##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2005
 Commission File Number 000-30138
 ROCKFORD CORPORATION
 (Exact Name of Registrant as Specified in its Charter)
 ARIZONA
    
    86-0394353(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    IdentificationNo.)600 South Rockford Drive
    
    85281Tempe, Arizona
    
    (Zip Code)(Address of Principal ExecutiveOffices)
 (480) 967-3565
 (Registrants Telephone Number, Including Area Code)
 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.
 Yes þ No o
 Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act)
 Yes o No o
 Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
 Yes
o No o
 Indicate the number of shares of each of the issuers classes of common stock, as of the latest
practical date:
 As of November 9, 2005, there were 9,264,098 shares of Common Stock, $.01 par value per share,
outstanding, which is the only class of common stock of the Company registered under Section 12(g)
of the Securities Act of 1933.




---



ROCKFORD CORPORATION AND SUBSIDIARIES
 TABLE OF CONTENTS
 Forward Looking StatementsPart I: Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheets  September 30, 2005 (Unaudited) and December 31, 2004Condensed Consolidated Statements of Operations  Three and Nine Months Ended September 30,
2005 and 2004 (Unaudited)Condensed Consolidated Statements of Cash Flows  Three and Nine Months Ended September 30,
2005 and 2004 (Unaudited)Notes to Condensed Unaudited Consolidated Financial Statements  September 30, 2005Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures about Market RiskItem 4. Controls and ProceduresPart II: Other InformationItem 1. Legal ProceedingsItem 6. Exhibits and Reports on Form 8-KSignaturesCertificationsEX-10.66EX-10.67EX-10.68EX-10.69EX-31.1EX-31.2EX-32
  2




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Forward-Looking Statements
    3




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
  
  (In thousands)
 September 30,
    
    
    December 31,2005
    
    
    2004(unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    Accounts receivable, less allowances of
$2,601 and $3,163 at September 30, 2005 and
December 31, 2004, respectively
    
    
    24,745
    
    
    
    31,670Inventories
    
    
    20,742
    
    
    
    31,787Income taxes receivable
    
    
    930
    
    
    
    940Prepaid expenses and other current assets
    
    
    3,111
    
    
    
    2,638Current assets of discontinued operations
    
    
    3,721
    
    
    
    4,572Total current assets
    
    
    53,249
    
    
    
    71,607Property and equipment, net
    
    
    3,795
    
    
    
    5,893Other assets
    
    
    2,692
    
    
    
    2,853Total assets
    
    $
    59,736
    
    
    $
    80,353Liabilities and shareholders equityCurrent liabilities:Accounts payable
    
    $
    6,368
    
    
    $
    14,876Accrued salaries and incentives
    
    
    1,598
    
    
    
    1,402Accrued warranty
    
    
    2,535
    
    
    
    2,812Other accrued expenses
    
    
    4,394
    
    
    
    7,693Current portion of long-term debt
    
    
    11,162
    
    
    
    18,204Current liabilities of discontinued operations
    
    
    397
    
    
    
    844Total current liabilities
    
    
    26,454
    
    
    
    45,831Notes payable, less unaccreted discount of $443 and
$563 at September 30, 2005 and December 31, 2004,
respectively
    
    
    12,057
    
    
    
    11,937Total liabilities
    
    
    38,511
    
    
    
    57,768Shareholders equity:Common stock, $.01 par value  Authorized
shares - 40,000 Issued shares  9,264 shares
at September 30, 2005 and 9,205 at December
31, 2004
    
    
    92
    
    
    
    92Additional paid-in capital
    
    
    37,399
    
    
    
    37,329Retained deficit
    
    
    (16,650
    )
    
    
    (15,321
    )Accumulated other comprehensive income
    
    
    384
    
    
    
    485Total shareholders equity
    
    
    21,225
    
    
    
    22,585Total liabilities and shareholders equity
    
    $
    59,736
    
    
    $
    80,353
   4




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(In thousands, except per share data)
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    30,213
    
    
    $
    39,212
    
    
    $
    107,746
    
    
    $
    126,347Cost of goods sold
    
    
    20,886
    
    
    
