RCHN..first quarter report.. Interim Report (UNAU

RCHN..first quarter report..

Interim Report
(UNAUDITED)
For
ROUCHON INDUSTRIES, INC. DBA SWIFTECH®
OTCPK: RCHN
FOR THE THREE-MONTH PERIOD ENDED MARCH 31ST, 2012
The financial statements attached are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The financial statements have not been audited. Gabriel Rouchon, the Company’s Chairman certifies that the statements and the notes thereto, present fairly in all material respects, the financial position of the issuer and the results of its operations and cash flows for the periods presented, in conformity with accounting principles generally accepted in the United States, consistently applied.
Dated May 17th, 2012
According to OTC Market Group Inc.,
Guidelines for Providing Adequate Current Information Version 10.0 updated on 01/14/2012
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 2
Table of Contents
I. OFFICES .......................................................................................................................................... 4
1. The exact name of the issuer .......................................................................................................................................... 4
2. Issuer’s address and principal executive offices: .......................................................................................................... 4
II. SHARES OUTSTANDING.............................................................................................................. 4
1. The number of shares or total amount of the securities outstanding for each class of securities authorized. ......... 4
III. INTERIM FINANCIAL STATEMENTS ...................................................................................... 6
IV. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION ............. 14
a) Forward looking statements: ..................................................................................................................................... 14
b) Revenues classifications: ........................................................................................................................................... 14
c) Fiscal period ending March 31st, 2012 financial results analysis: ............................................................................. 15
d) Conclusions and Prospects for the Second Quarter: ................................................................................................... 16
e) Risk factors: ............................................................................................................................................................... 17
f) Off-Balance Sheet Arrangements: .............................................................................................................................. 18
V. LEGAL PROCEEDINGS .............................................................................................................. 18
VI. DEFAULTS UPON SENIOR SECURITIES ............................................................................... 18
VII. OTHER INFORMATION ............................................................................................................. 18
1. Entry into a Material Definitive Agreement ............................................................................................................... 18
2. Termination of a Material Definitive Agreement ....................................................................................................... 18
3. Completion of Acquisition or Disposition of Assets, Including but not limited to Mergers .................................... 18
4. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of an Issuer ........................................................................................................................................................................................ 19
5. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement ................................................................................................................................................... 19
6. Costs Associated with Exit or Disposal Activities ....................................................................................................... 19
7. Material Impairments .................................................................................................................................................. 19
8. Sales of Equity Securities ............................................................................................................................................. 19
9. Material Modification to Rights of Security Holders ................................................................................................. 19
10. Changes in Issuer's Certifying Accountant ................................................................................................................. 19
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 3
11. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review ...................................................................................................................................................................................... 19
12. Changes in Control of Issuer ....................................................................................................................................... 19
13. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ............ 19
14. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ......................................................... 19
15. Amendments to the Issuer's Code of Ethics, or Waiver of a Provision of the Code of Ethics ................................ 20
VIII. EXHIBITS ...................................................................................................................................... 20
IX. CERTIFICATIONS ....................................................................................................................... 21
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 4
I. OfficesOfficesOffices
1. The exact name of the issuer
Rouchon Industries, Inc. DBA Swiftech®
2. Issuer’s address and principal executive offices:
151 W. Victoria St. Long beach, CA 90805, USA Telephone: (310) 763-0336 Fax: (310) 763-7095 URL : www.swiftech.com
Issuer’s investor relations contact information:
Gabriel Rouchon Telephone: (310) 763-0336 Email: gabe@swiftech.com 151 W. Victoria St. Long beach, CA 90805, USA
II. Share Share s OutstandingOutstandingOutstanding Outstanding
1. The number of shares or total amount of the securities outstanding for each class of securities authorized.
(i) As of the end of the issuer’s most recent fiscal quarter, March 31st, 2012, there are a total of 100,000,000 shares authorized: 75,000,000 shares of Common Stock and
25,000,000 of preferred. There are 22,505,712 Common shares outstanding and 0 preferred shares outstanding.
- Freely tradable shares (public float): 4,371,311
- Total number of beneficial shareholders (NOBOS): 473
- Total number of shareholders of record: 17
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 5
(ii) As of the end of the issuer’s last two fiscal years, there was a total of 100,000,000 shares authorized: 75,000,000 shares of Common Stock and 25,000,000 of preferred. There were 22,505,712 Common shares outstanding and 0 preferred shares outstanding.
