RICHARDSON ELECTRONICS LTD/DE - FORM 10-Q - EX-99.1 - EXHIBIT 99.1 - October 9, 2014

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EX-31.2 - EXHIBIT 31.2 - RICHARDSON ELECTRONICS LTD/DErell_ex312xfy2015xq1x08302.htm
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EX-31.1 - EXHIBIT 31.1 - RICHARDSON ELECTRONICS LTD/DErell_ex311xfy2015xq1x08302.htm


Press Release
For Immediate Release
For Details Contact:                             40W267 Keslinger Road
Edward J. Richardson        Kathleen S. Dvorak            PO BOX 393
Chairman and CEO        EVP & CFO                LaFox, IL 60147-0393 USA
Phone: (630) 208-2340        (630) 208-2208                (630) 208-2200 | Fax: (630) 208-2550
                                        
RICHARDSON ELECTRONICS REPORTS FIRST QUARTER FISCAL 2015 RESULTS AND DECLARES QUARTERLY CASH DIVIDEND

LaFox, IL, October 8, 2014: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported sales and earnings for its first quarter ended August 30, 2014. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.
Net sales for the first quarter of fiscal 2015 were $34.7 million, a 1.3% increase compared to net sales of $34.3 million in the prior year. The sales increase primarily reflects growth in the EDG business of 7.7% offset by a decline in the Canvys division. Gross margin increased slightly to $10.7 million, or 30.7% of net sales during the first quarter of fiscal 2015, compared to $10.2 million, or 29.8% of net sales during fiscal 2014. Operating expenses increased to $11.2 million during the first quarter of fiscal 2015, compared to $10.1 million during the fiscal 2014. The $1.1 million increase in expense is due to investments in new business units and new products to provide future growth along with incremental expenses associated with our new ERP system implementation. As a result, operating loss for the first quarter of fiscal 2015 was $0.5 million, compared to operating income for the first quarter of fiscal 2014 of $0.1 million.
Loss from continuing operations for the first quarter of fiscal 2015 was $0.1 million, compared to income from continuing operations of $2.0 million, or $0.14 per diluted common share during the first quarter of last year.
“We are pleased that EDG is beginning to see growth across multiple product lines and markets. Our solid vendor partnerships, coupled with the investments we are making in engineering, product development, and manufacturing capabilities, should enable us to continue increasing revenues in high growth niche markets.
We have now formalized Richardson Healthcare as a strategic business unit to focus on providing the highest quality replacement parts for diagnostic imaging equipment. Through our investments and focus on power management and healthcare, we believe our operating results will improve over the next several years as we leverage our global infrastructure and existing customer relationships,” said Edward J. Richardson, Chairman, Chief Executive Officer and President.
“We anticipate our second quarter sales should be in the range of $34 to $36 million. We remain focused on building our business to achieve sustainable growth over the long term,” said Mr. Richardson.

FINANCIAL SUMMARY ─ THREE MONTHS ENDED AUGUST 30, 2014

•
Net sales for the first quarter of fiscal 2015 were $34.7 million, an increase of 1.3%, compared to net sales of $34.3 million during the first quarter of fiscal 2014.

•
Gross margin increased to 30.7% during the first quarter of fiscal 2015, compared to 29.8% during the first quarter of fiscal 2014.





•
Selling, general, and administrative expenses increased to $11.2 million, or 32.2% of net sales, for the first quarter of fiscal 2015, compared to $10.1 million, or 29.4% of net sales, for the first quarter of fiscal 2014.

•
Operating loss during the first quarter of fiscal 2015 was $0.5 million, compared to an operating income of $0.1 million, or 0.4% of net sales during the first quarter of fiscal 2014.

•
Loss from continuing operations during the first quarter of fiscal 2015 was $0.1 million, versus income from continuing operations of $2.0 million, or $0.14 per diluted common share, during the first quarter of fiscal 2014.

•
Net loss during the first quarter of fiscal 2015 was $0.1 million, compared to net income of $2.0 million, or $0.14 per diluted common share, during the first quarter of fiscal 2014.

