 100% 100% 100% 100% 42% 31%
Cost of sales 59 62 60 64 34 23
--- --- --- --- ---- ----
Gross profit 41 38 40 36 56 45
--- --- --- --- ---- ----
Research and development 8 10 9 9 18 23
Sales and marketing 12 12 13 13 39 36
General and administrative 7 8 7 8 44 20
--- --- --- --- ---- ----
Total operating expenses 27 30 29 30 33 28
--- --- --- --- ---- ----
Income from operations 14 8 11 6 138 117
Other income (expense), net - 1 - - (112) (917)
--- --- --- --- ---- ----
Income before income taxes 14 9 11 6 116 113
Income tax expense 5 2 4 2 190 132
--- --- --- --- ---- ----
Net income 9% 7% 7% 4% 90% 104%
=== === === === ==== ====
</TABLE>
Sales
The following table sets forth the components of the Company's sales
and the percentage relationship of the components to sales by product area for
the periods ended as indicated (in thousands, except percentage data):
<TABLE>
<CAPTION>
Amounts % of Total
------------------------------- -------------------------------
Three Months Nine Months Three Months Nine Months
Ended May 31, Ended May 31, Ended May 31, Ended May 31,
-------------- --------------- -------------- ---------------
1997 1996 1997 1996 1997 1996 1997 1996
------- ------ ------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Low-power components $ 9,159 $6,574 $25,628 $18,316 71% 73% 76% 71%
Low-power Virtual Wire(R)
radio systems 461 245 1,697 1,011 4 2 5 4
Frequency control modules 1,175 1,508 2,598 4,752 9 17 8 18
Filters 2,020 697 3,471 1,532 16 8 10 6
Technology development
sales 26 5 219 73 0 0 1 1
------- ------ ------- ------- --- --- --- ---
Sales $12,841 $9,029 $33,613 $25,684 100% 100% 100% 100%
======= ====== ======= ======= === === === ===
</TABLE>
-7-
<PAGE>
Sales increased 42% in the current quarter over the comparable quarter of
the prior year and increased 20% from the previous quarter. Current year-to-date
sales increased 31% over the comparable year-to-date period. The increase in the
current quarter and current year-to-date period over the respective comparable
periods was primarily attributable to an increased number of units shipped in
three of the Company's four product areas. Low-power component sales in the
current quarter increased 39% over the comparable quarter of the prior year and
increased 11% compared to the previous quarter. Current year-to-date sales for
these products increased 40% over the comparable year-to-date period. This was
primarily due to increasing demand for the Company's surface mount resonator
products, particularly for customers in the automotive markets. Low-power
Virtual Wire(R) radio systems sales in the current quarter increased 88% over
the comparable quarter of the prior year and filter sales increased 190% in the
same time period. Similar increases for these products occurred on a year-to-
date basis. Sales increases for low-power Virtual Wire(R) radio system and
filter products resulted from an increase in the number of units shipped.
The increase in sales for these three product areas was achieved despite
lower overall average selling prices in each of these product areas. The lower
selling prices resulted primarily from competitive pressures. The Company
believes that increasing demand for those products is attracting increased
competition from large multi-national manufacturers. There can be no assurance
that the Company can continue to offset lower average selling prices with
increases in the number of units sold. If the impact of lower average selling
prices exceeds the impact of increased unit volume for any product line, lower
sales would result for that product line.
Sales of frequency control module products in the current quarter
decreased 22% from the comparable quarter of the prior year and increased 39%
from the previous quarter. Current year-to-date sales decreased 45% from the
comparable year-to-date period. The decrease in the current quarter and current
year-to-date period was primarily due to decrease in units shipped caused by
decreased demand from certain customers in computer markets who are experiencing
slower than anticipated production ramps. The increase in current quarter sales
was primarily due to an increase in the number of units shipped of the Company's
newer clock oscillator products in surface mount packages.
International sales were approximately 47% and 57% of the Company's sales
during the current quarter and the comparable quarter of the prior year,
respectively. Of the international sales in the current quarter, 70% were to
customers in Europe and 24% were to customers in Asia. In comparable periods,
the percentage of sales to these geographic regions was similar. International
sales were approximately 50% and 51% of sales during the current year-to-date
period and the comparable year-to-date period, respectively. The Company
considers all product sales with a delivery destination outside of North America
to be international sales. These sales are denominated primarily in U.S.
currency. The Company currently anticipates that international sales will
continue to represent a significant portion of its business. However, there can
be no assurance that these sales will continue as there are inherent risks in
the Company's international business activities which include unexpected changes
in regulatory requirements, tariffs and other trade barriers, additional cost of
marketing and delivering products into foreign countries, the impact of
fluctuations in foreign exchange rates and longer accounts receivable cycles.
