SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF ~~THESECURITIES~~THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~March 3031, ~~2004~~2009

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. Employer
Incorporation or Organization)		Identification No.)

600 South Rockford Drive		85281
Tempe, Arizona		(Zip Code)
(Address of Principal Executive Offices)

(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

~~Yes þ No o~~ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the ~~Registrant~~registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~(as~~or a smaller reporting company. See the definitions of “large ~~defined~~accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

~~Yes~~ Large accelerated filer o No Accelerated filer o Non-accelerated filer o Smaller reporting company þ (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares of each of the issuer’s classes of common stock, as of the latest practical date:

As of ~~June~~May 301, ~~2004~~2009, there were 98,~~025~~581,~~563~~208 shares of Common Stock, $.01 par value per share, outstanding. ~~This 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

Page

Forward Looking Statements

Part I:

Financial Information

Part I: Financial Information

Item 1.

Financial Statements (Unaudited)

Item 1. Financial Statements

Condensed Consolidated Balance Sheets – June 30, 2004 and December 31, 2003

Condensed Consolidated Balance Sheets —December 31, 2008 and March 31, 2009 (Unaudited)

Condensed Consolidated Income Statements – Three and Six Months Ended June 30, 2004 and 2003

Condensed Consolidated Statements of Operations — Three Months Ended March 31, 2008 and 2009 (Unaudited)

Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2004 and 2003

Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2008 and 2009 (Unaudited)

Notes to Condensed Consolidated Financial Statements – June 30, 2004

Notes to Condensed Consolidated Financial Statements — March 31, 2009 (Unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Continuing Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

Item 4. Controls and Procedures

Part II:

Other Information

Part II: Other Information

Item 1.

Legal Proceedings

Item 1. Legal Proceedings

Item 4.

Submission of Matters to a Vote of Security Holders

Item 1A. Risk Factors

Item 6.

Exhibits and Reports on Form 8-K

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Signatures

Item 6. Exhibits and Reports on Form 8-K

Certifications

Signatures

Exhibit 31.1

EX-31.1

Exhibit 31.2

EX-31.2

EX-32

Forward-Looking Statements

We make forward-looking statements in this report including, without limitation, statements concerning the future of our industry, ~~product development,~~ business strategy ~~(including the possibility of future acquisitions)~~, continued acceptance and growth of our products, product development, 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~~These statements may ~~identify~~be ~~these~~identified ~~statements~~ by ~~our~~the 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~~these forward-looking statements, which speak only as at the date on which they are made. ~~Our~~Actual ~~actual~~ results may differ materially from those ~~described~~anticipated in our forward-looking statements. We disclaim any obligation or undertaking to update ~~our~~these forward-looking statements to 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~~2008, filed with the SEC on ~~March~~April 3015, ~~2004~~ 2009, and in ~~Exhibit~~Item ~~99.9~~1A to our Annual Report, “Risk Factors That May Affect Rockford’s Operating Results, Business Prospects and Stock Price.” The risk ~~factors~~ factors noted throughout this report and our Annual Report, particularly in the discussion in ~~Exhibit~~Item ~~99.9~~1A 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.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROCKFORD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except share data)

	June 30,			December 31,
	December 31,			March 31,
	2004			2003
	2008			2009
	(Unaudited)			(Note)
				(unaudited)
	(In thousands except share data)
Assets
Current assets:
Cash and cash equivalents	$	—		$	~~716~~—
Accounts receivable, less allowances of $7,644 and $6,067 at June 30, 2004 and December 31, 2003, respectively		42,875			31,820
Accounts receivable, less allowances of $1,441 and $998 at December 31, 2008 and March 31, 2009, respectively		12,856			14,958
Inventories, net		50,109			37,925
Inventories		13,043			7,890
Deferred income taxes		6,704			5,965
Prepaid expenses and other current assets		551			347
Income taxes receivable		4,757			3,064
Total current assets		26,450			23,195
Prepaid expenses and other		5,565			3,985
Property and equipment, net		1,743			1,685
Total current assets		110,010			83,475
Other assets		332			268
Property and equipment, net		16,437			16,296
Total assets	$	28,525		$	25,148
Deferred income taxes		141			151
Goodwill, net		7,060			7,118
Other assets		3,577			1,987
Total assets	$	137,225		$	109,027
Liabilities and shareholders’ equity
Current liabilities:
Cash Overdraft	$	440		$	—
Accounts payable	$	3,980		$	3,574
Accounts payable		28,425			9,419
Accrued salaries and incentives		1,367			1,078
Accrued salaries and incentives		2,404			2,044
Accrued warranty and returns		700			642
Accrued warranty		5,828			4,789
Other accrued expenses		1,838			1,964
Other accrued expenses		6,765			4,740
Current portion of capital lease and other long-term liabilities		161			150
Current portion of notes payable, long-term debt and capital lease obligations		25,668			24,345
Notes payable, less unaccreted discount of $20 and $4 at December 31, 2008 and March 31, 2009, respectively		4,980			2,496
Total current liabilities		69,530			45,337
Asset-based credit facility		7,547			7,219
Notes payable, less discount of $464		12,036			—
Total current liabilities		20,573			17,123
Minority interest		234			483
Notes payable, less unaccreted discount of $10 and $4 at December 31, 2008 and March 31, 2009, respectively		2,593			2,599
Long-term portion of capital lease and other long-term liabilities		66			75
Total liabilities		23,232			19,797
Shareholders’ equity:
Common stock, $.01 par value – Authorized shares – 40,000,000
Common stock, $.01 par value — Authorized shares — 40,000,000 Issued shares —9,395,720 at December 31, 2008 and March 31, 2009		94			94
Issued shares – 9,025,563 shares at June 30, 2004, and 9,010,663 at December 31, 2003.		90			90
Additional paid-in capital		38,554			38,587
Additional paid-in capital		36,753			36,228
Accumulated deficit		(32,044	)		(32,019	)
Retained earnings		15,667			23,534
Less: Treasury stock, at cost — 814,512 shares at December 31, 2008 and March 31, 2009		(1,311	)		(1,311	)
Accumulated other comprehensive income		2,915			3,355
Total shareholders’ equity		5,293			5,351
Total shareholders’ equity		55,425			63,207
Total liabilities and shareholders’ equity	$	28,525		$	25,148
Total liabilities and shareholders’ equity	$	137,225		$	109,027

Note: The consolidated balance sheet at December 31, ~~2003~~2008, 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 notes to condensed~~ ~~consolidated~~ financial statements.

See notes to condensed consolidated financial statements. 2

~~Table of Contents~~4

ROCKFORDTable CORPORATIONof AND SUBSIDIARIES Contents

~~CONDENSED~~ROCKFORD ~~CONSOLIDATED~~CORPORATION ~~INCOME~~AND ~~STATEMENTS (UNAUDITED)~~SUBSIDIARIES

	Three months ended						Six months ended
	June 30,						June 30,
	2004			2003			2004			2003
	(In thousands, except per share data)
Revenues	$	54,686		$	56,500		$	94,856		$	96,288
Cost of goods sold		39,744			36,241			71,805			63,025
Gross profit		14,942			20,259			23,051			33,263
Operating expenses:
Sales and marketing		9,319			9,612			16,833			17,175
General and administrative		5,076			5,768			10,555			11,186
Research and development		2,540			2,113			5,458			4,347
Total operating expenses		16,935			17,493			32,846			32,708
Operating (loss) income		(1,993	)		2,766			(9,795	)		555
Interest and other expense/(income), net		1,085			(285	)		1,690			(333	)
(Loss) Income before income tax		(3,078	)		3,051			(11,485	)		888
Income tax (benefit)/expense		(520	)		1,302			(3,363	)		255
(Loss) Income before minority interest		(2,558	)		1,749			(8,122	)		633
Minority interest		(96	)		(85	)		(257	)		(254	)
Net (loss) income	$	(2,462	)	$	1,834		$	(7,865	)	$	887
Net (loss) income per common share:
Basic	$	(0.27	)	$	0.21		$	(0.87	)	$	0.10
Diluted	$	(0.27	)	$	0.20		$	(0.87	)	$	0.10
Weighted average shares:
Basic		9,026			8,829			9,020			8,799
Diluted		9,026			9,188			9,020			9,155

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)

See notes to condensed consolidated financial statements.


	Three months ended
	March 31,
	2008			2009
Net sales	$	18,445		$	14,466
Cost of goods sold		12,088			10,042

Gross profit		6,357			4,424
Operating expenses:
Sales and marketing		3,195			2,257
General and administrative		2,405			2,023
Research and development		641			483

Total operating expenses		6,241			4,763

Operating income (loss)		116			(339	)
Interest and other expense (income), net		207			(364	)

Income (loss) before income taxes		(91	)		25
Income tax expense		—			—

Net income (loss)	$	(91	)	$	25

Net income (loss) per common share:
Basic	$	(0.01	)	$	0.00

Diluted	$	(0.01	)	$	0.00

Weighted average shares:
Basic		8,883			8,581

Diluted		8,883			8,581

See notes to condensed consolidated financial statements. 3

~~Table of Contents~~5

ROCKFORDTable CORPORATIONof AND SUBSIDIARIES Contents

~~CONDENSED~~ROCKFORD ~~CONSOLIDATED~~CORPORATION ~~STATEMENTS~~AND ~~OF CASH FLOWS (UNAUDITED)~~SUBSIDIARIES

	Six months ended June 30,
	2004			2003
	(In thousands)
Operating activities
Net (loss) income	$	(7,865	)	$	887
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		2,639			2,250
Loss on sale of fixed assets		—			5
Provision for doubtful accounts		477			404
Provision for inventory allowances		499			476
Minority interest		(257	)		(254	)
Changes in operating assets and liabilities:
Accounts receivable		(11,532	)		(16,596	)
Inventories		(12,683	)		(7,634	)
Income taxes receivable		(1,693	)		1,497
Prepaid expenses and other assets		(2,319	)		(518	)
Bank overdraft		440			—
Accounts payable		19,006			7,694
Accrued salaries and incentives		360			135
Accrued warranty		1,039			357
Other accrued expenses		2,025			2,186
Net cash used in operating activities		(9,864	)		(9,111	)
Investing activities
Purchases of property and equipment		(2,776	)		(3,760	)
Proceeds from disposal of property and equipment		(4	)		18
Acquisitions of business, net of cash acquired		—			357
Increase in other assets		(1,516	)		(98	)
Net cash used in investing activities		(4,296	)		(3,483	)
Financing activities
Net proceeds from notes payable, long-term debt		17,823			12,099
Repayment of short-term debt		(4,000	)
Payments on capital lease obligations		—			(514	)
Proceeds from the exercise of stock options and warrants		61			489
Net cash provided by financing activities		13,884			12,074
Effect of exchange rate changes on cash		(440	)		971
Net (decrease) increase in cash and cash equivalents		(716	)		451
Cash and cash equivalents at beginning of period		716			304
Cash and cash equivalents at end of period	$	—		$	755

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

See notes to condensed consolidated financial statements.


	Three months ended
	March 31,
	2008			2009
Cash flows from operating activities:
Net income (loss)	$	(91	)	$	25
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		373			208
Net gain on buy back of notes and warrants		—			(497	)
Gain on sale of property and equipment		(30	)		—
Share based compensation expense		50			32
Provision for doubtful accounts		75			22
Provision for inventories		190			—
Changes in operating assets and liabilities:
Accounts receivable		(3,060	)		(2,123	)
Inventories		2,221			5,153
Prepaid expenses and other		62			204
Accounts payable		310			(405	)
Accrued salaries and incentives		(93	)		(292	)
Accrued warranty and returns		(43	)		(58	)
Other accrued expenses		536			126

Net cash provided by operating activities		500			2,395
Cash flow from investing activities:
Purchases of property and equipment		(238	)		(104	)
Proceeds from sale of property and equipment		34			—
Net proceeds from divestiture of businesses		100			—
Decrease in other assets		34			33

Net cash used in investing activities		(70	)		(71	)
Cash flow from financing activities:
Proceeds from bank debt		16,076			12,190
Payments on bank debt		(15,989	)		(12,518	)
Payments on capital lease obligations		(12	)		(13	)
Payments on notes payable and other debt		(309	)		(1,983	)
Purchase of treasury stock		(196	)		—

Net cash used in financing activities		(430	)		(2,324	)

Net increase in cash flow		—			—
Cash and cash equivalents at beginning of period		—			—

Cash and cash equivalents at end of period	$	—		$	—

See notes to condensed consolidated financial statements. 4

~~Table of Contents~~6

RockfordTable Corporationof and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) June 30, 2004 Contents

1.Rockford ~~Basis~~Corporation ofand ~~Presentation~~Subsidiaries

~~Unaudited~~Notes ~~Interim~~to Condensed Consolidated Financial ~~Information~~Statements (Unaudited)

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 ArticleMarch ~~10 of Regulation S-X. Accordingly~~31, ~~they do not include all of the~~2009 ~~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~~1. ~~results~~Basis ~~for the three-month and six-month periods ended June 30, 2004, are not necessarily indicative~~ of ~~the results you may expect for the year~~Presentation ending December 31, 2004. We have made certain reclassifications to the June 30, 2003 interim financial statements and the December 31, 2003 consolidated balance sheet in order to conform to the June 30, 2004 presentation.