CASH DIVIDEND
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 November 21, 2014, to common stockholders of record on November 7, 2014.
“Cash and investments at the end of our first quarter of fiscal 2015 were $133.2 million. As of today, the Company currently has 11.8 million outstanding shares of common stock and 2.1 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, October 9, 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 first quarter results for fiscal 2015. 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 35240832 approximately five minutes prior to the start of the call. A replay of the call will be available beginning at 11:00 a.m. CT on October 9, 2014, for seven days. The telephone numbers for the replay are (USA) (888) 286-8010 and (International) (617) 801-6888; passcode 87050145.

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 25, 2014. 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
 
August 30, 
 2014
 
May 31, 
 2014
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
98,084

 
$
102,752

Accounts receivable, less allowance of $564 and $581
18,494

 
18,354

Inventories
35,620

 
33,869

Prepaid expenses and other assets
936

 
1,089

Deferred income taxes
1,803

 
1,537

Income tax receivable
580

 
2,888

Investments—current
26,362

 
31,732

Discontinued operations—assets
—

 
18

Total current assets
181,879

 
192,239

Non-current assets:
 
 
 
Property, plant and equipment, net
7,723

 
7,223

Other intangibles
820

 
843

Non-current deferred income taxes
1,686

 
1,724

Investments—non-current
8,797

 
1,516

Total non-current assets
19,026

 
11,306

Total assets
$
200,905

 
$
203,545

Liabilities and Stockholders’ Equity

 
 
Current liabilities:
 
 
 
Accounts payable
$
12,336

 
$
12,337

Accrued liabilities
8,490

 
9,220

Discontinued operations—liabilities
—

 
7

Total current liabilities
20,826

 
21,564

Non-current liabilities:
 
 
 
Long-term income tax liabilities
5,876

 
5,691

Other non-current liabilities
1,296

 
1,315

Discontinued operations—non-current liabilities
126

 
130

Total non-current liabilities
7,298

 
7,136

Total liabilities
28,124

 
28,700

Commitments and contingencies
—

 
—

Stockholders’ equity
 
 
 
Common stock, $0.05 par value; issued 11,906 shares at August 30, 2014, and 11,835 shares at May 31, 2014
595

 
592

Class B common stock, convertible, $0.05 par value; issued 2,141 shares at August 30, 2014 and 2,191 shares at May 31, 2014
107

 
110

Preferred stock, $1.00 par value, no shares issued
—

 
—

Additional paid-in-capital
66,419

 
66,141

Common stock in treasury, at cost, 50 shares at August 30, 2014, and 1 share at May 31, 2014
(501
)
 
(14
)
Retained earnings
97,048

 
97,959

Accumulated other comprehensive income
9,113

 
10,057

Total stockholders’ equity
172,781

 
174,845

Total liabilities and stockholders’ equity
$
200,905

 
$
203,545






Richardson Electronics, Ltd.
Unaudited Consolidated Statements of Comprehensive Income (Loss)
(in thousands, except per share amounts)
 
Three Months Ended
 
August 30, 
 2014
 
August 31, 
 2013
Statements of Comprehensive Income (Loss)
 
 
 
Net Sales
$
34,699

 
$
34,257

Cost of Sales
24,041

 
24,065

Gross profit
10,658

 
10,192

Selling, general, and administrative expenses
11,182

 
10,069

Gain on disposal of assets
9

 
—

Operating income (loss)
(533
)
 
123

Other (income) expense:
 
 
 
Investment/interest income
(256
)
 
(265
)
Foreign exchange (gain) loss
(57
)
 
106

Proceeds from legal settlement
—

 
(2,115
)
Other, net
(2
)
 
(30
)
Total other income
(315
)
 
(2,304
)
Income (loss) from continuing operations before income taxes
(218
)
 
2,427

Income tax provision (benefit)
(135
)
 
448

Income (loss) from continuing operations
(83
)
 
1,979

Loss from discontinued operations, net of tax
—

 
(11
)
Net income (loss)
(83
)
 
1,968

Foreign currency translation gain (loss), net of tax
(968
)
 
425

Fair value adjustments on investments
25

 
1

Comprehensive income (loss)
$
(1,026
)
 
$
2,394

Net income (loss) per Common share - Basic:
 
 
 
Income (loss) from continuing operations
$
(0.01
)
 
$
0.14

Income (loss) from discontinued operations
—

 
—

Total net income (loss) per Common share - Basic:
$
(0.01
)
 