    35,328
    
    
    
    75,367
    
    
    
    101,929Gross profit
    
    
    9,327
    
    
    
    3,884
    
    
    
    32,379
    
    
    
    24,418Operating expenses:Sales and marketing
    
    
    5,006
    
    
    
    7,321
    
    
    
    17,150
    
    
    
    22,015General and administrative
    
    
    3,181
    
    
    
    10,898
    
    
    
    11,589
    
    
    
    19,537Research and development
    
    
    804
    
    
    
    1,186
    
    
    
    2,437
    
    
    
    5,642Total operating expenses
    
    
    8,991
    
    
    
    19,405
    
    
    
    31,176
    
    
    
    47,194Operating income (loss)
    
    
    336
    
    
    
    (15,521
    )
    
    
    1,203
    
    
    
    (22,776
    )Interest and other (income) expense, net
    
    
    (336
    )
    
    
    1,546
    
    
    
    1,280
    
    
    
    3,238Income (loss) from continuing operations before income taxes
    
    
    672
    
    
    
    (17,067
    )
    
    
    (77
    )
    
    
    (26,014
    )Income tax expense (benefit)
    
    
    (15
    )
    
    
    7,195
    
    
    
    4
    
    
    
    3,838Income (loss) from continuing operations
    
    
    687
    
    
    
    (24,262
    )
    
    
    (81)
    
    
    
    (29,852
    )Discontinued operations:Loss from disposal of discontinued operations, net of taxes
    
    
    (936
    )
    
    
    (5,676
    )
    
    
    (936
    )
    
    
    (5,676
    )Loss from discontinued operations, net of taxes
    
    
    (169
    )
    
    
    (1,448
    )
    
    
    (312
    )
    
    
    (3,723
    )Total loss from discontinued operations
    
    
    (1,105
    )
    
    
    (7,124
    )
    
    
    (1,248
    )
    
    
    (9,399
    )Net loss
    
    $
    (418
    )
    
    $
    (31,386
    )
    
    $
    (1,329
    )
    
    $
    (39,251
    )Net loss per common share:Income (loss) from continuing operationsBasic
    
    $
    0.07
    
    
    $
    (2.69
    )
    
    $
    (0.01
    )
    
    $
    (3.31
    )Diluted
    
    $
    0.07
    
    
    $
    (2.69
    )
    
    $
    (0.01
    )
    
    $
    (3.31
    )Loss from discontinued operationsBasic
    
    $
    (0.12
    )
    
    $
    (0.79
    )
    
    $
    (0.13
    )
    
    $
    (1.04
    )Diluted
    
    $
    (0.12
    )
    
    $
    (0.79
    )
    
    $
    (0.13
    )
    
    $
    (1.04
    )Net lossBasic
    
    $
    (0.05
    )
    
    $
    (3.48
    )
    
    $
    (0.14
    )
    
    $
    (4.35
    )Diluted
    
    $
    (0.04
    )
    
    $
    (3.48
    )
    
    $
    (0.14
    )
    
    $
    (4.35
    )Weighted average shares:Basic
    
    
    9,264
    
    
    
    9,026
    
    
    
    9,243
    
    
    
    9,022Diluted
    
    
    9,416
    
    
    
    9,026
    
    
    
    9,243
    
    
    
    9,022
  5




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(In thousands)
 Nine months ended September 30,2005
    
    
    2004Cash flow from continuing operating activities:Net loss from continuing operations
    
    $
    (81
    )
    
    $
    (29,852
    )Adjustments to reconcile net loss from continuing operations to
net cash (used in) provided by operating activities:Depreciation and amortization
    
    
    3,157
    
    
    
    4,056Loss on sale of property and equipment
    
    
    24
    
    
    
    1,404Deferred income tax expense
    
    
    0
    
    
    
    4,831Impairment of goodwill
    
    
    0
    
    
    
    4,377Provision for doubtful accounts
    
    
    462
    
    
    
    1,413Provision for inventory
    
    
    519
    
    
    
    5,459Changes in operating assets and liabilities:Accounts receivable
    
    
    6,463
    
    
    