~~For~~Unaudited ~~further~~Interim ~~information,~~Financial ~~refer to the consolidated financial statements and~~Information ~~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~~ Rockford Corporation and subsidiaries (“Rockford”) has prepared these 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-~~based~~Q ~~Compensation~~and Article 10 of Regulation S-X consistent in all material respects with those applied in Rockford’s Annual Report on Form 10-K for the year ended December 31, 2008. 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, Rockford has made all adjustments (all of which were normal and recurring) necessary for a fair presentation.

~~Rockford~~ Operating ~~accounts~~results for ~~stock-based compensation using~~ the ~~intrinsic~~three ~~value~~months ~~method prescribed~~ended ~~in Accounting Principles Board (“APB”) Opinion No.~~March 2531, ~~“Accounting for Stock Issued to Employees~~2009,” ~~and~~are ~~has~~not ~~adopted~~necessarily ~~the~~indicative ~~disclosure-only alternative~~ of the ~~Statement~~results ofyou ~~Financial~~may ~~Accounting~~expect ~~Standards (“SFAS”) No. 123, “Accounting~~ for ~~Stock-based~~the ~~Compensation,”~~year ~~and~~ending ~~SFAS No.~~December ~~148~~31, ~~“Accounting~~2009, ~~for~~or ~~Stock-Based Compensation – Transition and Disclosure.” Rockford grants stock options~~ for ~~a fixed~~any ~~number~~other ~~of shares to employees with an exercise price equal to the fair value of the shares at date of grant~~period. ~~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~~ For ~~following~~further ~~table represents~~information, ~~the~~refer ~~effect~~to onthe ~~net~~consolidated ~~(loss)~~financial ~~income~~statements and ~~(loss)~~footnotes ~~earnings~~included as ~~per~~part ~~share if~~of Rockford’s ~~had~~Form ~~applied~~10-K for the ~~fair~~year ~~value~~ended ~~based~~December 31, ~~method~~2008, ~~and~~filed ~~recognition~~with ~~provisions~~the Securities and ofExchange ~~SFAS~~Commission ~~No.~~(“SEC”) on April ~~123~~15, ~~Accounting~~2009. ~~for~~Management’s ~~Stock-Based~~plans ~~Compensation,~~with respect to ~~Rockford~~the Company’s ~~stock~~continued viability as described in the ‘Basis of Presentation’ section of the financial statements in the Form 10-~~based~~K ~~employee~~remain ~~compensation:~~essentially unchanged at March 31, 2009.

	Three months ended						Six months ended
	June 30,						June 30,
	2004			2003			2004			2003
	(In thousands, except per share data)
Net (loss) income as reported	$	(2,462	)	$	1,834		$	(7,865	)	$	887
Proforma SFAS No. 123 expense		(77	)		(113	)		(184	)		(188	)
Proforma net (loss) income	$	(2,539	)	$	1,721		$	(8,049	)	$	699
Proforma net (loss) income per common share
Basic	$	(0.28	)	$	0.19		$	(0.89	)	$	0.08
Diluted	$	(0.28	)	$	0.19		$	(0.89	)	$	0.08

Accounting Policy

Product Warranty Cost and Service Returns 5

~~Table~~ Rockford’s ofreturn ~~Contents~~policy is to replace, repair or issue credit for product under warranty. Returns received during the current period are expensed as received and a reserve is maintained for future returns from current shipments. Management calculates the reserve using historical return rates by brand. These rates are reviewed and adjusted periodically as actual results become available.

~~For~~ A ~~purposes~~reconciliation of ~~proforma disclosures,~~ the ~~estimated~~warranty ~~fair~~and ~~value~~returns ofreserve ~~the~~activity ~~options~~ is ~~amortized~~as tofollows ~~expense~~for ~~over~~ the ~~option’s~~three months ~~vesting~~ended ~~period~~March 31, 2008 and 2009.

2. Inventories


	Three Months Ended
	March 31,
	2008			2009
	(In thousands)
Balance at the beginning of period	$	1,267		$	700
Provision for warranties and returns		1,117			561
Net settlements made during the period		(1,160	)		(619	)

Balance at the end of the period	$	1,224		$	642

~~Inventories~~2. ~~consist of the following:~~Inventories

	June 30,			December 31,
	2004			2003
	(In thousands)
Raw materials	$	16,237		$	9,698
Work in progress		2,436			1,548
Finished goods		36,150			30,898
		54,823			42,144
Less allowances		(4,714	)		(4,219	)
	$	50,109		$	37,925

Inventories consist of the following:

3. Net (Loss) Income Per Share


	December 31,		March 31,
	2008		2009
	(In thousands)
Raw materials	$	501	$	518
Work-in-progress		49		98
Finished goods		12,493		7,274

	$	13,043	$	7,890

~~The following table sets forth the computation of basic and diluted net (loss)~~7 ~~income per share:~~

	Three months ended					Six months ended
	June 30,					June 30,
	2004			2003		2004			2003
	(In thousands, except per share data)
Numerator:
Numerator for basic and diluted net (loss) income per share	$	(2,462	)	$	1,834	$	(7,865	)	$	887
Denominator:
Denominator for basic net income per share, weighted average shares		9,026			8,829		9,020			8,799
Effect of dilutive securities:
Employee stock options		0			354		0			352
Warrants		0			5		0			4
Dilutive potential common shares		0			359		0			356
Denominator for diluted net (loss) income per share, adjusted weighted average shares		9,026			9,188		9,020			9,155
Basic net (loss) income per share	$	(0.27	)	$	0.21	$	(0.87	)	$	0.10
Diluted net (loss) income per share	$	(0.27	)	$	0.20	$	(0.87	)	$	0.10

AtRockford ~~June 30,~~Corporation ~~2004, options to purchase approximately 425,051 shares~~ and ~~warrants~~Subsidiaries to purchase 649,810 shares of Rockford stock were excluded from the calculation of the diluted net loss per share because they were anti-dilutive. At June 30, 2003, options to purchase approximately 541,000 shares of Rockford stock were excluded from the calculation of the diluted net income per share because they were anti-dilutive.

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued) 6

~~Table~~3. ofIncome ~~Contents~~(Loss) Per Share

4. The ~~Convertible~~following ~~Debt~~table sets forth the computation of basic and ~~Warrants~~diluted net income (loss) per share:

On June 11, 2004, Rockford completed the private placement of $12.5 million of Rockford’s 4.5% convertible senior subordinated secured notes due 2009 and warrants to purchase 649,810 shares of common stock at $5.75 per share. The private placement closed, and Rockford issued the notes and warrants, as of June 11, 2004.


	Three Months Ended March 31,
	2008			2009
	(In thousands, except per share data)
Numerator:
Net income (loss)	$	(91	)	$	25
Plus:
Income impact of assumed conversion of convertible debt		—			—

Net income (loss) available to shareholders	$	(91	)	$	25

Denominator:
Denominator for basic net income (loss) per share		8,883			8,581
Effect of dilutive securities:
Employee stock options		—			—
Warrants		—			—

Dilutive potential common shares		—			—

Denominator for diluted net income (loss) per share		8,883			8,581

Income (loss) per common share:
Net income (loss)
Basic	$	(0.01	)	$	0.00

Diluted	$	(0.01	)	$	0.00

~~The~~ There ~~noteholders~~were ~~may~~no ~~convert~~stock ~~the~~options ~~notes~~which ~~into~~would ~~Rockford’s~~have ~~common~~increased ~~stock~~net atshares ~~any~~outstanding ~~time prior~~using to the treasury ~~scheduled~~stock ~~maturity~~method ~~date~~in ofthe ~~June 10,~~diluted ~~2009.~~income ~~The conversion price is $5.29~~ (loss) per share, ~~which~~calculation ~~represents~~for ~~a 15% premium over the closing price of Rockford’s common stock on June~~March 931, ~~2004.~~2008 ~~If fully converted~~and 2009, ~~the Notes will convert into 2~~respectively,~~362,949~~ ~~shares~~because ~~of Rockford’s common stock. Rockford has~~ the ~~right~~ toexercise ~~automatically~~price ~~convert~~of the ~~notes into common~~ stock ifoptions exceeded the ~~common~~average ~~stock~~market ~~trades above a specified target~~ price ~~for a specified period. Rockford may also force the exercise~~ of the ~~warrants under certain circumstances prior to their expiration date~~stock.

At March 31, 2009, Rockford ~~used~~also ~~the~~had ~~net~~outstanding ~~proceeds~~$5.0 million ~~from~~of ~~the~~4.5% ~~sale~~convertible senior subordinated secured notes due 2009 and warrants to ~~pay~~purchase ~~off~~534,073 ~~its~~shares of common stock at $43.~~0 million~~73 ~~junior term~~per ~~loan~~share. ~~with~~The ~~Hilco~~noteholders ~~Capital~~have LPthe ~~(“Hilco”)~~right ~~and~~ to ~~pay~~convert ~~down~~the ~~its~~notes ~~revolving~~into ~~asset~~Rockford’s common ~~based~~stock ~~credit~~at ~~facility~~any ~~with~~time ~~Congress~~before ~~Financial~~the ~~Corporation~~original ~~(Western)~~maturity date of June 10, as2009. ~~agent~~The conversion price is $4.61 ~~(“Congress”)~~per share. ~~This~~The ~~resolves~~convertible ~~the~~senior ~~previously~~subordinated ~~reported~~secured ~~default~~notes ~~under~~and ~~the~~warrants ~~Hilco~~were not included in the ~~facility~~diluted income (loss) per share calculation for March 31, 2008 and 2009, as they were not dilutive.

At Outstanding ~~the~~stock ~~same~~options ~~time~~with itexercise ~~completed~~prices ~~the~~(plus ~~notes~~unearned ~~offering,~~compensation ~~Rockford~~for ~~received a waiver of~~unvested ~~its~~awards) ~~previously~~greater ~~announced~~than ~~violation of covenants on~~ the ~~revolving~~average ~~credit facility~~market ~~with~~price ~~Congress.~~of ~~In addition,~~ Rockford’s ~~and~~common ~~Congress~~stock ~~modified~~during ~~certain terms of~~ the ~~Congress~~period ~~facility.~~are excluded ~~This~~from ~~amendment reduced~~ the ~~current availability~~computation of ~~the~~diluted ~~line~~net toincome ~~$35.0~~(loss) ~~million~~per ~~until~~share ~~Congress~~of iscommon ~~able~~stock. toA ~~syndicate the~~summary ~~balance~~ of the ~~facility~~excluded ~~and~~amounts itfollows ~~added~~(in athousands, ~~rolling~~except ~~EBITDA~~exercise ~~covenant that is~~prices): ~~effective starting in August of 2004.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations


	Three Months Ended March 31,
	2008		2009
Outstanding options		1,669		1,495
Average exercise price	$	4.16	$	2.98

~~You should read this discussion and analysis of financial condition and results~~8 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 Table of Contents

~~Our~~Rockford ~~second~~Corporation ~~quarter results showed a significant improvement over the first quarter with income before taxes~~ and ~~minority interest improving by $5.3~~Subsidiaries million, resulting in a net loss of $3.1 million for the second quarter. Our gross margin increased by 7.1% from 20.2% to 27.3%. Our second quarter net loss included a charge of approximately $0.6 million related to the exit from the Hilco facility, described below. This expense contributed ($0.07) per share to our second quarter loss per share of ($0.27). Our loss was an improvement over the ($0.60) loss per share in the first quarter, but fell well short of the earnings per share of $0.21 achieved in the second quarter of 2003.