$
0.14

Net income (loss) per Class B common share - Basic:
 
 
 
Income (loss) from continuing operations
$
(0.01
)
 
$
0.13

Income (loss) from discontinued operations
—

 
—

Total net income (loss) per Class B common share - Basic:
$
(0.01
)
 
$
0.13

Net income (loss) per Common share - Diluted:
 
 
 
Income (loss) from continuing operations
$
(0.01
)
 
$
0.14

Income (loss) from discontinued operations
—

 
—

Total net income (loss) per Common share - Diluted:
$
(0.01
)
 
$
0.14

Net income (loss) per Class B common share - Diluted:
 
 
 
Income (loss) from continuing operations
$
(0.01
)
 
$
0.13

Income (loss) from discontinued operations
—

 
—

Total net income (loss) per Class B common share - Diluted:
$
(0.01
)
 
$
0.13

Weighted average number of shares:
 
 
 
Common shares - Basic
11,822

 
12,127

Class B common shares - Basic
2,182

 
2,428

Common shares - Diluted
11,822

 
14,688

Class B common shares - Diluted
2,182

 
2,428

Dividends per common share
$
0.060

 
$
0.060

Dividends per Class B common share
$
0.054

 
$
0.054






Richardson Electronics, Ltd.
Consolidated Statements of Cash Flows
(in thousands)
 
Three Months Ended
 
August 30, 
 2014
 
August 31, 
 2013
Operating activities:
 
 
 
Net income (loss)
$
(83
)
 
$
1,968

Adjustments to reconcile net income to cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
366

 
248

Gain on sale of investments
(3
)
 
(7
)
Share-based compensation expense
120

 
114

Deferred income taxes
(79
)
 
(59
)
Change in assets and liabilities, net of effect of acquired businesses:
 
 
 
Accounts receivable
(372
)
 
(1,218
)
Income tax receivable
2,308

 
2,751

Inventories
(2,110
)
 
(450
)
Prepaid expenses and other assets
135

 
156

Accounts payable
101

 
(2,547
)
Accrued liabilities
(662
)
 
(1,890
)
Long-term income tax liabilities
—

 
(242
)
Other
(49
)
 
(9
)
Net cash used in operating activities
(328
)
 
(1,185
)
Investing activities:
 
 
 
Cash consideration paid for acquired businesses
—

 
(973
)
Capital expenditures
(834
)
 
(441
)
Proceeds from maturity of investments
30,482

 
40,488

Purchases of investments
(32,362
)
 
(40,094
)
Proceeds from sales of available-for-sale securities
37

 
56

Purchases of available-for-sale securities
(37
)
 
(56
)
Other
(28
)
 
69

Net cash used in investing activities
(2,742
)
 
(951
)
Financing activities:
 
 
 
Repurchase of common stock
(488
)
 
(6,700
)
Proceeds from issuance of common stock
158

 
71

Cash dividends paid
(828
)
 
(857
)
Other
1

 
1

Net cash used in financing activities
(1,157
)
 
(7,485
)
Effect of exchange rate changes on cash and cash equivalents
(441
)
 
149

Decrease in cash and cash equivalents
(4,668
)
 
(9,472
)
Cash and cash equivalents at beginning of period
102,752

 
102,002

Cash and cash equivalents at end of period
$
98,084

 
$
92,530







Richardson Electronics, Ltd.
Net Sales and Gross Profit
For the First Quarter of Fiscal 2015 and Fiscal 2014
(in thousands)

By Strategic Business Unit:
Net Sales
Q1
 
Q1
 
 
FY 2015
 
FY 2014
% Change
EDG
$
27,438

 
$
25,479

7.7%
Canvys
5,968

 
7,446

(19.8%)
Healthcare
1,293

 
$
1,332

(2.9%)
Total
$
34,699

 
$
34,257

1.3%
 
 
 
 
 
Gross Profit
Q1
 
Q1
 
 
FY 2015
% of Net Sales
FY 2014
% of Net Sales
EDG
$
8,686

31.7%
$
7,859

30.8%
Canvys
1,656

27.7%
1,903

25.6%
Healthcare
316

24.4%
430

32.3%
Total
$
10,658

30.7%
$
10,192

29.8%




RICHARDSON ELECTRONICS LTD/DE Reports