The Company's top five customers accounted for approximately 31% of the
Company's sales in the current quarter, 24% in the comparable quarter of the
prior year and 27% in the previous quarter. The increase in sales to top five
customers was primarily due to an increase in sales to customers in the
automotive industry.
-8-
<PAGE>
While the Company has achieved sales increases in prior periods, there
can be no assurance that such sales increases can be achieved in future periods.
The Company's success is highly dependent on achieving technological advantages
in its product design and manufacturing capabilities, as well as its ability to
sell its products in a competitive marketplace that can be influenced by outside
factors such as economic and regulatory conditions. The Company experiences
increased competition from companies that offer alternative technology solutions
or aggressive product pricing. There can be no assurance that competition from
alternative technologies or from competitors duplicating the Company's
technologies will not adversely affect selling prices and market share.
GROSS PROFIT
The current quarter gross margin and year-to-date gross margin of 41.4%
and 40.4% respectively, increased from 37.7% and 36.5% in the comparable periods
of the prior year. Current quarter gross margin also increased in comparison
with the 40.0% in the previous quarter. This increase was primarily due to
increased gross margins for the Company's low-power components and Virtual
Wire(R) radio systems product lines. For both product lines, reductions in
average selling prices resulting from increased price competition were more than
offset by reductions in per unit manufacturing costs. The reduction in per unit
manufacturing costs resulted from continued improvements in yield and labor
productivity, purchasing cost reductions and an increase in the number of units
produced, allowing for fixed overhead expenses to be spread over a larger number
of units. Current quarter gross margins for the frequency control and filter
product lines were similar to the comparable quarter of the prior year and the
previous quarter. Filter products also experienced lower average selling prices
that were offset by lower per unit manufacturing cost. There can be no assurance
that lower average selling prices resulting from competitive pressures will
continue to be offset by reductions in per unit manufacturing cost. If average
selling prices decline more than per unit manufacturing costs, the Company's
gross profit margin would be adversely affected.
The Company has in the past experienced sudden increases in demand which
have put pressure on its manufacturing facilities to increase capacity to meet
this demand. In addition, new products sometimes require different manufacturing
processes than the Company currently possesses. The Company has devoted
substantial capital expenditures to increasing capacity and improving its
manufacturing processes. There can be no assurance that the Company can continue
to increase its manufacturing capacity and improve its manufacturing processes
in a timely manner so as to take advantage of increased market demand. Failure
to do this would result in a loss of potential sales in the periods impacted.
RESEARCH AND DEVELOPMENT
Research and development expenses in the current quarter increased
approximately $164,000, or 18%, over the comparable quarter of the prior year.
Current year-to-date research and development expenses increased 23% in
comparison to the comparable year-to-date period. These costs increased due to
the Company's increase in staffing for these activities and in other product
development costs. The Company believes that the continued development of its
technology and new products is essential to its success and is committed to
continue its investment in research and development. The Company expects that
research and development expenses will increase in absolute dollars in future
periods.
-9-
<PAGE>
SALES AND MARKETING
Current quarter sales and marketing expenses increased approximately
$419,000, or 39%, from the prior comparable period, primarily due to increased
sales commissions, increased staffing and increased marketing costs needed to
support the Company's increased sales. Sales and marketing expenses increased
36% on a year-to-date basis. Since sales increased faster than sales &
marketing expenses, such expenses decreased to 12% of sales in the current
quarter, compared to 13% of sales in the comparable quarter of the prior year.
The Company expects to incur higher sales and marketing expenses in absolute
dollars in future periods as it continues to increase its contacts with
customers.
GENERAL AND ADMINISTRATIVE
General and administrative expenses for the current quarter increased
approximately $300,000, or 44%, from the prior comparable period. Current year-
to-date general and administrative expenses increased by 20% in comparison with
the comparable year-to-date period. Such increase was primarily attributable to
increased support for the Company's expansion. Since sales increased faster
than general and administrative expenses, such expenses decreased to 7% of sales
in the current quarter, compared to 8% of sales in the comparable quarter of the
prior year. The Company expects general and administrative expenses will
increase in absolute dollars in future periods.
INCOME FROM OPERATIONS
Income from operations was approximately $1,770,000, or 14% of sales in
the current quarter, compared to approximately $743,000 or 8% of sales in the
comparable quarter of the prior year. On a year-to-date basis, current year
income from operations was 11% of sales, compared to 6% of sales for the
comparable year-to-date period. The increase in income from operations as a
percent of sales reflects the increase in gross margin and a reduction in
operating expense as a percent of sales.
INCOME TAX EXPENSE
Income tax expense for the current quarter was $612,000, which represents
a 35% effective tax rate, compared to a 26% effective rate from the prior
comparable period. The effective rate for the prior comparable period included a
one time credit of $115,000 or $.02 per share arising from research and
development tax credits.
