Welcome!

News Feed Item

Richardson Electronics Reports Third Quarter Fiscal 2014 Results and Declares Quarterly Cash Dividend; Invests in Key Initiatives

Richardson Electronics, Ltd. (NASDAQ: RELL), today reported sales and earnings for its third quarter ended March 1, 2014. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.

Net sales for the third quarter of fiscal 2014 were $32.9 million, a 2.2% decrease compared to net sales of $33.6 million in the prior year. Sales for the company's EDG business were relatively flat while sales for Canvys were down 6.5%, compared to the prior year's quarter. Gross margin decreased to $9.7 million, or 29.3% of net sales during the third quarter of fiscal 2014, compared to $9.9 million, or 29.5% of net sales during fiscal 2013. Operating expenses were $10.5 million for the third quarter of fiscal 2014, compared to $9.3 million for the third quarter of fiscal 2013. Operating loss for the third quarter of fiscal 2014 was $0.9 million compared to operating income of $0.6 million for the third quarter of fiscal 2013.

Loss from continuing operations for the third quarter of fiscal 2014 was $0.1 million compared to income from continuing operations for the third quarter of fiscal 2013 of $0.6 million, or $0.04 per diluted common share.

“We remain committed to profit improvement with growth initiatives that allow us to leverage our global infrastructure. While we are not satisfied with our current financial performance, we are pleased to see pockets of growth in key geographic areas and markets. Sales in both the Asia and European regions improved versus the prior year. In terms of key markets, we are seeing growth in industrial markets as well as the automotive markets which utilize laser cutting equipment,” said Edward J. Richardson, Chairman, Chief Executive Officer and President.

“We believe our fourth quarter sales should be in the range of $34 to $36 million. We continue to focus on acquisition targets, and to invest in key initiatives such as vacuum capacitors and our new product development team focused on microwave solutions. Both take advantage of our global infrastructure and provide significant opportunity for sustainable growth over the long term,” said Mr. Richardson.

FINANCIAL SUMMARY – THREE MONTHS ENDED MARCH 1, 2014

  • Net sales for the third quarter of fiscal 2014 were $32.9 million, down 2.2%, compared to net sales of $33.6 million during the third quarter of fiscal 2013.
  • Gross margin decreased to 29.3% during the third quarter of fiscal 2014 compared to 29.5% during last year's third quarter.
  • Selling, general, and administrative expenses increased to $10.5 million, or 32.0% of net sales for the third quarter of fiscal 2014 compared to $9.3 million for the third quarter of fiscal 2013, or 27.7% of net sales. Operating expenses during the third quarter of fiscal 2014 included approximately $0.4 million of expenses associated with evaluating potential acquisitions, $0.1 million for new product development costs, and $0.2 million of increased information technology expenses for a new system implementation.
  • Operating loss during the third quarter of fiscal 2014 was $0.9 million compared to operating income of $0.6 million for the third quarter of fiscal 2013.
  • Other income for the third quarter of fiscal 2014 was $0.7 million compared to expense of $0.2 million for the third quarter of fiscal 2013. Other income for the third quarter of fiscal 2014 included $0.4 million of proceeds from a class action lawsuit settlement.
  • Loss from continuing operations during the third quarter of fiscal 2014 was $0.1 million compared to income from continuing operations for the third quarter of fiscal 2013 of $0.6 million, or $0.04 per diluted common share.
  • Loss from discontinued operations, net of tax, was $0.4 million during the third quarter of fiscal 2014 compared to $0.2 million during the third quarter of fiscal 2013.
  • Net loss during the third quarter of fiscal 2014 was $0.5 million compared to net income of $0.4 million, or $0.03 per diluted common share, during the third quarter of fiscal 2013.

FINANCIAL SUMMARY – NINE MONTHS ENDED MARCH 1, 2014

  • Net sales for the first nine months of fiscal 2014 were $102.6 million, down 3.1%, compared to net sales of $105.9 million during the first nine months of fiscal 2013.
  • Gross margin increased to 30.1% during the first nine months of fiscal 2014 compared to 29.6% during the first nine months of fiscal 2013.
  • Selling, general, and administrative expenses increased to $31.1 million, or 30.3% of net sales, for the first nine months of fiscal 2014 compared to $29.7 million, or 28.0% of net sales, for the first nine months of fiscal 2013. Operating expenses during the nine months of fiscal 2014 included $0.8 million of expenses associated with evaluating potential acquisitions, $0.2 million for new product development costs, and $0.5 million of increased information technology expenses for a new system implementation.
  • Operating loss during the first nine months of fiscal 2014 was $0.2 million compared to operating income of $1.6 million during the first nine months of fiscal 2013.
  • Other income for the first nine months of fiscal 2014 was $3.3 million compared to other income of $0.3 million for the first nine months of fiscal 2013. Other income for the first nine months of fiscal 2014 included $2.5 million of proceeds from a class action lawsuit settlement.
  • Income from continuing operations during the first nine months of fiscal 2014 was $2.5 million, or $0.17 per diluted common share, versus $1.9 million, or $0.12 per diluted common share, during the first nine months of fiscal 2013.
  • Loss from discontinued operations, net of tax, was $0.5 million during the first nine months of fiscal 2014 and fiscal 2013.
  • Net income during the first nine months of fiscal 2014 was $2.0 million, or $0.13 per diluted common share, compared to net income of $1.4 million, or $0.09 per diluted common share, during the first nine months of fiscal 2013.