~~Our~~Notes ~~goal is~~ to ~~return~~Condensed toConsolidated ~~profitability~~Financial ~~and~~Statements ~~positive operating cash flow though~~(Unaudited)—(Continued) ~~increased sales and margins, reduced expenses and improved working capital~~ ~~management. We are beginning to see the results of our efforts, but recognize that we have significant challenges ahead of us.~~

~~Sales for the three months ended June 30, 2004 were $1~~4.~~8 million~~ ~~less~~Notes ~~than sales~~Payable ~~for~~and the three months ended June 30, 2003. Sales of our core Rockford Fosgate line in the second quarter of 2004 exceeded 2003 second quarter levels due to the strength of our relaunched product line. We believe sales would have been higher had we not continued to experience some of the product availability issues discussed in our first quarter 10Long-Q.Term ~~Sales of our Lighting~~Debt Audio brand for the second quarter of 2004 were well below second quarter 2003 levels, largely because 2003 included the load in sales of our 2 Fast 2 Furious promotional products. In order to preserve our domestic market presence and

Rockford entered into an asset-based credit facility with Wachovia Capital Financial Corporation (Western) as Agent and Wachovia Bank, National Association as Arranger on March 29, 2004 and as amended most recently on July 30, 2008. This credit facility, as amended, is a $20 million asset-based credit facility, has a term expiring on March 24, 2011, and is collateralized by substantially all of Rockford’s assets. Under the agreement, pricing options based on LIBOR and prime rates are available to Rockford. The LIBOR and prime interest rate options were 2.5% and 3.75% at March 31, 2009, respectively. As of March 31, 2009, Rockford was in compliance with all applicable covenants. The availability under the credit facility at March 31, 2009 was approximately $3.9 million in excess of the outstanding balance of $7.2 million.

~~Table~~ The Wachovia credit facility requires that Rockford maintain blocked lock box accounts, whereby Wachovia takes possession of ~~Contents~~all cash receipts on a daily basis and these amounts are applied to reduce Rockford’s outstanding debt. 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 $7.5 million and $7.2 million outstanding balances as of December 31, 2008 and March 31, 2009, respectively, on the Wachovia credit facility as short-term. Rockford expects to maintain the facility for its entire term.

~~our~~ At ~~relationships~~March 31, ~~with~~2009, ~~our~~Rockford ~~major~~had ~~customers,~~outstanding ~~during~~$5.0 million ~~the~~of ~~second~~4.5% ~~quarter~~convertible wesenior ~~diverted~~subordinated ~~product~~secured ~~into~~notes ~~the~~due US2009 ~~market~~and ~~that~~warrants weto ~~would ordinarily~~purchase ~~allocate~~534,073 toshares ~~overseas~~of ~~customers~~common stock at $3.73 ~~This~~per ~~has~~share. ~~reduced~~These ~~our~~items ~~international~~were outstanding under agreements effective on June 10, 2004 and as ~~sales;~~amended ~~however~~on November 12, we2004. ~~increased~~The ~~product~~noteholders ~~shipments~~have ~~into~~the ~~these~~right ~~markets~~to inconvert ~~June~~the ~~and~~notes into Rockford’s ~~expect~~common tostock ~~reduce~~at ~~our~~any ~~international~~time ~~backlog~~before intheir redemption, which at latest would be on the ~~third~~scheduled maturity ~~quarter~~date of June 10, 2009. The conversion price was $4.61 per share. The noteholders also have a second priority lien on certain Rockford assets.

We In ~~began~~January ~~shipping~~of ~~our~~2009, ~~higher~~Rockford ~~gross~~repurchased ~~margin~~$2.5 million ~~Power~~of ~~product~~the ~~line~~convertible innotes ~~the~~and ~~month of June~~237,500 associated ~~which~~warrants ~~contributed~~for toa antotal ~~increase~~price inof ~~our~~approximately ~~margin for June~~$2.0 million. ~~April~~In ~~and~~connection ~~May~~with this ~~gross~~repurchase, ~~margins~~Rockford ~~were~~recorded ~~approximately 25% versus~~ a ~~gross~~gain ~~margin of 32% in June. In addition~~ to ~~the~~interest ~~positive~~and ~~product~~other ~~mix~~expense ~~change~~(income), ~~our~~net ~~manufacturing~~of ~~variances improved significantly from~~ approximately $30.45 million, net of ~~unfavorable~~fees ~~variances in~~and ~~the~~write-off ~~first~~of ~~quarter~~the torelated ~~$2.4 million~~portion of ~~unfavorable~~unamortized ~~variances~~debt inissuance ~~the second quarter~~costs. The Werepurchase ~~expect~~reduced ~~variances~~the ~~will~~outstanding ~~continue~~principal ~~to improve now that we are producing all~~ of ~~our~~the ~~major~~notes ~~relaunched~~from ~~product~~$7.5 million ~~lines~~to $5.0 million.

~~Our~~ In ~~announced~~April ~~June~~of 12009, ~~price~~Rockford ~~increase~~agreed ~~had~~with athe ~~minimal~~holder ~~impact~~of onthe ~~our~~remaining ~~second~~$5.0 million ~~quarter~~of convertible ~~margins~~notes ~~because~~to weamend ~~allowed~~the ~~dealers~~terms toof ~~order~~the inconvertible ~~May~~notes. ~~for~~The ~~scheduled~~maturity ~~delivery~~date of June 10, 2009 is amended and the notes will now be repaid in four equal payments of $1.25 million on June 10, 2009, December 10, 2009, June 10, 2010 and December 10, 2010. ~~Our~~As ~~margins~~of inJune 10, 2009, the ~~second~~interest ~~quarter~~rate ~~were~~will increase ~~also~~to ~~negatively affected~~10% byon the ~~final~~unpaid ~~significant~~balance ~~sales~~and ofthe ~~end~~outstanding ofwarrants ~~life~~and ~~products~~the ~~from~~conversion ~~our~~option ~~2003~~will each expire in accordance with their original terms. Rockford ~~Fosgate~~may ~~product~~repay ~~line~~early any or all of the outstanding principal without penalty.

~~Spending for sales and marketing, engineering and general and administrative~~9 functions for the six months ended June 30, 2004 versus 2003 remained flat as a result of our effort to contain operating costs. In May, we reduced headcount by 22 individuals, primarily in engineering and indirect marketing, in an effort to align the structure of these departments with our strategic goals and reduce operating costs. We recorded a reserve in May in the amount of $0.2 million to cover termination costs. We continue to review all our spending as part of our efforts to return to profitability.

WeTable continued our efforts to improve liquidity in the second quarter with the placement of $12.5 million of convertible subordinated debt. This placement is intended to provide the bridge necessary until we return to generating positive operating cash flow. In addition, the new debt has a five year term and the interest rate is a low 4.5%. Contents

Rockford Corporation and Subsidiaries 8

~~Table~~Notes ofto ~~Contents~~Condensed Consolidated Financial Statements (Unaudited)—(Continued)

~~Results~~5. ofIncome ~~Operations~~Taxes

~~The~~ Rockford ~~following~~adopted ~~table~~the ~~shows,~~provisions of FASB Interpretation No. 48 “Accounting for ~~the~~Uncertainty ~~periods~~in Income ~~indicated~~Taxes (“FIN 48”) an interpretation of FASB Statement No. 109” (“SFAS 109”) on January 1, 2007. ~~selected~~Adoption had no net impact given that the approximately $1.1 million adjustment reduced both ~~consolidated~~Rockford’s ~~statements~~deferred tax assets and the related valuation allowance. The future recognition of ~~operations~~the $1.1 million ~~data~~would ~~expressed~~not impact the effective income tax rate as along ~~percentage~~as Rockford maintains its full valuation allowance against its deferred tax assets. However, the recognition of ~~net~~such assets, along ~~sales:~~with a release in the valuation allowance, could favorably affect the effective income tax rate. In 2008, Rockford’s unrealized tax benefits decreased by $505,000 due to completion of an IRS review of Rockford’s 2006 federal income tax return.

	Three months ended						Six months ended
	June 30,						June 30,
	2004			2003			2004			2003
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of goods sold		72.7			64.1			75.7			65.5
Gross profit		27.3			35.9			24.3			34.5
Operating expenses:
Sales and marketing		17.0			17.1			17.7			17.8
General and administrative		9.3			10.2			11.1			11.6
Research and development		4.6			3.7			5.8			4.5
Sales, general and administrative expenses		30.9			31.0			34.6			33.9
Operating (loss) income		(3.6	)		4.9			(10.3	)		0.6
Interest expense and other (income), net		2.0			(0.5	)		1.8			0.3
Income (loss) before tax		(5.6	)		5.4			(12.1	)		0.9
Income tax expense (benefit)		(1.0	)		2.3			(3.5	)		0.3
Minority interest		(0.1	)		(0.1	)		(0.3	)		(0.3	)
Net (loss) income		(4.5	)%		3.2	%		(8.3	)%		0.9	%

Rockford recognizes interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2009, Rockford has not recorded any related expense in its statement of operations. Rockford’s 2005-2008 years remain subject to examination for federal income tax purposes, as well as 2004-2008 years for certain state taxing jurisdictions where Rockford operates. The statute of limitations for certain years may be extended if Rockford were to use certain of its carryover attributes from years outside of this range. Rockford does not expect the amount of unrecognized tax benefits to increase or decrease significantly over the next twelve months.

~~Cost~~6. ofSpecial ~~goods sold primarily consists of raw materials, direct labor and~~Charges ~~manufacturing costs associated with production of our products as well as warranty, in-bound freight, warehousing and customer service expenses.~~

~~Sales~~ During ~~and~~2008, ~~marketing~~Rockford ~~expenses~~recorded ~~primarily~~special ~~consist~~charges of ~~salaries,~~approximately ~~sales~~$1.1 million ~~commissions~~of which none of ~~and~~the ~~costs~~special charges related to the first quarter of ~~advertising,~~2008. ~~trade~~These ~~shows,~~charges ~~distributor~~are due to cost associated with the elimination of two executive officer positions, and ~~sales~~severance ~~representative~~cost for personnel ~~conferences~~discharged associated with the closing of Rockford’s Tempe manufacturing facilities in 2008 and ~~freight~~the planned closing of its Michigan distribution facility in the second quarter of 2009.

~~General~~ Each of the special charges increased general and administrative expenses. ~~primarily~~Rockford ~~consist~~expects ofto complete ~~salaries~~all payments arising from these special charges by January 31, ~~facilities~~2010. The following table ~~and~~summarizes ~~other~~the ~~costs~~outstanding ofliabilities ~~our~~arising ~~accounting,~~from ~~finance,~~these ~~management~~special ~~information~~charges ~~systems~~at December 31, 2008, the ~~administrative~~changes ~~and~~in ~~executive~~the ~~departments,~~three asmonth ~~well~~period asending ~~legal~~March 31, ~~accounting~~2009, and ~~other~~ ~~professional~~the ~~fees~~outstanding ~~and~~liabilities ~~expenses~~at ~~associated~~March 31, ~~with~~2009 ~~our~~(in ~~business~~thousands).

Research and development expenses primarily consist of salaries associated with our research and development personnel and legal costs related to our intellectual property.

Three months ended

March 31, 2009

Liability at

December 31,

Reserve

Adjustments

March 31,

2008

Recorded

Payments

To Reserve

2009

Post employment costs:

740

$—

(373

)

$—

367

7. Stock Purchase Program 9

~~Table~~ In September 2007 and February 2008, Rockford’s Board of ~~Contents~~Directors authorized two common share repurchase programs that enable Rockford to purchase, in the open market or through negotiated transactions, up to approximately 920,000 of its outstanding common shares. Rockford had repurchased, before January 1, 2009, 814,512 shares for an aggregate purchase price of approximately $1.3 million. Rockford did not repurchase any shares during the quarter ended March 31, 2009, and has remaining authority to purchase up to 105,488 shares under the programs.

~~Geographic Distribution of Sales~~10

OurTable salesof by geographic region were as follows: Contents

	Three months ended				Six months ended
	June 30,				June 30,
	2004		2003		2004		2003
	(In thousands)				(In thousands)
REGION:
United States	$	44,864	$	44,417	$	79,088	$	77,595
Other Americas		3,345		3,484		4,532		4,926
Europe		4,254		6,139		7,526		9,966
Asia		2,223		2,460		3,710		3,801
Total sales (1)	$	54,686	$	56,500	$	94,856	$	96,288

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Continuing Operations

~~(1)~~ This ~~Sales~~discussion ~~are~~and ~~attributed~~analysis toof ~~geographic~~financial ~~regions~~condition ~~based~~and onresults of continuing operations should be read keeping in mind the ~~location~~risk factors noted in the Forward Looking Statements section of this ~~customers.~~report Noand ~~single~~in ~~foreign~~conjunction ~~country~~with ~~accounted~~Rockford’s ~~for~~unaudited ~~greater~~condensed ~~than~~consolidated ~~10%~~financial statements and the related disclosures included elsewhere in this report, and Management’s Discussion and Analysis of ~~our~~Financial ~~sales~~Condition and Results of Continuing Operations included as part of Rockford’s Form 10-K for the year 2008, filed with the SEC on April 15, 2009.