    (4,504
    )Inventories
    
    
    10,526
    
    
    
    (9,839
    )Prepaid expenses and other
    
    
    (1,315
    )
    
    
    170Bank overdraft
    
    
    0
    
    
    
    634Accounts payable
    
    
    (8,506
    )
    
    
    12,680Accrued salaries and incentives
    
    
    195
    
    
    
    490Accrued warranty
    
    
    (278
    )
    
    
    (1,860
    )Income taxes payable (receivable)
    
    
    10
    
    
    
    1,962Other accrued expenses
    
    
    (3,300
    )
    
    
    3,052Net cash provided by (used in) operating activities
    
    
    7,876
    
    
    
    (5,527
    )Cash flow from investing activities:Purchases of property and equipment
    
    
    (604
    )
    
    
    (3,177
    )Proceeds from sale of property and equipment
    
    
    125
    
    
    
    18Increase in other assets
    
    
    (322
    )
    
    
    (1,855
    )Net cash used in investing activities
    
    
    (801
    )
    
    
    (5,014
    )Cash flow from financing activities:Net proceeds from (payments on) notes payable and long-term debt
    
    
    (7,044
    )
    
    
    17,538Payment of short term debt
    
    
    0
    
    
    
    (4,000
    )Payments on capital lease obligations
    
    
    0
    
    
    
    (2,381
    )Proceeds from employee stock purchase plan
    
    
    70
    
    
    
    0Proceeds from exercise of stock options
    
    
    0
    
    
    
    60Net cash (used in) provided by financing activities
    
    
    (6,974
    )
    
    
    11,217Effect of exchange rate changes on cash
    
    
    (101
    )
    
    
    (1,151
    )Net decrease in cash flow from continuing operations
    
    
    
    
    
    
    (475
    )Net decrease in cash flow from discontinued operations
    
    
    
    
    
    
    (241
    )Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    716Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    
  6




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##### Table of Contents



1. Basis of Presentation
 Unaudited Interim Financial Information
    Comprehensive Loss
  Three months ended
    
    
    Nine months endedSeptember 30
    
    
    September 302005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands)
    
    
    (In thousands)Net loss
    
    $
    (418
    )
    
    $
    (31,386
    )
    
    $
    (1,329
    )
    
    $
    (39,251
    )Foreign currency translation adjustments
    
    
    (13
    )
    
    
    143
    
    
    
    (101
    )
    
    
    339Total comprehensive loss
    
    $
    (431
    )
    
    $
    (31,243
    )
    
    $
    (1,430
    )
    
    $
    (38,912
    )
 Stock-based Compensation
 Accounting for Stock Issued to Employees Accounting for Stock-Based Compensation
 New Accounting Standards
 Share-Based Payment, Accounting for Stock Issued to Employees,
 7




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Accounting for
Stock-Based Compensation
 Three months ended
    
    
    Nine months endedSeptember 30
    
    
    September 302005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands, except per share data)
    
    
    (In thousands, except per share data)Net loss as reported
    
    $
    (418
    )
    
    $
    (31,386
    )
    
    $
    (1,329
    )
    
    $
    (39,251
    )Proforma SFAS No. 123 expense
    
    
    (50
    )
    
    
    (76
    )
    
    
    (174
    )
    
    
    (240
    )Proforma net loss
    
    $
    (468
    )
    
    $
    (31,462
    )
    
    $
    (1,503
    )
    
    $
    (39,491
    )Proforma loss per common share:Basic
    
    $
    (0.05
    )
    
    $
    (3.49
    )
    
    $
    (0.16
    )
    
    $
    (4.38
    )Diluted
    
    $
    (0.05
    )
    
    $
    (3.49
    )
    
    $
    (0.16
    )
    
    $
    (4.38
    )
  2. Discontinued Operations
 SimpleDevices, Inc.
  Three months
    
    
    Nine monthsended
    
    
    endedSeptember 30
    
    
    September 302004
    
    
    2004(In thousands)Revenues
    
    $
    150
    
    
    $
    322Cost of sales
    
    
    78
    
    
    
