SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~March~~June 3130, 2009

Commission File Number 000-30138

ROCKFORD CORPORATION

(Exact Name of Registrant as Specified in its Charter)

ARIZONA		86-0394353
ARIZONA (State or Other Jurisdiction of Incorporation or Organization)		86-0394353 (I.R.S. Employer Identification No.)
(State or Other Jurisdiction of		(I.R.S. Employer
600 South Rockford Drive Tempe, Arizona (Address of Principal Executive Offices)		85281 (Zip Code)
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

Indicate by check mark whether the ~~registrant~~Registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its corporate Web site,~~accelerated ~~if any~~filer, ~~every~~a ~~Interactive~~non-accelerated ~~Data~~filer ~~File~~or ~~required~~a tosmaller bereporting ~~submitted~~company. ~~and~~See ~~posted~~the ~~pursuant~~definitions ~~to Rule 405~~ of ~~Regulation S-T~~“large ~~during~~accelerated ~~the~~filer,” ~~preceding~~“accelerated ~~12 months~~filer” ~~(or~~and ~~for~~“smaller ~~such~~reporting ~~shorter~~company” ~~period~~in ~~that~~Rule 12b-2 ~~the~~of ~~registrant was required to submit and post~~the ~~such~~Exchange ~~files)~~Act. ~~Yes o No o~~

~~Indicate~~Large ~~by check mark whether the registrant is a large~~ accelerated filer, ano ~~accelerated~~ Accelerated filer, ao ~~non~~Non-accelerated filer, oro(Do not check if a smaller reporting company.) ~~See~~Smaller ~~the definitions of “large accelerated filer,” “accelerated filer” and “smaller~~ reporting company” ~~in Rule 12b-2 of the Exchange Act. (Check one):~~ þ

Large accelerated filer o 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 ~~May~~August 16, 2009, there were 8,581,208 shares of Common Stock, $.01 par value per share, outstanding.

ROCKFORD CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

Forward Looking Statements			3
Part I: Financial Information			4
Item 1. Financial Statements			4
Condensed Consolidated Balance Sheets —December 31, 2008 and March 31, 2009 (Unaudited)			4
Condensed Consolidated Balance Sheets —December 31, 2008 and June 30, 2009 (Unaudited)			4
Condensed Consolidated Statements of Operations — Three Months Ended March 31, 2008 and 2009 (Unaudited)			5
Condensed Consolidated Statements of Operations — Three and Six Months Ended June 30, 2008 and 2009 (Unaudited)			5
Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2008 and 2009 (Unaudited)			6
Condensed Consolidated Statements of Cash Flows — Six Months Ended June 30, 2008 and 2009 (Unaudited)			6
Notes to Condensed Consolidated Financial Statements — March 31, 2009 (Unaudited)			7
Notes to Condensed Consolidated Financial Statements — June 30, 2009 (Unaudited)			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Continuing Operations			11
Item 3. Quantitative and Qualitative Disclosures about Market Risk			1618
Item 4. Controls and Procedures			1618
Part II: Other Information			1719
Item 1. Legal Proceedings			1719
Item 1A. Risk Factors			1719
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			1719
Item 6. Exhibits and Reports on Form 8-K			18
Item 4. Submission of Matters to a Vote of Security Holders			19
Signatures			19
Item 6. Exhibits and Reports on Form 8-K			20
Signatures			21
Certifications
Ex — 10.84
Ex — 31.1
Ex — 31.2
Ex — 32
EX-10.84
EX-31.1
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, our business strategy, continued acceptance and growth of ~~our~~ our products, product development, our dependence on significant customers and suppliers, and the ~~adequacy~~ adequacy of our available cash resources. Our statements may contain projections of results of operations or of financial condition. These statements may be identified by 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 these forward-looking statements, which speak only as at the date on which they are made. ~~Actual~~Our actual results may differ materially from those anticipated in our forward-looking statements. We disclaim any obligation or undertaking to update ~~these~~our forward-looking statements to reflect changes in our expectations or changes in events, conditions, or circumstances on which our expectations are based.

When considering our forward-looking statements, you should keep in mind the risk factors and other cautionary statements identified in this report, in our Annual Report on Form 10-K for the year 2008, filed with the SEC on April 15, 2009, and in Item 1A to our Annual Report, “Risk Factors That May Affect Rockford’s Operating Results, Business Prospects and Stock Price.” The risk factors noted throughout this report and our Annual Report, particularly in the discussion in Item 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)

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except share data)


	December 31,			June 30,
	2008			2009
				(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	—		$	—
Accounts receivable, less allowances of $1,441 and $841 at December 31, 2008 and June 30, 2009, respectively		12,856			15,697
Inventories		13,043			6,165
Prepaid expenses and other current assets		551			464

Total current assets		26,450			22,326
Property and equipment, net		1,743			1,673
Other assets		332			271

Total assets	$	28,525		$	24,270

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	3,980		$	6,245
Accrued salaries and incentives		1,367			793
Accrued warranty and returns		700			666
Other accrued expenses		1,838			2,232
Current portion of capital lease and other long-term liabilities		161			137
Notes payable, less unaccreted discount of $20 at December 31, 2008		4,980			2,500
Asset-based credit facility		7,547			4,595

Total current liabilities		20,573			17,168
Notes payable, less unaccreted discount of $10 at December 31, 2008		2,593			1,297
Long-term portion of capital lease and other long-term liabilities		66			106

Total liabilities		23,232			18,571
Shareholders’ equity:
Common stock, $.01 par value — Authorized shares — 40,000,000 Issued shares —9,395,720 at December 31, 2008 and June 30, 2009		94			94
Additional paid-in capital		38,554			38,616
Accumulated deficit		(32,044	)		(31,700	)
Less: Treasury stock, at cost — 814,512 shares at December 31, 2008 and June 30, 2009		(1,311	)		(1,311	)

Total shareholders’ equity		5,293			5,699

Total liabilities and shareholders’ equity	$	28,525		$	24,270

	December 31,			March 31,
	2008			2009
				(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	—		$	—
Accounts receivable, less allowances of $1,441 and $998 at December 31, 2008 and March 31, 2009, respectively		12,856			14,958
Inventories		13,043			7,890
Prepaid expenses and other current assets		551			347
Total current assets		26,450			23,195
Property and equipment, net		1,743			1,685
Other assets		332			268
Total assets	$	28,525		$	25,148
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	3,980		$	3,574
Accrued salaries and incentives		1,367			1,078
Accrued warranty and returns		700			642
Other accrued expenses		1,838			1,964
Current portion of capital lease and other long-term liabilities		161			150
Notes payable, less unaccreted discount of $20 and $4 at December 31, 2008 and March 31, 2009, respectively		4,980			2,496
Asset-based credit facility		7,547			7,219
Total current liabilities		20,573			17,123
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 Issued shares —9,395,720 at December 31, 2008 and March 31, 2009		94			94
Additional paid-in capital		38,554			38,587
Accumulated deficit		(32,044	)		(32,019	)
Less: Treasury stock, at cost — 814,512 shares at December 31, 2008 and March 31, 2009		(1,311	)		(1,311	)
Total shareholders’ equity		5,293			5,351
Total liabilities and shareholders’ equity	$	28,525		$	25,148

Note: The consolidated balance sheet at December 31, 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.

ROCKFORD CORPORATION AND SUBSIDIARIES

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

	Three months ended						Six months ended
	March 31,
	June 30,						June 30,
	2008			2009			2008			2009
Net sales	$	1821,~~445~~786		$	1415,~~466~~448		$	40,230		$	29,914
Cost of goods sold		1214,~~088~~163			10,~~042~~530			26,251			20,572
Gross profit		67,~~357~~623			4,~~424~~918			13,979			9,342
Operating expenses:
Sales and marketing		3,~~195~~410			2,~~257~~073			6,605			4,330
General and administrative		23,~~405~~255			21,~~023~~989			5,660			4,012
Research and development		~~641~~716			~~483~~451			1,356			934
Total operating expenses		67,~~241~~381			4,~~763~~513			13,621			9,276
Operating income (loss)		116			(339	)
Operating income		242			405			358			66
Interest and other expense (income), net		207			(364	)
Interest and other (income) expense, net		(597	)		78			(390	)		(286	)
Income (loss) before income taxes		(91	)		25
Income before income taxes		839			327			748			352
Income tax expense		—			—8			—			8
Net income (loss)	$	(91	)	$	25
Net income	$	839		$	319		$	748		$	344
Net income (loss) per common share:
Net income per common share:
Basic	$	(0.0110	)	$	0.0004		$	0.08		$	0.04
Diluted	$	(0.0109	)	$	0.0004		$	0.08		$	0.04
Weighted average shares:
Basic		8,~~883~~744			8,581			8,813			8,581
Diluted		810,~~883~~576			8,581			8,813			8,581

See notes to condensed consolidated financial statements.