~~Six Months Ended June 30, 2004, Compared to Six Months Ended June 30, 2003~~Overview

In Rockford ~~the~~is ~~following~~now ~~discussion,~~focused ~~certain~~almost ~~increases~~entirely oron ~~decreases~~its ~~may~~core ~~differ~~mobile ~~due~~audio business. During 2009, Rockford expects to ~~rounding~~work on improving penetration of the mobile audio markets and continuously improving its core operations.

~~Net~~ Production ~~Sales.~~of ~~Sales~~all ~~decreased~~of byRockford’s ~~$1.4 million,~~products oris ~~1.5%,~~now ~~to $94~~outsourced.~~9 million~~ ~~for~~Rockford ~~the six~~completed ~~months ended June 30, 2004, from $96.3 million for~~ the ~~six months ended~~ ~~June 30,~~outsourcing ~~2003.~~of ~~Major~~amplifier ~~contributors~~assembly toduring the ~~decline~~fourth ~~include~~quarter ~~missed turns resulting from product delays and lower sales~~ of ~~Lightning~~2008, ~~Audio~~allowing ~~branded products. The Lightning Audio shortfall compared to~~ the ~~prior~~removal ~~year was approximately $6.5 million, principally due to 2003 sales~~ of ~~2 Fast 2 Furious~~ ~~products.~~another Anlayer ~~additional $0.8 million~~ of ~~sales~~overhead ~~decline is attributed to the same promotional products offered under the Rockford Fosgate brand name. Although sales~~ in ~~big-box~~its ~~retailers~~operations ~~continue to show strength, declines~~ in ~~the domestic specialty dealer channel continue~~2009. ~~U.S.~~With ~~sales in 2004 increased by 2.0% to $78.1 million compared to $77.6 million for~~ the ~~same~~completion ~~period~~of ~~last~~its ~~year.~~outsourcing ~~International~~projects, ~~sales~~and ~~decreased~~assuming byonly ~~$2.9 million,~~favorable or ~~15.5%~~moderately toadverse ~~$15.8 million~~changes ~~for the~~in ~~six~~exchange ~~months~~rates ~~ended~~and international ~~June 30,~~trading ~~2004~~conditions, ~~from~~Rockford ~~$18.7 million~~anticipates ~~for~~that ~~the~~its ~~six~~2009 ~~months~~results ~~ended June 30,~~will ~~2003.~~reflect ~~The majority of the decrease is the result of the product~~further ~~delays~~reductions ~~mentioned previously, with the decrease impacting international sales because of our decision to allocate product to the US market~~ in ~~order~~its ~~to maintain~~cost ~~US relationships~~structure.

~~Cost~~ All of ~~Goods~~Rockford’s ~~Sold.~~sales ~~Cost~~are ofnow ~~goods~~focused ~~sold~~on ~~increased~~the bymass ~~$8.8 million~~retail, orindependent ~~14.0%~~specialist, to ~~$71.8 million~~international ~~for~~distribution ~~the~~and ~~six~~OEM ~~months~~channels. ~~ended~~In ~~June 30,~~first ~~2004~~quarter of 2009, ~~from~~aftermarket ~~$63.0 million~~sales ~~for~~were ~~the~~down ~~six~~in ~~months~~the ~~ended~~international ~~June 30,~~and ~~2003.~~independent Asspecialist achannels ~~percent~~for ofthe ~~sales,~~Rockford ~~cost~~Fosgate ~~of goods sold~~branded ~~increased~~product toline ~~75.7%~~and ~~for~~in the ~~six~~mass ~~months~~retail ~~ended~~and ~~June 30,~~international ~~2004,~~distribution ~~from~~channels ~~65.5%~~ for ~~the~~Rockford’s ~~six~~Lightning ~~months~~Audio ~~ended~~branded ~~June 30,~~product ~~2003~~line. The ~~largest~~mobile ~~contributing~~audio ~~factors~~aftermarket ~~are manufacturing~~in ~~variances~~the ~~and~~U.S. ~~premium~~continues ~~freight,~~to ~~resulting~~be under ~~from~~pressure, ~~our~~creating ~~first~~an ~~quarter product~~environment ~~development~~in ~~delays~~which ~~discussed~~competitors in ~~our~~the ~~prior~~aftermarket ~~filings.~~channels ~~These account for~~continued ~~$3.5 million~~aggressive ofpricing ~~the~~and ~~increase~~promotional ~~in cost of goods sold during 2004~~activity.

~~General~~ Rockford ~~and~~is ~~Administrative~~working ~~Expenses.~~to ~~General~~increase aftermarket sales and ~~administrative~~believes ~~expenses decreased~~its bycurrent ~~$0.6 million,~~products orperform better ~~5.6%,~~than tothe ~~$10.6 million~~products ~~for~~Rockford ~~the~~had ~~six~~previously ~~months~~offered. ~~ended June 30,~~Their ~~2004,~~improved ~~from~~performance ~~$11.2 million~~contributes positively ~~for~~to ~~the~~Rockford’s ~~six~~sales ~~months~~efforts ~~ended~~as ~~June 30,~~dealers ~~2003.~~have Asfound ~~a percent~~their ofinstallation ~~sales,~~to ~~general~~be easier and their ~~administrative~~operation ~~expenses~~to ~~were~~be ~~11.1%~~more powerful and 11more reliable.~~6% respectively.~~ ~~Abandoned~~Assuming ~~acquisition~~a ~~costs~~moderate ofdecline ~~$0.9 million~~ in the ~~first~~overall mobile ~~half~~audio ~~of 2003~~aftermarket, ~~are~~Rockford ~~the~~believes ~~basis~~that ~~for~~it ~~the~~should ~~decline~~be ~~year~~able to ~~date~~stabilize or even increase its aftermarket sales. ~~However,~~If weconsumer ~~expect~~spending ~~further improvements~~as ina ~~general~~whole ~~and~~decreases ~~administrative~~more ~~expenses~~significantly, ~~during~~Rockford expects the ~~remainder~~mobile ~~of 2004~~audio asaftermarket awould ~~result~~also ofdecline ~~restructuring~~significantly ~~efforts~~and ~~initiated~~Rockford would likely suffer a decrease in ~~the~~its ~~second~~aftermarket ~~quarter~~sales.

In 2008 and early 2009 OEM sales were impacted by a significant reduction in consumer spending 10for automobiles. If decreases in consumer spending continue, and sales of Nissan and Mitsubishi vehicles continue to decline, or if other changes in demand reduce sales of the particular vehicles in which Rockford’s systems are offered, OEM sales may decline further.

~~Table~~ Because offinancial ~~Contents~~events in late 2008 and early 2009 increased consumer fears and reduced or eliminated available financing, particularly lease financing, the short term outlook is for continued reductions in vehicle sales and Rockford’s OEM revenue. On the other hand, leasing has been an impediment to aftermarket audio sales because consumers are less willing to modify leased vehicles. In the longer term, if the shift away from vehicle leasing continues, the shift may contribute to a revival in aftermarket audio sales because consumers will own and be more willing to modify their vehicles.

~~Research and Development Expenses. Research and development expenses increased~~11 by $1.1 million, or 25.6%, to $5.5 million for the six months ended June 30, 2004, from $4.3 million for the six months ended June 30, 2003. As a percent of sales, these expenses were 5.8% and 4.5% respectively. The rise continues to relate to increased personnel and product development costs associated with the production delays for our core product line, as disclosed in our prior filings. Development costs related to Simple Devices and OmniFi brands are also contributing to the increase. We expect expenses to decline in the second half of 2004 as a result of the restructuring efforts mentioned earlier and the elimination of development costs associated with the product delays.

OperatingTable (Loss) Income. Operating (loss) income decreased by $10.4 million to a loss of $9.8 million for the six months ended June 30, 2004 as compared with income of $0.6 million for the six months ended June 30, 2003. As a percent of sales, operating (loss) income was (10.3)% for the six months ended June 30, 2004 and 0.6% for the same period in 2003. As mentioned previously, the primary reasons for the decrease in operating (loss) income are unfavorable manufacturing variances, premium freight costs, inefficiencies and development costs associated with the delayed relaunch of our core products, as well as additional selling and administrative expenses in acquired companies. Contents

~~Interest~~Results ~~and Other Expense (Income), Net. Interest and other expense (income) net, primarily consists~~ of ~~interest expense and currency gains and losses. Net~~Operations interest and other expense (income), increased by $2.0 million to result in an expense of $1.7 million for the six months ended June 30, 2004, compared to income of $0.3 million for the six months ended June 30, 2003. Of the increase, $0.6 million resulted from the repayment of our junior credit facility with Hilco out of the proceeds of our new convertible notes offering. Interest expense increased $0.5 million to $1.0 million for the six months ending June 30, 2004, compared to $0.5 million for the same period 2003. In addition, $0.5 million of currency gains during the first six months of 2003 compare to ($0.1) million of currency loss during the same period of 2004.

~~Income~~ The ~~Tax~~following ~~(Benefit) Expense.~~table ~~Income tax (benefit) expense decreased by $3.6 million~~shows, ~~to a tax benefit of $3.4 million~~ for the ~~six~~periods ~~months ended June 30~~indicated, ~~2004,~~selected ~~compared to~~consolidated astatements ~~tax expense~~ of ~~$0.3 million for the six months ended June 30, 2003. The~~ ~~effective~~operations ~~income~~data ~~tax~~expressed ~~rates~~as ~~were~~a ~~29.3%~~percentage ~~and 28.7% respectively. We have reviewed our deferred tax assets and determined that, as~~ of ~~May 2004,~~net ~~no additional tax~~sales: ~~benefit will be recorded.~~

Three Months Ended June 30, 2004, Compared to Three Months Ended June 30, 2003


	Three months ended
	March 31,
	2008			2009
Net sales		100.0	%		100.0	%
Cost of goods sold		65.5			69.4

Gross profit		34.5			30.6
Operating expenses:
Sales and marketing		17.3			15.6
General and administrative		13.1			14.0
Research and development		3.5			3.3

Total operating expenses		33.9			32.9

Operating income (loss)		0.6			(2.3	)
Interest and other expense (income), net		1.1			(2.5	)

Income (loss) before income tax		(0.5	)		0.2
Income tax expense		—			—

Net income (loss)		(0.5	)%		0.2	%

In Cost of goods sold primarily consists of product costs associated with the ~~following~~purchase ~~discussion,~~of Rockford’s ~~certain~~products ~~increases~~as orwell ~~decreases~~as ~~may~~warranty, ~~differ~~warehousing, ~~due~~freight-in toand ~~rounding~~customer service expenses.

~~Net~~ Sales. ~~Sales~~and ~~decreased~~marketing byexpenses ~~$1.8 million,~~primarily orconsist ~~3.2%,~~of ~~to $54.7 million for the three months ended June 30~~salaries, ~~2004,~~sales ~~from $56.5 million for the three months ended June 30~~commissions, ~~2003.~~costs ~~The decrease is primarily the result~~ of ~~product delays~~ ~~associated with the relaunch of our core product line. Although production delays moderated as the second quarter progressed~~advertising, ~~the~~trade ~~current~~show ~~backlog~~costs ~~of $7.2 million at the end of the quarter was a result of product availability issues~~ and ~~had~~freight-out ~~an unfavorable effect on the current period as compared to the backlog of $1~~expenses.~~9 million at the end of the same period in 2003.~~

~~U.S.~~ General ~~sales~~and ~~increased~~administrative byexpenses ~~$0.5 million,~~primarily orconsist ~~1.1%~~of salaries, tofacilities ~~$44.9 million~~and ~~for~~other ~~the three~~costs ~~months~~of ~~ended~~Rockford’s ~~June 30~~accounting, ~~2004~~finance, ~~from~~management ~~$44.4 million~~information ~~for~~systems, ~~the~~administrative ~~three~~and ~~months ended June~~executive 30departments, ~~2003.~~as ~~International~~well ~~sales~~as ~~decreased $2.3 million~~legal, oraccounting 19.0%, to $9.8 million for the three months ended June 30, 2004, from $12.1 million for the same period last year. Our international markets were unfavorably affected because we concentrated on delivering delayed products to the domestic marketplace and weother ~~had~~professional ~~a larger than normal volume of new products in transit to foreign warehouses at the close of the current period~~fees.

Research and development expenses primarily consist of salaries associated with research and 11development personnel as well as prototyping and other costs related to new product development.

