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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2004 Commission File Number 000-30138 ROCKFORD CORPORATION (Exact Name of Registrant as Specified in its Charter)
 ARIZONA
(State or Other Jurisdiction of
Incorporation or Organization)
    
    86-0394353
(I.R.S. Employer
Identification
No.)
 600 South Rockford Drive
Tempe, Arizona
(Address of Principal Executive
Offices)
    
    85281
(Zip Code)
 (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 or15(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 x            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 x Indicate the number of shares of each of the issuers classes of common stock,
as of the latest practical date: As of April 30, 2004, there were 9,025,563 shares of Common Stock, $.01
par value per share, outstanding, which is the only class of common stock of
the Company registered underSection 12(g)of the Securities Act of 1933.




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ROCKFORD CORPORATION AND SUBSIDIARIES TABLE OF CONTENTS  
 PageForward Looking Statements
    
    
    1Part I: Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheets  March 31, 2004 (Unaudited) and December 31, 2003
    
    
    1Condensed Consolidated Statements of Operations  Three Months Ended March 31, 2004 and 2003 (Unaudited)
    
    
    2Condensed Consolidated Statements of Cash Flows  Three Months Ended March 31, 2004 and 2003 (Unaudited)
    
    
    3Notes
to Condensed Unaudited Consolidated Financial Statements  March 31, 2004
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    7Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    15Item 4. Controls and Procedures
    
    
    16Part II: Other InformationItem 1. Legal Proceedings
    
    
    17Item 3. Defaults upon Senior Securities
    
    
    17Item 6. Exhibits and Reports on Form 8-K
    
    
    17Signatures
    
    
    19Certifications
    
    
    19EX-10.61EX-10.62EX-31.1EX-31.2EX-32




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Forward-Looking Statements We make forward-looking statements in this report. These may include, without
limitation, statements about the future of our industry, product development,
business strategy (including the possibility of future acquisitions), acceptance and growth of our products, dependence on significant customers and
suppliers, and the adequacy of our available cash resources. Our statements may
contain projections of results of operations or of financial condition. You may
identify these statements by our use of forward-looking terminology such as
may, will, believe, expect, anticipate, estimate, continue or
other similar words. Forward-looking statements are subject to many risks and uncertainties. We
caution you not to place undue reliance on our forward-looking statements,
which speak only as at the date on which they are made. Our actual results may
differ materially from those described in our forward-looking statements. We
disclaim any obligation or undertaking to update our forward-looking statements
to reflect changes in our expectations or changes in events, conditions, or
circumstances on which our expectations are based. When considering our forward-looking statements, you should keep in mind the
risk factors and other cautionary statements identified in this report, in our
Annual Report on Form 10-K for the year 2003, filed with the SEC on March 30,
2004, and in Exhibit 99.9 to our Annual Report, Risk Factors That May Affect
Rockfords Operating Results, Business Prospects and Stock Price. The risk
factors noted throughout this report and our Annual Report, particularly in the
discussion in Exhibit 99.9 to our Annual Report, and other risk factors that we
have not anticipated or discussed, could cause our actual results to differ
significantly from those anticipated in our forward-looking statements. 1




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PART I. FINANCIAL INFORMATION 
 Item 1. Financial Statements ROCKFORD CORPORATION AND SUBSIDIARIES 
  March 31,
    
    December 31,2004
    
    2003(Unaudited)(In thousands)AssetsCurrent assets:Cash
    
    $
    
    
    
    $
    716Accounts receivable, less allowances of $6,517 and $6,067 at
March 31, 2004 and December 31, 2003, respectively
    
    
    35,962
    
    
    
    31,820Inventories, net
    
    
    47,395
    
    
    
    37,925Deferred income taxes
    
    
    6,712
    
    
    
    5,965Income taxes receivable
    
    
    4,204
    
    
    
    3,064Prepaid expenses and other
    
    
    4,849
    
    
    
    3,985Total current assets
    
    
    99,122
    
    
    
    83,475Property and equipment, net
    
    
    16,517
    
    
    
    16,296Deferred income taxes
    
    
    144
    
    
    
    151Goodwill, net
    
    
    7,072
    
    
    
    7,118Other assets
    
    
    2,574
    
    
    
    1,987Total assets
    
    $
    125,429
    
    
    $
    109,027Liabilities and shareholders equityCurrent liabilities:Bank overdraft
    
    $
    2,248
    
    
    $
    Accounts payable
    
    
    27,143
    
    
    
    9,419Accrued salaries and incentives
    
    
    2,169
    
    
    
    2,044Accrued warranty
    
    
    4,803
    
    
    
    4,789Other accrued expenses
    
    
    5,382
    
    
    
    4,740Short-term debt
    
    
    4,000
    
    
    
    Current portion of long-term debt and capital lease obligations
    
    
    21,892
    
    
    
    24,345Total current liabilities
    
    
    67,637
    
    
    
    45,337Minority interest
    
    
    321
    
    
    
    483Shareholders equity:Common stock, $.01 par value  Authorized shares - 40,000,000
Issued shares  9,025,563 shares at March 31, 2004 and
9,010,663 at December 31, 2003
    
    
    90
    
    
    
    90Additional paid-in capital
    
    
    36,289
    
    
    
    36,228Retained earnings
    
    
    18,129
    
    
    
    23,534Accumulated other comprehensive income
    
    
    2,963
    
    
    
    3,355Total shareholders equity
    
    
    57,471
    
    
    
    63,207Total liabilities and shareholders equity
    
    $
    125,429
    
    
    $
    109,027
 Note: The consolidated balance sheet at December 31, 2003, has been derived
from the audited consolidated financial statements at that date but does not
include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements. See accompanying notes to condensed consolidated financial statements. 2




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ROCKFORD CORPORATION AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three months endedMarch 31,2004
    
