FORM 8K File:20041016-FY05Q2

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) :       December 16, 2004      

 
 
 

RICHARDSON ELECTRONICS, LTD.

(Exact name of registrant as specified in its charter)

 

Delaware	0-12906	36-2096643
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
40W267 Keslinger Road, P.O. Box 393, LaFox, Illinois		60147-0393
(Address of principal executive offices)		(Zip Code)
Registrant's telephone number, including area code:		(630) 208-2200
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[X]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

For Immediate Release

For Details, Please Contact:
Ed Richardson	Dario Sacomani
Chairman and Chief Exective Officer Richardson Electronics, Ltd.	Senior Vice President and Chief Financial Officer Richardson Electronics, Ltd.
Phone: (630)208-2340 E-mail: info@rell.com

Richardson Reports Record Quarter Sales of $151 Million,
up 18% from the Prior Year

LaFox, IL, Thursday December 16, 2004:   Richardson Electronics, Ltd. (NASDAQ: RELL) today reported results for the second quarter of fiscal 2005, which ended November 27, 2004. Sales in the quarter were $151.4 million, the highest quarter sales level in the Company’s history, and represented an increase of 18% from the second quarter of fiscal 2004. Net income was $1.7 million, or $0.10 per share, in the quarter compared to $2.2 million, or $0.15 per share, in the same quarter last year.

Sales Highlights - Second Quarter Fiscal 2005 Compared to Second Quarter Fiscal 2004

The Company recorded its tenth consecutive quarter of year over year sales growth. The Display Systems Group led the sales growth in the quarter increasing sales 58.5% as custom display sales more than doubled on large project deliveries to financial and retail customers. Sales in RF/Wireless Communications increased 16.7% driven by strong growth in Asia and higher demand for passive/interconnect and network access products. Industrial Power Group sales grew 12.3% with continued growth in Asia and power component demand. Sales in the Security Systems Division were up 4.8% led by increased sales in Canada and private label products.

Geographically, the Company’s sales in Asia/Pacific were up 26.3% with continued sales growth in China for wireless and industrial power products. Sales in North America grew 21.5% led by strong growth in custom display sales in the United States. Sales in Latin America increased 9.0% as all countries grew sales with particular strength in Colombia’s demand for wireless products. Sales in Europe were up 6.7% led by wireless sales in England and display systems and wireless sales in Germany.

“We are pleased with the record demand for our products and solutions and with the record quarter sales levels achieved by the Display Systems Group and Security Systems Division,” said Edward J. Richardson, Chairman of the Board and Chief Executive Officer. “Our earnings in the quarter were affected by incremental expenses associated with our ongoing Sarbanes-Oxley compliance program and PeopleSoft supply chain implementation. The system implementation successfully went live in early December after many years of work and investment. During the quarter, we followed a detailed implementation plan, which included training over 250 people, expanding our network bandwidth and testing system functionality. These efforts allowed us to realize a very seamless installation without disruption to our operations. Overall, we expect increased engineered solutions demand to continue sales growth and lower operating expenses to result in improved earnings.”

 
On Friday, December 17, 2004 at 9:00 a.m. CST, Mr. Edward J. Richardson, Chairman and Chief Executive Officer will host a conference call to discuss the release. A question and answer session will be included as part of the call’s agenda. To listen to the call, please dial 888-423-3275 approximately five minutes prior to the start of the call. A replay of the call will be available from 12:30 p.m. on December 17, 2004 through March 23, 2005. The telephone numbers for the replay are (USA) 800-475-6701 and (International) 320-365-3844; access code 761015.

This release includes certain “forward-looking” statements as defined by the SEC. 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 “Risk Factors” in the Company’s annual report on form 10-K. 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

Richardson Electronics, Ltd. is a global provider of “engineered solutions,” serving the RF and wireless communications, industrial power conversion, security and display systems markets. The Company delivers engineered solutions for its customers’ needs through product manufacturing, systems integration, prototype design and manufacture, testing and logistics. Press announcements and other information about Richardson are available on the World Wide Web at http://www.rell.com/investor.asp.

 
RICHARDSON ELECTRONICS, LTD
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTH AND SIX-MONTH PERIODS
ENDED NOVEMBER 27, 2004 AND NOVEMBER 29, 2003
(In thousands, except per share amounts, unaudited)

	Three months ended				Six months ended
	November 27, 2004		November 29, 2003		November 27, 2004		November 29, 2003
Net sales	$	151,374	$	128,051	$	289,894	$	247,357
Cost of products sold		114,320		97,109		219,238		187,300
Gross margin		37,054		30,942		70,656		60,057
Selling, general and administrative expenses		32,148		25,495		61,437		51,340
Operating income		4,906		5,447		9,219		8,717
Other expenses, net		2,623		2,398		5,095		4,992
Income before income taxes		2,283		3,049		4,124		3,725
Income tax provision		621		844		1,214		1,128
Net income	$	1,662	$	2,205	$	2,910	$	2,597
Net income per share - basic:
Net income per share	$	0.10	$	0.16	$	0.18	$	0.19
Average shares outstanding		17,284		13,979		16,578		13,952
Net income per share - diluted:
Net income per share	$	0.10	$	0.15	$	0.17	$	0.18
Average shares outstanding		17,479		14,361		16,801		14,281
Dividends per common share	$	0.04	$	0.04	$	0.08	$	0.08