NET INCOME
Net income increased 90% to approximately $1,149,000 ($.20 per common
share) in the current quarter, compared to approximately $605,000 ($.11 per
common share) for the comparable quarter of the prior year. On a year-to-date
basis, net income increased 104% over the comparable year-to-date period.
LIQUIDITY AND CAPITAL RESOURCES
The principal sources of liquidity at May 31, 1997, consisted of $6.8
million of cash and short-term investments and $7.5 million of unused credit
facilities. These credit facilities include $4.8 million unused under a line of
credit agreement with a commercial bank which expires December 31, 1997, and
$2.7 million in an equipment-collateralized term lease facility with a
commercial bank. The credit facilities contain restrictions and financial
covenants relating to various financial ratios, including net worth, interest
coverage and levels of debt compared to tangible net worth. As of May 31, 1997,
the Company was in compliance with such restrictions and covenants.
-10-
<PAGE>
Net cash provided by operating activities was approximately $4.8 million
and $1.8 million for the year-to-date periods of fiscal 1997 and 1996,
respectively. Increased cash generated from operations was primarily due to an
increase in net income and non-cash items included in net income for the
comparable periods.
Cash used in investing activities was approximately $3.5 million and $1.5
million for the year-to-date periods of fiscal 1997 and 1996, respectively,
primarily as a result of capital expenditures. The Company expects Capital
spending to be approximately $5 million to $7 million for fiscal 1997,
consisting primarily of equipment needed for its manufacturing facilities. Some
of this equipment may be acquired under the equipment-collateralized operating
lease facility.
Net cash used in financing activities was $.7 million for the current
year-to-date period, primarily related to payments on the line of credit and
other notes payable offset by the impact of common stock option exercises and
stock purchases under the Employee Stock Purchase Plan. Net cash generated from
financing activities was $.2 million for the prior year-to-date period,
primarily related to the borrowings in support of the capital equipment
acquisitions offset by payments on these borrowings.
The Company believes that cash generated from operations, if any, banking
facilities and the $6.8 million balance in cash and short-term investments will
be sufficient to meet the Company's operating cash requirements through the rest
of the calendar year. To the extent that these sources of funds are
insufficient to meet the Company's capital requirements, the Company may be
required to raise additional funds. No assurance can be given that additional
financing will be available or, if available, that it will be available on
acceptable terms.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On June 7, 1996 the Company was served with a complaint filed by TimeKeeping
Systems, Inc. ("TimeKeeping") in the Court of Common Pleas for Cuyahoga County,
Ohio, captioned TimeKeeping Systems, Inc. v. R.F. Monolithics, Inc., No. 308658.
The Company is the only defendant named in the complaint. The complaint
purports to state a single cause of action for breach of contract and alleges
that the Company failed to timely fulfill certain purchase orders TimeKeeping
issued in 1995. The complaint seeks damages of $900,000 based primarily on a
claim of lost profits, however, in other contexts the plaintiff has asserted
damages in excess of this amount. The Company has removed the action to the
United States District Court for the Northern District of Ohio, where it is
pending as No. 1:96 CV 1451. The Company has submitted a counterclaim for
$33,000 in unpaid billings plus related legal expenses. Discovery is underway
and the matter has been set for trial in October 1997.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
-11-
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The Company hereby incorporates by reference all exhibits filed
in connection with Form 10-K for the year ended August 31, 1996 and the
Forms 10-Q for the quarters ended November 30, 1996 and February 28, 1997.
(b) The Company did not file any reports on Form 8-K during the quarter ended
May 31, 1997.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Act"), may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RF MONOLITHICS, INC.
Dated: July 14, 1997 By: /s/ Sam L. Densmore
-------------------------------------
Sam L. Densmore
CEO, President and Director
/s/ James P. Farley
-------------------------------------
James P. Farley
Controller
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> MAY-31-1997
<CASH> 1,687
<SECURITIES> 5,146
<RECEIVABLES> 9,031
<ALLOWANCES> 442
<INVENTORY> 4,358
<CURRENT-ASSETS> 21,618
<PP&E> 23,659
<DEPRECIATION> 11,295
<TOTAL-ASSETS> 35,410
<CURRENT-LIABILITIES> 6,886
<BONDS> 2,324
0
0
<COMMON> 25,139
<OTHER-SE> 1,061
<TOTAL-LIABILITY-AND-EQUITY> 35,410
<SALES> 33,613
<TOTAL-REVENUES> 33,613
<CGS> 20,039
<TOTAL-COSTS> 20,039
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 135
<INTEREST-EXPENSE> 264
<INCOME-PRETAX> 3,832
<INCOME-TAX> 1,399
<INCOME-CONTINUING> 2,433
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,433
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