ROCKFORD CORPORATION AND SUBSIDIARIES

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

	Three months ended
	Six months ended
	March 31,
	June 30,
	2008			2009
Cash flows from operating activities:
Net income (loss)	$	(91	)	$	25
Net income	$	748		$	344
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		~~373~~806			~~208~~423
Net gain on buy back of notes and warrants		—(812	)		(497	)
Gain on sale of property and equipment		(3029	)		—(89	)
Share based compensation expense		5095			3261
Provision for doubtful accounts		75336			2299
Provision for inventories		~~190~~213			—61
Impairment of other assets		188			33
Changes in operating assets and liabilities:
Accounts receivable		(35,~~060~~026	)		(2,~~123~~940	)
Inventories		23,~~221~~524			56,~~153~~818
Prepaid expenses and other		62270			~~204~~53
Accounts payable		~~310~~2,088			~~(405~~2,265	)
Accrued salaries and incentives		~~(93~~142	)		(~~292~~578	)
Accrued warranty and returns		(43379	)		(5835	)
Other accrued expenses		~~536~~133			~~126~~397
Net cash provided by operating activities		~~500~~2,297			26,~~395~~415
Cash flow from investing activities:
Purchases of property and equipment		(~~238~~574	)		(~~104~~271	)
Proceeds from sale of property and equipment		34			—89
Net proceeds from divestiture of businesses		100			—
Decrease in other assets		3445			333
Net cash used in investing activities		(70395	)		(71179	)
Cash flow from financing activities:
Proceeds from bank debt		1634,~~076~~700			1224,~~190~~821
Payments on bank debt		(1534,~~989~~730	)		(1227,~~518~~773	)
Payments on capital lease obligations		(1223	)		(1326	)
Payments on notes payable and other debt		(~~309~~1,253	)		(13,~~983~~258	)
Purchase of treasury stock		(196	)		—
Payment on other, debt		(184	)		—
Net cash used in financing activities		(430	)		(2,324	)
Purchase of treasury stock		(412	)		—
Net cash used in financing activities		(1,902	)		(6,236	)
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.

Rockford Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~March~~June 3130, 2009

1. Basis of Presentation

Unaudited Interim Financial Information

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-Q 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.

~~Operating~~In ~~results~~connection ~~for~~with preparation of the ~~three~~condensed ~~months~~consolidated ~~ended~~financial ~~March 31,~~statements ~~2009,~~and ~~are~~in accordance ~~not~~with ~~necessarily~~the ~~indicative~~recently issued Statement of Financial Accounting Standards No, 165 “Subsequent ~~the~~Events” ~~results~~(SFAS ~~you~~165), ~~may~~Rockford ~~expect~~evaluated ~~for~~subsequent events after the ~~year~~balance ~~ending~~sheet ~~December~~date of June 3130, 2009 through August 6, 2009, orthe ~~for~~date ~~any~~the ~~other~~condensed ~~period~~consolidated financial statements were issued.

~~For~~Operating ~~further~~results ~~information,~~for ~~refer to~~ the ~~consolidated~~three ~~financial statements~~ and ~~footnotes~~six ~~included as~~months ~~part of Rockford’s Form 10-K for the year~~ ended ~~December~~June 3130, ~~2008~~2009, ~~filed~~are ~~with~~not ~~the Securities and~~necessarily ~~Exchange~~indicative ~~Commission~~of ~~(“SEC”) on April 15, 2009. Management’s plans with respect to~~ the ~~Company’s continued~~results ~~viability~~you asmay ~~described~~expect infor the ~~‘Basis~~year ofending ~~Presentation’~~December 31, ~~section~~2009, ofor ~~the~~for ~~financial~~any ~~statements~~other ~~in the Form 10-K remain essentially unchanged at March 31, 2009~~period.

For further information, refer to the consolidated financial statements and footnotes included as part of Rockford’s Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission (“SEC”) on April 15, 2009. Management’s plans with respect to the Company’s continued viability as described in the ‘Basis of Presentation’ section of the financial statements in the Form 10-K remain unchanged at June 30, 2009.

Accounting Policy

Product Warranty Cost and Service Returns

Rockford’s return 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.

A reconciliation of the warranty and returns reserve activity is as follows for the three and six months ended ~~March~~June 3130, 2008 and 2009.

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2008			2009			2008			2009
	~~(In thousands)~~			(In thousands)
Balance at the beginning of period	$	1,~~267~~224		$	~~700~~642		$	1,267		$	700
Provision for warranties and returns		1,~~117~~285			~~561~~798			2,402			1,358
Net settlements made during the period		(1,~~160~~621	)		(~~619~~774	)		(2,781	)		(1,392	)
Balance at the end of the period	$	~~1,224~~888		$	~~642~~666		$	888		$	666

2. Inventories

Inventories consist of the following:

	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

~~Rockford~~2. ~~Corporation and Subsidiaries~~Inventories

~~Notes~~ Inventories toconsist ~~Condensed~~of ~~Consolidated~~the ~~Financial Statements (Unaudited)—(Continued)~~following:

3. Income (Loss) Per Share


	December 31,		June 30,
	2008		2009
	(In thousands)
Raw materials	$	501	$	323
Work-in-progress		49		66
Finished goods		12,493		5,776

	$	13,043	$	6,165

~~The~~3. ~~following~~Earnings ~~table~~Per ~~sets forth the computation of basic and diluted net income (loss) per~~Share ~~share:~~

	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 following table sets forth the computation of basic and diluted net income per share:

There were no stock options which would have increased net shares outstanding using the treasury stock method in the diluted income (loss) per share calculation for March 31, 2008 and 2009, respectively, because the exercise price of the stock options exceeded the average market price of the stock.


	Three months ended				Six months ended
	June 30,				June 30,
	2008		2009		2008		2009
	(In thousands, except per share				(In thousands, except per share
	data)				data)
Numerator:
Net income	$	839	$	319	$	748	$	344
Plus:
Income impact of assumed conversion of convertible debt		163		—		—		—

Diluted net income available to shareholders	$	1,002	$	319	$	748	$	344

Denominator:
Denominator for basic net income per share		8,744		8,581		8,813		8,581
Effect of dilutive securities:
Incremental shares from assumed conversion of convertible debt		1,832		—		—		—
Employee stock options		—		—		—		—
Warrants		—		—		—		—

Dilutive potential common shares		1,832		—		—		—

Denominator for diluted net income per share		10,576		8,581		8,813		8,581

Income per common share:
Net income
Basic	$	0.10	$	0.04	$	0.08	$	0.04

Diluted	$	0.09	$	0.04	$	0.08	$	0.04

AtThere ~~March 31,~~were ~~2009,~~no ~~Rockford~~stock ~~also~~options ~~had~~which ~~outstanding~~would ~~$5.0 million~~have ofincreased ~~4.5%~~net ~~convertible~~shares ~~senior subordinated~~outstanding ~~secured~~using ~~notes~~the treasury ~~due~~stock ~~2009~~method ~~and~~in ~~warrants~~the todiluted ~~purchase~~income ~~534,073 shares of common stock at $3.73~~ per share. ~~The~~calculation ~~noteholders~~for ~~have~~ the ~~right~~three toand ~~convert~~six ~~the notes into Rockford’s common~~months ~~stock~~ended ~~at any time before the original maturity date of~~ June 1030, ~~2009.~~2008 ~~The conversion price is $4.61 per share. The convertible senior subordinated secured notes~~ and ~~warrants~~2009, ~~were~~respectively, ~~not~~because ~~included in~~ the ~~diluted~~ ~~income~~exercise ~~(loss) per~~price ~~share~~of ~~calculation~~the ~~for~~stock ~~March 31,~~options exceeded ~~2008~~the ~~and~~average ~~2009,~~market asprice ~~they~~of ~~were~~the ~~not dilutive~~stock.