    2003(In thousands, except per share data)Net sales
    
    $
    40,628
    
    
    $
    40,414Cost of goods sold
    
    
    32,061
    
    
    
    26,785Gross profit
    
    
    8,567
    
    
    
    13,629Operating expenses:Sales and marketing
    
    
    7,972
    
    
    
    8,187General and administrative
    
    
    5,479
    
    
    
    5,419Research and development
    
    
    2,918
    
    
    
    2,234Total operating expenses
    
    
    16,369
    
    
    
    15,840Operating loss
    
    
    (7,802
    )
    
    
    (2,211
    )Interest and other expense (income), net
    
    
    605
    
    
    
    (48
    )Loss before income taxes
    
    
    (8,407
    )
    
    
    (2,163
    )Income tax benefit
    
    
    (2,843
    )
    
    
    (1,047
    )Loss before minority interest
    
    
    (5,564
    )
    
    
    (1,116
    )Minority interest
    
    
    (161
    )
    
    
    (170
    )Net loss
    
    $
    (5,403
    )
    
    $
    (946
    )Net loss per common share:Basic
    
    $
    (0.60
    )
    
    $
    (0.11
    )Diluted
    
    $
    (0.60
    )
    
    $
    (0.11
    )Weighted average shares:Basic
    
    
    9,014
    
    
    
    8,881Diluted
    
    
    9,014
    
    
    
    8,881
 See notes to condensed consolidated financial statements. 3




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ROCKFORD CORPORATION AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three months ended March 31,2004
    
    2003(In thousands)Operating activitiesNet loss
    
    $
    (5,403
    )
    
    $
    (946
    )Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:Depreciation and amortization
    
    
    1,314
    
    
    
    1,183Loss on sale of fixed assets
    
    
    
    
    
    
    2Provision for doubtful accounts
    
    
    171
    
    
    
    35Provision for inventory allowances
    
    
    333
    
    
    
    248Minority Interest
    
    
    (161
    )
    
    
    (170
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (4,312
    )
    
    
    (5,766
    )Inventories
    
    
    (9,801
    )
    
    
    (4,792
    )Prepaid expenses and other assets
    
    
    (1,611
    )
    
    
    (859
    )Bank overdraft
    
    
    2,248
    
    
    
    Accounts payable
    
    
    17,724
    
    
    
    1,258Accrued salaries and incentives
    
    
    125
    
    
    
    (22
    )Accrued warranty
    
    
    14
    
    
    
    261Income taxes receivable
    
    
    (1,140
    )
    
    
    (603
    )Other accrued expenses
    
    
    642
    
    
    
    1,240Net cash provided by (used in)
operating activities
    
    
    143
    
    
    
    (8,931
    )Investing activitiesPurchases of property and equipment
    
    
    (1,536
    )
    
    
    (2,235
    )Proceeds from disposals of property and equipment
    
    
    (4
    )
    
    
    Acquisitions of business, net of cash acquired
    
    
    
    
    
    
    317Increase in other assets
    
    
    (534
    )
    
    
    (73
    )Net cash used in investing activities
    
    
    (2,074
    )
    
    
    (1,991
    )Financing activitiesProceeds from notes payable, short-term and long-term
debt
    
    
    2,955
    
    
    
    10,559Payments on capital lease obligations
    
    
    (1,408
    )
    
    
    (253
    )Proceeds from the exercise of stock options and warrants
    
    
    60
    
    
    
    185Net cash provided by financing activities
    
    
    1,607
    
    
    
    10,491Effect of exchange rate changes on cash and cash equivalents
    
    
    (392
    )
    
    
    454Net (decrease) increase in cash and cash equivalents
    
    
    (716
    )
    
    
    23Cash and cash equivalents at beginning of period
    
    
    716
    
    
    
    304Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    327
 See notes to condensed consolidated financial statements. 4




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Rockford Corporation and Subsidiaries 
 Notes to Condensed Consolidated Financial Statements (Unaudited) March 31, 2004 1. Basis of Presentation Unaudited Interim Financial Information We have prepared our unaudited condensed consolidated financial statements in
accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, we have made all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation. Operating results for the three-month period ended March 31, 2004, are not
necessarily indicative of the results you may expect for the year ending
December 31, 2004. We have made certain reclassifications to the
March 31, 2003, interim financial statements and the
December 31, 2003, consolidated balance sheet in order to
conform to the March 31, 2004 presentation. For further information, refer to the consolidated financial statements and
footnotes included as part of our Form 10-K for the year ended December 31,
2003, filed with the Securities and Exchange Commission (SEC) on March 30,
2004. Stock-based Compensation Rockford accounts for stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board (APB) Opinion No. 25, Accounting
for Stock Issued to Employees, and has adopted the disclosure-only alternative
of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting
for Stock-based Compensation, and SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure. Rockford grants stock options for a
fixed number of shares to employees with an exercise price equal to the fair
value of the shares at date of grant. Fair value of the underlying shares is
determined by the market price at the date of the grant. Stock option grants to
non-employees are charged to expense based upon the fair value of the options
granted. The following table represents the effect on net loss and loss per share if
Rockford had applied the fair value based method and recognition provisions of
SFAS No. 123, Accounting for Stock-Based Compensation,to stock-based employee
compensation: Three months endedMarch 31,2004
    
    2003(In thousands, except per share data)Net loss as reported
    
    $
    (5,403
    )
    
    $
    (946
    )Proforma SFAS No. 123 expense
    
    
    (107
    )
    
    
    (75
    )Proforma net loss
    
    $
    (5,510
    )
    
    $
    (1,021
    )Proforma loss per common shareBasic
    
    $
    (0.61
    )
    
    $
    (0.11
    )Diluted
    
    $
    (0.61
    )
    
    $
    (0.11
    )
 For purposes of proforma disclosures, the estimated fair value of the options
is amortized to expense over the options vesting period. 5




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2. Inventories Inventories consist of the following: March 31,
    
