Rockford Corp (OTC:ROFO)

Third Quarter 2012 Results

• Net sales for the three months ended September 30, 2012, increased 7.4% to $15.3 million compared to net sales of $14.2 million for the same period in 2011.
• Net income for the three months ended September 30, 2012, was $1.4 million compared to $1.2 million for the same period in 2011.
• Earnings per share for the three months ended September 30, 2012, was $0.17 compared to $0.13 in prior year period.

William R. Jackson, Rockford's Chief Executive Officer and President, commented, "Car audio retail sales across the US have been turbulent over the past three months. Retailers and distributors are reporting softer than normal traffic patterns. Our team has done a good job working with our retail partners, both domestic and international, to maximize sell through of our products. The Rockford brand portfolio continues to perform well in this challenging retail environment. Net sales were up 7.4% in the third quarter of 2012 and up 14.8% year to date."

Mr. Jackson observed: "Our OEM business continues to be solid; however, royalty revenue was down approximately $1 million for the nine month period. This is due to reduced production of Mitsubishi vehicles with Rockford Fosgate branded audio systems."

Mr. Jackson noted: "In the third quarter we completed an agreement to distribute Blaupunkt car audio products in North America and, late in the quarter, began shipping the Blaupunkt product line to selected partners in the US market. We are encouraged about the initial market response and sell through that distributors are reporting."

Mr. Jackson continued: "Our sales and marketing group has been working with our retail partners in preparation for holiday season. We believe our aggressive plan will help retailers to maximize their car audio sales potential for the season. The team is also already preparing for our 2013 New Product Showcase which will be unveiled at the Palms Hotel in Las Vegas on January 8^th, 2013."

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."

Fourth Quarter 2011 Results

• Net sales for the three months ended December 31, 2011, increased 11.9% to $13.0 million compared to net sales of $11.7 million for the same period in 2010.
• Net income for the three months ended December 31, 2011 was $1.1 million, compared to $0.2 million for the same period in 2010.
• Diluted earnings per share for fourth quarter $0.12 vs $0.02 in prior year

William R. Jackson, Rockford's Chief Executive Officer and President, commented, "We are pleased with our 4th quarter and full year results for 2011. The overall car audio market was challenging in 2011. However, our brand portfolio performed quite well and we were able to show growth in all of our distribution channels. The entire team at Rockford did a terrific job in 2011."

Mr. Jackson observed: "The strength of the Rockford Fosgate brand and product mix continues to grow. In 2011 we launched several key new products that focused on better vehicle integration and increased applications. The market response to these products has been excellent. The new Punch BRT amplifiers have allowed consumers to install better performing audio into motorcycles, ATVs, compact cars and marine applications. In addition, the new line of Punch Subwoofers has re-set the bar for high performance bass response. Throughout 2011 we focused on working with our dealers to increase our brand presence and drive consumers to retail stores. Our Soundlab promotional vehicles traveled the United States exposing consumers and audio enthusiasts to the Rockford Fosgate experience."

Mr. Jackson stated: "Our other brands, Renegade, Lightning Audio, BRAX and Helix continued to grow throughout 2011. We were able to add a significant number of new dealers and reach new customers."

Mr. Jackson noted: "In January 2012, we exhibited our new product offerings at the Palms Hotel in Las Vegas at the time of the International Consumer Electronics Show. This introduction included over 80 new products. The dealer and international distributor attendance was improved over 2011. Many of our retailers and distributors were optimistic about 2012 and very excited about our new products. Over 90% of all our new products are shipping and have been well received in the marketplace."

Mr. Jackson commented: "We have several new marketing campaigns in play for 2012. I am pleased to announce that Rockford Fosgate will be the exclusive car audio sponsor for the 2012 Van's Warped Concert Tour. This is a 41 city concert tour visiting the US and Canada. The tour kicks off June 16th and ends August 5th. Our Rockford Fosgate Soundlab vehicle will be traveling with the tour and available for demonstration at all of the events. In addition, we have several new endorsement and sponsorship programs launching, including the Hart and Huntington Supercross team, Ryan Sipes - professional Supercross racer, Cameron Dollar - MMA fighter, Paul Tracy - race car driver, Casey Currie - Lucas Oil off road racer and Andrew Pierce - amateur motocross champion."