    234Operating expenses
    
    
    850
    
    
    
    1,459Interest and other expense, net
    
    
    39
    
    
    
    39Minority interest
    
    
    (88
    )
    
    
    (345
    )Net loss
    
    $
    (729
    )
    
    $
    (1,065
    )
 MB Quart.
 8




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##### Table of Contents



Three months ended
    
    
    Nine months endedSeptember 30
    
    
    September 302005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands)Revenues
    
    $
    
    
    
    $
    1,339
    
    
    $
    
    
    
    $
    4,547Cost of sales
    
    
    
    
    
    
    806
    
    
    
    
    
    
    
    2,840Operating expenses
    
    
    63
    
    
    
    890
    
    
    
    63
    
    
    
    3,317Interest and other expense, net
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    4Income tax (benefit) expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )Net loss
    
    $
    (63
    )
    
    $
    (364
    )
    
    $
    (63
    )
    
    $
    (1,608
    )
 Rockford Home Group.
   Three months ended
    
    
    Nine months endedSeptember 30
    
    
    September 302005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands)Revenues
    
    $
    1,496
    
    
    $
    2,140
    
    
    $
    5,153
    
    
    $
    6,481Cost of sales
    
    
    887
    
    
    
    1,122
    
    
    
    3,113
    
    
    
    4,136Operating expenses
    
    
    717
    
    
    
    1,379
    
    
    
    2,288
    
    
    
    3,397Interest and other expense (income), net
    
    
    (2
    )
    
    
    (6
    )
    
    
    1
    
    
    
    (2
    )Net loss
    
    $
    (106
    )
    
    $
    (355
    )
    
    $
    (249
    )
    
    $
    (1,050
    )
 9




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##### Table of Contents



3. Inventories
  September 30,
    
    
    December 31,2005
    
    
    2004(In thousands)Raw materials
    
    $
    5,774
    
    
    $
    6,392Work-in-progress
    
    
    1,600
    
    
    
    1,732Finished goods
    
    
    13,368
    
    
    
    23,663$
    20,742
    
    
    $
    31,787
 4. Net Loss Per Share
  Three months ended
    
    
    Nine months endedSeptember 30
    
    

    September 302005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands, except per share data)
    
    
    (In thousands, except per share data)Numerator:Income (loss) from continuing operations
    
    $
    687
    
    
    $
    (24,262
    )
    
    $
    (81
    )
    
    $
    (29,852
    )Loss from discontinuing operations
    
    
    (1,105
    )
    
    
    (7,124
    )
    
    
    (1,248
    )
    
    
    (9,399
    )Net loss
    
    $
    (418
    )
    
    $
    (31,386
    )
    
    $
    (1,329
    )
    
    $
    (39,251
    )Denominator:Denominator for basic net loss per share
Effect of dilutive securities:
    
    
    9,264
    
    
    
    9,026
    
    
    
    9,243
    
    
    
    9,022Employee stock options
    
    
    152
    
    
    
    
    
    
    
    
    
    
    
    Warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dilutive potential common shares
    
    
    152
    
    
    
    
    
    
    
    
    
    
    
    Denominator for diluted net income (loss) per share
    
    
    9,416
    
    
    
    9,026
    
    
    
    9,243
    
    
    
    9,022Income (loss) per common share:Income (loss) from continuing operationsBasic
    
    $
    0.07
    
    
    $
    (2.69
    )
    
    $
    (0.01
    )
    
    $
    (3.31
    )Diluted
    
    $
    0.07
    
    
    $
    (2.69
    )
    
    $
    (0.01
    )
    
    $
    (3.31
    )Loss from discontinued operationsBasic
    
    $
    (0.12
    )
    
    $
    (0.79
    )
    
    $
    (0.13
    )
    
    $
    (1.04
    )Diluted
    
    $
    (0.12
    )
    
    $
    (0.79
    )
    
    $
    (0.13
    )
    
    $
    (1.04
    )Net lossBasic
    
    $
    (0.05
    )
    
    $
    (3.48
    )
    