    December 31,2004
    
    2003(In thousands)Raw materials
    
    $
    15,664
    
    
    $
    9,698Work-in-progress
    
    
    2,363
    
    
    
    1,548Finished goods
    
    
    34,020
    
    
    
    30,89852,047
    
    
    
    42,144Less allowances
    
    
    (4,652
    )
    
    
    (4,219
    )$
    47,395
    
    
    $
    37,925
 3. Net Loss Per Share The following table sets forth the computation of basic and diluted net loss
per share: Three months endedMarch 31,2004
    
    2003(In thousands, except per share data)Numerator:Net loss for basic and diluted net loss per share
    
    $
    (5,403
    )
    
    $
    (946
    )Denominator:Denominator for basic net loss per share,
weighted average shares
    
    
    9,014
    
    
    
    8,881Effect of dilutive securities:Employee stock options
    
    
    
    
    
    
    Warrants
    
    
    
    
    
    
    Dilutive potential common shares
    
    
    
    
    
    
    Denominator for diluted net loss per share,
adjusted weighted average shares and assumed
conversions
    
    
    9,014
    
    
    
    8,881Basic net loss per share
    
    $
    (0.60
    )
    
    $
    (0.11
    )Diluted net loss per share
    
    $
    (0.60
    )
    
    $
    (0.11
    )
 6




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There were 468,871 employee stock options not included in the loss per share
calculation for March 31, 2004, as they were not dilutive. At March 31, 2003,
options to purchase 356,000 shares and warrants to purchase 4,000 shares of
Rockford stock were excluded from the calculation of the diluted net
loss per share because they were anti-dilutive. 4. Asset Based Credit Facility Rockford entered into a 3-year $45.0 million asset based credit facility with
Congress Financial Corporation (Western) as Agent and Wachovia Bank, National
Association as Arranger (Congress Facility) on March 29, 2004. This credit
facility replaced the $30 million revolving credit facility previously
maintained with Bank of America, N.A. and Bank One, Arizona, N.A. This credit
facility is collateralized by substantially all of Rockfords assets and has a
variable interest rate of LIBOR plus 250 basis points or Prime plus 50 basis
points. Under this credit facility, Rockfords borrowings are limited by a
borrowing base defined by specified percentages of Rockfords accounts
receivable, inventories, and other assets. In addition, the covenants limit
the payment of dividends; however, Rockford has not historically paid
dividends. Rockford used $1.3 million of this credit facility to pay off its
outstanding leases with Bank One, Arizona, N.A. on March 29, 2004. In addition, Rockford has entered into a one-year term loan agreement with
Hilco Capital, LP in the amount of $4 million on March 29, 2004. This term
loan is junior to the $45.0 million senior Congress Facility. The Hilco
facility has a variable interest rate of the LaSalle Bank Rate/Prime plus 450
basis points. This facility requires that Rockford maintain certain minimum
levels of debt service coverage beginning in April 2004. The debt service
coverage ratio calculation uses year-to-date numbers, anchoring in March, 2004.
As a result of Rockfords March operating results, Rockford has
failed to comply with the required year-to-date ratio for April, 2004 and this failure
is a default under the Hilco facility. Rockford is currently in
discussions with Hilco Capital about steps Rockford will take to resolve this
default. Hilco is restricted in its ability to take action with respect to
this default by an intercreditor agreement with Congress. Although
the Congress facility does not have a comparable debt service
coverage covenant, the Hilco default also constitutes a default under
the Congress facility under its cross-default provision. Rockford is
also in discussions with Congress about the steps Rockford will take
to resolve this default. Both the Congress and Hilco facilities require Rockford to maintain minimum
levels of excess availability and also limit capital expenditures annually. At
March 31, 2004, Rockford was in compliance with these requirements and
anticipates that it will be in compliance with these requirements going
forward. The Congress Facility requires that Rockford maintain blocked lock box
accounts, whereby Congress takes possession of all cash receipts and these
amounts are applied to reduce the debt outstanding. In accordance with EITF
95-22: Balance Sheet Classification of Borrowings Outstanding under Revolving
Credit Agreements That Include both a Subjective Acceleration Clause and a
Lock-Box Arrangement, Rockford has recorded the $21.7 million outstanding
balance as at March 31, 2004 on the Congress Facility as
short-term. Rockford expects to maintain
the facility for the entire three-year term. Due to the daily cash
sweep arrangement, Rockford no longer carries any cash balances. The bank
overdraft presented as a current liability represents outstanding
checks, which Rockford will pay when presented using advances from
the Congress facility. 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations You should read this discussion and analysis of financial condition and results
of operations in conjunction with our unaudited condensed consolidated
financial statements and the related disclosures included elsewhere in this
report, and Managements Discussion and Analysis of Financial Condition and
Results of Operations included as part of our Form 10-K for the year 2003,
filed with the SEC on March 30, 2004. Overview Our results for the first quarter were dominated by the relaunch of our
Rockford Fosgate product line and by difficulties we experienced in delivering
this product line to our customers. Our sales for the month of March 2004 were
approximately $2.0 million over March 2003; however, sales for the first
quarter of 2004 were only slightly 7