~~Outstanding~~Until ~~stock~~June 10, ~~options~~2009, ~~with~~Rockford ~~exercise~~also ~~prices~~had ~~(plus~~outstanding ~~unearned~~$5.0 million ~~compensation~~of ~~for~~4.5% ~~unvested~~convertible senior ~~awards)~~subordinated ~~greater~~secured ~~than~~notes ~~the~~due ~~average~~2009 ~~market~~and ~~price~~warrants to purchase 534,073 shares of common stock at $3.73 per share. The noteholders had the right to convert the notes into Rockford’s common stock ~~during~~at any time before the ~~period~~original ~~are~~maturity date of June 10, 2009. The conversion price was $4.61 per ~~excluded~~share. ~~from~~The ~~the~~convertible ~~computation~~senior ofsubordinated ~~diluted~~secured ~~net~~notes and warrants were not included in the diluted income ~~(loss)~~ per share ofcalculation ~~common~~for ~~stock.~~the Athree ~~summary~~and six month periods ended June 30, 2009, as they were not dilutive and as the conversion rights had been terminated as of the end of the period, and for the ~~excluded~~six ~~amounts~~month ~~follows~~period ~~(in~~ended ~~thousands~~June 30, ~~except~~2008, ~~exercise~~as ~~prices):~~they were not dilutive.

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

Outstanding stock options with exercise prices (plus unearned compensation for unvested awards) greater than the average market price of Rockford’s common stock during the period are excluded from the computation of diluted net income per share of common stock. A summary of the excluded amounts follows (in thousands, except exercise prices):


	Three Months ended June 30,				Six Months ended June 30,
	2008		2009		2008		2009
Outstanding options		1,654		1,495		1,654		1,495
Average exercise price	$	4.18	$	2.98	$	4.18	$	2.98

Rockford Corporation and Subsidiaries

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

4. Notes Payable and Long-Term Debt

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~~August 303, ~~2008~~2009. 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 approximately 2.59% and 3.75% at ~~March~~June 3130, 2009, respectively. As of ~~March~~June 3130, 2009, Rockford was in compliance with ~~all~~ all applicable covenants. The availability under the credit facility at ~~March~~June 3130, 2009 was approximately $37.95 million in excess of the outstanding balance of $74.26 million.

The Wachovia credit facility requires that Rockford maintain blocked lock box accounts, whereby Wachovia takes possession of 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 $74.26 million outstanding balances as of December 31, 2008 and ~~March~~June 3130, 2009, respectively, on the Wachovia credit facility as short-term. Rockford expects to maintain the facility for its entire term.

At ~~March~~April 311, 2009, Rockford had ~~outstanding~~ $5.0 million of ~~4.5%~~ convertible ~~senior subordinated~~notes ~~secured~~outstanding ~~notes~~which were to become due on June 10, 2009. ~~and~~In ~~warrants~~April of 2009, Rockford agreed with the sole holder of the convertible notes to ~~purchase~~amend ~~534~~their terms,~~073~~ ~~shares~~increasing ofthe ~~common~~interest ~~stock~~rate ~~at $3~~from 4.735% ~~per~~to ~~share.~~10% ~~These~~as ~~items~~of ~~were~~June 10, ~~outstanding~~2009, ~~under~~and ~~agreements~~requiring ~~effective~~four equal payments of $1.25 million on June 10, ~~2004~~2009, ~~and~~December 10, as2009, ~~amended~~June 10, on2010, ~~November~~and December 1210, ~~2004~~2010. ~~The~~Until ~~noteholders~~June 10, ~~have~~2009, the ~~right~~notes were convertible into Rockford common stock and had associated warrants to ~~convert~~purchase ~~the~~additional ~~notes~~shares ~~into~~of Rockford~~’s common~~ common stock. atAll ~~any~~conversion ~~time~~rights ~~before~~and ~~their~~warrants ~~redemption,~~were ~~which~~terminated as at ~~latest~~June 10, ~~would~~2009. beRockford onmade the ~~scheduled~~ ~~maturity~~required ~~date~~$1.25 million ofpayment on June 10, 2009. ~~The~~As ~~conversion~~a ~~price~~result ~~was~~of the amendment and payment, at June 30, 2009, Rockford had outstanding $43.6175 million ~~per~~of ~~share~~its senior subordinated secured notes and such notes were not convertible into Rockford equity. ~~The~~Rockford ~~noteholders~~may ~~also~~repay ~~have~~early any or all of the outstanding principal without penalty. The notes are secured by a second priority lien on certain Rockford assets.

In January of 2009, Rockford had repurchased $2.5 million of ~~the~~ convertible notes ~~and 237,500 associated warrants~~ for ~~a total price of~~ approximately $2.0 million. In connection with this repurchase, Rockford recorded a gain to interest and other expense (income), net of approximately $0.5 million, net of fees and ~~write-off of the~~ related ~~portion of~~ unamortized debt issuance costs. The repurchase reduced the ~~outstanding~~ principal ofamount outstanding on the notes from $7.5 million to $5.0 million.

~~In April of 2009, Rockford agreed with the holder of the remaining $~~5.~~0 million~~ ofIncome ~~convertible~~Taxes 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.

Rockford adopted the provisions of FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of FASB Statement No. 109 (“SFAS 109”) on January 1, 2007. Adoption had no net impact because the approximately $1.1 million adjustment reduced both Rockford’s deferred tax assets and the related valuation allowance. The future recognition of the $1.1 million would not impact the effective income tax rate as long as Rockford maintains its full valuation allowance against its deferred tax assets. If Rockford decides that it must recognize such assets, and release the related valuation allowance, the application of SFAS 109 could favorably affect Rockford’s 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.

Rockford recognizes interest and penalties related to uncertain tax positions in income tax expense. As of June 30, 2009, Rockford had not recorded any related expense in its statement of operations. Rockford’s 2005-2008 years remain subject to examination for federal income tax purposes and its 2004-2008 years remain subject to examination 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.

Rockford Corporation and Subsidiaries

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

5. Income Taxes

Rockford adopted the provisions of FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of FASB Statement No. 109” (“SFAS 109”) on January 1, 2007. Adoption had no net impact given that the approximately $1.1 million adjustment reduced both Rockford’s deferred tax assets and the related valuation allowance. The future recognition of the $1.1 million would not impact the effective income tax rate as long as Rockford maintains its full valuation allowance against its deferred tax assets. However, the recognition of such assets, along 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.

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.

6. Special Charges

During 2008, Rockford recorded special charges of approximately $1.1 million of which ~~none of~~$0.5 ~~the~~million ~~special charges~~ related to the ~~first~~second quarter of 2008. ~~These~~The ~~charges~~second ~~are~~quarter ~~due~~of to2008 ~~cost~~charges ~~associated~~are costs associated with the elimination of two executive officer positions,. ~~and~~The ~~severance~~remaining ~~cost~~costs ~~for~~were ~~personnel~~for ~~discharged~~personnel discharges associated with the closing of Rockford’s Tempe manufacturing facilities in 2008 and the ~~planned~~ closing of ~~its~~Rockford’s Michigan distribution facility in the second quarter of 2009.

Each of the special charges increased general and administrative expenses. Rockford expects to complete all payments arising from these special charges by January 31, 2010. The following table summarizes the outstanding liabilities arising from these special charges at December 31, 2008, the changes in the ~~three~~six month period ending ~~March~~June 3130, 2009, and the outstanding liabilities at ~~March 31~~June 30, 2009 (in thousands).

