8-K 1 f5q3prel4earn.htm FORM 8-K
FORM 8K File:20050323-FY05Q3
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) :       March 23, 2005      

 
 
 

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):

[   ]

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

Download FORM 8-K in PDF format
 

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 Fiscal Third Quarter Sales of $141.7 Million,
up 11% from the Prior Year

LaFox, IL, Wednesday March 23, 2005:   Richardson Electronics, Ltd. (NASDAQ: RELL) today reported results for the third quarter of fiscal 2005, which ended February 26, 2005. Sales in the quarter were $141.7 million, an increase of 11.3% from the third quarter of fiscal 2004. Net loss was $2.1 million, or $0.12 per share, in the quarter, which included restructuring, incremental tax provisions and other charges of $2.9 million after-tax ($4.2 million pre-tax). Net income in the third quarter of fiscal 2004 was $1.0 million, or $0.07 per share.

The Company implemented restructuring actions at the end of the third quarter of fiscal 2005, which included changes in management and a reduction in workforce, to accelerate the alignment of operations with the Company's engineered solutions strategy and improve operating efficiency. Severance charges of $2.2 million and inventory write-down charges of $0.9 million were recorded in the quarter primarily related to the restructuring actions, which included de-emphasizing certain product lines. The Company also recorded charges of $0.8 million associated with previously capitalized freight, which will now be reported as a period expense, and an incremental bad debt provision of $0.3 million. The severance and bad debt charges were recorded to selling, general and administrative expense. Incremental tax provisions of $0.2 million were taken in the quarter related to foreign tax exposures and assessments.

Product margin (sales less direct product cost) increased to 26.5% of sales in the third quarter of fiscal 2005 compared to 26.0% of sales in the third quarter of fiscal 2004. Gross margin declined to 23.8% of sales in the quarter from 24.8% in the prior year quarter primarily due to the restructuring which included write-downs of inventory and previously capitalized freight as stated above.

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

The Company recorded its eleventh consecutive quarter of year over year sales growth as all four strategic business units and all four geographic areas increased sales over the prior year. RF/Wireless Communications sales grew 16.6% led by continued strength in infrastructure and network access demand, particularly in Asia. Sales in the Display Systems Group increased 16.0% with continued growth in custom display sales to the financial market. Industrial Power Group sales grew 7.8% led by increased demand in the United States for both power component and tube products. Sales in the Security Systems Division were up 1.4% on higher private label sales.

 
 

 
Geographically, the Company's sales in Asia/Pacific were up 29.7% with strong growth continuing in China for wireless and industrial power products. Sales in North America grew 7.4% led by increased demand for security systems in Canada and display systems in the United States. Sales in Europe were up 6.8% with continued growth in wireless sales, particularly in France, Israel and Spain. Sales in Latin America increased 2.1% with growth in wireless demand.

“Demand for our products and engineered solutions continues to grow worldwide,” said Edward J. Richardson, Chairman of the Board and Chief Executive Officer. “The restructuring actions taken in the third quarter will accelerate our ability to better serve our customers and sustain earnings growth through engineered solutions.”

On Thursday, March 24, 2005 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 800-553-0329 approximately five minutes prior to the start of the call. A replay of the call will be available from 12:30 p.m. on March 24, 2005 through June 30, 2005. The telephone numbers for the replay are (USA) 800-475-6701 and (International) 320-365-3844; access code 774694.

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 NINE-MONTH PERIODS
ENDED FEBRUARY 26, 2005 AND FEBRUARY 28, 2004
(In thousands, except per share amounts, unaudited)
 

 

Three months ended

     

Nine months ended

February 26,
2005

February 28,
2004

February 26,
2005

February 28,
2004

 

 

 

 

 

Net sales

 

$

141,700

 

 

$

127,267

 

 

$

431,421

 

 

$

374,523

 

Cost of products sold

 

108,033

 

 

95,802

 

 

327,271

 

 

283,102

 

     Gross margin

  

 

 

33,667

 

 

 

31,465

 

 

 

104,150

 

 

 

91,421

 

Selling, general and administrative expenses                   

 

 

34,009

 

  

 

27,030

 

 

 

95,273

 

  

 

78,269

 

     Operating (loss) income

 

 

 

(342

)

 

 

4,435

 

 

 

8,877

 

 

 

13,152

 

Other expenses, net

 

 

 

2,404

 

 

2,942

 

 

 

7,499

 

 

7,934

 

     (Loss) income before income taxes

 

 

 

(2,746

)

 

 

1,493

 

 

 

1,378

 

 

 

5,218

 

Income tax provision 

 

 

(688

 )

 

 

493

 

 

 

526

 

 

1,621

 

     Net (loss) income

 

 $

(2,058

)

 

 $

1,000

 

 

 $

852

 

 

 $

3,597

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share - basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Net (loss) income per share

 

 $

(0.12

)

 

 $

0.07

 

 

 $

0.05

 

 

 $

0.26

 

     Average shares outstanding

 

17,299

 

 

14,102

 

 

16,818

 

 

14,002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Net (loss) income per share

 

 $

(0.12

)

 

 $

0.07

 

 

 $

0.05

 

 

 $

0.25

 