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higher than the first quarter of 2003 due to a delay in production of the new
product line. We believe the production delay will result in a deferral into
the second quarter of approximately $5.0 to $6.0 million of sales we had
anticipated in the first quarter. Despite the sales and shipping shortfall, we
believe our new product line is being accepted in the marketplace and we
received customer orders for approximately $60.5 million during the three
months ended March 31, 2004, which was 23.5% over orders received for the same
period in 2003. The sales shortfall for the quarter was caused by a delay in the release of the
product designs for our new products to production, which resulted in raw
material ordering delays, production inefficiencies and increased engineering
costs. The raw material ordering delays resulted in approximately $0.8 million
of premium freight charges and $0.3 million of expedite charges for the
quarter. In addition, in order to expedite delivery of needed parts, we took
in-house many of the raw material inspection and sorting activities we normally
have our vendors perform. The inconsistent flow of material resulted in
downtime on our production lines. This, coupled with the short time available
to learn the production requirements of the new product line, resulted in
significant unfavorable manufacturing variances. Engineering costs for the
first quarter of 2004 were approximately 31.8% higher than the first quarter of
2003 due to assistance our engineers provided to put the new product designs
into production and continued research and development on new Omnifi products.
We anticipate these charges and production inefficiencies will decline during
the second quarter of 2004 and have already seen a reduction in these costs in
the month of April. Because of our decision to attempt to build greater perceived value and
performance into our new products, our new product line is more costly to
produce than the previous product line. We are initiating value engineering
projects to review the cost to produce the new product line. We have also
announced a price increase, effective June 1, 2004, to cover some of the
additional costs. We believe the new product has been well received in the marketplace resulting
in lower discounting for our new products than the marketplace normally
demands; however, new product launches require the load-in of demo programs
that give dealers a reduced price for their demo units. Discounting of end of life product was also prevalent and greater than we
anticipated due to the extent of our product line overhaul, which impacted
margins more than we anticipated. Together, these factors resulted in a 30%,
or $1.0 million, increase in discounting costs over the first quarter of 2003.
We have sold most of our end of life product, with the remainder scheduled to
ship in the second quarter. The new product line launch resulted in higher purchases of inventory during
the first quarter, with most of the increase in our raw materials purchases.
This resulted in an increase in ending inventory at March 31, 2004. We are
producing finished goods using the increased raw materials as rapidly as we
can. This inventory is turning quickly and we anticipate gradually declining
inventory levels for the full year. We are deliberately moving our vendors to 60 day payment terms to compensate
for the longer payment terms expected of us by our big box and mass
merchandising customers. Our increased purchasing levels and extended payment
terms, which we stretched even further as we negotiated our new credit facility
(the facility closed only 2 days before the end of the quarter and we were not
able to make payments to return our vendors to their normal terms before the
end of the quarter), resulted in a significant increase in our accounts payable
balance at March 31, 2004. Our accounts payable also increased as a result of
the correction of the weakness in our period end reconciliation process,
discussed in more detail in Item 4 of this report. The correction of the
material weakness is not a recurring event and we do not expect further
increases in our accounts payable as a result of this correction. 8




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We believe accounts payable should decrease as inventory purchases level off
and we return to normal vendor payment terms, but expect to have greater
accounts payable balances going forward than we have historically carried
because of the move to 60 day payment terms. We believe the new asset based facility that we entered into on March 29, 2004,
will provide the funding we need to implement the strategic goals described in
our Managements Discussion and Analysis of Financial Condition and Results of
Operations included as part of our Form 10-K for the year 2003, filed with the
SEC on March 30, 2004. The facility is more fully described below under
Liquidity and Capital Resources. Results of Operations The following table shows, for the periods indicated, selected consolidated
statements of operations data expressed as a percentage of net sales: Three months endedMarch 31,2004
    
    2003Net sales
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold
    
    
    78.9
    
    
    
    66.3Gross profit
    
    
    21.1
    
    
    
    33.7Operating expenses:Sales and marketing
    
    
    19.7
    
    
    
    20.3General and administrative
    
    
    13.5
    
    
    
    13.4Research and development
    
    
    7.1
    
    
    
    5.5Total operating expenses
    
    
    40.3
    
    
    
    39.2Operating loss
    
    
    (19.2
    )
    
    
    (5.5
    )Interest and other (income) expense, net
    
    
    1.5
    
    
    
    (0.1
    )Loss before tax
    
    
    (20.7
    )
    
    
    (5.4
    )Income tax benefit
    
    
    (6.9
    )
    
    
    (2.6
    )Minority interest
    
    
    (0.5
    )
    
    
    (0.5
    )Net loss
    
    
    (13.3
    )%
    
    
    (2.3
    )%
 Cost of goods sold primarily consists of raw materials, direct labor and
manufacturing costs associated with production of our products as well as
warranty, warehousing and customer service expenses. Sales and marketing expenses primarily consist of salaries, sales commissions
and costs of advertising, trade shows, distributor and sales representative
conferences and freight. General and administrative expenses primarily consist of salaries, facilities
and other costs of our accounting, finance, management information systems,
administrative and executive departments, as well as legal, accounting and
other professional fees and expenses associated with our business. Research and development expenses primarily consist of salaries associated with
our research and development personnel and legal costs related to our
intellectual property. 9




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Geographic Distribution of Sales Our sales by geographic region were as follows: Three months endedMarch 31,2004
    
    2003(In thousands)Region:(1)United States
    
    $
    34,684
    
    
    $
    33,798Other Americas
    
    
    1,185
    
    
    
    1,447Europe
    
    
    3,272
    
    
    
    3,827Asia
    
    
    1,487
    
    
    
    1,342Total sales
    
    $
    40,628
    
    
    $
    40,414
   (1)
    