Three months ended

Six months ended

March 31, 2009

June 30, 2009

Liability at

~~Liability at~~

Liability at

December 31,

Reserve

~~Adjustments~~

~~March 31,~~Adjustments

June 30,

2008

Recorded

~~Payments~~

Payments

~~To Reserve~~

~~2009~~To Reserve

2009

Post employment costs:

740

$—

—

~~(373~~

527

$—

~~367~~—

213

7. Stock Purchase Program

In September 2007 and February 2008, Rockford’s Board of Directors ~~authorized~~adopted two common share repurchase programs that ~~enable~~authorized 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~~six ~~ended~~month ~~March~~period 31ended June 30, 2009, and has remaining authority to purchase up to 105,488 shares under the programs.

8. Subsequent Events

Rockford’s board of directors approved the delisting of Rockford’s common stock from the NASDAQ Stock Market and the deregistering of its common stock with the SEC. Rockford anticipates that its delisting filing of Form 25 and its deregistration filing of Form 15 will be made with the SEC during August 2009. Rockford expects the deregistration with the SEC to become effective 90 days from the date of the filing of the Form 15. After its shares have been delisted from NASDAQ, Rockford anticipates that its shares will be quoted on the Pink OTC Markets Inc. quotation service.

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

This discussion and analysis of financial condition and results of continuing operations should be read keeping in mind the risk factors noted in the Forward Looking Statements section of this report and in conjunction with Rockford’s 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 Continuing Operations included as part of Rockford’s Form 10-K for the year 2008, filed with the SEC on April 15, 2009.

Overview

Rockford is now focused almost entirely on its core mobile audio business. During 2009, Rockford expects to work on improving penetration of the mobile audio markets and continuously improving its core operations.

Production of all of Rockford’s products is now outsourced. Rockford completed the outsourcing of amplifier assembly during the fourth quarter of 2008, allowing the removal of another layer of overhead in its operations in 2009. With the completion of its outsourcing projects, and assuming only favorable or moderately adverse changes in exchange rates and international trading conditions, Rockford anticipates that its 2009 results will reflect further reductions in its cost structure.

All of Rockford’s sales are now focused on the mass retail, independent specialist, international distribution and OEM channels. In the first ~~quarter~~half of 2009, aftermarket sales were down in the international and independent specialist channels for the Rockford Fosgate branded product line and in the mass retail and international distribution channels for Rockford’s Lightning Audio branded product line. The mobile audio aftermarket in the U.S. continues to be under pressure, creating an environment in which competitors in the aftermarket channels continued aggressive pricing and promotional activity.

Rockford is working to increase aftermarket sales and believes its current products perform better than the products Rockford had previously offered. Their improved performance contributes positively to Rockford’s sales efforts as dealers have found their installation to be easier and their operation to be more powerful and more reliable. Assuming a moderate decline in the overall mobile audio aftermarket, Rockford believes that it should be able to stabilize or even increase its aftermarket sales. If consumer spending as a whole decreases more significantly, Rockford expects the mobile audio aftermarket would also decline significantly and Rockford would likely suffer a decrease in its aftermarket sales. Rockford believes its sales in the aftermarket channel for the first half of 2009 were consistent with these expectations.

In 2008 and early 2009 OEM sales were impacted by a significant reduction in consumer spending for automobiles, with a particularly dramatic impact on Rockford’s revenues in these periods as its OEM partners reduced production to bring their inventories in line with sales. IfSince Rockford’s sales and royalty revenues are recognized on automobile production rather than its OEM partners’ final sales, their inventory reduction efforts had a disproportionate impact on Rockford’s revenues. Rockford anticipates some revival in OEM sales as its OEM partners return to production consistent with their final sales results. Nevertheless, 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.

Because financial 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 leasing ~~Rockford’s~~remains ~~OEM~~uncertain ~~revenue.~~and On the ~~other~~trend ~~hand,~~appears to be away from vehicle leasing. Leasing has ~~been~~ 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 (1) consumers will own and be more ~~willing~~ willing to modify their vehicles and (2) consumers who are unable to replace their existing vehicles may choose to spend on improvements.

Results of Operations

The following table shows, ~~for the periods indicated,~~ selected consolidated statements of operations data expressed as a percentage of net sales:

	Three months ended						Six months ended
	March 31,
	June 30,						June 30,
	2008			2009			2008			2009
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of goods sold		65.50			6968.42			65.2			68.8
Gross profit		3435.50			3031.68			34.8			31.2
Operating expenses:
Sales and marketing		1715.37			1513.64			16.4			14.5
General and administrative		1314.19			1412.09			14.1			13.4
Research and development		3.53			32.39			3.4			3.1
Total operating expenses		33.9			3229.92			33.9			31.0
Operating income (loss)		0.6			(2.3	)
Operating income		1.1			2.6			0.9			0.2
Interest and other expense (income), net		1(2.17	)		(20.5	)		(1.0	)		(1.0	)
Income (loss) before income tax		(0.5	)		0.2
Income before income tax		3.8			2.1			1.9			1.2
Income tax expense		—			—			—			—
Net income (loss)		(0.5	)%		0.2	%
Net income		3.8	%		2.1	%		1.9	%		1.2	%

Cost of goods sold primarily consists of product costs, direct labor and manufacturing costs associated with ~~the~~production ~~purchase~~ of Rockford’s products as well as ~~warranty,~~ warehousing, freight-in and customer service expenses.

Sales and marketing expenses primarily consist of salaries, sales commissions, costs of advertising, trade show costs and freight-out expenses.

General and administrative expenses primarily consist of salaries, facilities and other costs of Rockford’s accounting, finance, management information systems, administrative and executive departments, as well as legal, accounting and other professional fees.

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

Geographic Distribution of Sales

Sales by geographic region were as follows:

	Three months ended				Six months ended
	March 31,
	June 30,				June 30,
	2008		2009		2008		2009
	(In thousands)				(In thousands)
Region: (1)
United States	$	1517,~~115~~642	$	1213,~~568~~093	$	32,796	$	25,661
Other Americas		12,~~476~~044		~~967~~837		3,480		1,804
Europe		1,~~049~~472		~~430~~647		2,521		1,077
Asia		~~805~~628		~~501~~871		1,433		1,372
Total sales	$	1821,~~445~~786	$	1415,~~466~~448	$	40,230	$	29,914


(1)		Sales are attributed to geographic regions based on the location of customers. No single foreign country accounted for greater than 10% of sales.

In the following discussion, certain increases or decreases may differ due to rounding.

Three Months Ended ~~March~~June 3130, 2009 Compared to Three Months Ended ~~March~~June 3130, 2008

Net Sales. Net sales decreased by $46.03 million, or 2129.61%, to $1415.54 million for the three months ended ~~March~~June 3130, 2009, from $1821.48 million for the three months ended ~~March~~June 3130, 2008. The decrease in sales was primarily attributable to ~~lower~~substantial reductions in royalty revenue, lower sales of Rockford’s Lightning Audio branded products, lower sales to international customers, and 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~~June 3130, 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~~June 30, 2009 and 2008 were $0.32 million and $1.76 million, respectively.

U.S. sales decreased by $24.5 million, or 1725.18%, to $1213.61 million for the three months ended ~~March~~June 3130, 2009, from $1517.16 million for the three months ended ~~March~~June 3130, 2008. International sales decreased by $1.48 million, or 4243.31%, to $12.94 million for the three months ended ~~March~~June 3130, 2009, ~~from~~ from $34.31 million for the three months ended ~~March~~June 3130, 2008. The decrease in international sales ~~was~~ was primarily due to across the board reductions in sales, which were significantly aggravated by a receivership for one of Rockford’s larger European ~~Distributors~~distributors. Rockford replaced the European distributor at the end of the second quarter 2009

Gross Profit. Gross profit decreased by $12.97 million, or 3035.45%, to $4.49 million for the three months ended ~~March~~June 3130, 2009 from $67.46 million for the three months ended ~~March~~June 3130, 2008. As a ~~percent~~ percent of sales, gross profit decreased to 3031.68% for the three months ended ~~March~~June 3130, 2009, from 34 35.50% for the three months ended ~~March~~June 3130, 2008. The decrease in gross profit as a percent of net sales is primarily due to lower royalty revenue as a percent of net sales and higher discounts on end-of-life products. This decline was partially offset by lower product costs.