     Average shares outstanding

 

17,299

 

 

14,560

 

 

17,085

 

 

14,374

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

 

 $

0.04

 

 

 $

0.04

 

 

 $

0.12

 

 

 $

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
RICHARDSON ELECTRONICS, LTD
SALES AND GROSS MARGIN
FOR THIRD QUARTER FISCAL 2005 AND 2004
ENDED FEBRUARY 26, 2005 AND FEBRUARY 28, 2004
(In thousands, unaudited)
 

By Business Unit:

SALES

GROSS MARGIN

                               

  

  

  

  

  

  

  

  

  

   

  

  

  

  

  

  

  

  

  

  

  

FY 2005

FY 2004

%  Change

FY 2005 

% of Sales

FY 2004

% of Sales

Third Quarter

     RFWC

$

65,268

$

55,973

16.6

%

$

13,533

20.7

%

$

13,162

23.5

%

     IPG

29,657

27,514

7.8

%

8,891

30.0

%

8,383

30.5

%

     SSD

25,607

25,260

1.4

%

6,260

24.4

%

6,394

25.3

%

     DSG

19,498

16,813

16.0

%

4,097

21.0

%

4,146

24.7

%

     Other

1,670

1,707

886

(620

)

          Total

$

141,700

$

127,267

11.3

%

$

33,667

23.8

%

$

31,465

24.7

%

Fiscal Year to Date

     RFWC

$

197,053

$

163,493

20.5

%

$

43,864

22.3

%

$

37,190

22.7

%

     IPG

90,608

81,232

11.5

%

27,525

30.4

%

27,730

30.4

%

     SSD

78,728

76,541

2.9

%

20,062

25.5

%

19,419

25.4

%

     DSG

60,040

47,756

25.7

%

13,528

22.5

%

12,132

25.4

%

     Other

4,992

5,501

(829

)

(2,050

)

          Total

$

431,421

$

374,523

15.2

%

$

104,150

24.1

%

$

91,421

24.4

%
 

By Geographic Area:

SALES

GROSS MARGIN

                               

  

  

  

  

  

  

  

  

  

   

  

  

  

  

  

  

  

  

  

  

  

FY 2005

FY 2004

%  Change

FY 2005 

% of Sales

FY 2004

% of Sales

Third Quarter

     North America

$

73,443

$

68,392

7.4

%

$

19,047

25.9

%

$

17,681

25.9

%

     Europe

31,118

29,124

6.8

%

9,425

30.3

%

8,480

29.1

%

     Asia/Pacific

30,652

23,630

29.7

%

7,104

23.2

%

5,640

23.9

%

     Latin America

5,544

5,428

2.1

%

1,458

26.3

%

1,243

22.9

%

     Corporate

943

693

(3,367

)

(1,579

)

          Total

$

141,700

$

127,267

11.3

%

$

33,667

23.8

%

$

31,465

24.7

%

Fiscal Year to Date

     North America

$

227,548

$

199,468

14.1

%

$

58,783

25.8

%

$

52,244

26.2

%

     Europe

94,284

86,025

9.6

%

27,047

28.7

%

24,825

28.9

%

     Asia/Pacific

91,217

71,120

28.3

%

21,560

23.6

%

16,227

22.8

%

     Latin America

15,392

15,102

1.9

%

4,184

27.2

%

3,541

23.4

%

     Corporate

2,980

2,808

(7,424

)

(5,416

)

          Total

$

431,421

$

374,523

15.2

%

$

104,150

24.1

%

$

91,421

24.4

%


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

February 26,

    May    29,    

2005

2004

                                                                                                                                               

(unaudited)

ASSETS

Current Assets

 

 

 

 

 

 

 

 

 

Cash

 

$

22,737

 

 

$

16,927

 

 

Account receivable, net

 

 

109,920

 

 

 

106,130

 

 

Inventories

 

 

107,116

 

 

 

92,297

 

 

Other

 

 

18,265

 

          

 

19,739

 

 

 

Total current assets

 

 

258,038

 

 

 

235,093

 

 

Property, plant and equipment, net

33,541

30,589

Goodwill and intangible assets

 

 

7,218

 

 

 

6,726

 

Other assets

 

 

10,628

 

 

 

6,806

 

 

       Total assets

 

$

309,425

 

 

$

279,214

 

    

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

37,439

 

 

$

33,473

 

 

Accrued liabilities

 

 

19,464

 

 

 

23,224

 

 

Current portion of long-term debt

 

 

12

 

 

 

4,027

 

 

 

Total current liabilities

 

 

56,915

 

 

 

60,724

 

 

Long-term debt, less current portion

 

 

134,042

 

 

 

133,813

 

Other non-current liabilities

 

 

1,117

 

 

 

241

 

 

 

Total liabilities

 

 

192,074

 

 

 

194,778

 

  

Stockholders’ Equity

 

 

117,351

 

 

 

84,436

 

 

       Total liabilities and stockholders' equity

 

$

309,425

 

 

$

279,214

 

  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

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:   March 23, 2005  

By: /s/  DARIO SACROMANI            

 
Name: Dario Sacromani
Title:    Senior Vice President and
            Chief Financial Officer