EX-99.1 6 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

     LOGO
       Corporate Headquarters
       40W267 Keslinger Road
For Immediate Release      PO Box 393
For Details Contact:      LaFox, IL 60147-0393
Edward J. Richardson    Kathleen S. Dvorak   USA
Chairman and CEO    EVP & CFO   Phone:   (630) 208-2200
Phone:   (630) 208-2340    (630) 208-2208   Fax:   (630) 208-2550
E-mail:   info@rell.com       

 

 

RICHARDSON ELECTRONICS REPORTS INCREASED SALES AND

EARNINGS PER SHARE FOR THE FIRST QUARTER FISCAL 2009

AND DECLARES CASH DIVIDEND

LaFox, IL, October 8, 2008: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported its results for the first quarter ended August 30, 2008, and declared its quarterly dividend.

Net sales during the first quarter of fiscal 2009 were $138.9 million, up 7.3%, from net sales of $129.5 million during the first quarter last year. Operating income during the first quarter of fiscal 2009 increased to $4.5 million, compared to operating income of $2.7 million last year. Net income for the first quarter of fiscal 2009 was $3.7 million, or $0.20 per diluted common share, compared to a net loss during the first quarter of fiscal 2008 of $0.4 million.

“This quarter’s results exceeded our expectations, driven by stronger-than-anticipated sales growth within our RFPD business combined with operating cost reductions throughout the company. Executing on our company-wide initiatives enabled us to make progress on many fronts during the quarter,” said Edward J. Richardson, Chairman, Chief Executive Officer and President of Richardson Electronics, Ltd.

FINANCIAL HIGHLIGHTS — THREE MONTHS ENDED AUGUST 30, 2008

 

  •  

Net sales for the RF, Wireless & Power Division (“RFPD”) increased 14.9%, or $12.6 million, during the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008 primarily due to a major communications infrastructure project within our Asian operations. Net sales for the Electron Device Group (“EDG”) and Display Systems Group (“DSG”) decreased 4.0% and 4.3%, respectively, during the first quarter of fiscal 2009 as compared to the first quarter last year.

 

  •  

Consolidated gross margin percentage declined to 23.5% during the first quarter of fiscal 2009 compared to 25.2% during the first quarter last year primarily due to the lower gross margin related to the communications infrastructure project within our Asian operations. Gross margin for DSG increased to 25.3% during the first quarter of fiscal 2009 compared to 21.3% during the first quarter of fiscal 2008 reflecting an increased focus on profitable sales. Gross margin for EDG decreased to 30.5% during the first quarter of fiscal 2009 compared to 32.2% during the first quarter of fiscal 2008 due to shifts to lower margin products.

 

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  •  

Selling, general, and administrative expenses decreased to $28.2 million, or 20.3% of net sales, during the first quarter of fiscal 2009 compared to $30.0 million, or 23.1% of net sales, during the first quarter last year.

 

  •  

Operating income during the first quarter of fiscal 2009 was $4.5 million, up 67%, compared to operating income of $2.7 million during the first quarter of fiscal 2008.

CONTINUING FOCUS ON WORKING CAPITAL MANAGEMENT AND CASH FLOWS

Cash flows used in operating activities were $1.0 million during the first quarter of fiscal 2009, compared to cash flows provided by operating activities of $5.9 million during the first quarter of fiscal 2008.

“We spent $7.6 million for inventory, excluding the effects of foreign exchange, during the first quarter of fiscal 2009 to support the strong sales growth within the largest segment of our business. This was offset by a decrease in our accounts receivable and an increase in our accounts payable balances as of August 30, 2008, compared to our fiscal 2008 year end. We believe our continued focus on disciplined working capital management will result in decreased investments in working capital and improved cash flows for the remainder of fiscal 2009,” said Kathleen S. Dvorak, Executive Vice President and Chief Financial Officer.

OUTLOOK

“Our first quarter results reflect progress in many key areas of our business. While the global economy presents near-term challenges, we are taking appropriate actions to enable us to achieve our profit goals for 2009. Looking ahead, we believe that our continued focus on gross margin improvement as well as our company-wide cost reduction efforts will result in stronger financial and operational performance. We look forward to delivering solid results to all of our shareholders,” added Mr. Richardson.