~~Table~~Geographic Distribution of ~~Contents~~Sales

~~Cost~~ Sales ~~of Goods Sold. Cost of goods sold increased~~ by ~~$3.5 million,~~geographic orregion ~~9.7%, to $39.7 million for the three months ended June 30, 2004, from $36.2 million for the three months ended June 30, 2003. As a percent of sales, cost of goods sold~~ were ~~72.7%~~as ~~and 64.1% respectively. A heavier mix of lower margin product~~follows: ~~caused by the unavailability of higher margin product until late in the quarter, manufacturing variances and premium freight were the primary cause of this increase.~~

General and Administrative Expenses. General and administrative expenses decreased by $0.7 million, or 12.0%, to $5.1 million for the three months ended June 30, 2004, from $5.8 million for the three months ended June 30, 2003. As a percent of sales, general and administrative expenses were 9.3% and 10.2% respectively. The decrease was primarily attributable to abandoned acquisition costs and restructuring costs associated with our German operations incurred in 2003.


	Three months ended
	March 31,
	2008		2009
	(In thousands)

Region: (1)
United States	$	15,115	$	12,568
Other Americas		1,476		967
Europe		1,049		430
Asia		805		501

Total sales	$	18,445	$	14,466

~~Research~~(1) ~~and~~Sales ~~Development~~are ~~Expenses.~~attributed ~~Research and development expenses increased by $0.4 million, or 20.2%,~~ to ~~$2.5 million~~geographic ~~for~~regions ~~the~~based ~~three~~on ~~months ended June 30, 2004, from $2.1 million for~~ the ~~three~~location ~~months~~of ~~ended June 30, 2003~~customers. AsNo asingle ~~percent of~~foreign ~~sales,~~country ~~these~~accounted ~~expenses increased to 4.6%~~ for ~~the~~greater ~~three~~than ~~months ended June 30, 2004, from 3.7~~10% ~~for the for the same period last year. Increases are primarily the result~~ of ~~costs associated with the relaunch delays for our core products~~sales.

~~Operating (Loss)~~12 Income. Operating (loss) income decreased by $4.8 million, to a loss of $(2.0) million for the three months ended June 30, 2004, from income of $2.8 million for the three months ended June 30, 2003. As a percent of sales, operating (loss) income decreased to (3.6)% for the three months ended June 30, 2004, from 4.9% for the three months ended June 30, 2003. The decrease in operating income is attributable to unfavorable manufacturing variances, premium freight costs, inefficiencies and development costs associated with the delayed relaunch of our core products, as well as additional selling and administrative expenses in acquired companies.

InterestTable and Other Expense (Income), Net. Interest and other expense (income), net, primarily consists of interest expense and currency gains and losses. Interest and other expense (income), net, increased to an expense of $1.1 million for the three months ended June 30, 2004 as compared to income of $0.3 million for the three months ended June 30, 2003. Of the increase, $0.6 million was a result of the termination and payoff of the Hilco facility. Interest expense increased by $0.3 million to $0.5 million for the three months ending June 30, 2004, compared to $0.2 million for the same period of 2003. Contents

~~Income~~In ~~Tax (Benefit) Expense. Income tax expense decreased by $1.8 million to a tax benefit of $0.5 million for~~ the ~~three~~following ~~months ended June 30~~discussion, ~~2004,~~certain ~~from~~increases ~~a tax~~or ~~expense~~decreases ofmay ~~$1.3 million~~differ ~~for~~due ~~the~~to ~~three months ended June 30, 2003. The~~rounding effective income tax rates were 16.9% and 42.6% respectively. This reduced our effective tax rate for the period. We have reviewed our deferred tax asset and determined that, as of May 2004, no additional tax benefit will be recorded.

Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008 12

~~Table~~ Net Sales. Net sales decreased by $4.0 million, or 21.6%, to $14.5 million for the three months ended March 31, 2009, from $18.4 million for the three months ended March 31, 2008. The decrease in sales was primarily attributable to lower sales of ~~Contents~~Rockford’s Lightning Audio branded products, lower sales to international customers, higher discounts due to end-of-life sales and lower royalty revenue. These reductions were partially offset by lower returns. Net sales for the three months ended March 31, 2009 also included sales of end-of-life product and initial pipeline shipments of Rockford’s 2009 new product line. OEM royalty revenue for the three months ended March 31, 2009 and 2008 were $0.3 million and $1.7 million, respectively.

~~Liquidity~~ U.S. ~~and~~sales ~~Capital~~decreased ~~Resources~~by $2.5 million, or 17.1%, to $12.6 million for the three months ended March 31, 2009, from $15.1 million for the three months ended March 31, 2008. International sales decreased by $1.4 million, or 42.3%, to $1.9 million for the three months ended March 31, 2009, from $3.3 million for the three months ended March 31, 2008. The decrease in international sales was primarily due to across the board reductions in sales, which were significantly aggravated by a receivership for one of Rockford’s European Distributors.

We Gross ~~have~~Profit. ~~financed~~Gross ~~our~~profit ~~business~~decreased ~~primarily~~by ~~using existing working capital~~$1.9 million, ~~cash flows~~or ~~from operations~~30.4%, ~~the~~to ~~proceeds from our initial public offering, and bank borrowings~~$4.4 million ~~During~~for the ~~second~~three months ~~quarter~~ended ~~of 2004~~March 31, we2009 ~~completed~~from ~~the~~ $126.5 4 million ~~private~~for ~~placement~~the ofthree ~~our~~months ~~convertible~~ended ~~notes~~March 31, ~~discussed~~2008. inAs ~~more detail~~a ~~below,~~percent toof ~~assist~~sales, ingross ~~our~~profit ~~efforts~~decreased to ~~finance our business~~30.6% ~~Our~~for ~~cash~~the ~~flow~~three ~~used~~months ~~in operations~~ended ~~was~~March 31, $92009, from 34.~~8 million~~5% for the ~~six~~three months ended ~~June~~March 3031, ~~2004 compared to $9~~2008.~~1 million~~ ~~used~~The decrease in ~~operations~~gross ~~for~~profit ~~the~~as ~~six~~a ~~months~~percent ~~ended~~of ~~June 30,~~net sales ~~2003.~~is ~~The net~~primarily ~~loss~~due ~~and~~to ~~inventory~~lower ~~increases~~royalty ~~accounted~~revenue ~~for~~as ~~most~~a percent of ~~our~~net ~~use~~sales and higher discounts on end-of-life ~~cash~~products. ~~These uses~~This ~~were~~decline was partially offset by anlower ~~increase~~product ~~in our accounts payable~~costs.

We Sales ~~rely on bank borrowings to finance operations~~ and ~~purchases~~Marketing ~~of property and equipment~~Expenses. ~~Because~~Sales ~~of our net losses~~ and ~~substantial~~marketing ~~need~~expenses ~~for~~decreased ~~cash~~by ~~during~~$0.9 million, ~~the~~or ~~last year~~29.4%, weto ~~are~~$2.3 million ~~near~~for to the ~~credit~~three ~~limits~~months onended ~~our~~March 31, ~~current~~2009 ~~financing arrangements~~from ~~and~~$3.2 million ~~are~~for ~~focused~~the onthree months ~~reducing~~ended ~~our~~March 31, ~~need for cash~~2008. IfAs wea ~~continue~~percent ~~to require~~of ~~substantial~~sales, ~~additional~~sales ~~cash~~and ~~resources,~~marketing weexpenses ~~may~~decreased ~~need~~ to ~~seek additional~~15.6% ~~debt~~for orthe ~~equity~~three ~~financing.~~months Weended ~~cannot~~March 31, be2009 ~~sure~~from ~~that~~17.3% ~~such~~for ~~financing~~the ~~will~~three ~~be available~~months onended ~~acceptable~~March 31, ~~terms~~2008. WeThe decrease ~~expect~~in tosales ~~continue~~and tomarketing ~~rely~~expenses onwas ~~our~~primarily ~~credit facility~~due to ~~finance~~lower ~~operations~~sales ~~and~~commissions ~~purchases of property~~ and ~~equipment even~~reduced ~~after~~outbound ~~our~~freight ~~operating~~expenses ~~cash~~resulting ~~flows~~from ~~improve~~lower sales.

We General ~~entered~~and ~~into~~Administrative aExpenses. ~~3-year~~General ~~asset~~and ~~based~~administrative ~~credit~~expenses ~~facility~~decreased ~~with~~by ~~Congress Financial~~$0.4 ~~Corporation~~million ~~(Western)~~or as15.9%, ~~Agent~~to ~~and~~$2.0 million ~~Wachovia~~for ~~Bank,~~the ~~National~~three ~~Association~~months ~~as Arranger~~ended on March 2931, ~~2004.~~2009 ~~This~~from ~~credit facility replaced the~~ $302.4 million for ~~revolving~~the ~~credit~~three ~~facility~~months weended ~~previously maintained with Bank of America~~March 31, N2008.~~A. and~~ ~~Bank~~As ~~One,~~a ~~Arizona,~~percent ~~N.A. This credit facility is collateralized by substantially all~~ of ~~our~~sales, ~~assets~~general and ~~has~~administrative ~~a variable interest rate of LIBOR plus~~expenses ~~300~~increased ~~basis~~to ~~points or Prime plus 100 basis points~~14.0% Infor ~~addition,~~ the ~~covenants limit~~three ~~the~~months ~~payment~~ended ~~of dividends; however~~March 31, we2009 ~~have~~from ~~not historically paid dividends~~13.1% Atfor the ~~time~~three ofmonths ~~the closing of the convertible note financing~~ended ~~discussed in the next paragraph~~March 31, ~~we modified certain terms of the Congress facility~~2008. ~~This~~The ~~amendment~~decrease ~~reduced~~in ~~the~~general ~~current~~and ~~availability~~administrative ofexpenses ~~the~~is ~~line~~due ~~from~~in ~~$45 million~~large topart ~~$35 million until Congress is able~~ to ~~syndicate the balance of the~~lower ~~facility~~personnel ~~and~~related itexpenses ~~added a rolling EBITDA covenant that anchors in August of 2004. The reduction of current availability has put stress on our working capital position~~ and weprofessional ~~are using most of our available credit facility~~fees.

On Research ~~June 11,~~and ~~2004~~Development weExpenses. ~~entered~~Research ~~into,~~ and ~~closed,~~development ~~agreements~~expenses ~~for~~decreased ~~the~~by ~~private placement of~~ $120.5 2 million, ofor ~~our 4~~24.56%, ~~convertible~~to ~~senior~~$0.5 million ~~subordinated~~for ~~secured notes~~the ~~due~~three ~~2009~~months ~~and~~ended ~~warrants to purchase 649~~March 31,~~810~~ ~~shares~~2009 offrom ~~common stock at~~ $50.756 million for ~~per~~the ~~share.~~three ~~The~~months ~~note~~ended ~~holders~~March 31, ~~may~~2008. ~~convert~~As ~~the~~a ~~notes~~percent ~~into~~of ~~our~~sales, ~~common~~these ~~stock~~expenses atdecreased ~~any time~~to ~~before~~3.3% for the ~~scheduled~~three ~~maturity~~months ~~date~~ended ~~of June~~March 1031, 2009~~. The conversion price is $5.29 per share~~, ~~which~~from ~~represents a 15~~3.5% ~~premium~~for ~~over~~ the ~~closing~~three ~~price~~months ~~of our~~ended ~~common stock on June~~March 931, ~~2004~~2008. ~~If fully converted, the Notes will convert~~The ~~into~~decrease ~~2,362,949~~in ~~shares~~research ofand ~~our~~development ~~common~~expenses ~~stock.~~is Weprimarily ~~have~~related to the ~~right~~costs toincurred ~~automatically~~in 2008 ~~convert~~associated with the ~~notes~~launch ~~into~~of ~~common~~Rockford’s ~~stock~~2008 ifnew ~~the~~products. ~~common~~Although ~~stock~~Rockford ~~trades~~also ~~above~~introduced a ~~specified~~significant ~~target~~number ~~price~~of ~~for~~new aproducts ~~specified~~in ~~period.~~2009, Wethe ~~may~~outsourced ~~also~~model ~~force~~allowed ~~the~~Rockford ~~exercise~~to reduce ofresearch ~~the~~and ~~warrants~~development ~~under~~expenses ~~certain~~relating ~~circumstances prior~~ to ~~their~~the ~~expiration~~2009 ~~date~~new products.