CASH DIVIDEND AND SHARE REPURCHASES

The Company also announced today that its Board of Directors declared a $0.06 quarterly dividend per share to holders of common stock and a $0.054 cash dividend per share to holders of Class B common stock. The dividend will be payable on May 23, 2014, to common stockholders of record on May 9, 2014.

“Cash and investments at the end of our third quarter were $132.2 million. As of today, the Company currently has 11.8 million outstanding shares of common stock and 2.2 million outstanding shares of Class B common stock. With our strong balance sheet, we are committed to returning value to our shareholders,” said Mr. Richardson.

CONFERENCE CALL INFORMATION

On Thursday, April 10, 2014, at 9:00 a.m. CT, Edward J. Richardson, Chairman and Chief Executive Officer, and Kathleen S. Dvorak, Chief Financial Officer, will host a conference call to discuss the Company's third quarter results for fiscal 2014. A question and answer session will be included as part of the call's agenda. To listen to the call, please dial (888) 339-2688 and enter passcode 13408790 approximately five minutes prior to the start of the call. A replay of the call will be available beginning at 11:59 p.m. CT on April 10, 2014, for seven days. The telephone numbers for the replay are (USA) (888) 286-8010 and (International) (617) 801-6888; passcode 35522088.

FORWARD-LOOKING STATEMENTS

This release includes certain “forward-looking” statements as defined by the Securities and Exchange Commission. Statements in this press release regarding the Company's business which are not historical facts represent “forward-looking” statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, “Risk Factors” in the Company's Annual Report on Form 10-K filed on July 26, 2013. The Company assumes no responsibility to update the “forward-looking” statements in this release as a result of new information, future events, or otherwise.

ABOUT RICHARDSON ELECTRONICS, LTD.

Richardson Electronics, Ltd. is a leading global provider of engineered solutions, power grid and microwave tubes and related consumables, and customized display solutions serving customers in the alternative energy, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. The Company's strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair. More information is available online at www.rell.com.

Richardson Electronics common stock trades on the NASDAQ Global Select Market under the ticker symbol RELL.

 

Richardson Electronics, Ltd.

Consolidated Balance Sheets

(in thousands, except per share amounts)

 
  Unaudited   Audited
March 1,   June 1,
2014 2013
Assets
Current assets:
Cash and cash equivalents $ 97,160 $ 102,002
Accounts receivable, less allowance of $1,106 and $1,092 20,026 18,268
Inventories 35,180 33,975
Prepaid expenses and other assets 1,319 1,155
Deferred income taxes 1,915 1,856
Income tax receivable 3,640 6,429
Investments—current 33,322 38,971
Discontinued operations—assets 148   303  
Total current assets 192,710   202,959  
Non-current assets:
Property, plant and equipment, net 6,541 5,073
Goodwill 1,668 1,519
Other intangibles 864 908
Non-current deferred income taxes 1,487 1,398
Investments—non-current 1,757   5,461  
Total non-current assets 12,317   14,359  
Total assets $ 205,027   $ 217,318  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 11,248 $ 14,255
Accrued liabilities 7,428 9,566
Discontinued operations—liabilities   245  
Total current liabilities 18,676   24,066  
Non-current liabilities:
Long-term income tax liabilities 6,291 6,726
Other non-current liabilities 1,287 1,287
Discontinued operations—non-current liabilities 133    
Total non-current liabilities 7,711   8,013  
Total liabilities 26,387   32,079  
Commitments and contingencies
Stockholders’ equity
Common stock, $0.05 par value; issued 11,835 shares at March 1, 2014, and 12,263 shares at June 1, 2013 592 613
Class B common stock, convertible, $0.05 par value; issued 2,191 shares at March 1, 2014 and 2,491 shares at June 1, 2013 110 125
Preferred stock, $1.00 par value, no shares issued
Additional paid-in-capital 65,955 73,979
Common stock in treasury, at cost, 0 shares at March 1, 2014, and 9 shares at June 1, 2013 (105 )
Retained earnings 101,263 101,816
Accumulated other comprehensive income 10,720   8,811  
Total stockholders’ equity 178,640   185,239  
Total liabilities and stockholders’ equity $ 205,027   $ 217,318  
 