    $
    (0.14
    )
    
    $
    (4.35
    )Diluted
    
    $
    (0.04
    )
    
    $
    (3.48
    )
    
    $
    (0.14
    )
    
    $
    (4.35
    )
  10




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##### Table of Contents



5. Notes Payable and Long-Term Debt
  Balance Sheet
Classification of Borrowings Outstanding under Revolving Credit Agreements That Include both a
Subjective Acceleration Clause and a Lock-Box Arrangement
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Continuing
Operations
  Overview
   11




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##### Table of Contents



Results of Operations
  Three months ended
    
    
    Nine months endedSeptember 30
    
    
    September 302005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold
    
    
    69.1
    
    
    
    90.1
    
    
    
    69.9
    
    
    
    80.7Gross profit
    
    
    30.9
    
    
    
    9.9
    
    
    
    30.1
    
    
    
    19.3Operating expenses:Sales and marketing
    
    
    16.6
    
    
    
    18.7
    
    
    
    15.9
    
    
    
    17.4General and administrative
    
    
    10.5
    
    
    
    27.8
    
    
    
    10.8
    
    
    
    15.5Research and development
    
    
    2.7
    
    
    
    3.0
    
    
    
    2.3
    
    
    
    4.4Total operating expenses
    
    
    29.8
    
    
    
    49.5
    
    
    
    29.0
    
    
    
    37.3Operating income (loss)
    
    
    1.1
    
    
    
    (39.6
    )
    
    
    1.1
    
    
    
    (18.0
    )Interest and other (income)
expense, net
    
    
    (1.1
    )
    
    
    3.9
    
    
    
    1.2
    
    
    
    2.6Income (loss) from
continuing operations
before income tax
    
    
    2.2
    
    
    
    43.5
    
    
    
    (0.1
    )
    
    
    (20.6
    )Income tax expense
(benefit)
    
    
    0.1
    
    
    
    18.3
    
    
    
    
    
    
    
    3.1Income (loss) from
continuing operations
    
    
    2.3
    
    
    
    (61.8
    )
    
    
    (0.1
    )
    
    
    (23.7
    )Discontinued operations:Loss from disposal of
discontinued operations
    
    
    (3.1
    )
    
    
    (14.5
    )
    
    
    (0.8
    )
    
    
    (4.5
    )Loss from discontinued
operations
    
    
    (0.6
    )
    
    
    (3.7
    )
    
    
    (0.3
    )
    
    
    (2.9
    )Total loss from discontinued
operations
    
    
    (3.7
    )
    
    
    (18.2
    )
    
    
    (1.1
    )
    
    
    (7.4
    )Net loss
    
    
    (1.4
    )%
    
    
    (80.0
    )%
    
    
    (1.2
    )%
    
    
    (31.1
    )%
   12




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##### Table of Contents



Geographic Distribution of Sales
  Three months ended
    
    
    Nine months endedSeptember 30
    
    
    September 302005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands)
    
    
    (In thousands)Region:(1)United States
    
    $
    24,670
    
    
    $
    32,001
    
    
    $
    89,170
    
    
    $
    106,934Other Americas
    
    
    2,301
    
    
    
    3,509
    
    
    
    7,747
    
    
    
    7,831Europe
    
    
    2,095
    
    
    
    2,403
    
    
    
    7,353
    
    
    
    7,956Asia
    
    
    1,147
    
    
    
    1,299
    
    
    
    3,476
    
    
    
    3,626Total sales
    
    $
    30,213
    
    
    $
    39,212
    
    
    $
    107,746
    
    
    $
    126,347
 
 (1)
    
    Sales are attributed to geographic regions based on the location of customers. No single
foreign country accounted for greater than 10% of sales. In the following discussion, certain increases or decreases may differ due to rounding
 Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004
 Net Sales
  Gross Profit
 Sales and Marketing Expenses.
 13




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##### Table of Contents



General and Administrative Expenses.
 Research and Development Expenses
 Operating Income (Loss)
 Interest and Other (Income) Expense, Net
 Income Tax (Benefit) Expense.
 Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004
 Net Sales
  Gross Profit
 14




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##### Table of Contents



Sales and Marketing Expenses.
 General and Administrative Expenses.
 Research and Development Expenses
 Operating Income (Loss)
 Interest and Other (Income) Expense, Net
 Income Tax (Benefit) Expense.
 Liquidity and Capital Resources
   15




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##### Table of Contents




    
    Rockford had no cash and cash equivalents at September 30, 2005 and December 31, 2004.
Due to the daily sweep of cash by Wachovia Capital, described below, Rockford has
reclassified cash and cash equivalents to net against its current debt balance.
    