Mr. Jackson continued: "On March 28th, Rockford became the exclusive mobile electronics distributor for Sanctiond Car Care products. Sanctiond is a brand developed by legendary artist and tattoo icon 'Mister Cartoon.' The brand targets the urban consumer and features proprietary packaging and formulas. We are excited about the opportunity. The Sanctiond brand aligns perfectly with Rockford and offers our retailers an opportunity to expand into a new category. The Sanctiond brand will only be available at select specialist auto parts stores and Rockford Fosgate dealers."

Mr. Jackson concluded: "In summary, we feel good about our 2011 performance. We continue to be cautiously optimistic about the future and committed to growing our brands with our partners."

First Quarter 2012 Earning Guidance 

Rockford also announced it expects to report increased profits and revenues for the three months ended March 31, 2012 compared to the same period in 2011. Revenues are expected to be in the range of approximately $20.5 million to $21.5 million for the first quarter of 2012, an increase of approximately 24% to 30% compared to revenues of $16.6 million in the first quarter of 2011. Net income is expected to increase by a significantly larger percentage than the increase in revenues.

Stock Buyback Program

Rockford announced on January 25, 2012, that its Board of Directors approved a program to purchase up to 765,000 shares, or approximately 10%, of Rockford's Common Stock in the open market or through privately negotiated transactions. From January 25, 2012, to date Rockford has repurchased approximately 146,000 shares under this stock buyback program. After these repurchases Rockford has approximately 7.5 million shares outstanding. The program will expire on March 31, 2013, but may be suspended or discontinued at any time.

TEMPE, AZ--(Marketwire - Dec 5, 2011) - Rockford Corporation (PINKSHEETS: ROFO) today announced the commencement of a modified "Dutch auction" offer (the "Offer") to acquire shares of its common stock. Rockford intends to spend up to $2.5 million to repurchase up to 1,000,000 shares of common stock, or up to approximately 12.5% of its outstanding shares, at a price per share not greater than $3.25 nor less than $2.50. The Offer is scheduled to expire at 12:00 a.m. Eastern time on January 6, 2012 unless extended.

The modified "Dutch auction" offer process will allow shareholders to indicate how many of their shares and at what price within the $2.50 to $3.25 range the shareholders wish to tender. The prices that may be specified increase in increments of $0.25 from $2.50 up to $3.25 per share, the highest price that may be specified. On December 2, 2011, the last full trading day prior to the commencement of the Offer, the last sale price for Rockford's common stock as reported on the Pink Sheets was $2.50 per share.

Based on the number of shares tendered and the prices specified by the tendering shareholders, Rockford will determine the lowest price per share within the range that will enable it to purchase a maximum of $2.5 million worth of shares (up to 1,000,000 shares or a lesser amount depending on the number of shares properly tendered and the price at which shares are tendered). All shares accepted in the Offer will be purchased at the same price. Rockford will not purchase shares below a price stipulated by a shareholder, and in some cases, may purchase shares at prices above a shareholder's stipulated price. "Odd lot" tenders (tenders by holders of 100 or fewer shares of common stock of all of the shares owned by them) will be purchased on a priority basis. Specific instructions and a complete explanation of the terms and conditions of the Offer will be in the offer to purchase and related materials being sent to shareholders of record promptly.

The Offer will be subject to various terms and conditions as will be described in the offer to purchase and related materials that will be sent to shareholders. Additional copies of the offer materials will also be available from the Information Agent, Georgeson Inc. Rockford may extend, amend or terminate the Offer as set forth in the offer to purchase.

William R. Jackson, Rockford's President and Chief Executive Officer, said, "After evaluating various opportunities, we concluded that the best investment of our capital was in our own stock. Moreover, we believe that the offer will benefit stockholders by providing an efficient mechanism for those who desire liquidity to receive cash for their shares and, for our remaining stockholders, an enhanced ability to participate in the long-term earnings potential of our business."

Third Quarter 2011 Results

• Net sales for the three months ended September 30, 2011, decreased 0.7% to $14.2 million compared to net sales of $14.3 million for the same period in 2010.
• Net income for the three months ended September 30, 2011 was $1.2 million, compared to net income of $0.7 million for the comparable period in 2010.

William R. Jackson, Rockford's Chief Executive Officer and President, commented, "Net sales were essentially flat for the third quarter of 2011 and up 12.3% year to date. All of our distribution channels remain stable and have shown growth year to date. The US market continues to be bumpy. Several dealers and distributors have reported improving retail trends, but a lack of floor traffic and fears about general consumer confidence are an ongoing concern. Our gross margins have improved and our expenses are in line with our plan."