Sales and Marketing Expenses. Sales and marketing expenses decreased by $01.93 million, or 2939.42%, to $2.31 million for the three months ended ~~March~~June 3130, 2009 from $3.24 million for the three months ended ~~March~~June 3130, 2008. As a percent of sales, sales and marketing expenses decreased to 1513.64% for the three months ended ~~March~~June 3130, 2009 from 1715.37% for the three months ended ~~March~~June 3130, 2008. The decrease in sales and marketing expenses was primarily due to lower sales commissions and reduced outbound freight expenses resulting from lower sales.

General and Administrative Expenses. General and administrative expenses decreased by $01.43 million or 1538.9%, to $2.0 million for the three months ended ~~March~~June 3130, 2009 from $23.43 million for the three months ended ~~March~~June 3130, 2008. As a percent of sales, general and administrative expenses ~~increased~~decreased to 1412.09% for the three months ended ~~March~~June 3130, 2009 from 1314.19% for the three months ended ~~March~~June 3130, 2008. The decrease in general and administrative expenses is due in large part to lower personnel related expenses and professional fees, and $0.5 million of severance expense for the three months ended June 30, 2008 that was not repeated during the same period in 2009.

Research and Development Expenses. Research and development expenses decreased by $0.23 million, or 2437.60%, to $0.5 million for the three months ended ~~March~~June 3130, 2009 from $0.67 million for the three months ended ~~March~~June 3130, 2008. As a percent of sales, these expenses decreased to 32.39% for the three months ended ~~March~~June 3130, 2009, from 3.53% for the three months ended ~~March~~June 3130, 2008. The decrease in research and development expenses is primarily related to the costs incurred in 2008 associated with the launch of Rockford’s 2008 new products. Although Rockford also introduced a significant number of new products in 2009, the outsourced model allowed Rockford to reduce research and development expenses relating to the 2009 new products.

Operating Income ~~(Loss)~~. Operating income ~~(loss) declined~~increased by $0.52 million, to ~~an operating loss of~~ $0.34 million for the three months ended ~~March~~June 3130, 2009 from $0.12 million ~~of operating income~~ for the three months ended ~~March~~June 3130, 2008. As a percent of sales, operating income ~~(loss) declined~~increased to ~~an operating loss of~~ 2.36% for the three months ended ~~March~~June 3130, 2009, from ~~an operating income of 0~~1.61% for the three months ended ~~March~~June 3130, 2008. This ~~decline~~increase in operating income ~~(loss)~~ is primarily due to lower ~~reduced~~operating ~~sales~~expenses partially offset by ~~lower~~reduced ~~operating expenses~~sales.

Interest and Other Expense (Income), Net. Interest and other expense (income), net, primarily consists of interest expense and other gains and losses. Interest and other expense (income), net, ~~improved~~increased by $0.67 million or ~~275~~113.81%, to ~~income~~an expense of $0.41 million for the three months ended ~~March 31,~~June 30, 2009 from anincome ~~expense~~of ~~from~~ $0.26 million for the three months ended ~~March~~June 3130, 2008. The ~~improvement is~~decline is primarily attributable to the gain of approximately $0.58 million arising from the repurchase of $2.50 million face value of convertible notes ~~and~~in to2008 partially offset by lower interest expense in 2009 due to lower effective borrowing rates and reduced loan balances.

Income Tax Expense. Income tax expense was ~~zero~~$8,000 expense for the three months ended ~~March~~June 3130, 2009 and zero expense for the three months ended June 30, 2008. The effective income tax rates were 0.0% for the three months ended ~~March~~June 3130, 2009 and 2008. ~~Rockford did not record any tax expense (benefit)~~

Rockford did not record any federal tax expense on income ~~(loss)~~ in the ~~first~~second ~~quarter~~quarters of ~~2009 and~~ 2008 or 2009 for financial reporting purposes. Income tax expense for the second quarter 2009 related to state income tax in jurisdictions where loss carryforwards are not available. Rockford continues to maintain a valuation allowance reserve against all of its net deferred tax assets which include net operating loss carryforwards. The available loss carryforwards are likely to offset virtually all current period income tax expense until such time, if ever, that management concludes that some portion of the reserved deferred tax asset becomes more likely than not recoverable.

Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008

Net Sales. Net sales decreased by $10.3 million, or 25.6%, to $29.9 million for the six months ended June 30, 2009, from $40.2 million for the six months ended June 30, 2008. The decrease in sales was primarily attributable to substantially lower royalty revenue, lower sales of Rockford’s Lightning Audio branded products, lower sales to international customers, and higher discounts due to end-of-life sales. These reductions were partially offset by lower returns. Net sales for the six months ended June 30, 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 six months ended June 30, 2009 and 2008 were $0.5 million and $3.4 million, respectively.

U.S. sales decreased by $7.1 million, or 21.8%, to $25.7 million for the six months ended June 30, 2009, from $32.8 million for the six months ended June 30, 2008. International sales decreased by $3.2 million, or 42.8%, to $4.3 million for the six months ended June 30, 2009, from $7.4 million for the six months ended June 30, 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 larger European distributors. Rockford replaced the European distributor at the end of the second quarter 2009.

Gross Profit. Gross profit decreased by $4.6 million, or 33.2%, to $9.3 million for the six months ended June 30, 2009 from $14.0 million for the six months ended June 30, 2008. As a percent of sales, gross profit decreased to 31.2% for the six months ended June 30, 2009, from 34.8% for the six months ended June 30, 2008. The decrease in gross profit as a percent of net sales is primarily due to lower royalty revenue as a percent of net sales and higher discounts on end-of-life products. This decline was partially offset by lower product costs.

Sales and Marketing Expenses. Sales and marketing expenses decreased by $2.3 million, or 34.4%, to $4.3 million for the six months ended June 30, 2009 from $6.6 million for the six months ended June 30, 2008. As a percent of sales, sales and marketing expenses decreased to 14.5% for the six months ended June 30, 2009 from 16.4% for the six months ended June 30, 2008. The decrease in sales and marketing expenses was primarily due to lower sales commissions and reduced outbound freight expenses resulting from lower sales.

General and Administrative Expenses. General and administrative expenses decreased by $1.6 million or 29.1%, to $4.0 million for the six months ended June 30, 2009 from $5.7 million for the six months ended June 30, 2008. As a percent of sales, general and administrative expenses decreased to 13.4% for the six months ended June 30, 2009 from 14.1% for the six months ended June 30, 2008. The decrease in general and administrative expenses is due in large part to lower personnel related expenses and professional fees.

Research and Development Expenses. Research and development expenses decreased by $0.4 million, or 31.1%, to $0.9 million for the six months ended June 30, 2009 from $1.4 million for the six months ended June 30, 2008. As a percent of sales, these expenses decreased to 3.1% for the six months ended June 30, 2009, from 3.4% for the six months ended June 30, 2008. The decrease in research and development expenses is primarily related to the costs incurred in 2008 associated with the launch of Rockford’s 2008 new products. Although Rockford also introduced a significant number of new products in 2009, the outsourced model allowed Rockford to reduce research and development expenses relating to the 2009 new products.

Operating Income. Operating income declined by $0.3 million, to $0.1 million for the six months ended June 30, 2009 from $0.4 million for the six months ended June 30, 2008. As a percent of sales, operating income declined to 0.2% for the six months ended June 30, 2009, from 0.9% for the six months ended June 30, 2008. This decline in operating income is primarily due to reduced sales partially offset by lower operating expenses.

Interest and Other Expense (Income), Net. Interest and other expense (income), net, primarily consists of interest expense and other gains and losses. Interest and other expense (income), net, declined by $0.1 million or 26.7%, to income of $0.3 million for the six months ended June 30, 2009 from income of $0.4 million for the six months ended June 30, 2008. The decline is primarily attributable to the gain of approximately $0.8 million arising from the repurchase of $2.0 million face value of convertible notes in 2008 compared to the gain of approximately of $0.5 million arising from the repurchase of $2.5 million face value of convertible notes

in 2009. The decline was also partially offset by lower interest expense in 2009 due to lower effective borrowing rates and reduced loan balances.