CASH DIVIDEND

The Company today also announced that its Board of Directors voted to declare a $0.02 cash dividend per share to all holders of common stock and a $0.018 cash dividend per share to all holders of Class B common stock. The dividend will be payable on November 21, 2008, to all common stockholders of record on November 7, 2008. The Company currently has 14,865,370 outstanding shares of common stock and 3,048,258 outstanding shares of Class B common stock.

 

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CONFERENCE CALL INFORMATION

On Thursday, October 9, 2008, 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 2009 results. A question and answer session will be included as part of the call’s agenda. To listen to the call, please dial 800-688-0796 and enter passcode 47833084 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, 2008, for seven days. The telephone numbers for the replay are (USA) 888-286-8010 and (International) 617-801-6888; access code 94336648.

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 for the most recently ended fiscal year. 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 global provider of engineered solutions and a global distributor of electronic components to the radio frequency (“RF”), wireless and power conversion, electron device, and display systems markets. Utilizing its core engineering and manufacturing capabilities, the Company is committed to a strategy of providing specialized technical expertise and value-added products, or “engineered solutions,” in response to its customers’ needs. These solutions include products which it manufactures or modifies and products which are manufactured to the Company’s specifications by independent manufacturers under its own private labels. Additionally, the Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, and logistics for end products of its customers. More information is available online at www.rell.com.

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

 

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Richardson Electronics, Ltd.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

     Three Months Ended  
     August 30,
2008		     September 1,
2007		  

Statements of Operations

     

Net sales

    $ 138,947     $ 129,465  

Cost of sales

      106,228       96,827  
                

Gross profit

      32,719       32,638  

Selling, general, and administrative expenses

      28,184       29,966  

Loss on disposal of assets

      75       1  
                

Operating income

      4,460       2,671  
                

Other (income) expense:

     

Interest expense

      1,176       2,628  

Investment income

      (207 )     (371 )

Foreign exchange (gain) loss

      (998 )     444  

Other, net

      (76 )     47  
                

Total other (income) expense

      (105 )     2,748  
                

Income (loss) from continuing operations before income taxes

      4,565       (77 )

Income tax provision

      872       314  
                

Income (loss) from continuing operations

      3,693       (391 )

Income from discontinued operations, net of tax

      —         31  
                

Net income (loss)

    $ 3,693     $ (360 )
                

Net income (loss) per common share – basic:

     

Income (loss) from continuing operations

    $ 0.21     $ (0.02 )

Income from discontinued operations

      0.00       0.00  
                

Net income (loss) per common share – basic

    $ 0.21     $ (0.02 )
                

Net income (loss) per Class B common share – basic:

     

Income (loss) from continuing operations

    $ 0.19     $ (0.02 )

Income from discontinued operations

      0.00       0.00  
                

Net income (loss) per Class B common share – basic

    $ 0.19     $ (0.02 )
                

Net income (loss) per common share – diluted:

     

Income (loss) from continuing operations

    $ 0.20     $ (0.02 )

Income from discontinued operations

      0.00       0.00  
                

Net income (loss) per common share – diluted

    $ 0.20     $ (0.02 )
                

Net income (loss) per Class B common share – diluted:

     

Income (loss) from continuing operations

    $ 0.18     $ (0.02 )

Income from discontinued operations

      0.00       0.00  
                

Net income (loss) per Class B common share – diluted

    $ 0.18     $ (0.02 )
                

Weighted average number of shares:

     

Common shares - basic

      14,854       14,840  
                

Class B common shares - basic

      3,048       3,048  
                

Common shares - diluted

      18,981       14,840  
                

Class B common shares - diluted

      3,048       3,048  
                

Dividends per common share

    $ 0.020     $ 0.040  
                

Dividends per Class B common share

    $ 0.018     $ 0.036  
                

 

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Richardson Electronics, Ltd.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)

 

     August 30,
2008		     May 31,
2008		  

Assets

     

Current assets:

     

Cash and cash equivalents

    $ 37,067     $ 40,042  

Receivables, less allowance of $1,807 and $1,635

      105,805       109,520  

Inventories

      100,090       93,858  

Prepaid expenses

      5,761       4,300  

Deferred income taxes

      2,135       2,121  
                

Total current assets

      250,858       249,841  
                

Non-current assets:

     