Mr. Jackson stated, "Our overall supply chain remains in good condition. We are experiencing some difficulty with selective part outages, but not to the level of the past 12 to 18 months. A continued rise of the Chinese currency compared to the dollar may cause additional cost pressures heading into 2012. We are monitoring the currency environment carefully."

Mr. Jackson observed, "Rockford Fosgate products continue to do well in all of our channels. Our core line of amplifiers and speakers is tracking up in all channels year to date. Response to the new Punch woofer line has been very strong. Our Renegade, Lightning Audio and Brax/Helix brands continue to gain new dealers every month. Our OEM business remains stable and our Japanese based partners have returned to normal production after the earthquake and tsunami that reduced their operations in the second quarter."

Mr. Jackson continued: "We continue to work with our marketing partners, distributors and retailers to drive consumer awareness of Rockford Fosgate and car audio. In 2011 Rockford Fosgate was a sponsor of AMA Supercross. The consumer link between high performance car audio and high-octane motorsports is strong. In addition, our Street Team and Sound Lab demonstration vehicles are finishing up their final 2011 events and preparing for 2012."

Mr. Jackson concluded: "We feel good about our overall performance and market position. The entire Rockford team has performed well. We continue to be cautiously optimistic about the car audio market and our ability to grow in it."

Second Quarter 2011 Results

• Net sales for the three months ended June 30, 2011, increased 14.2% to $17.0 million compared to net sales of $14.9 million for the same period in 2010.
• Net income for the three months ended June 30, 2011 was $1.8 million, compared to net income of $1.1 million for the comparable period in 2010.
• Net income per share of $0.19 vs $0.12 in second quarter 2010

William R. Jackson, Rockford's Chief Executive Officer and President, commented, "Overall our sales were up over 14% in the second quarter. All of our business and distribution channels contributed to the gain. Our specialist and international channels continue to perform well. Several areas in the US are experiencing improved retail traffic, while others are still feeling the impact of the weak economy. Gas prices appear to have stabilized and our retailers are beginning to take a more optimistic view. Gross margins have improved compared to last year and expenses are tracking to plan."

Mr. Jackson noted: "Our marketing team has been working non-stop with our reps and retailers in the field. In the second quarter, our SoundLab 'Street Team' visited 23 states and worked with retailers in the market making several thousand consumer impressions. Ed Dalesandro, our rep in the Ohio/Pennsylvania territory told me that, 'The Sound Lab is the single best tool I have used to activate customers and create excitement about premium car audio. It makes a statement about the Rockford Fosgate sound and the brand.' The SoundLab vehicles have proven to be a great marketing device. We continue to work with our dealers to drive excitement for car audio and to create retail traffic."

Mr. Jackson concluded: "The second quarter finished well for us. We are pleased with the way our products and brands are being received in the market. Although the market continues to be turbulent, we remain cautiously optimistic."

Stock Buyback Program

Rockford announced on March 31, 2011, that its Board of Directors approved a program to purchase up to 870,000 shares, or approximately 10%, of Rockford's Common Stock in the open market or through privately negotiated transactions. From March 31, 2011, to date Rockford has repurchased approximately 501,000 shares under this stock buyback program. After these repurchases Rockford has approximately 8.3 million shares outstanding, a reduction from approximately 8.8 million shares that were outstanding at March 31, 2011. The program will expire on December 31, 2012, but may be suspended or discontinued at any time.

Mr. Jackson observed, "We began shipping several of our new products in the first quarter of 2010. The overall market acceptance for these new products has been very good. We continue to work closely with our retail partners on programs to drive consumers to their stores and create excitement for the Rockford Fosgate brand. Late in the first quarter of 2010, we launched the Rockford Fosgate Sound Lab, a mobile demonstration vehicle built on a Sprinter chassis. The vehicle gives our retailers a new way to demonstrate and experience our products and its reception in the marketplace has been incredible. It is helping our retailers to build promotions and create events for their stores. In addition, we began shipping our Renegade branded products in the first quarter of 2010. Overall response to this new entry level product line has been positive."

Mr. Jackson noted, "Our Asian suppliers are beginning to see some tightness in their supply chain, which is slowing down product deliveries. We are working closely with them in order to minimize any impact to our retail partners."

Mr. Jackson concluded, "Overall, we feel very good about the first quarter. The team has done a terrific job working with both our customers and suppliers. Looking forward, our outlook for 2010 remains cautiously optimistic."