Income Tax Expense. Income tax expense was $8,000 for the six months ended June 30, 2009 and zero expense for the six months ended June 30, 2008. The effective income tax rates were 0.0% for the six months ended June 30, 2009 and 2008. Rockford did not record any federal tax expense on income in the first half of 2009 and 2008 for financial reporting purposes. Income tax expense for the first half of 2009 related to state income tax in jurisdictions where loss carryforwards are not available. Rockford continues to maintain a valuation allowance reserve against all of its net deferred tax assets which include net operating loss carryforwards. The available loss carryforwards are likely to offset virtually all current period income tax expense until such time, if ever, that management concludes that some portion of the reserved deferred tax asset becomes more likely than not recoverable.

Liquidity and Capital Resources

Rockford has financed its business primarily using existing capital, cash flows from operations, and bank borrowings. Rockford’s cash flow provided by operations was $26.4 million for the ~~three~~six months ended ~~March~~June 3130, 2009 compared to $02.53 million of cash provided by operations for the six ~~three~~ months ended ~~March~~June 3130, 2008. A reduction in inventory ~~was~~and an increase in accounts payable were the primary ~~source~~sources of cash for Rockford during the first ~~three~~six months of 2009. An increase in accounts receivable was the primary use of cash during the first ~~three~~six months of 2009.

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~~August 303, ~~2008~~2009. 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 approximately 2.59% and 3.75% at ~~March~~June 3130, 2009, respectively. As of ~~March 31~~June 30, 2009, Rockford was in compliance with all applicable covenants. The availability under the credit facility at ~~March~~June 3130, 2009 was approximately $37.95 million in excess of the outstanding balance of $74.26 million.

At ~~March~~April 311, 2009, Rockford had ~~outstanding~~ $5.0 million of ~~4.5%~~ convertible ~~senior subordinated~~notes ~~secured~~outstanding ~~notes~~which were to become due on June 10, 2009. ~~and~~In ~~warrants~~April of 2009, Rockford agreed with the sole holder of the convertible notes to ~~purchase~~amend ~~534~~their terms,~~073~~ ~~shares~~increasing ofthe ~~common~~interest ~~stock~~rate ~~at $3~~from 4.735% ~~per~~to ~~share.~~10% ~~These~~as ~~items~~of ~~were~~June 10, ~~outstanding~~2009, ~~under~~and ~~agreements~~requiring ~~effective~~four equal payments of $1.25 million on June 10, ~~2004~~2009, ~~and~~December 10, as2009, ~~amended~~June 10, on2010, ~~November~~and December 1210, ~~2004~~2010. ~~The~~Until ~~noteholders~~June 10, ~~had~~2009, the ~~right~~notes were convertible into Rockford common stock and had associated warrants to ~~convert~~purchase ~~the~~additional ~~notes~~shares ~~into~~of Rockford’s common stock. All atconversion ~~any~~rights ~~time~~and ~~before~~warrants ~~their~~were ~~redemption,~~terminated ~~which~~as at ~~latest~~June 10, ~~would~~2009. beRockford onmade the ~~scheduled~~ ~~maturity~~required ~~date~~$1.25 million ofpayment on June 10, 2009. ~~The~~As ~~conversion~~a ~~price~~result isof the amendment and payment, at June 30, 2009, Rockford had outstanding $43.6175 million ~~per~~of ~~share~~its senior subordinated secured notes and such notes were not convertible into Rockford equity. ~~The~~Rockford ~~noteholders~~may ~~also~~repay ~~have~~early any or all of the outstanding principal without penalty. The notes are secured by a second priority lien on certain Rockford assets.

InAs ~~January of 2009~~amended, Rockford ~~repurchased~~will be required to pay $2.5 million of the ~~convertible~~remaining ~~notes~~outstanding ~~and 237,500~~notes ~~associated~~during ~~warrants~~the ~~for~~next atwelve ~~total~~months. ~~price~~Based ofon ~~approximately~~current ~~$2.0 million.~~cash-flow Inforecasts, ~~connection~~Rockford ~~with~~anticipates ~~this~~that it ~~repurchase~~will ~~Rockford~~have ~~recorded~~available aborrowings ~~gain~~under toits ~~interest~~credit ~~and~~facility ~~other~~to ~~expense~~complete ~~(income),~~this ~~net~~repayment. ~~of approximately~~This ~~$0.5 million,~~availability ~~net~~could ofbe ~~fees~~reduced ~~and~~by ~~write-off~~adverse ofeconomic ~~the~~events ~~related~~such ~~portion~~as ofthe ~~unamortized~~credit ~~debt~~crisis ~~issuance~~suffered ~~costs.~~at the ~~The~~end ~~repurchase~~of ~~reduced~~2008 ~~the~~and ~~outstanding~~early ~~principal~~2009 ofor ~~the~~by ~~notes~~a ~~from~~deterioration ~~$7.5 million~~in toRockford’s $5operations or financial performance.~~0 million.~~

In ~~April of~~ January 2009, Rockford ~~agreed~~had ~~with~~repurchased ~~the holder of the remaining~~ $52.05 million of convertible notes tofor ~~amend the terms of the convertible notes~~approximately $2.0 million. ~~The~~In ~~maturity~~connection ~~date~~with ofthis ~~June 10~~repurchase, ~~2009~~Rockford isrecorded ~~amended and~~a ~~the~~gain ~~notes~~to ~~will~~interest ~~now~~and beother expense ~~repaid~~(income), innet ~~four equal payments~~ of approximately $10.255 million ~~on June 10~~, ~~2009,~~net ~~December 10,~~of ~~2009,~~fees ~~June 10,~~and ~~2010~~related ~~and~~unamortized ~~December 10,~~debt issuance ~~2010~~costs. AsThis ofrepurchase ~~June 10,~~reduced ~~2009~~ the ~~interest~~principal ~~rate~~amount ~~will~~outstanding ~~increase to 10%~~ on the ~~unpaid~~notes ~~balance~~from ~~and the outstanding warrants and the conversion option will each expire in accordance with their original terms~~$7. ~~Rockford may repay early any or all of the~~5 ~~outstanding~~million ~~principal~~to ~~without penalty~~$5.0 million.

Rockford anticipates, based on its cash flow forecast, that cash flow from operations at the expected level of operations for 2009 and available borrowings under its credit facility will be adequate to meet Rockford’s requirements for current capital expenditures, working capital and interest payments for the next twelve months. Rockford does not expect asset sales will be a significant source of cash in 2009 or 2010.

AsIf ~~amended~~Rockford is unable to meet its liquidity needs, ~~Rockford~~it ~~will~~could be ~~required~~forced to ~~pay~~seek ~~$2.5 million~~one ofor ~~the~~more financing ~~remaining~~alternatives ~~outstanding convertible~~and ~~notes~~to ~~during~~consider ~~the~~changes ~~balance~~in ofits ~~2009~~operations. ~~Based~~Financing onalternatives ~~current~~could include ~~cash-flow~~reducing ~~forecasts~~or ~~Rockford anticipates~~delaying ~~that~~capital itexpenditures, ~~will~~borrowing ~~have~~additional ~~available~~funds, ~~borrowings~~selling ~~under~~equity securities, ~~its~~restructuring ~~credit~~indebtedness, ~~facility~~selling toadditional ~~complete~~assets, ~~this~~reducing expenditures for new ~~repayment~~product development, and cutting other costs. ~~This~~Operational ~~availability~~changes could beinclude ~~impacted~~reductions byin employee ~~adverse~~compensation ~~economic~~and ~~events~~benefits, ~~such~~reductions asin ~~the~~working ~~credit crisis~~capital ~~suffered~~needs, atchanges ~~the~~in ~~end~~distribution strategies ofand ~~2008~~potential ~~and~~exit ~~early~~strategies. ~~2009~~Some orof bythese aalternatives ~~deterioration~~and inchanges ~~Rockford’s~~might ~~operations~~not ~~or financial~~prove ~~performance.~~to

~~If Rockford is unable to meet its liquidity needs, it could be forced to seek one or more~~15 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 a public company in order to 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

be available on acceptable terms; others may substantially interfere with Rockford’s business and prospects and with the market for and liquidity of Rockford’s common shares. 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 may not be able to satisfy its liquidity needs. Under such circumstances, Rockford might not be able to continue its business as currently anticipated.