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except per share amounts)

 
  Three Months Ended   Nine Months Ended
March 1,   March 2,   March 1,   March 2,
2014 2013 2014 2013
Net Sales $ 32,884 $ 33,630 $ 102,577 $ 105,883
Cost of Sales 23,233   23,720   71,727   74,585  
Gross profit 9,651 9,910 30,850 31,298
Selling, general, and administrative expenses 10,537 9,318 31,079 29,695
Gain on disposal of assets       (2 )
Operating income (loss) (886 ) 592   (229 ) 1,605  
Other (income) expense:
Investment/interest income (277 ) (260 ) (797 ) (995 )
Foreign exchange loss 31 460 123 720
Proceeds from legal settlement (432 ) (2,547 )
Other, net (21 ) 3   (36 ) (62 )
Total other (income) expense (699 ) 203   (3,257 ) (337 )
Income (loss) from continuing operations before income taxes (187 ) 389 3,028 1,942
Income tax provision (benefit) (75 ) (197 ) 530   41  
Income (loss) from continuing operations (112 ) 586 2,498 1,901
Loss from discontinued operations, net of tax (420 ) (182 ) (538 ) (472 )
Net income (loss) (532 ) 404   1,960   1,429  
Foreign currency translation gain (loss), net of tax 258 (103 ) 1,879 1,844
Fair value adjustments on investments 6   9   29   14  
Comprehensive income (loss) $ (268 ) $ 310   $ 3,868   $ 3,287  

Net income (loss) per Common share - Basic:

Income (loss) from continuing operations $ (0.01 ) $ 0.04 $ 0.18 $ 0.13
Loss from discontinued operations (0.03 ) (0.01 ) (0.04 ) (0.03 )
Total net income (loss) per Common share - Basic: $ (0.04 ) $ 0.03   $ 0.14   $ 0.10  

Net income (loss) per Class B common share - Basic:

Income (loss) from continuing operations $ (0.01 ) $ 0.04 $ 0.16 $ 0.11
Loss from discontinued operations (0.03 ) (0.01 ) (0.03 ) (0.03 )
Total net income (loss) per Class B common share - Basic: $ (0.04 ) $ 0.03   $ 0.13   $ 0.08  

Net income (loss) per Common share - Diluted:

Income (loss) from continuing operations $ (0.01 ) $ 0.04 $ 0.17 $ 0.12
Loss from discontinued operations (0.03 ) (0.01 ) (0.04 ) (0.03 )
Total net income (loss) per Common share - Diluted: $ (0.04 ) $ 0.03   $ 0.13   $ 0.09  

Net income (loss) per Class B common share - Diluted:

Income (loss) from continuing operations $ (0.01 ) $ 0.04 $ 0.16 $ 0.11
Loss from discontinued operations (0.03 ) (0.01 ) (0.03 ) (0.03 )
Total net income (loss) per Class B common share - Diluted: $ (0.04 ) $ 0.03   $ 0.13   $ 0.08  
Weighted average number of shares:
Common shares - Basic 11,832   12,292   11,942   12,500  
Class B common shares - Basic 2,191   2,740   2,270   2,822  
Common shares - Diluted 14,140   15,165   14,335   15,455  
Class B common shares - Diluted 2,191   2,740   2,270   2,822  
Dividends per common share $ 0.060   $ 0.060   $ 0.180   $ 0.180  
Dividends per Class B common share $ 0.054   $ 0.054   $ 0.162   $ 0.162  
 

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 
  Three Months Ended   Nine Months Ended
March 1,   March 2, March 1,   March 2,
2014   2013 2014 2013
Operating activities:
Net income (loss) (532 ) 404 1,960 1,429
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization 275 218 796 783
Gain on sale of investments (4 ) (5 ) (23 ) (26 )
Loss on disposal of assets 18 16
Share-based compensation expense 201 81 585 413
Deferred income taxes 62 (8 ) (105 ) (16 )
Change in assets and liabilities, net of effect of acquired businesses:
Accounts receivable 228 1,881 (1,498 ) 477
Income tax receivable (319 ) (419 ) 2,789 (228 )
Inventories 273 452 133 2,167
Prepaid expenses and other assets 140 102 (134 ) (324 )
Accounts payable (940 ) (979 ) (3,170 ) 255
Accrued liabilities (73 ) (95 ) (2,528 ) (295 )
Long-term income tax liabilities 175 191 (302 ) (126 )
Other 13   158   60   348  
Net cash provided by (used in) operating activities (501 ) 1,999   (1,437 ) 4,873  
Investing activities:
Cash consideration paid for acquired businesses (973 ) (2,557 )
Capital expenditures (840 ) (512 ) (1,821 ) (1,069 )
Proceeds from sale of assets 4
Proceeds from maturity of investments 203,757 109,794 258,289 346,750
Purchases of investments (197,321 ) (86,721 ) (248,873 ) (301,729 )
Proceeds from sales of available-for-sale securities 76 24 152 161
Purchases of available-for-sale securities (76 ) (24 ) (152 ) (161 )
Other 6     97    
Net cash provided by investing activities 5,602   22,561   6,719   41,399  
Financing activities:
Repurchase of common stock (8,725 ) (11,550 )
Proceeds from issuance of common stock 13 65 184 148
Cash dividends paid (829 ) (886 ) (2,514 ) (2,685 )
Other (26 )   (25 )  
Net cash used in financing activities (842 ) (821 ) (11,080 ) (14,087 )
Effect of exchange rate changes on cash and cash equivalents 255   (234 ) 956   945  
Increase/ (decrease) in cash and cash equivalents 4,514 23,505 (4,842 ) 33,130
Cash and cash equivalents at beginning of period 92,646   53,518   102,002   43,893  
Cash and cash equivalents at end of period $ 97,160   $ 77,023   $ 97,160   $ 77,023  
 