    Sales are attributed to geographic regions based on the location of
customers. No single foreign country accounted for greater than 10% of
our sales. In the following discussion, certain increases or decreases may differ due to rounding Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003 Net Sales. Sales increased by $0.2 million, or 0.5%, to $40.6 million for the
three months ended March 31, 2004, from $40.4 million for the three months
ended March 31, 2003. The increase in sales was primarily attributable to
record March sales of the new Rockford Fosgate product line offset by lower net
sales in January and February due to the product delay that left us with
inadequate availability of current inventory and required heavy discounting of
end of life product. U.S. sales increased by $0.9 million, or 2.6%, to $34.7 million for the three
months ended March 31, 2004, from $33.8 million for the three months ended
March 31, 2003. International sales decreased by $0.7 million, or 10.2%, to
$5.9 million for the three months ended March 31, 2004, from $6.6 million for
the three months ended March 31, 2003. The decrease in international sales was
due to a delay in marketing the new product lines until there is adequate
inventory to meet demand. Cost of Goods Sold. Cost of goods sold increased by $5.3 million, or 19.8%, to
$32.1 million for the three months ended March 31, 2004, from $26.8 million for
the three months ended March 31, 2003. As a percent of sales, cost of goods
sold increased to 78.9% for the three months ended March 31, 2004, from 66.3%
for the three months ended March 31, 2003. This increase was primarily due to
costs associated with the production delays and subsequent expedited production
described in the Overview above. Research and Development Expenses. Research and development expenses increased
by $0.7 million, or 31.8% to $2.9 million for the three months ended March 31,
2004, from $2.2 million for the three months ended March 31, 2003. As a
percent of sales, these expenses increased to 7.1 % for the three months ended
March 31, 2004, from 10




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5.5% for the three months ended March 31, 2003. The increase is primarily due
to increased personnel and product development costs relating to final design
and initial production of our new product line and continuing development of
the Omnifi product line. Operating Loss. Operating loss increased by $5.6 million, or 254.5%, to a $7.8
million loss for the three months ended March 31, 2004 from a $2.2 million loss
for the three months ended March 31, 2003. As a percent of sales, operating
loss increased to a 19.2% loss for the three months ended March 31, 2004, from
a 5.5% loss for the three months ended March 31, 2003. This increased loss is
the result of the delays in availability of our new products and resulting
increased cost of sales described in the Overview above. Interest and Other Expense (Income), Net. Interest and other expense (income),
net, primarily consists of interest expense and currency gains and losses.
Interest and other (income) expense, net, decreased by $0.7 million, or 700.0%,
to $0.6 million loss for the three months ended March 31, 2004 from less than
$(0.1) million income for the three months ended March 31, 2003. We incurred
$0.2 million of expenses due to the write off of unamortized costs on the debt
facility that was replaced in March, legal costs associated with the payoff of
the facility and audit fees from potential lenders. Income Tax Benefit. Income tax (benefit) expense increased by $1.8 million, or
180.0%, to a $(2.8) million benefit for the three months ended March 31, 2004,
from a $(1.0) million benefit for the three months ended March 31, 2003. The
effective income tax rates were 33.8% for the three months ended March 31,
2004, and 48.4% for the three months ended March 31, 2003. This drop in rate
was primarily a result of not recording any tax benefit on losses recognized by
our MB Quart German subsidiary due to concern about its ability to use these
losses against future income. Liquidity and Capital Resources We have financed our business primarily using existing working capital, cash
flows from operations, the proceeds from our initial public offering, and bank
borrowings. Our cash flow provided by operations was $0.1 million for the
three months ended March 31, 2004 compared to $8.9 million used in operations
for the three months ended March 31, 2003. The net loss and inventory
increases were both significantly higher in the three months ended March 31,
2004 than the same period in 2003. These increases were more than offset by
the increase in our accounts payable and bank overdraft. We relied on bank
borrowings to finance operations and purchases of property and equipment. We
will continue to rely on our credit facility to finance operations and
purchases of property and equipment even after our operating cash flows
improve. We entered into a 3-year $45.0 million asset based credit facility with
Congress Financial Corporation (Western) as Agent and Wachovia Bank, National
Association as Arranger (Congress Facility) on March 29, 2004. This credit
facility replaced the $30 million revolving credit facility we previously
maintained with Bank of America, N.A. and Bank One, Arizona, N.A. This credit
facility is collateralized by substantially all of our assets and has a
variable interest rate of LIBOR plus 250 basis points or Prime plus 50 basis
points. In addition, the covenants limit the payment of dividends; however, we
have not historically paid dividends. We used $1.3 million of this credit
facility to payoff our outstanding leases with Bank One, Arizona, N.A. on March
29, 2004. In addition, we entered into a one-year term loan agreement with Hilco Capital,
LP in the amount of $4 million on March 29, 2004. This term loan is junior to
the $45.0 million senior Congress Facility. The Hilco facility has a variable
interest rate of the LaSalle Bank Rate/Prime plus 450 basis points. This
facility requires that we maintain certain minimum levels of debt service
coverage beginning in April 2004. The debt service coverage ratio calculation
uses year-to-date numbers, anchoring in March, 2004. As a result of our March
operating results, we did not reach the required
year-to-date ratio for April, 2004 and this failure is a default 11