    Rockfords net accounts receivable were $24.7 million at September 30, 2005 compared to
$31.7 million at December 31, 2004. The decrease in accounts receivable balances is
primarily due to lower sales, more favorable terms and improved collection activities.
    
    Rockfords inventory position decreased from $31.8 million at the end of 2004 to $20.7
million at September 30, 2005. This inventory decrease was primarily due to improved
inventory turns and the reduction of excess and obsolete inventory previously reserved for.
    
    Accounts payable decreased $8.5 million, from $14.9 million at December 31, 2004 to $6.4
million at September 30, 2005. This decrease was primarily due to reestablishing normalized
vendor payment terms compared to the extended vendor payment terms experienced at December
31, 2004.
 Balance
Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements That Include both
a Subjective Acceleration Clause and a Lock-Box Arrangement
 16




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##### Table of Contents



Contractual Obligations as of September 30, 2005
  Payments due by periodLess than
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    1 year
    
    1-3 years
    
    3-5 years
    
    5 yearsCurrent portion of long-term debt
    
    $
    13,158
    
    
    $
    1,365
    
    
    $
    11,793
    
    
    
    
    
    
    
    Long-term notes payable
    
    $
    14,611
    
    
    $
    563
    
    
    $
    14,048
    
    
    $
    
    
    
    
    Operating Leases
    
    $
    6,136
    
    
    $
    2,272
    
    
    $
    3,108
    
    
    $
    756
    
    
    
    
   Critical Accounting Policies and Estimates
  Revenue Recognition. Revenue Recognition in Financial Statements.
 
    
    Persuasive evidence of an arrangement exists;
    
    The price to the customer is fixed or determinable; and
    
    Collectibility is reasonably assured.
   17




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##### Table of Contents



Intangible Assets. Business Combinations Goodwill and Other Intangible Assets.
 Allowance for Doubtful Accounts.
 Inventory.
 Warranty.
 Income Taxes.
 Inflation.
 New Accounting Standards
 Share-Based Payment, Accounting for Stock Issued to Employees,
 18




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##### Table of Contents



Inventory Costs, an Amendment of ARB 43,
Chapter 4.
 Exchanges of Non-monetary Assets, an Amendment of
APB No. 29, Accounting for Non-monetary Transactions.
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
     
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
    19




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##### Table of Contents



Material Weaknesses of Disclosure Controls and Procedures
         20




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##### Table of Contents



Part II. Other Information
 
 Item 1. Legal Proceedings.
    21




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##### Table of Contents



Item 6. Exhibits and Reports on Form 8-K
  ExhibitNumber
    
    Description of Document3.1
    
    Articles of Incorporation+3.2
    
    Restated Bylaws as amended through July 27, 2000++3.3
    
    Amendment to Articles of Incorporation filed on January 12, 1988+3.4
    
    Amendment to Articles of Incorporation filed on May 12, 1999+3.5
    
    Amendment to Articles of Incorporation filed on May 17, 1999+3.7
    
    Amendment to Articles of Incorporation filed on July 1, 1999+4.1
    
    Specimen Common Stock Certificate+4.2
    
    Reference is made to the Articles of Incorporation, as amended, and the Restated Bylaws, as
amended, filed as Exhibits 3.1, 3.2, 3.3, 3.4, 3.5 and 3.7 for a description of the rights of
the holders of Common Stock.10.66
    
    Third Amendment to Loan and Security Agreement, dated August 31, 2005, among Rockford,
Rockfords wholly owned subsidiary Audio Innovations, Inc. (AII), and Wachovia Capital
Finance Corporation (Western).10.67
    