Richardson Electronics, Ltd.

Net Sales and Gross Profit

For the Third Quarter and First Nine Months of Fiscal 2014 and Fiscal 2013

(in thousands)

 

By Strategic Business Unit:

 

Net Sales

  QTD     QTD  
FY 2014 FY 2013   % Change
EDG $ 24,193 $ 24,333 (0.6)%
Canvys 8,691   9,297   (6.5)%
Total $ 32,884   $ 33,630   (2.2)%
 
YTD YTD
FY 2014 FY 2013   % Change
EDG $ 75,835 $ 76,146 (0.4)%
Canvys 26,742   29,737   (10.1)%
Total $ 102,577   $ 105,883   (3.1)%
 

Gross Profit

QTD QTD
FY 2014   % of Net Sales   FY 2013   % of Net Sales
EDG $ 7,139 29.5% $ 7,407 30.4%
Canvys 2,512   28.9% 2,503   26.9%
Total $ 9,651   29.3% $ 9,910   29.5%
 
YTD YTD
FY 2014   % of Net Sales   FY 2013   % of Net Sales
EDG $ 23,505 31.0% $ 23,337 30.6%
Canvys 7,345   27.5% 7,961   26.8%
Total $ 30,850   30.1% $ 31,298   29.6%
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
SYS-CON Events announced today that TidalScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale is the leading provider of Software-Defined Servers that bring flexibility to modern data centers by right-sizing servers on the fly to fit any data set or workload. TidalScale’s award-winning inverse hypervisor technology combines multiple commodity servers (including their ass...
In the fast-paced advances and popularity in cloud technology, one of the most critical factors revolves around concerns for security of your critical data. How to assure both your company and your customers they can confidently trust and utilize your cloud environment is most often top on the list. There is a method to evaluating and providing security that exceeds conventional modes of protecting data both within the cloud as well externally on mobile and other devices. With the public failure...
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, will provide a fun and simple way to introduce Machine Leaning to anyone and everyone. Together we will solve a machine learning problem and find an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intellige...
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
As popularity of the smart home is growing and continues to go mainstream, technological factors play a greater role. The IoT protocol houses the interoperability battery consumption, security, and configuration of a smart home device, and it can be difficult for companies to choose the right kind for their product. For both DIY and professionally installed smart homes, developers need to consider each of these elements for their product to be successful in the market and current smart homes.
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
In his session at 21st Cloud Expo, Michael Burley, a Senior Business Development Executive in IT Services at NetApp, will describe how NetApp designed a three-year program of work to migrate 25PB of a major telco's enterprise data to a new STaaS platform, and then secured a long-term contract to manage and operate the platform. This significant program blended the best of NetApp’s solutions and services capabilities to enable this telco’s successful adoption of private cloud storage and launchi...
The session is centered around the tracing of systems on cloud using technologies like ebpf. The goal is to talk about what this technology is all about and what purpose it serves. In his session at 21st Cloud Expo, Shashank Jain, Development Architect at SAP, will touch upon concepts of observability in the cloud and also some of the challenges we have. Generally most cloud-based monitoring tools capture details at a very granular level. To troubleshoot problems this might not be good enough.
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In their Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, and Mark Lav...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Cloud Expo, Inc. has announced today that Andi Mann and Aruna Ravichandran have been named Co-Chairs of @DevOpsSummit at Cloud Expo Silicon Valley which will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. "DevOps is at the intersection of technology and business-optimizing tools, organizations and processes to bring measurable improvements in productivity and profitability," said Aruna Ravichandran, vice president, DevOps product and solutions marketing...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...