Mr. Jackson concluded: "In summary, I am pleased with our third quarter and year to date 2012 results. The Rockford team continues to be focused on building our business with our partners and expanding the experience of premium car audio for consumers."
Liquidity and Capital Resources
Rockford's cash provided by operations was $3.6 million for the nine months ended September 30, 2012 as compared to $1.5 million during the comparable period in 2011. Net income of $6.5 million was the primary source of cash from operations and a decrease in accounts payable of $1.7 million and an increase in accounts receivable of $1.5 million were the primary use of cash from operations.
Rockford's asset-based credit facility with Wells Fargo Capital Financial continues to have the terms described in Rockford's annual report for the year ended December 31, 2011. Under the agreement, pricing options based on LIBOR rates are available to Rockford. The interest rate was approximately 4.4% at September 30, 2012. Availability under the credit facility at September 30, 2012 was approximately $3.8 million in excess of the outstanding balance of $6.2 million. The increase in the credit line balance during the third quarter reflects Rockford's use of its credit line to complete the purchase of shares in the Dutch Auction that closed on September 14, 2012.
Rockford anticipates, based on its operating plans and cash flow forecast, that cash flow from operations for 2012 and 2013, and available borrowings under its credit facility, will be adequate to meet Rockford's requirements for current capital expenditures, working capital and interest payments for the next twelve months.
At the completion of the recent Dutch Auction, our three largest shareholders agreed to restructure our Board of Directors. As a result of these changes our Board of Directors has been reduced to 5 directors including continuing directors Mr. Kamin, Mr. Tim Bartol, Mr. Godfrey, and Mr. Jackson and our new director Mr. Mark A. Riser. Mr. Nick Bartol, Mr. Goldress, and Mr. Lloyd have retired from our Board of Directors.
Mr. Kamin has been appointed Chairman of the Board of Directors, replacing Mr. Goldress. The Board of Directors appointed Mr. Riser as one of Rockford's directors as a nominee of Mr. Kamin, who is now Rockford's largest shareholder. Mr. Riser joined Morningside Private Investors in 2010 and has been a private investor since 1999.
Peter Kamin, Chairman of the Board of Directors, commented, "I would like to thank Jerry Goldress, Nick Bartol, and John Lloyd for their service and commitment to Rockford Corporation over many years. I would also like to welcome Mark Riser to the Board and we look forward to his contributions as a director."
About Rockford Corporation
Setting the standard for excellence in the mobile audio industry, Rockford markets and distributes high-performance audio systems for the mobile audio aftermarket and OEM market. Headquartered in Tempe, Arizona, Rockford Corporation distributes its products under the brands: Rockford Fosgate®, Rockford Acoustic Design®, Lightning Audio®, Brax, Helix, Renegade® and Blaupunkt. For more information, please visit: www.rockfordfosgate.com, www.rockfordacousticdesign.com, www.lightningaudio.com, www.braxhifi.com, www.helixhifi.com, www.renegadecaraudio.com and blaupunkt-usa.net.
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