    Asset Purchase Agreement between Rockford Corporation and NHT, Inc., effective as of October
18, 2005 and relating to the sale of the assets of Rockfords NHT business.10.68
    
    Amendment to the Agreement dated March 11, 2005, among Rockford, Rockfords European
subsidiary Rockford Europe Vertriebs GmbH, and Tobias Wahl as insolvency trustee for MB Quart
GmbH.10.69
    
    Assignment between Rockford and Maxxsonics Europe GmbH relating to the assignment of the MB
Quart brand rights in North America to Maxxsonics.31.1
    
    Certification pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 for W. Gary Suttle.31.2
    
    Certification pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 for Richard G. Vasek.32
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.99.1
    
    Risk Factors That May Affect Rockfords Operating Results,Business Prospects and Stock Price+++
 
 +
    
    Previously filed with our registration statement on Form S-1, which the SEC declared effective on April 19, 2000 and/or amendments++
    
    Previously filed on August 11, 2000 with our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.+++
    
    Previously filed on April 15, 2005, with our Annual Report on Form 10-K for the year ended December 31, 2004.  
    
    July 29, 2005 Report disclosing on Item 9 that Rockford had issued a news release
regarding Rockfords results of operations for the 2nd Quarter, ended June
30, 2005. This report furnished a copy of the press release under Item 9 of Form 8-K.
    
    August 31, 2005 report disclosing on Item 9 that Rockford had issued a news release
regarding its closing of an amendment to its asset-based credit facility. This report
furnished a copy of the press release under Item 9 of Form 8-K.
 22




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##### Table of Contents



SIGNATURES
  ROCKFORD CORPORATIONDate: November 9, 2005
    By:
    /s/ Richard G. VasekRichard G. VasekVice President of Finance,
Chief Financial Officer and Secretary(Principal Financial Officer and Duly Authorized Officer) 23




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Document3.1
    
    Articles of Incorporation+3.2
    
    Restated Bylaws as amended through July 27, 2000++3.3
    
    Amendment to Articles of Incorporation filed on January 12, 1988+3.4
    
    Amendment to Articles of Incorporation filed on May 12, 1999+3.5
    
    Amendment to Articles of Incorporation filed on May 17, 1999+3.7
    
    Amendment to Articles of Incorporation filed on July 1, 1999+4.1
    
    Specimen Common Stock Certificate+4.2
    
    Reference is made to the Articles of Incorporation, as amended, and the Restated Bylaws, as
amended, filed as Exhibits 3.1, 3.2, 3.3, 3.4, 3.5 and 3.7 for a description of the rights of
the holders of Common Stock.10.66
    
    Third Amendment to Loan and Security Agreement, dated August 31, 2005, among Rockford,
Rockfords wholly owned subsidiary Audio Innovations, Inc. (AII), and Wachovia Capital
Finance Corporation (Western).10.67
    
    Asset Purchase Agreement between Rockford Corporation and NHT, Inc., effective as of October
18, 2005 and relating to the sale of the assets of Rockfords NHT business.10.68
    
    Amendment to the Agreement dated March 11, 2005, among Rockford, Rockfords European
subsidiary Rockford Europe Vertriebs GmbH, and Tobias Wahl as insolvency trustee for MB Quart
GmbH.10.69
    
    Assignment between Rockford and Maxxsonics Europe GmbH relating to the assignment of the MB
Quart brand rights in North America to Maxxsonics.31.1
    
    Certification pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 for W. Gary Suttle.31.2
    
    Certification pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 for Richard G. Vasek.32
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.99.1
    
    Risk Factors That May Affect Rockfords Operating Results,Business Prospects and Stock Price+++
 
 +
    
    Previously filed with our registration statement on Form S-1, which the SEC declared effective on April 19, 2000 and/or amendments++
    
    Previously filed on August 11, 2000 with our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.+++
    
    Previously filed on April 15, 2005, with our Annual Report on Form 10-K for the year ended December 31, 2004. 24