We Operating ~~used~~Income ~~the~~(Loss). ~~net~~Operating ~~proceeds~~income ~~from~~(loss) declined ~~the~~by ~~sale~~$0.5 million, ~~of the notes~~ to ~~pay~~an ~~off~~operating loss ~~our~~of $40.3 million ~~junior~~ ~~term~~for ~~loan~~the ~~with~~three ~~Hilco~~months ~~Capital~~ended LPMarch 31, ~~(“Hilco”)~~2009 ~~and~~from to$0.1 million ~~pay~~of ~~down the revolving~~operating ~~asset~~income ~~based~~for ~~credit~~the ~~facility~~three ~~with~~months ~~Congress~~ended ~~Financial Corporation (Western)~~March 31, ~~as agent (“Congress”)~~2008. ~~This~~As ~~resolved~~a ~~the~~percent ~~default~~of ~~under~~sales, ~~the~~operating ~~Hilco~~income ~~facility~~(loss) ~~previously~~declined ~~reported~~to inan ~~our~~operating ~~first~~loss ~~quarter~~of ~~10-Q~~2.3% Wefor ~~incurred~~the ~~expenses~~three ~~of approximately~~months ~~$0.6~~ended March ~~million~~31, ~~to exit the Hilco facility~~2009, ~~including~~from ~~the~~an ~~write off~~operating ofincome ~~unamortized loan origination fees and the payment~~ of ~~certain guaranteed fees~~0.6% ~~The~~for ~~payoff of~~ the ~~Hilco~~three ~~facility~~months ~~eliminated~~ended ~~the~~March 31, ~~default~~2008. ~~under~~This ~~the cross-default~~decline ~~provision~~in ofoperating ~~the~~income ~~Congress~~(loss) is ~~facility~~primarily ~~and~~due weto ~~received~~reduced asales ~~waiver~~partially ~~of this~~offset ~~violation~~by oflower ~~covenants~~operating ~~on the Congress facility~~expenses.

~~Our~~ Interest ~~inventory~~and ~~position~~Other ~~increased~~Expense ~~from~~(Income), ~~$47~~Net.~~4 million~~ atInterest ~~the~~and ~~end~~other ofexpense ~~first~~(income), ~~quarter~~net, primarily consists of ~~2004~~interest toexpense ~~$50.1 million~~and atother ~~the~~gains ~~end~~and ~~of the second quarter~~losses. ~~This~~Interest ~~inventory~~and ~~increase~~other ~~was~~expense ~~due to~~ (aincome) ~~purchases~~, ~~of raw~~net, ~~materials~~improved ~~for~~by ~~the~~$0.6 million ~~Power~~or ~~product~~275.8%, ~~line launch that began in June and (b) increases in finished goods inventory~~ to ~~begin~~income toof ~~build safety stock levels on our Punch product line~~$0.4 million ~~This~~for ~~inventory~~the isthree ~~historically~~months ~~high~~ended ~~and~~March 31, 2009 itfrom isan ~~taking longer~~expense ~~than~~from we$0.2 million ~~had~~for ~~hoped~~the ~~for~~three ~~our~~months ~~inventory~~ended ~~management~~March 31, ~~initiatives~~2008. toThe ~~reduce~~improvement ~~inventory~~is ~~levels~~primarily ~~due~~attributable to the ~~large~~gain ~~amount~~ of ~~material~~approximately ~~brought~~$0.5 million inarising tofrom ~~help us overcome~~ the ~~product~~repurchase ~~launch delays for our core products and increase our~~of ~~manufacturing flexibility~~$2.5 million Weface ~~have~~value ~~confidence~~of ~~that~~convertible wenotes ~~are~~and ~~taking the correct steps~~ to ~~improve~~lower ~~our~~interest ~~inventory~~expense ~~position~~in ~~and~~2009 ~~expect~~due ~~our inventory levels~~ to lower ~~decrease~~effective inborrowing ~~the second half of 2004~~rates.

We Income ~~had~~Tax ~~working~~Expense. ~~capital~~Income oftax ~~$40.5 million~~expense atwas ~~June 30,~~zero ~~2004,~~expense ~~compared~~for tothe ~~$38.1 million~~three atmonths ~~December~~ended March 31, 2009 ~~2003~~and 2008. The ~~significant~~effective ~~components~~income oftax ~~working~~rates ~~capital~~ were 0.0% for the ~~quarter~~three months ended ~~June~~March 3031, ~~2004~~2009 and ~~include:~~2008. Rockford did not record any tax expense (benefit)

~~There~~on ~~were~~income no(loss) in ~~cash~~the ~~and~~first ~~cash~~quarter ~~equivalents~~of at2009 ~~June 30,~~and ~~2004~~2008 ~~versus~~for $0financial reporting purposes.~~7 million~~ asRockford atcontinues ~~December 31,~~to ~~2003.~~maintain ~~Our~~a ~~cash~~valuation ~~and~~allowance ~~cash~~reserve ~~equivalent~~against ~~balance~~all ~~decreased~~of ~~due~~its net deferred tax toassets ~~the~~which ~~negative~~include ~~cash~~net ~~flow~~operating ~~from~~loss ~~operations~~carryforwards. ~~Due~~The toavailable ~~the~~loss ~~daily~~carryforwards ~~sweep~~are ~~of cash~~likely byto ~~Congress,~~offset wevirtually doall ~~not~~current ~~carry~~period ~~any~~income ~~cash~~tax ~~balances.~~expense ~~The~~until ~~bank~~such ~~overdraft presented~~time, asif aever, ~~current~~that ~~liability~~management concludes ~~represents~~that ~~outstanding~~some ~~checks,~~portion ~~which~~of ~~we will~~the ~~pay~~reserved ~~when~~deferred ~~presented~~tax ~~using~~asset ~~advances~~becomes ~~from~~more ~~the~~likely ~~Congress~~than ~~facility~~not recoverable.

~~Our~~Liquidity ~~net~~and ~~accounts~~Capital ~~receivable were $42.9 million, or 70.6 days sales~~Resources outstanding (DSO) at June 30, 2004 compared to $31.8 million or 77.6 DSO at December 31, 2003. The increase in accounts receivable balances is due to seasonally higher sales. The DSO improvement is due to strengthening of our collection efforts.

~~Net~~ Rockford ~~inventory~~has ~~increased~~financed ~~$12.2 million~~its business primarily using existing capital, cash flows from operations, and bank borrowings. Rockford’s cash flow provided by operations was $372.94 million atfor the ~~December~~three months ended March 31, ~~2003~~ 2009 compared to $500.15 million atof ~~June~~cash provided by operations for the three months ended March 3031, ~~2004~~2008. ~~This~~A ~~increase~~reduction in inventory was ~~due~~the toprimary ~~increased raw~~source ~~material~~of ~~requirements~~cash for Rockford during the ~~Rockford~~first ~~Fosgate~~three ~~product~~months ~~line~~of ~~redesign,~~2009. an An increase in ~~inventory~~accounts inreceivable ~~transit,~~was ~~and~~the ~~increased~~primary use ~~finished~~of ~~goods~~cash ~~inventory~~during ~~of our~~the ~~Omnifi~~first ~~product~~three months of 2009.

~~Accounts~~ Rockford ~~payable~~entered ~~increased~~into ~~$19.0 million~~an asset-based credit facility with Wachovia Capital Financial Corporation (Western) as Agent and Wachovia Bank, ~~from~~National ~~$9.4 million~~Association atas ~~December~~Arranger on March 3129, ~~2003~~2004 toand ~~$28.4 million~~as atamended ~~June~~most recently on July 30, ~~2004~~2008. This ~~increase~~credit ~~was~~facility, ~~primarily~~as ~~due~~amended, tois a $20 ~~increased~~million ~~inventory~~asset-based ~~purchases~~credit facility, has a term expiring on March 24, 2011, and ~~extending~~is collateralized by substantially all of ~~vendor~~Rockford’s ~~payment~~assets. ~~terms~~Under the agreement, pricing options based on LIBOR and prime rates are available to Rockford. WeThe ~~have~~LIBOR and prime interest ~~obtained~~rate ~~extended~~options ~~terms~~were ~~from~~2.5% ~~most~~and 3.75% at March 31, 2009, respectively. As of ~~our~~March 31, ~~vendors~~2009, toRockford ~~compensate~~was ~~for~~in compliance with all applicable covenants. The availability under the ~~longer~~credit ~~payment~~facility ~~terms~~at ~~expected~~March 31, of2009 uswas byapproximately ~~our~~$3.9 million ~~big~~in ~~box~~excess ~~and~~of ~~mass~~the ~~merchandising~~outstanding ~~customers~~balance of $7.2 million.

~~The~~ At ~~Congress~~March 31, ~~Facility~~2009, ~~requires~~Rockford ~~that~~had weoutstanding ~~maintain~~$5.0 million ~~blocked~~of ~~lock~~4.5% ~~box~~convertible ~~accounts,~~senior ~~whereby~~subordinated ~~Congress~~secured ~~takes~~notes ~~possession~~due of2009 ~~all~~and ~~cash~~warrants ~~receipts~~to ~~and~~purchase ~~these~~534,073 ~~amounts~~shares ~~are applied~~of tocommon ~~reduce~~stock ~~the~~at $3.73 ~~debt~~per ~~outstanding~~share. InThese ~~accordance~~items ~~with~~were ~~EITF~~outstanding ~~95-22: Balance~~under ~~Sheet~~agreements ~~Classification~~effective ofon ~~Borrowings~~June 10, ~~Outstanding~~2004 ~~under~~and ~~Revolving~~as ~~Credit~~amended ~~Agreements~~on ~~That~~November 12, ~~Include~~2004. ~~both~~The anoteholders ~~Subjective~~had ~~Acceleration~~the ~~Clause~~right ~~and~~to ~~a Lock-Box~~convert ~~Arrangement,~~the wenotes ~~have~~into ~~recorded~~Rockford’s common ~~the~~stock ~~outstanding~~at ~~balance~~ any ontime ~~the~~before ~~Congress~~their ~~Facility~~redemption, aswhich ~~short-term.~~at Welatest ~~expect~~would ~~to maintain~~be on the ~~facility~~scheduled maturity ~~for~~date ~~the~~of ~~entire~~June 10, ~~three-year term~~2009. The ~~treatment~~conversion ofprice ~~our credit~~is ~~facility~~$4.61 asper ashare. ~~current~~The ~~liability~~noteholders ~~reduced~~also ~~our~~have a ~~working~~second ~~capital~~priority bylien ~~the entire~~on ~~$25.7 million~~certain ~~balance~~Rockford ~~of that facility~~assets.

~~Investing~~ In ~~activities~~January ~~used cash~~ of ~~$4.3 million in the six months ended June 30~~2009, ~~2004~~ ~~versus~~Rockford repurchased $32.5 million ~~for~~of the ~~six~~convertible ~~months~~notes ~~ended~~and ~~June 30~~237, ~~2003. Capital~~500 ~~expenditures,~~associated ~~the~~warrants ~~primary use of cash from investing activities, were $2.8 million~~ for ~~the~~a ~~first~~total ~~six~~price ~~months~~ of ~~2004~~approximately ~~versus~~ $32.80 million. ~~for~~In ~~the~~connection ~~first~~with ~~six~~this ~~months~~repurchase ofRockford ~~2003.~~recorded Wea ~~continue~~gain ~~working~~ to ~~improve~~interest ~~management of our capital spending~~ and ~~have~~other ~~imposed~~expense ~~more~~(income), ~~stringent~~net ~~payback requirements for approval~~ of ~~capital~~ ~~spending. Our capital spending is primarily in tooling for specific~~approximately ~~production lines~~$0.5 million, ~~general~~net ~~machinery~~of fees and ~~equipment~~write-off toof ~~support~~the ~~manufacturing~~related ~~and computer~~portion ~~hardware~~of ~~and~~unamortized ~~software~~debt toissuance ~~support our operations~~costs. The Werepurchase doreduced ~~not~~the ~~anticipate significant~~outstanding ~~changes~~principal inof ~~our~~the ~~future~~notes ~~capital~~from ~~spending~~$7.5 million ~~requirements~~to $5.0 million.

~~Off~~ In ~~Balance~~April ~~Sheet~~of ~~Arrangements~~2009, Rockford agreed with the holder of the remaining $5.0 million of convertible notes to amend the terms of the convertible notes. The maturity date of June 10, 2009 is amended and the notes will now be repaid in four equal payments of $1.25 million on June 10, 2009, December 10, 2009, June 10, 2010 and December 10, 2010. As of June 10, 2009 the interest rate will increase to 10% on the unpaid balance and the outstanding warrants and the conversion option will each expire in accordance with their original terms. Rockford may repay early any or all of the outstanding principal without penalty.