~~Rockford~~Immediately ~~had~~before ~~working~~the ~~capital~~filing of ~~$6.1 million~~this atForm ~~March 31~~10-Q, ~~2009,~~Rockford ~~compared~~announced toin ~~$5.9 million~~a atpress release and in ~~December 31,~~a ~~2008.~~separate ~~The~~Form ~~significant~~8-K ~~components~~filing that its board of ~~working~~directors ~~capital~~approved atthe ~~March 31~~delisting of Rockford’s common stock from the NASDAQ Stock Market and the deregistering of its common stock with the SEC. The primary reasons for this decision, ~~2009~~which ~~include~~are discussed in more detail in the Form 8-K filing and press release, are:

• ~~Rockford~~The ~~had~~nature ~~no cash~~ and ~~cash~~limited ~~equivalents~~extent atof ~~March~~the ~~31,~~trading ~~2009~~in ~~and~~Rockford’s ~~December~~common ~~31,~~stock ~~2008.~~as ~~Due~~well toas the ~~daily~~market ~~sweep~~value ofthat ~~cash~~the bypublic ~~Wachovia~~markets ~~Capital,~~are ~~described~~currently ~~below,~~applying to Rockford; ~~has~~• ~~reclassified~~The ~~cash~~costs, ~~and~~both ~~cash~~direct ~~equivalents~~and toindirect, ~~net~~associated ~~against~~with ~~its~~the ~~current~~preparation ~~debt~~and ~~balance.~~filing •of Rockford’s ~~net~~periodic ~~accounts~~reports ~~receivable~~with ~~were~~the SEC—Rockford estimates it will save approximately $~~15.~~0.5 million aton ~~March~~an ~~31,~~annualized ~~2009~~basis ~~compared~~by todelisting ~~$12.9~~and ~~million~~deregistering; at• ~~December~~The ~~31,~~costs ~~2008.~~associated with complying with the Sarbanes-Oxley Act of 2002; • The ~~increase~~fact inthat ~~accounts~~Rockford’s ~~receivable~~stock ~~balances~~price ishas ~~primarily~~reached ~~due~~very tolow ~~increased~~levels ~~sales~~and ~~late~~that indelisting ~~the~~proceedings ~~first~~involving ~~quarter~~additional ofexpense ~~2009.~~and distraction are almost certain; • The expiration of Rockford’s ~~inventory~~contractual ~~position~~obligation ~~decreased~~to ~~from~~maintain ~~$13~~its NASDAQ listing.0 ~~million~~This atobligation to the ~~end~~holders of ~~2008~~its toconvertible ~~$7.9~~notes ~~million~~expired aton ~~March~~June 3110, 2009.; ~~This~~• ~~inventory~~The ~~decrease~~fact ~~was~~that ~~primarily~~many ~~due~~other totypical ~~outsourcing,~~advantages ~~improved~~of ~~inventory~~being ~~turns, and~~ a ~~reduction~~public incompany ~~end~~are ofnot ~~life~~currently ~~inventory.~~available •to ~~Accounts~~Rockford, ~~payable~~including ~~decreased~~enhanced ~~$0.4~~access ~~million,~~to ~~from~~capital ~~$4.0~~and ~~million~~the atability ~~December~~to ~~31,~~use ~~2008~~equity securities to ~~$3.6~~acquire ~~million~~other atbusinesses; ~~March~~and ~~31,~~• ~~2009.~~The ~~This~~current ~~decrease~~level ~~was~~of ~~primarily~~analyst ~~due~~coverage toand ~~lower~~minimal ~~inventory~~liquidity ~~purchases~~for ~~during~~Rockford’s ~~the~~common ~~first~~stock ~~quarter~~under ofcurrent ~~2009~~and reasonably foreseeable market conditions.

~~The~~Rockford ~~Wachovia~~anticipates ~~Capital~~that ~~credit~~its ~~facility~~delisting ~~requires~~filing ~~that~~of ~~Rockford~~Form 25 ~~maintain~~will ~~blocked~~be ~~lock~~made ~~box accounts,~~with ~~whereby~~the ~~Wachovia~~SEC ~~Capital~~on approximately ~~takes~~August 17, ~~possession~~2009, ofand ~~all~~that ~~cash~~its ~~receipts~~deregistration onfiling aof ~~daily~~Form 15 ~~basis~~will ~~and~~be ~~these~~made with the ~~amounts~~SEC ~~are~~on ~~applied~~approximately toAugust 27, ~~reduce~~2009. Rockford’s ~~outstanding~~expects ~~debt.~~the Inderegistration ~~accordance~~ with ~~EITF~~the ~~95-22:~~SEC ~~Balance~~to become ~~Sheet~~effective ~~Classification~~90 days offrom ~~Borrowings~~the ~~Outstanding~~date ~~under~~of ~~Revolving~~the ~~Credit~~filing ~~Agreements~~of ~~That~~the ~~Include~~Form 15. ~~both a~~After ~~Subjective~~its ~~Acceleration~~shares ~~Clause~~have ~~and~~been adelisted from ~~Lock-Box Arrangement~~NASDAQ, Rockford ~~has~~anticipates ~~recorded~~that ~~the~~its ~~$7.2 million and~~shares ~~$7.5 million~~will ~~outstanding~~be ~~balance~~quoted ason atthe ~~March 31,~~Pink ~~2009~~OTC ~~and~~Markets ~~December 31,~~Inc. quotation ~~2008,~~service. ~~respectively,~~For ~~on the~~more ~~Wachovia~~information ~~Capital~~about ~~credit~~this ~~facility~~service, asplease ~~short~~see ~~term~~www.pinksheets.com. ~~The~~Once ~~credit facility matures~~ on the ~~March 24,~~pink ~~2011~~sheets, ~~and~~ Rockford ~~currently~~intends ~~expects~~ to ~~maintain~~continue ~~the~~to ~~facility~~make ~~until~~available itperiodic ~~matures~~financial information.

~~Investing~~Rockford ~~activities~~had ~~used~~working ~~$0.1 million~~capital of ~~cash for the three months ended March 31, 2009 and used~~ $05.12 million ofat ~~cash for the three months ended March~~June 3130, ~~2008. Capital expenditures~~2009, ~~the primary~~compared ~~use~~to ~~of cash from investing activities, were~~ $05.19 million ~~for the three months ended March~~at ~~31, 2009 versus $0.2~~December ~~million for the three months ended March~~ 31, 2008. ~~Rockford’s~~The ~~capital spending is primarily in tooling for specific product lines, and computer hardware and software to support operations. Rockford does not anticipate~~ significant ~~changes~~components inof ~~its~~working ~~future~~ capital ~~spending requirements~~at June 30, ~~other~~2009 ~~than additional expenditures that may arise from future OEM development~~include: ~~opportunities.~~

As• ofRockford ~~March~~ had no cash and cash equivalents at June 30, 2009 and December 31, 2008. Due to the daily sweep of cash by Wachovia Capital, described below, Rockford has reclassified cash and cash equivalents to net against its current debt balance. • Rockford’s net accounts receivable were $15.7 million at June 30, 2009 compared to $12.9 million at December 31, 2008. The increase in accounts receivable balances is primarily due to increased sales late in the second quarter of 2009. • Rockford’s inventory position decreased from $13.0 million at the end of 2008 to $6.2 million at June 30, 2009. This inventory decrease was ~~not~~primarily ~~involved~~due to outsourcing, reduced inventory purchases, the reduction of end of life inventory, and improved inventory management resulting in ~~any~~increased ~~unconsolidated~~inventory ~~Variable~~turns. ~~Interest~~• ~~Entity (VIE) transactions~~Accounts payable increased $2. 2 million, from $4.0 million at December 31, 2008 to $6.2 million at June 30, 2009. This increase was primarily due to higher inventory purchases late in the second quarter of 2009.