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under the Hilco facility. We are currently in discussions with Hilco about
steps we will take to resolve this default. Hilco is restricted in its ability
to take action with respect to this default by an intercreditor agreement with
Congress. Although the Congress facility does not have a comparable
debt service coverage covenant, the Hilco default also constitutes a
default under the Congress facility as a result of its cross-default
provision. We are also in discussions with Congress about the steps
Rockford will take to resolve this default. Both the Congress and Hilco facilities require we maintain minimum levels of
excess availability and also limit capital expenditures annually. At March 31,
2004, we were in compliance with these requirements and we anticipate that we
will continue to be in compliance with these requirements going forward. The Congress Facility requires that we maintain blocked lock box accounts,
whereby Congress takes possession of all cash receipts and these amounts are
applied to reduce the debt outstanding. In accordance with EITF 95-22:
Balance Sheet Classification of Borrowings Outstanding under Revolving Credit
Agreements That Include both a Subjective Acceleration Clause and a Lock-Box
Arrangement, we have recorded the $21.7 million outstanding
balance as at March 31, 2004 on the Congress Facility as short-term. We expect to maintain the facility for the entire
three-year term. We had working capital of $31.5 million at March 31, 2004, compared to $38.1
million at December 31, 2003. The significant components of working capital
for the quarter ended March 31, 2004 include:  Cash and cash equivalents was $0 million as at
March 31, 2004 versus $0.7 million as at December 31, 2003. Due to the daily sweep of cash
by Congress, we do not carry any cash balances. The bank overdraft presented
as a current liability represents outstanding checks, which we will
pay when presented using advances from the Congress facility.Our net accounts receivable were $36.0 million, or 79.7 days sales
outstanding (DSO) at March 31, 2004 compared to $31.8 million, or 79.1 DSO
at December 31, 2003. The increase in accounts receivable balances is due
primarily to record sales in the month of March.Net inventory increased $9.5 million, from $37.9 million at December 31,
2003 to $47.4 million at March 31, 2004. This increase was due to increased
raw material requirements for the Rockford Fosgate product line redesign and
increased finished goods inventory of our Omnifi product. We have
implemented a number of inventory reduction initiatives, including quicker
response time from offshore vendors, managing key components of inventory
levels to shorten response time to market changes and continued focus on the
launch of our Omnifi product line. We anticipate that these initiatives
will result in gradually decreasing inventory levels.Accounts payable increased $17.7 million, from $9.4 million at December 31,
2003 to $27.1 million at March 31, 2004. This increase was primarily due to
increased inventory purchases and extending of vendor payment terms. We have
extended the terms of most of our vendors to 60 days to compensate for the
longer payment terms expected of us by our big box and mass merchandising
customers. We also temporarily extended some vendors beyond this period
while awaiting the closing of our new credit facility, which did not close
until 2 days before the end of the quarter. We were not able to make
payments to vendors to bring them back to normal vendor terms in the 2 days
between the credit line closing and the end of the quarter. The correction
of the internal control weakness in our period end reconciliation process
discussed in more detail in Item 4 of this report, also contributed to the
increase in our accounts payable. The correction of the material weakness
is not a recurring event and we do not expect further increases in our
accounts payable as a result of this correction. We believe accounts
payable should decrease as inventory purchases level off and we return to
normal vendor payment terms.The treatment of our credit facility as a current liability reduced our
working capital by the entire $21.7 million balance of that facility. Investing activities used cash of $2.1 million in the three months ended March
31, 2004 versus $2.0 million for the three months ended March 31, 2003.
Capital expenditures, the primary use of cash from investing activities, were
$1.5 million for the first quarter of 2004 versus $2.2 million for the first
quarter of 2003. We continue working to improve management of our capital
spending including more stringent payback requirements for approval of capital
spending. Our capital spending is primarily in tooling for specific production
lines, general machinery and equipment to support manufacturing and computer
hardware and software to support our operations. We do not anticipate
significant changes in our future capital spending requirements. 12




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Off Balance Sheet Arrangements We do not participate in transactions that generate relationships with
unconsolidated entities or financial partnerships, such as entities referred to
as structured finance or variable interest entities (VIEs), which would have
been established for the purpose of facilitating off-balance sheet
arrangements. As of March 31, 2004, we are not involved in any unconsolidated
VIE transactions. Contractual Obligations as of March 31, 2004 We had certain cash obligations at March 31, 2004 due as follows (dollars in
thousands) Payments due by periodLess than
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    1 year
    
    1-3 years
    
    3-5 years
    
    5 yearsShort-term Debt
    
    $
    4,000
    
    
    $
    4,000Current portion of
long-term debt
    
    $
    21,892
    
    
    $
    176
    
    
    $
    21,716Operating Leases
    
    $
    9,187
    
    
    $
    2,947
    
    
    $
    4,766
    
    
    $
    1,474
 There were not material changes in Operating Leases since December 31, 2003. We did not have any material outstanding noncancelable purchase obligations at
March 31, 2004. One of our vendor sourcing agreements includes contractual
terms that would require us to pay for excess raw materials in the event the
program is terminated and to honor submitted purchase orders if we attempt to
cancel after a stated production lead time. Under this agreement, we have
requirements to purchase $1.7 million of additional raw materials for the
Omnifi product during 2004. Several of our other sourcing agreements require
us to place monthly purchase orders, but do not require a minimum purchase
quantity or dollar amount. We do not anticipate significant liability in
connection with these contractual requirements. Critical Accounting Policies and Estimates The methods, estimates and judgments we use in applying our accounting policies
have a significant impact on the results we report in our consolidated
condensed financial statements. We evaluate our estimates and judgments on an
on-going basis. We base our estimates on historical experience and assumptions
that we believe to be reasonable under the circumstances. Our experience and
assumptions form the basis for our judgments about the carrying value of assets
and liabilities that are not readily apparent from other sources. Actual
results may vary from what we anticipate and different assumptions or estimates
about the future could change our reported results. We believe the following
accounting policies are the most critical to us, in that they are important to
the portrayal of our financial statements and they require our most difficult,
subjective or complex judgments in the preparation of our consolidated
financial statements: Revenue Recognition.We recognize revenue pursuant to Staff Accounting Bulletin
No. 104, Revenue Recognition in Financial Statements. Accordingly, we recognize
revenue and record sales, net of related discounts, when all of the following
criteria are met:  
    
    Persuasive evidence of an arrangement exists;
    
    Ownership has transferred to the customer;
    