We Rockford doanticipates, ~~not~~based ~~participate~~on inits ~~transactions~~cash flow forecast, that ~~generate~~cash ~~relationships~~flow ~~with~~from operations at the ~~unconsolidated~~expected ~~entities~~level orof ~~financial~~operations ~~partnerships,~~for ~~such~~2009 asand ~~entities~~available ~~referred~~borrowings ~~to as~~under ~~structured~~its ~~finance~~credit orfacility ~~variable~~will ~~interest~~be adequate ~~entities~~to ~~(VIE~~meet Rockford’s) requirements for current capital expenditures, ~~which~~working ~~would~~capital ~~have~~and ~~been~~interest ~~established~~payments for the ~~purpose~~next oftwelve ~~facilitating~~months. ~~off-balance~~Rockford ~~sheet arrangements.~~does Asnot ofexpect ~~June 30,~~asset ~~2004,~~sales wewill ~~are~~be ~~not~~a significant ~~involved~~source of cash in ~~any~~2009 ~~unconsolidated VIE~~or ~~transactions~~2010.

~~Contractual~~ As ~~Obligations~~amended, asRockford ofwill ~~June~~be required to pay $2.5 ~~30,~~million ~~2004~~of the remaining outstanding convertible notes during the balance of 2009. Based on current cash-flow forecasts Rockford anticipates that it will have available borrowings under its credit facility to complete this repayment. This availability could be impacted by adverse economic events such as the credit crisis suffered at the end of 2008 and early 2009 or by a deterioration in Rockford’s operations or financial performance.

We If ~~had~~Rockford ~~certain~~is ~~cash~~unable ~~obligations~~to atmeet ~~June 30~~its liquidity needs, ~~2004~~it ~~due~~could be forced to seek one or more financing alternatives and to consider changes in its operations. Financing alternatives could include reducing or delaying capital expenditures, borrowing additional funds, selling equity securities, restructuring indebtedness, selling additional assets, reducing expenditures for new product development, and cutting other costs. Operational changes could include reductions in employee compensation and benefits, evaluation of Rockford’s status as ~~follows~~a ~~(dollars~~public company in order to ~~thousands)~~reduce costs, reductions in working capital needs, changes in distribution strategies and potential exit strategies. Some of these alternatives and changes might not prove to be available on acceptable terms; others may substantially interfere with Rockford’s business and prospects. Rockford cannot give assurance that satisfactory alternatives or changes could be put into effect on reasonable terms. If it needs to take some or all of these actions, but is not able to do so, Rockford

	Payments due by period
			Less than						More than
Contractual Obligations	Total		1 year		1-3 years		3-5 years		5 years
Current portion of long-term debt	$	25,668	$	245	$	25,423
Long-term notes payable	$	12,500					$	12,500
Operating Leases	$	9,187	$	2,947	$	4,766	$	1,474

ThereTable wereof not material changes in Operating Leases since December 31, 2003. Contents

may not be able to satisfy its liquidity needs. Under such circumstances, Rockford might not 14be able to continue its business as currently anticipated.

~~Table~~ Rockford had working capital of ~~Contents~~$6.1 million at March 31, 2009, compared to $5.9 million at December 31, 2008. The significant components of working capital at March 31, 2009 include:

We• ~~did~~Rockford ~~not~~had ~~have~~no ~~any~~cash ~~material~~and ~~outstanding~~cash ~~noncancelable~~equivalents ~~purchase~~at ~~obligations~~March ~~at June 30~~31, ~~2004~~2009 and December 31, 2008. ~~One~~Due to the daily sweep of ~~our~~cash ~~vendor~~by ~~sourcing~~Wachovia ~~agreements~~Capital, ~~includes~~described ~~contractual terms~~below, ~~that~~Rockford ~~would~~has ~~require~~reclassified uscash toand ~~pay~~cash ~~for~~equivalents ~~excess~~to ~~raw~~net ~~materials~~against inits ~~the~~current ~~event~~debt ~~the program~~balance. is• ~~terminated~~Rockford’s ~~and~~net toaccounts ~~honor~~receivable ~~submitted~~were ~~purchase~~$15.0 ~~orders~~million ifat weMarch ~~attempt~~31, 2009 compared to ~~cancel~~ ~~after~~$12.9 amillion ~~stated~~at ~~production~~December ~~lead~~31, ~~time~~2008. ~~Under~~The ~~this~~increase ~~agreement,~~in weaccounts ~~have requirements~~receivable balances is primarily due to ~~purchase~~increased sales late in the first quarter of 2009. • Rockford’s inventory position decreased from $013.4 0 million at the end of ~~additional~~2008 ~~raw~~to ~~materials~~$7.9 ~~for~~million ~~the Omnifi~~at ~~product~~March ~~during~~31, ~~2004~~2009. ~~Several~~This ofinventory ~~our~~decrease ~~other~~was ~~sourcing~~primarily ~~agreements~~due ~~require us~~ to ~~place~~outsourcing, ~~monthly~~improved ~~purchase~~inventory ~~orders~~turns, ~~but~~and doa ~~not~~reduction ~~require~~in aend ~~minimum~~of ~~purchase quantity~~life orinventory. ~~dollar~~• ~~amount~~Accounts payable decreased $0.4 Wemillion, dofrom ~~not~~$4.0 ~~anticipate~~million ~~significant~~at ~~liability~~December ~~in connection~~31, ~~with~~2008 ~~these~~to ~~contractual~~$3.6 ~~requirements~~million at March 31, 2009. This decrease was primarily due to lower inventory purchases during the first quarter of 2009.

~~Critical~~ The ~~Accounting~~Wachovia ~~Policies~~Capital credit facility requires that Rockford maintain blocked lock box accounts, whereby Wachovia Capital takes possession of all cash receipts on a daily basis and ~~Estimates~~these amounts are applied to reduce Rockford’s outstanding debt. 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 $7.2 million and $7.5 million outstanding balance as at March 31, 2009 and December 31, 2008, respectively, on the Wachovia Capital credit facility as short term. The credit facility matures on March 24, 2011, and Rockford currently expects to maintain the facility until it matures.

~~The~~ Investing ~~methods,~~activities ~~estimates~~used ~~and~~$0.1 million ~~judgments~~of wecash ~~use~~for ~~in applying our accounting policies have a significant impact on~~ the ~~results~~three wemonths ~~report~~ended inMarch 31, ~~our~~2009 ~~consolidated~~and ~~condensed~~used ~~financial statements~~$0.1 million Weof ~~evaluate~~cash ~~our~~for ~~estimates~~the ~~and~~three ~~judgments~~months onended ~~an on-going~~March 31, ~~basis~~2008. WeCapital ~~base~~expenditures, ~~our estimates on historical experience and assumptions~~the ~~that~~primary weuse ~~believe~~of tocash befrom ~~reasonable~~investing ~~under~~activities, ~~the~~were ~~circumstances~~$0.1 million ~~Our experience and assumptions form the basis~~ for ~~our judgments about~~ the ~~carrying~~three ~~value~~months ofended ~~assets~~March ~~and~~31, ~~liabilities~~2009 ~~that~~versus ~~are not readily apparent from other sources~~$0.2 million ~~Actual results~~for ~~may vary from what we anticipate and different assumptions or estimates about~~ the ~~future~~three ~~could~~months ~~change~~ended ~~our~~March 31, ~~reported results~~2008. WeRockford’s ~~believe~~capital ~~the following~~spending ~~accounting~~is ~~policies~~primarily ~~are~~in ~~the~~tooling ~~most~~for ~~critical~~specific toproduct uslines, inand ~~that~~computer ~~they~~hardware ~~are~~and ~~important~~software to support ~~the~~operations. ~~portrayal~~Rockford ofdoes ~~our~~not ~~financial~~anticipate ~~statements~~significant ~~and~~changes ~~they~~in ~~require~~its ~~our~~future ~~most~~capital ~~difficult,~~spending ~~subjective~~requirements, orother ~~complex~~than ~~judgments~~additional inexpenditures ~~the~~that ~~preparation~~may ofarise ~~our~~from ~~consolidated financial~~future ~~statements:~~OEM development opportunities.

~~Revenue~~ As ~~Recognition.~~of ~~We recognize revenue pursuant to Staff Accounting Bulletin No.~~March ~~104~~31, ~~Revenue Recognition in Financial Statements. Accordingly~~2009, weRockford ~~recognize revenue~~was ~~and~~not ~~record~~involved ~~sales,~~in ~~net~~any ofunconsolidated ~~related~~Variable ~~discounts,~~Interest ~~when all of the following~~Entity ~~criteria are met:~~(VIE) transactions.

• Inflation. ~~Persuasive~~Inflation ~~evidence~~has ofnot anhad ~~arrangement~~a ~~exists;~~significant •impact ~~Ownership~~on ~~has~~Rockford’s ~~transferred~~operations tosince ~~the~~it operates ~~customer;~~in •a ~~The~~market that requires continuing price decreases and Rockford has historically been able to insist on continuing price decreases from its suppliers. Rising metal prices and increasing transportation costs had an impact on Rockford’s operations during much of 2008, but these impacts have moderated late in 2008 and during 2009. Depending upon future cost trends, increases in commodity and transportation costs may have an impact on Rockford’s operations in 2009. Rockford sources a significant and increasing portion of its products and parts from China. Although most of its purchases from China are priced in dollars, the ~~customer~~suppliers’ isability ~~fixed~~to maintain or ~~determinable;~~reduce current prices may be affected by changes in China’s exchange rate policy and •by ~~Collectibility~~changes isin ~~reasonably~~the exchange ~~assured~~rate.

WeContractual ~~sell almost all of our products F.O.B. our facility, so that upon shipment~~Obligations 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 Rockford ~~also~~did ~~record~~not ~~reductions~~have toany ~~revenue~~material ~~for~~outstanding ~~estimated~~noncancelable ~~customer~~purchase ~~returns~~obligations ~~and~~at March 31, ~~additional~~2009. ~~sales~~Several ~~incentive~~of ~~offerings~~Rockford’s ~~such~~sourcing asagreements ~~growth~~require ~~and~~Rockford ~~volume~~to ~~incentive rebates~~place ~~and~~monthly ~~prompt~~purchase ~~pay~~orders, but ~~discounts~~do ~~based~~not onrequire ~~historical rates. Should~~ a ~~greater proportion~~minimum ~~of customers~~purchase ~~return~~quantity ~~product~~ or ~~redeem~~dollar ~~incentives~~amount. ~~than~~Rockford wedoes ~~estimate,~~not weanticipate significant ~~may~~liability ~~need~~in ~~to make~~connection ~~additional~~with ~~reductions~~these tocontractual ~~revenue~~requirements.

~~Intangible~~Critical ~~Assets. On January 1, 2002, we adopted Statement of Financial~~ Accounting ~~Standards~~Policies ~~(SFAS) No. 141, Business Combinations,~~ and ~~SFAS No. 142,~~Estimates 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, we allocate any excess purchase price over the fair value of the net assets acquired to goodwill.

There were no material changes to Rockford’s critical accounting policies and estimates during the three months ended March 31, 2009. For further information on Rockford’s critical accounting policies and estimates, refer to the annual report on Form 10-K for the year ended December 31, 2008 which was filed with the SEC on April 15, 2009.

~~Table of Contents~~15

PriorTable 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 June 30, 2004, we had gross goodwill of $7,435,000 and accumulated amortization of $374,000. For the six months ended June 30, 2004 and 2003, we did not recognize amortization expense related to goodwill. Contents

InItem 3. ~~assessing~~Quantitative ~~the recoverability of our goodwill~~ and ~~other~~Qualitative ~~intangibles,~~Disclosures ~~we must make assumptions~~ about ~~estimated~~Market ~~future cash flows and other factors to~~Risk 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:

• Rockford’s ~~Significant~~primary ~~underperformance~~market ~~relative~~risk toexposures ~~expected~~are ~~historical~~in orthe ~~projected~~areas ~~future~~of ~~operating~~interest ~~results;~~rate •risk ~~Significant~~and ~~changes~~foreign currency inexchange ~~the~~rate ~~manner~~risk. ofIts ~~our~~holdings ~~use~~ of ~~the~~cash ~~acquired~~equivalents ~~assets~~are orsubject ~~the~~to ~~strategy~~interest ~~for~~rate fluctuations, ~~our~~but ~~overall~~Rockford ~~business;~~believes •this ~~Our~~risk ~~market~~is ~~capitalization~~immaterial ~~relative~~due to ~~net~~the ~~book~~short-term ~~value;~~nature of these investments and •the ~~Significant~~essentially ~~negative~~zero ~~industry~~cash orbalances ~~economic~~it ~~trends~~carries. The outstanding balances on its credit facilities are also subject to interest rate fluctuations.