- Freely tradable shares (public float): 4,151,311
- Total number of beneficial shareholders (NOBOS): about 470
- Total number of shareholders of record: 17
- INTENTIONNALY LEFT BLANK -
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 6
III. Interim financial stateme Interim financial stateme Interim financial stateme Interim financial stateme Interim financial stateme nts
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 7
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 8
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 9
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 10
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 11
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 12
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 13
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 14
IV. Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation Management’s Discussion and Analysis or Plan of Operation
a) Forward looking statements:
Certain portions of this report, and particularly the Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Notes to Consolidated Financial Statements, contain forward-looking statements which represent the Company’s expectations or beliefs concerning future events. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements.
b) Revenues classifications:
For further reference with respect to the analysis below, the Issuer classifies its revenues into two distinct activities: Industrial Sales, which represent goods not available to the general public, and Retail Sales which represent goods available to the general public; Retail Sales are further divided into two sub-categories, Domestic & Export Sales which are conducted thru retail and wholesale distribution channels such as wholesale distributors, retail e-sellers, and brick-and-mortar retail stores, and OEM sales which represent other manufacturers.
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 15
c) Fiscal period ending March 31st, 2012 financial results analysis:
Summary
Item As of March 31st, 2011 As of March 31st, 2012 % Change
Gross Revenues
$ 603,390.00
$ 744,361.00
+23%
COGS
$ 418,360.00
$ 423,401.00
+1%
Gross Profits
$ 185,030.00
$ 320,960.00
+73%
Operating Expenses
$ 229,345.00
$ 274,670.00
+20%
Net Income after provision for income tax expense
$ (37,615.00)
$ 39,441.00
+205%
Internal Liquidity As of March 31st, 2011 As of March 31st, 2012
Cash balance at end of period
$ 70,336.00
$ 22,869.00
Current ratio (current assets/Current liabilities)
6.0
8.0
Cash flow provided by operations
$ 57,010.00
$ 60,179.00
The first quarter (3 month period ending march 31st, 2012) was marked by a 23% increase in gross revenues, compared to the same period in 2011; growth was primarily fueled by the industrial sales sector compared to the same period in 2011.
Gross profits rose 73% from $185k as of March 31st, 2011 to $321k as of March 31st, 2012, reflecting a 41% increase in gross margins from 31% in 2011 to 43% for the same period in 2012.
(i) Operating expenses increased 20% from $229k as of March 31st, 2011 to $275k as of March 31st, 2012. Items of substantial increases included: Salaries (+49%) and Employee Benefit programs (+30%); items of substantial decreases included Legal & Professional Services (-61%), Interest Expenses (-58%), and advertising (-38%).
(ii) A net profit (after provisions for income taxes) of $39k emerged compared to a $37k net loss recorded as of March 31st, 2011.
(iii) Cash balance at the end of period was $23k.
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 16
(iv) Internal liquidity: the current ratio (current assets/current liabilities) was 8.0. Cash flow provided by operating activities was $60k.
(v) There is no long term debt.
d) Conclusions and Prospects for the Second Quarter:
Fiscal period ending March 31st, 2012 was on course with respect to earlier expectations, and marked by a sustained industrial sales activity. The industrial sales sector of the Company which is based on a 2-year cycle is in its high phase this year, and it is expected to increase by 30% compared to 2011, which will result in an estimated increase of about $250K in gross yearly revenues; shipments in this sector will spread throughout 2012, with most already secured by existing or firmly scheduled purchase orders.
Retail products:
One new product was released during the period ending March 31st, 2012: the MP35X2 dual pump; it was met with excellent reviews by the press, and sold out as soon as released. Demand is expected to remain strong for the product.
A host of new products including but not limited to those listed below are scheduled for release during the second quarter of 2012; the following products have already been discussed in various public forums, and are disclosed hereafter:
? Liquid cooling solutions for AMD Radeon high-end graphics cards:
o Komodo HD7970: released 4-6-2012
o Komodo HD7950” scheduled for release on 5/25/2012
o Heatsinks for various models from 7900 to 7800 series: scheduled fro release throughout June 2012
? Lok-Seal™ complete line of compression fittings: released 4-13-2012
? Helix™ 120mm fan : released 5-1-2012
? Apogee™ Drive II integrated pump and water-block scheduled for release on 5/20/2012
? MCRX40 140mm radiators, scheduled for release on 5/25/2012
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 17
? Maelstrom™ integrated pump and 5 ¼” bay reservoir, scheduled for release in June
e) Risk factors:
The above statements and any others in this document are forward-looking statements that involve a number of risks and uncertainties. Many factors could affect Swiftech’s actual results, and variances from Swiftech’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Swiftech presently considers the following to be the important factors that could cause actual results to differ materially from the company's expectations.