    The price to the customer is fixed or determinable; and
    
    Collectibility is reasonably assured. 13




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We sell almost all of our products F.O.B. our facility, so that upon shipment
of products, the above criteria are met and revenue is recognized.
Additionally, we recognize revenue from the sale of software in accordance with
SOP 97-2, Software Revenue Recognition.Revenue is recorded from packaged
software and license fees when persuasive evidence of an arrangement exists,
the software product has been shipped, the fees are fixed and determinable,
collectibility is reasonably assured and vendor-specific objective evidence of
fair value exists for any undeliverable products or services (elements) of
the arrangement. We also record reductions to revenue for estimated customer returns and
additional sales incentive offerings such as growth and volume incentive
rebates and prompt pay discounts based on historical rates. Should a greater
proportion of customers return product or redeem incentives than we estimate,
we may need to make additional reductions to revenue. Intangible Assets.On January 1, 2002, we adopted Statement of Financial
Accounting Standards (SFAS) No. 141, Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. When we account for acquired businesses
as purchases, we allocate purchase prices to the assets, definite-lived
intangible assets, and liabilities acquired based on the estimated fair values
on the respective acquisition dates. Based on these values, any excess purchase
price over the fair value of the net assets acquired is allocated to goodwill. Prior to January 1, 2002, we amortized goodwill over the useful life of the
underlying asset, not to exceed 15 years. On January 1, 2002, we began
accounting for goodwill under the provisions of SFAS Nos. 141 and 142. As at March 31, 2004, we had gross goodwill of $7,447,000
and accumulated amortization of $374,000. For the three months ended March 31,
2004 and 2003, we did not recognize amortization expense related to goodwill. In
assessing the recoverability of our goodwill and other intangible
assets, we must make assumptions about estimated future cash flows and other factors to
determine the fair value of the respective assets. If these estimates or their
related assumptions change in the future, we may be required to record
impairment charges for these assets not previously recorded. Some factors we
consider important which could trigger an impairment review include the
following:  
    
    Significant underperformance relative to expected historical or projected future operating results;
    
    Significant changes in the manner of our use of the acquired assets or the strategy for our overall business;
    
    Our market capitalization relative to net book value; and
    
    Significant negative industry or economic trends. We have tested goodwill for impairment using the two-step process prescribed in
SFAS No. 142. The first step is a screen for potential impairment, while the
second step measures the amount of the impairment, if any. We performed the
first of the required impairment tests for goodwill as at December 31, 2002,
and a second at December 31, 2003. In each case we determined that our
goodwill was not impaired and it was not necessary to undertake the second step
in the two-step process. During the three months ended March 31, 2004 and 2003,
we did not record any impairment losses related to goodwill and other
intangible assets. Allowance for Doubtful Accounts.We maintain an allowance for doubtful
accounts, based on historical rates, for estimated losses resulting from the
inability of our customers to make required payments. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances might be required. 14




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Excess and Obsolete Inventory.We maintain a reserve for estimated obsolescence
or unmarketable inventory equal to the difference between the cost of inventory
and the estimated market value based upon assumptions about future demand and
market conditions. We review information such as quantity on hand versus
forecasted use and inventory aging listings to assist in this assessment. If
actual future demand or market conditions are less favorable than those we
project, additional inventory write-downs might be required. Any change to the
reserve arising from forecast revisions is reflected in cost of sales in the
period the revision is made. Warranty.We maintain a warranty reserve, based on historical rates, for costs
associated with the repair or replacement of product that fails to meet our
standard warranty against defects in material and workmanship. Should actual
product failure rates differ from our estimates, revisions to our estimated
accruals would be required. Income taxes. We must make certain estimates and judgments in determining
income tax expense for financial statement purposes. These estimates and
judgments occur in the calculation of certain tax assets and liabilities, which
arise from differences in the timing of recognition of revenue and expense for
tax and financial statement purposes. We must assess the likelihood that we will be able to recover our deferred tax
assets. If recovery is not likely, we must increase our provision, or decrease
our benefit, by recording a valuation allowance against the deferred tax assets
that we estimate will not ultimately be recoverable. Inflation.Inflation has not had a significant impact on our operations since
we operate in a market that requires continuing price decreases and we have
historically been able to insist on continuing price decreases from our
suppliers. Rising metal prices and increasing transportation costs may have an
impact on our operations in the remainder of 2004, if we are not able to secure
concessions from our suppliers. 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk Our primary market risk exposures are in the areas of interest rate risk and
foreign currency exchange rate risk. Our holdings of cash equivalents are
subject to interest rate fluctuations, but we believe this risk is immaterial
due to the short-term nature of these investments and the relatively small cash
balances we carry. The outstanding balances on our credit facilities are also
subject to interest rate fluctuations. The value of the U.S. dollar affects our financial results. Changes in exchange
rates may positively or negatively affect our revenues, gross margins,
operating expenses and shareholders equity as expressed in U.S. dollars.
Historically, our exposure to currency exchange rate fluctuations was modest
due to the fact that we sold our products primarily in U.S. dollars and held
only a small percentage of our assets outside the U.S. However, we conduct a
growing portion of our business in foreign currency and are increasing our
billings in local currencies in Canada and Europe. During the first quarter of 2003 our Board of Directors approved and we began
to implement a new foreign currency hedging policy. The goal of the program is
to provide stability to the U.S. Dollar values of non-function currency cash
flows. Although it is impossible to eliminate all currency risk, implementation
of this program should mitigate the risk of significant changes in our earnings
due to short-term foreign exchange fluctuations. During the year ended
December 31, 2003, we entered into several Canadian dollar forward contracts to
hedge foreign denominated assets with foreign denominated liabilities in order
to mitigate the risk of significant changes in earnings due to short-term
foreign exchange fluctuations. Changes in the fair value of derivatives were
recognized through net loss. We did not engage in any hedging activity during
the first quarter of 2004 because we determined that we had more important uses
for our available cash. At March 31, 2004, there were no outstanding forward
contracts. 
 Item 4. Controls and Procedures 15