We The ~~have~~value ~~tested~~of ~~goodwill for impairment using~~ the ~~two-step process prescribed in SFAS No~~U. ~~142~~S. ~~The~~dollar ~~first~~affects ~~step~~Rockford’s isfinancial toresults. ~~screen~~Changes ~~for~~in ~~potential~~exchange ~~impairment, while the~~rates ~~second~~may ~~step~~positively ~~measures~~or ~~the~~negatively ~~amount~~affect ofrevenues, ~~the~~gross ~~impairment,~~margins ifand ~~any.~~operating Weexpenses ~~performed~~as ~~the~~expressed in ~~first~~U.S. ofdollars. ~~the~~Historically, ~~required~~Rockford’s ~~impairment~~exposure ~~tests~~to ~~for~~currency ~~goodwill~~exchange asrate atfluctuations ~~December 31,~~have ~~2002,~~been ~~and~~modest abecause ~~second~~it atpurchases ~~December 31,~~finished ~~2003.~~goods Inand ~~each~~sells ~~case~~its weproducts ~~determined~~primarily ~~that~~in ~~our goodwill~~U.S. ~~was~~dollars ~~not impaired~~ and holds itonly ~~was~~a ~~not~~small ~~necessary~~percentage toof ~~undertake~~its ~~the~~assets ~~second~~outside ~~step in~~ the ~~two-step process~~U.S. ~~During the six months ended June 30~~However, ~~2004~~Rockford ~~and~~conducts ~~2003,~~a weportion ~~did~~of ~~not~~its ~~record~~business ~~any~~in ~~impairment~~Canadian ~~losses related to goodwill and other intangible assets~~currency.

~~Allowance~~ In ~~for~~recent ~~Doubtful~~years, ~~Accounts.~~Rockford Wehas ~~maintain~~sourced an ~~allowance~~increasing ~~for~~percentage ~~doubtful accounts~~of its products, ~~based~~or onof ~~historical~~raw materials ~~rates,~~and parts for ~~estimated~~its ~~losses~~products, ~~resulting~~ from outside the ~~inability~~ United States. Most of ~~our~~Rockford’s ~~customers~~finished goods, toraw ~~make~~materials ~~required~~and ~~payments.~~parts Ifare ~~the~~sourced ~~financial condition~~in Asia, principally in China. Although most of ~~our~~these purchases ~~customers~~are ~~were~~denominated toin ~~deteriorate~~dollars, ~~resulting~~an extended decline in anthe ~~impairment~~value of the dollar may affect the ~~their~~terms ~~ability~~and prices on which Rockford is able to ~~make~~purchase ~~payments~~from its foreign suppliers and may, therefore, weincrease ~~might~~Rockford’s ~~need~~costs. toChanges ~~make~~in ~~additional~~the ~~allowances~~Chinese government’s exchange rate policies may have increased the risk of adverse changes in the U.S./China exchange rate.

~~Excess~~ At ~~and~~March 31, ~~Obsolete~~2009, ~~Inventory.~~Rockford Wedid ~~maintain~~not ahave ~~reserve~~any ~~for~~outstanding ~~estimated~~forward ~~obsolescence or~~contracts 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~~other ~~conditions are less favorable than those we~~financial ~~project,~~hedges weagainst ~~may~~exchange ~~need~~rate ~~to take additional inventory write-downs~~risk. ~~Any change to~~ ~~the reserve arising from forecast revisions is reflected in cost of sales in the period the revision is made.~~

~~Warranty~~Item 4. WeControls ~~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~~Procedures ~~product failure rates differ from our estimates, we would need to make revisions to our estimated accruals.~~

~~Income~~Evaluation ~~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~~Disclosure ~~tax~~Controls ~~assets~~ and ~~liabilities, which~~Procedures arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. We presently have $6.7 million in deferred tax assets as of June 30, 2004, which we review quarterly for balance and recoverability.

Rockford’s principal executive officer (“PEO”) and principal financial officer (“PFO”), after 16evaluating the effectiveness of Rockford’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this quarterly report, have concluded that Rockford’s disclosure controls and procedures are effective based on their evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.

~~Table~~Changes ofin ~~Contents~~Internal Control over Financial Reporting

We There ~~must~~were ~~assess~~no ~~the~~changes ~~likelihood~~in ~~that~~Rockford’s weinternal ~~will~~control beover ~~able~~financial toreporting ~~recover~~that ~~our deferred tax~~occurred ~~assets.~~during IfRockford’s ~~recovery~~last isfiscal ~~not~~quarter ~~likely,~~that wehave ~~must~~materially ~~increase our provision~~affected, or ~~decrease our~~are ~~benefit,~~reasonably bylikely ~~recording a valuation allowance against the deferred tax assets~~to ~~that~~materially weaffect, ~~estimate~~Rockford’s ~~will~~internal ~~not~~control ~~ultimately~~over befinancial ~~recoverable~~reporting.

~~Inflation.~~Inherent ~~Inflation~~Limitations ~~has not had a significant impact~~ on ~~our~~Effectiveness 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~~Controls ~~concessions from our suppliers.~~

~~Item~~ Rockford’s 3management, including Rockford’s PEO and PFO, believes that Rockford’s disclosure controls and procedures and internal control over financial reporting are effective at the reasonable assurance level. ~~Quantitative~~However, Rockford’s management does not expect that its disclosure controls and ~~Qualitative~~procedures ~~Disclosures~~or its internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about ~~Market~~the likelihood ~~Risk~~of future events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions and the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

~~Our primary market risk exposures are in the areas of interest rate risk and~~16 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.

TheTable 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 we are increasing our billings in local currencies in Canada and Europe. Contents

~~During~~Part ~~the first quarter of 2003, our Board of Directors approved and we began to implement a new foreign currency hedging policy~~II. ~~The~~Other ~~goal of the program is~~Information to provide stability to the U.S. Dollar values of non-functional 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 six months of 2004 because we determined that we had uses that are more important for our available cash. At June 30, 2004, we did not have any outstanding forward contracts.

Item 4 1. ~~Controls~~Legal ~~and Procedures~~Proceedings

~~Our~~ Rockford ~~principal~~is, ~~executive officer~~ and ~~principal~~may ~~accounting~~continue ~~officer~~to ~~reviewed~~be, ~~our disclosure~~a ~~controls~~party ~~and~~to ~~procedures~~various ~~during~~lawsuits ~~the~~and ~~last~~arbitrations ~~90 days~~from intime ~~order~~ to ~~comply~~ ~~with the SEC’s requirements for certification of this Form 10-Q~~time. ~~Our~~As ~~Chief Financial~~at ~~Officer resigned effective July~~March 1331, ~~2004~~2009, ~~and~~Rockford wewas ~~have~~not ~~appointed~~a ~~an interim~~party ~~C.F.O.~~to ~~who~~any islegal ~~performing~~proceedings ~~the~~that ~~duties~~it ofbelieves ~~principal accounting officer and~~are ~~has participated in the review of our disclosure controls and procedures in connection with the preparation of this Form 10-Q~~material.

Since we became public, we have maintained a disclosure policy committee, which currently includes our CEO, CFO, Chief Accounting Officer, Treasurer, Director of Investor Relations, and General CounselItem 1A. ~~Our~~Risk ~~officers, directors, and~~Factors 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~~ Rockford ~~disclosure~~is ~~policy~~not ~~committee,~~aware ~~other~~of ~~senior~~any ~~managers,~~material ~~and~~changes ~~our~~in ~~finance~~the ~~staff are~~Risk ~~responsible~~Factors ~~for~~described ~~preparation~~in ofItem 1A ~~our~~to Rockford’s ~~periodic~~Annual ~~reports.~~Report ~~Our~~filed ~~finance~~with ~~staff~~the ~~and senior~~SEC ~~managers:~~on April 15, 2009.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17

~~Table of Contents~~ None

~~• 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.~~17

WeTable 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 information 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. Contents

~~Based~~Item 6. onExhibits ~~their review of our disclosure controls~~ and ~~policies,~~Reports ~~our~~on ~~principal~~Form 8-K 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 we are not~~(a) Exhibits ~~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


Exhibit
Number		Description of Document
3.1		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.

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 William R. Jackson.

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.

Item 1. Legal Proceedings.


+		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.

~~Since~~(b) During the ~~date~~period wefrom ~~filed~~January 1, ~~our Form 10-Q for the first quarter~~2009, ~~filed~~through ~~with the SEC on May~~March 1731, ~~2004~~2009, ~~there~~Rockford ~~have~~filed ~~been no additional material developments in connection with~~ the ~~patent claim or litigation with a former distributor as~~following ~~described~~reports inon ~~the~~Form ~~Legal Proceedings section of our Annual Report~~8-K.

We• ~~are~~January ~~and~~6, ~~may~~2009 ~~continue~~report todisclosing beon aItem ~~party to various lawsuits and arbitrations from time to time~~1.02 ~~As at June 30, 2004, we were not a party to any legal proceedings~~ that weRockford ~~believe~~had ~~are~~repurchased ~~material,~~$2.5 ~~other~~million ~~than~~in ~~the~~aggregate ~~effect~~principal amount of ~~the~~its ~~expenses~~4.5% ~~associated with~~convertible ~~the~~senior ~~lawsuits~~subordinated ~~described~~secured innotes ~~our~~for ~~Annual~~$2.0 ~~Report~~million cash.

~~Item 4. Submission of Matters to a Vote of Security Holders~~18

WeTable held our annual meeting of shareholders on Wednesday, May 12, 2004. The election of all our directors was submitted to our shareholders at the meeting and the shareholders re-elected all six of our directors. The names of the directors elected, and the number of votes each received, is as follows: Contents

Name	Votes For		Votes Against		Abstentions		Broker Non-Votes
W. Gary Suttle		8,146,330		0		49,931		0
Nicholas G. Bartol		8,181,541		0		14,720		0
Ralph B. Godfrey		8,150,061		0		46,200		0
Jerry E. Goldress		8,144,730		0		51,531		0
Timothy C. Bartol		8,122,396		0		73,065		0
John P. Lloyd		8,150,061		0		46,200		0

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant 18caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	ROCKFORD CORPORATION
Date: May 1, 2009	By:	/s/ Richard G. Vasek
		Richard G. Vasek
		Vice President of Finance, Chief Financial Officer and Secretary (Principal Financial Officer and Duly Authorized Officer)

~~Item 6. Exhibits and Reports on Form 8-K~~19

(a)Table Exhibitsof Contents

Exhibit
Number		Description of Document
3.1		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.
31.1		Certification Required by Section 302 of the Sarbanes-Oxley Act
31.2		Certification Required by Section 302 of the Sarbanes Oxley Act
32		Certification Required by Section 906 of the Sarbanes Oxley Act
99.1		Risk Factors That May Affect Rockford’s Operating Results, Business Prospects and Stock Price+++

EXHIBIT INDEX

+		Previously filed with our registration statement on Form S-1, which the SEC declared effective on April 19, 2000 and/or amendments
Exhibit
++		Previously filed on August 11, 2000 with our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
Number		Description of Document
+++		Previously filed on March 30, 2004, with our Annual Report on Form 10-K for the year ended December 31, 2003.
3.1		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.
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 William R. Jackson.
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.

(b) During the period from April 1, 2003, through June 30, 2003, Rockford filed the following reports on Form 8-K:


+		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.

~~April 6, 2004 Report disclosing on Item 9 that Rockford had issued a news~~20 ~~release regarding its closing of a new asset based credit facility. This report furnished a copy of the press release under Item 9 of Form 8-K.~~

May 21, 2004 Report disclosing on Item 9 that Rockford had issued a news release regarding Rockford’s results of operations for the 1st Quarter, ended March 31, 2004. This report furnished a copy of the press release under Item 9 of Form 8-K.

June 15, 2004 Report disclosing on Item 9 that Rockford had issued a news release regarding Rockford’s guidance for the 2nd Quarter of 2004. This report furnished a copy of the certification under Item 9 of Form 8-K.

June 15, 2004 Report disclosing on Item 5 that Rockford had entered into agreements for the private placement of $12,500,000 of 4.5% Convertible Senior Subordinated Secured Notes due 2009 and warrants to purchase 649,810 shares of common stock. This report described certain terms of the notes and filed as exhibits the agreements relating to the notes and warrants. The report also filed as an exhibit the news release announcing the financing.

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 CORPORATION
Date: August 10, 2004	By:	/s/ Murray Cohen
		Murray Cohen
		Vice President of Finance, Chief Financial Officer and Secretary (Principal Financial Officer and Duly Authorized Officer)

Exhibit Index

Exhibit
Number		Description of Document
3.1		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.
31.1		Certification Required by Section 302 of the Sarbanes-Oxley Act
31.2		Certification Required by Section 302 of the Sarbanes Oxley Act
32		Certification Required by Section 906 of the Sarbanes Oxley Act
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 March 30, 2004, with our Annual Report on Form 10-K for the year ended December 31, 2003

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