Demand could be different from Swiftech’s expectations due to factors including changes in business and economic conditions; customer acceptance of the company’s and competitors' products; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers.
Swiftech operates in an intensely competitive industry that is characterized by a high percentage of costs that are fixed or difficult to reduce in the short term and product demand that is highly variable and difficult to forecast. Additionally, Swiftech is in the process of transitioning its production process to new CNC equipment, and there could be execution issues associated with these changes, including product defects and errata along with lower than anticipated manufacturing yields. Revenue and the gross margin percentage are affected by the timing of new product introductions and the demand for and market acceptance of Swiftech’s products; actions taken by Swiftech's competitors, including product offerings and introductions, marketing programs and pricing pressures and Swiftech's response to such actions; and Swiftech's ability to respond quickly to technological developments and to incorporate new features into its products.
The gross margin could vary significantly from expectations based on changes in revenue levels; variations in inventory valuation, including excess or obsolete inventory; product mix and pricing; manufacturing yields; changes in unit costs; and the timing and execution of the manufacturing ramp and associated costs.
Swiftech's results could be impacted by adverse economic, social, political and physical/infrastructure conditions in countries where Swiftech, its customers or its suppliers operate.
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 18
Swiftech's results could be affected by adverse effects associated with product defects and errata (deviations from published specifications), and by litigation or regulatory matters involving intellectual property.
f) Off-Balance Sheet Arrangements:
None
V. Legal proceedings Legal proceedingsLegal proceedings Legal proceedings
Any current, past, pending or threatened legal proceedings or administrative actions either by or against the issuer that could have a material effect on the issuer’s business, financial condition, or operations and any current, past or pending trading suspensions by a securities regulator. State the names of the principal parties, the nature and current status of the matters, and the amounts involved.
Swiftech has no past, pending or threatened legal proceedings against it that have not been resolved completely that could have a material effect on its business, financial condition, or operation;
VI. Defaults upon senior securities Defaults upon senior securities Defaults upon senior securities Defaults upon senior securities Defaults upon senior securities Defaults upon senior securitiesDefaults upon senior securities
There was no material default in the payment of principal, interest, or purchase fund installment, or any other material default with respect to any indebtedness exceeding 5% of the total assets of the issuer.
VII. Other InformationOther Information Other Information Other Information Other Information
1. Entry into a Material Definitive Agreement
None to report
2. Termination of a Material Definitive Agreement
None to report
3. Completion of Acquisition or Disposition of Assets, Including but not limited to Mergers
None to report
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 19
4. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of an Issuer
None to report
5. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
None to report
6. Costs Associated with Exit or Disposal Activities
None to report
7. Material Impairments
None to report
8. Sales of Equity Securities
None to report
9. Material Modification to Rights of Security Holders
None to report
10. Changes in Issuer's Certifying Accountant
None to report
11. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
None to report
12. Changes in Control of Issuer
None to report
13. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
None to report
14. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
None to report
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 20
15. Amendments to the Issuer's Code of Ethics, or Waiver of a Provision of the Code of Ethics
None to report
VIII. Exhibits Exhibits
None that have not already been described or attached in prior disclosure statements
- INTENTIONALLY LEFT BLANK -
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 21
IX. Certifications CertificationsCertifications Certifications
I, Gabriel Rouchon, certify that:
1. I have reviewed this financial report of Rouchon Industries, Inc.:
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting;
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 22
Date: May 17th, 2012
_________ ________
By: Gabriel Rouchon
Chairman of the Board and Chief Executive Officer
According to OTC Guideline version 10.0 updated on 01/14/2012 - Page | 23
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
()
In connection with the Financial Report of Rouchon Industries Inc.,(the “Company&rdquo, for the interim period ending March 31st, 2012, as filed on the date hereon (the “Report&rdquo, I, Gabriel Rouchon, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: May 17th, 2012
___________________
Gabriel Rouchon
Chairman of the Board, and Chief Executive Officer