Property, plant and equipment, net

      27,472       28,635  

Goodwill

      1,534       1,483  

Other intangible assets, net

      699       758  

Non-current deferred income taxes

      3,534       3,875  

Assets held for sale

      106       105  

Other non-current assets

      1,451       1,538  
                

Total non-current assets

      34,796       36,394  
                

Total assets

    $ 285,654     $ 286,235  
                

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable

    $ 62,038     $ 58,860  

Accrued liabilities

      20,109       21,818  

Current portion of long-term debt

      —         —    
                

Total current liabilities

      82,147       80,678  
                

Non-current liabilities:

     

Long-term debt, less current portion

      55,683       55,683  

Long-term income tax liabilities

      6,311       6,768  

Other non-current liabilities

      1,529       1,676  
                

Total non-current liabilities

      63,523       64,127  
                

Total liabilities

      145,670       144,805  
                

Commitments and contingencies

      —         —    

Stockholders’ equity

     

Common stock, $0.05 par value; issued 15,930 shares at August 30, 2008, and 15,929 shares at May 31, 2008

      797       797  

Class B common stock, convertible, $0.05 par value; issued 3,048 shares at August 30, 2008, and May 31, 2008

      152       152  

Preferred stock, $1.00 par value, no shares issued

      —         —    

Additional paid-in-capital

      119,838       119,735  

Common stock in treasury, at cost, 1,065 shares at August 30, 2008, and May 31, 2008

      (6,310 )     (6,310 )

Retained earnings

      14,439       11,098  

Accumulated other comprehensive income

      11,068       15,958  
                

Total stockholders’ equity

      139,984       141,430  
                

Total liabilities and stockholders’ equity

    $ 285,654     $ 286,235  
                

 

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Richardson Electronics, Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

     Three Months Ended  
     August 30,
2008		     September 1,
2007		  

Operating activities:

     

Net income (loss)

    $ 3,693     $ (360 )

Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:

     

Depreciation and amortization

      1,209       1,315  

Loss on disposal of assets

      75       1  

Write-off of deferred financing costs

      —         643  

Stock compensation expense

      98       98  

Deferred income taxes

      191       (778 )

Accounts receivable

      1,154       8,857  

Inventories

      (7,598 )     (6,563 )

Prepaid expenses

      (1,257 )     639  

Accounts payable

      3,849       8,686  

Accrued liabilities

      (1,646 )     (5,822 )

Other liabilities

      (99 )     (7 )

Other

      (632 )     (785 )
                

Net cash provided by (used in) operating activities

      (963 )     5,924  
                

Investing activities:

     

Capital expenditures

      (129 )     (1,578 )

Proceeds from sale of assets

      22       41  

Contingent purchase price consideration

      (53 )     —    

(Gain) loss on sale of investments

      (14 )     8  

Proceeds from sales of available-for-sale securities

      59       157  

Purchases of available-for-sale securities

      (59 )     (157 )
                

Net cash used in investing activities

      (174 )     (1,529 )
                

Financing activities:

     

Proceeds from borrowings

      10,300       45,800  

Payments on debt

      (10,300 )     (107,240 )

Restricted cash

      —         61,899  

Proceeds from issuance of common stock

      5       69  

Cash dividends

      (352 )     (702 )
                

Net cash used in financing activities

      (347 )     (174 )
                

Effect of exchange rate changes on cash and cash equivalents

      (1,491 )     124  
                

Increase (decrease) in cash and cash equivalents

      (2,975 )     4,345  

Cash and cash equivalents at beginning of period

      40,042       17,436  
                

Cash and cash equivalents at end of period

    $ 37,067     $ 21,781  
                

 

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Richardson Electronics, Ltd.

Net Sales and Gross Profit

For the First Quarter of Fiscal 2009 and 2008

(in thousands)

By Business Unit:

 

     Net Sales     Gross Profit  
     FY 2009     FY 2008    %
Change		     FY 2009     GP% of
Sales		     FY 2008    GP% of
Sales		  

First Quarter

                 

RF, Wireless & Power Division

    $ 96,872     $ 84,306    14.9 %   $ 20,906     21.6 %   $ 20,372    24.2 %

Electron Device Group

      25,051       26,085    (4.0 )%     7,629     30.5 %     8,412    32.2 %

Display Systems Group

      17,113       17,887    (4.3 )%     4,330     25.3 %     3,817    21.3 %

Corporate

      (89 )     1,187        (146 )       37   
                                    

Total

    $ 138,947     $ 129,465    7.3 %   $ 32,719     23.5 %   $ 32,638    25.2 %
                                    

Note: Corporate consists of freight and other non-specific net sales.

 

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