~~Inflation.~~Notes ~~Inflation~~payable ~~has~~decreased ~~not~~$3.8 million, had a significant impact on Rockford’s operations since it operates in a market that requires continuing price decreases and Rockford has historically been able to insist on continuing price decreases from ~~its suppliers~~$7.6 million ~~Rising~~at ~~metal prices and increasing transportation costs had an impact on Rockford’s operations during much of 2008~~December 31, ~~but these impacts have moderated late in~~ 2008 ~~and~~to ~~during 2009~~$3.8 million at ~~Depending upon future cost trends~~June 30, ~~increases in commodity and transportation costs may have an impact on Rockford’s operations in~~ 2009. ~~Rockford sources~~The adecrease ~~significant~~is ~~and~~the ~~increasing~~result ~~portion~~ of ~~its~~the ~~products~~payments ~~and~~on ~~parts~~the ~~from~~convertible ~~China.~~notes ~~Although most of~~completed ~~its~~during ~~purchases from China are priced in dollars,~~ the ~~suppliers’~~first ~~ability~~half toof ~~maintain or reduce current prices may be affected by changes in China’s exchange rate policy and by changes in the exchange rate~~2009.

The Wachovia 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 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 $4.6 million and $7.5 million outstanding balance as at June 30, 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.

Investing activities used $0.2 million of cash for the six months ended June 30, 2009 and used $0.4 million of cash for the six months ended June 30, 2008. Capital expenditures, the primary use of cash from investing activities, were $0.3 million for the six months ended June 30, 2009 versus $0.6 million for the six months ended June 30, 2008. Rockford’s capital spending is primarily in tooling for specific product lines, and computer hardware and software to support operations. Rockford does not anticipate significant changes in its future capital spending requirements, other than additional expenditures that may arise from future product development opportunities.

As of June 30, 2009, Rockford was not involved in any unconsolidated Variable Interest Entity (VIE) transactions.

Inflation. Inflation has not had a significant impact on Rockford’s operations since it operates in a 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 unfavorable 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 suppliers’ ability to maintain or reduce current prices may be affected by changes in China’s exchange rate policy and related exchange rate.

Contractual Obligations

Rockford did not have any material outstanding noncancelable purchase obligations at ~~March~~June 3130, 2009. Several of Rockford’s sourcing agreements require Rockford to place monthly purchase orders, but do not require a minimum purchase quantity or dollar amount. Rockford does not anticipate significant liability in connection with these contractual requirements.

Critical Accounting Policies and Estimates

There were no material changes to Rockford’s critical accounting policies and estimates during the three months ended ~~March~~June 3130, 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.

15New Accounting Standards

In May 2009, the FASB issued Statement of Financial Accounting Standards No. 165, “Subsequent Events” (SFAS 165). SFAS 165 is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for selecting that date, that is, whether that date represents the date the financial statements were issued or were available to be issued. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. Rockford adopted SFAS 165 during the second quarter of 2009, and its adoption did not have a material impact on our results of operations and financial position.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Rockford’s primary market risk exposures are in the areas of interest rate risk and foreign currency exchange rate risk. Its holdings of cash equivalents are subject to interest rate fluctuations, but Rockford believes this risk is immaterial due to the short-term nature of these investments and the essentially zero cash balances it carries. The outstanding balances on its credit facilities are also subject to interest rate fluctuations.

The value of the U.S. dollar affects Rockford’s financial results. Changes in exchange rates may positively or negatively affect revenues, gross margins and operating expenses as expressed in U.S. dollars. Historically, Rockford’s exposure to currency exchange rate fluctuations have been modest because it ~~purchases~~purchased finished goods and ~~sells~~sold its products primarily in U.S. dollars and ~~holds~~ held only a small percentage of its assets outside the U.S. However, Rockford conducts a portion of its business in Canadian currency.

In recent years, Rockford has sourced an increasing percentage of its products, orand of raw materials and parts for its products, from outside the United States. ~~Most~~Substantially ofall of Rockford’s finished goods, raw materials and parts are sourced in Asia, principally in China. Although most of these purchases are denominated in dollars, an extended decline in the value of the dollar may affect the terms and prices on which Rockford is able to purchase from its foreign suppliers and may, therefore, increase Rockford’s costs. Changes in the Chinese government’s exchange rate policies may have increased the risk of adverse changes in the U.S./China exchange rate.

At ~~March~~June 3130, 2009, Rockford did not have any outstanding forward contracts or other financial hedges against exchange rate risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Rockford’s principal executive officer (“PEO”) and principal financial officer (“PFO”), after evaluating 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.

Changes in Internal Control over Financial Reporting

There were no changes in Rockford’s internal control over financial reporting that occurred during Rockford’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, Rockford’s internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Rockford’s management, 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. However, Rockford’s management does not expect that its disclosure controls and procedures 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 the likelihood 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.

1618

Part II. Other Information

Item 1. Legal Proceedings

Rockford is, and may continue to be, a party to various lawsuits and arbitrations from time to time. As at ~~March~~June 3130, 2009, Rockford was not a party to any legal proceedings that it believes are material.

Item 1A. Risk Factors

Rockford is not aware of any material changes in the Risk Factors described in Item 1A to Rockford’s Annual Report filed with the SEC on April 15, 2009.

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

None

17Item 4. Submission of Matters to a Vote of Security Holders

	(a)		Rockford’s annual meeting of shareholders was held on May 28, 2009.

	(b)		At the meeting, Rockford’s shareholders elected six Directors for one-year terms which expire at the annual shareholders meeting in 2010. The following tabulation represents voting for the Directors


Name	Votes For		Withheld Authority

Nicholas G. Bartol		7,702,979		101,205
Timothy C. Bartol		6,923,012		881,172
Ralph B. Godfrey		6,827,185		976,999
Jerry E. Goldress		7,445,055		359,129
William R. Jackson		7,701,751		102,433
John P. Lloyd		7,611,383		192,801

	(c)		At the annual meeting, Rockford’s shareholders ratified the appointment of Ernst & Young L.L.P. as Rockford’s auditors for 2009. The holders of 7,783,116 common shares voted to ratify the appointment, the holders of 20,568 common shares voted against the ratification, and 500 common shares abstained.

	(d)		At the meeting, Rockford’s shareholders also approved the proposal to amend Rockford’s 1997, 2002, 2005, and 2008 stock option plans, authorize an option exchange program for options granted under the plans, and reapprove the plans as amended. The holders of 4,478,517 common shares voted in favor of the proposal, the holders of 2,602,718 common shares voted against the Plan, the holders of 480 common shares abstained and the holders of 722,469 common shares did not vote.

	(e)		Not applicable.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

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.
10.84		Ninth Amendment to Loan and Security Agreement, dated August 3, 2009, among Rockford and Wachovia Capital Finance Corporation (Western)
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.


+		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.

(b) During the period from ~~January~~April 1, 2009, through ~~March~~June 3130, 2009, Rockford filed the following reports on Form 8-K.

• ~~January~~May 61, 2009 report disclosing on Item ~~1.02~~9 that Rockford had ~~repurchased~~issued ~~$2.5~~a ~~million~~news inrelease ~~aggregate~~regarding ~~principal~~Rockford’s ~~amount~~results of ~~its~~Operations 4for the Quarter ended March 31, 2009.5% ~~convertible~~This ~~senior~~report ~~subordinated~~furnished ~~secured~~a ~~notes~~copy ~~for~~of ~~$2.0~~the ~~million~~press ~~cash~~release under Item 9 of Form 8-K.

1820

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 officer.

	ROCKFORD CORPORATION
Date: May 1, 2009	By:	/s/ Richard G. Vasek
Date: August 6, 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)

1921

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.
10.84		Ninth Amendment to Loan and Security Agreement, dated August 3, 2009, among Rockford and Wachovia Capital Finance Corporation (Western)
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.


+		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.

2022

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