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Our principal executive officer and principal accounting officer reviewed our
disclosure controls and procedures during the last 90 days in order to comply
with the SECs requirements for certification of this Form 10-Q. Since we became public we have maintained a disclosure policy committee, which
currently includes our CEO, CFO, Corporate Controller, Treasurer, Director of
Investor Relations, and General Counsel. Our officers, directors, and
employees are responsible to inform the committee about material developments
in our business so that the committee can decide when we need to make new
filings with the SEC or make disclosures to the public markets about
developments in our business. The disclosure policy committee, other senior managers, and our finance staff
are responsible for preparation of our periodic reports. Our finance staff and
senior managers:  
    
    monitor our operations and financial performance on a regular basis,
    
    evaluate how our performance may affect our reports to the SEC, and
    
    schedule preparation of our periodic reports. We use our Oracle information system to develop the financial information used
in our reports beginning shortly after the end of each reporting period.
Members of our finance staff and our senior managers compile this information,
as well as reports about our business from our officers, directors, and
employees, and use the compiled information to prepare our reports to the SEC.
Our procedures have allowed us to file our reports within the times that the
SECs rules require. During the first quarter of 2004 our recently hired Corporate Controller
identified a weakness in our procedures for reconciling our accounts payable at
the end of each reporting period. The weakness arose as a result of a
reconciliation process that failed to reconcile the accounts payable module of
our Oracle information system, which includes all pending invoices, with our
general ledger accounts payable. Before the first quarter of 2004, our
reconciliation process for each period focused on our general ledger balances
and did not reconcile the general ledger to the Oracle accounts payable module.
Timing issues resulting from the approval process for our accounts payable
caused our general ledger accounts payable not to reflect all of the accounts
payable that had been entered into the accounts payable module in Oracle and
our reconciliation process did not identify this discrepancy. As a result, our
general ledger and financial statements did not reflect all of the accounts
payable that the Oracle module showed at the end of each period nor did they
reflect certain corresponding assets. We have reviewed our financial statements for prior periods and believe that
the reconciliation failures we discovered did not have a material effect on our
reported earnings in any quarter for the last 4 fiscal years, going back
through fiscal 2000. As a result, we have not restated our results for any
prior periods. We have also concluded that our underlying business processes
were properly using the Oracle payables module and that, upon approval through
our normal business processes, the payables shown in the Oracle payables module
were being paid in accordance with their terms and reflected in our general
ledger and financial statements. For the first quarter of 2004, and going forward, we have implemented
additional reconciliation procedures to assure that the accounts payable
reported on our general ledger reconcile to the information contained in our
Oracle accounts payable module for the end of each period reported. As at
March 31, 2004, the balance sheet reflected an increase in our accounts payable
of $4.7 million, an increase in inventory in-transit of $3.7 million, and an
increase in other assets or offsets to other accrual accounts of $0.5 million
as a result of this reconciliation. The after tax impact on our operating
results for the quarter was $0.3 million, or $0.03 per share. We believe each
of these items reflects a one-time adjustment and that going forward the
reconciliation process will not have a material impact on 16




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our results of operations. Our independent auditors, Ernst & Young LLP, have advised management and the
audit committee of our board of directors that the reconciliation failures
described above are considered to be material weaknesses in our internal
controls, which constitute reportable conditions. under standards established
by the American Institute of Certified Public Accountants. Our
audit committee, our board of directors, management and Ernst &
Young have discussed this weakness. We have assigned the highest priority to the
correction of this weakness and have implemented new reconciliation procedures
effective with our first quarter 2004 closing. Management and our audit
committee are committed to addressing and resolving this weakness fully and we
believe that the new reconciliation process we have instituted will correct
this weakness. We believe the weakness resulted from a failure to identify and
fully understand the interaction between different parts of our Oracle
information system, rather than from a failure in the ability or intent of our
personnel, and have taken steps to correct these failures. We are evaluating
other parts of our Oracle system, but have not identified and do not expect to
find other significant weaknesses in our understanding of the system that will
have as significant an effect on our financial reporting efforts. We are confident that our financial statements for the quarter year ended March
31, 2004, and for the three-months ended March 31, 2004 fairly present, in all
material respects, our financial condition, results of operations and cash
flows. Based on their review of our disclosure controls and policies, and except for
the failures noted above that we believe to be corrected, our principal
executive officer and principal accounting officer concluded that our
disclosure controls and procedures are effective and that they allow us to
comply with our periodic reporting obligations. We believe the reports we have
filed are in compliance with the SECs requirements. We have not made significant changes to our internal controls, and are not
aware of changes in other factors that could significantly affect these
controls, since our principal executive officer and principal accounting
officer reviewed our disclosure controls and procedures. 
 Part II. Other Information 
 Item 1. Legal Proceedings. Since the date of our Annual Report for the year 2003, filed with the SEC on
March 30, 2004, there have been no additional material developments in
connection with the patent claim or litigation with a former distributor as
described in the Legal Proceedings section of our Annual Report. We are and may continue to be a party to various lawsuits and arbitrations from
time to time. As at March 31, 2004, we were not a party to any legal
proceedings that we believe are material, other than the effect of the expenses
associated with the lawsuits described in our Annual Report. 
 Item 6. Exhibits and Reports on Form 8-K 17




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(a)
    
    Exhibits 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.10.61
    
    Loan and Security Agreement among
Rockford Corporation, Audio Innovations, Inc. and Hilco Capital LP,
dated March 29, 200410.62
    
    Loan and Security Agreement among
Rockford Corporation, Audio Innovations, Inc., Congress Financial
Corporation (Western), and various Financial Institutions, dated March 29, 200431.1
    
    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 Suttle31.2
    
    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 James M. Thomson32
    
    Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200299.9
    
    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 March 30, 2004, with our Annual Report on Form
10-K for the year ended December 31, 2003.
  (b)
    
    During the period from January 1, 2004, through March 31, 2004, Rockford
filed the following reports on Form 8-K: March 4, 2004 Report disclosing on Item 12 that Rockford had issued on
February 26, 2004, a news release regarding Rockfords results of
operations for the 4th Quarter of 2003 and for the year 2003. This report
furnished a copy of the press release under Item 12 of Form 8-K. 18




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SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized. ROCKFORD CORPORATIONDate: May 17, 2004
    
    By:
    
    /s/ James M. Thomson
James M. Thomson
Vice President of Finance,
Chief Financial Officer and Secretary
(Principal Financial Officer
and Duly Authorized Officer)
 19