 
RICHARDSON ELECTRONICS, LTD
SALES AND GROSS MARGIN
FOR SECOND QUARTER FISCAL 2005 AND 2004
ENDED NOVEMBER 27, 2004 AND NOVEMBER 29, 2003
(In thousands, unaudited)

By Business Unit:
				SALES								GROSS MARGIN
		FY 2005		FY 2004	%  Change				FY 2005		% of Sales				FY 2004		% of Sales
Second Quarter
RFWC	$	67,358	$	57,705		16.7	%	$	15,661			23.3	%	$	12,846			22.3	%
IPG		31,304		27,868		12.3	%		9,527			30.4	%		8,678			31.1	%
SSD		27,360		26,109		4.8	%		7,304			26.7	%		6,664			25.5	%
DSG		23,562		14,864		58.5	%		5,298			22.5	%		3,727			25.1	%
Other		1,790		1,505					(736	)					(973	)
Total	$	151,374	$	128,051		18.2	%	$	37,054			24.5	%	$	30,942			24.2	%
Fiscal Year to Date
RFWC	$	131,785	$	107,520		22.6	%	$	30,331			23.0	%	$	24,028			22.3	%
IPG		60,951		53,718		13.5	%		18,634			30.6	%		16,347			30.4	%
SSD		53,121		51,281		3.6	%		13,802			26.0	%		13,025			25.4	%
DSG		40,542		30,943		31.0	%		9,431			23.3	%		7,986			25.8	%
Other		3,495		3,895					(1,542	)					(1,329	)
Total	$	289,894	$	247,357		17.2	%	$	70,656			24.4	%	$	60,057			24.3	%

By Geographic Area:
				SALES								GROSS MARGIN
		FY 2005		FY 2004	%  Change				FY 2005		% of Sales				FY 2004		% of Sales
Second Quarter
North America	$	79,833	$	65,702		21.5	%	$	20,835			26.1	%	$	17,064			26.0	%
Europe		33,695		31,576		6.7	%		9,226			27.4	%		9,009			28.5	%
Asia/Pacific		31,777		25,160		26.3	%		7,741			24.4	%		5,648			22.4	%
Latin America		4,983		4,572		9.0	%		1,432			28.7	%		1,118			24.5	%
Corporate		1,086		1,041					(2,180	)					(1,897	)
Total	$	151,374	$	128,051		18.2	%	$	37,054			24.5	%	$	30,942			24.2	%
Fiscal Year to Date
North America	$	154,218	$	131,133		17.6	%	$	39,849			25.8	%	$	34,620			26.4	%
Europe		63,224		56,942		11.0	%		17,680			28.0	%		16,386			28.8	%
Asia/Pacific		60,566		47,490		27.5	%		14,457			23.9	%		10,587			22.3	%
Latin America		9,848		9,677		1.8	%		2,726			27.7	%		2,301			23.8	%
Corporate		2,038		2,115					(4,056	)					(3,837	)
Total	$	289,894	$	247,357		17.2	%	$	70,656			24.4	%	$	60,057			24.3	%
Note: Fiscal 2004 data has been reclassified to conform with the fiscal 2005 presentation. Direct Export and a portion          of Corporate have been reclassified to the identified geographic areas based on ship to location.          Europe includes sales and gross margins to Middle East and Africa.          Corporate consists of freight and other non-area specific sales and gross margins.

 
RICHARDSON ELECTRONICS, LTD
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

				As of
				November 27,	May    29,
				2004	2004
				(unaudited)
ASSETS
Current Assets
	Cash		$	17,328	$	16,927
	Account receivable, net			115,186		106,130
	Inventories			106,546		92,297
	Other			15,418		19,739
		Total current assets		254,478		235,093
Property, plant and equipment, net				33,294		30,589
Goodwill and intangible assets				6,899		6,726
Other assets				10,908		6,480
Total assets			$	305,579	$	278,888
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
	Accounts payable		$	36,754	$	33,473
	Accrued liabilities			21,290		23,224
	Current portion of long-term debt			3,796		4,027
		Total current liabilities		61,840		60,724
Long-term debt, less current portion				123,584		133,813
Other non-current liabilities				460		241
		Total liabilities		185,884		194,778
Stockholders’ Equity				119,695		84,110
Total liabilities and stockholders' equity			$	305,579	$	278,888

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
	RICHARDSON ELECTRONICS, LTD.
Date:   December 16, 2004	By: /s/  DARIO SACROMANI
	Name: Dario Sacromani Title:    Senior Vice President and             Chief Financial Officer