EX-99.1 5 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

 

For Immediate Release

 

    

Corporate Headquarters

40W267 Keslinger Road

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 RECORD FIRST QUARTER

FISCAL 2011 RESULTS AND DECLARES CASH DIVIDEND

First quarter sales growth of 25%

Earnings per share of $0.47

LaFox, IL, October 6, 2010: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported record sales and earnings for its first quarter ended August 28, 2010. The Company also declared its regular quarterly dividend.

Net sales for the first quarter of Fiscal 2011 were $137.1 million, up 25.3% from net sales of $109.5 million during the first quarter of last year. Operating income improved to $9.3 million or 6.8% of net sales for the first quarter of Fiscal 2011, compared to $3.5 million or 3.2% of net sales during last year’s first quarter.

“We are pleased to begin Fiscal 2011 on a strong note which includes record sales and earnings for our first quarter. Net sales growth included growth of over 25 percent from our RFPD business and over 46 percent growth from our EDG business. Also, our consolidated operating margin is at the highest level in the Company’s history,” said Edward J. Richardson, Chairman, Chief Executive Officer and President of Richardson Electronics, Ltd.

FINANCIAL SUMMARY — THREE MONTHS ENDED AUGUST 28, 2010

 

  •  

Net sales for the first quarter of fiscal 2011 were $137.1 million, up 25.3%, compared to net sales of $109.5 million during the first quarter of last year.

 

  •  

Gross margin as a percentage of net sales decreased to 23.8% during the first quarter of fiscal 2011 compared to 24.2% during the first quarter of last year.

 

  •  

SG&A expenses during the first quarter of Fiscal 2011 were $23.3 million, or 17.0% of net sales, compared to $22.9 million, or 21.0% of net sales, during the first quarter of last year.

 

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  •  

Operating income during the first quarter of fiscal 2011 was $9.3 million, or 6.8% of net sales, compared to $3.5 million, or 3.2% of net sales, for the first quarter last year.

 

  •  

Net income during the first quarter of fiscal 2011 was $8.4 million, or $0.47 per diluted common share, compared to net income of $1.9 million, or $0.11 per diluted common share, during the first quarter of last year.

CASH FLOWS AND REDUCED DEBT

Cash flows provided by operating activities were $0.4 million during the first quarter of Fiscal 2011, compared to cash flows used in operating activities of $2.2 million during the first quarter of Fiscal 2010. The Company ended the quarter in a net cash position of $10.0 million, reflecting cash of $32.0 million and total debt of $22.0 million.

“Our balance sheet is solid and we are continuing our focus on working capital management and operational excellence,” said Kathleen Dvorak, Executive Vice President and Chief Financial Officer.

OUTLOOK

On October 1, 2010, the Company announced the signing of a definitive agreement to sell its RF, Wireless and Power Division (“RFPD”) and certain other assets to Arrow Electronics, Inc. (NYSE: ARW) for $210 million in cash, subject to post-closing adjustments.

The transaction is subject to the approval of shareholders of Richardson Electronics, Ltd. as well as customary closing conditions and regulatory approvals. The companies expect the transaction to close in early January 2011.

“We continue to see growing demand in our business despite concern over the sustainability of the recovery. During the second quarter, RFPD will be reflected as a discontinued operation. As a result, we expect that sales for EDG and Canvys for the second quarter to be in the range of $35 to $40 million, representing more than 10 percent growth over prior year,” said Mr. Richardson.

CASH DIVIDEND

The Company also announced today 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 19, 2010, to all common stockholders of record on November 5, 2010. The Company currently has 14,697,341 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 7, 2010, 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 fiscal 2011 results. A question and answer session will be included as part of the call’s agenda. To listen to the call, please dial 866-800-8648 and enter passcode 68973186 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 7, 2010, for seven days. The telephone numbers for the replay are (USA) 888-286-8010 and (International) 617-801-6888; access code 64771075.

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 2010 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, LTD.

Richardson Electronics, Ltd. is a global provider of engineered solutions and a global distributor of electronic components to the radio frequency, wireless and power management, electron device, and display systems markets. Utilizing its core engineering and manufacturing capabilities, the Company’s strategy is to provide specialized technical expertise and value-add, or “engineered solutions.” 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 28,
2010		    August 29,
2009		  
Statements of Operations      
Net sales    $ 137,144    $ 109,492   

Cost of sales

      104,553      83,023   
               

Gross profit

      32,591      26,469   

Selling, general, and administrative expenses

      23,295      22,943   

Gain on disposal of assets

      —        (2 ) 
               

Operating income

      9,296      3,528   
               

Other (income) expense:

      

Interest expense

      234      1,145   

Investment income

      —        (33 ) 

Foreign exchange loss

      119      818   

Loss on retirement of short-term debt

      60      —     

Other, net

      9      (7 ) 
               

Total other expense

      422      1,923   
               

Income before income taxes

      8,874      1,605   

Income tax provision (benefit)

      498      (310 ) 
               

Net income

    $ 8,376    $ 1,915   
               

Net income per share - basic:

      

Common stock

    $ 0.48    $ 0.11   
               

Class B Common stock

    $ 0.43    $ 0.10   
               

Net income per share - diluted:

      

Common stock

    $ 0.47    $ 0.11   
               

Class B Common stock

    $ 0.43    $ 0.10   
               

Weighted average number of shares:

      

Common shares - basic

      14,679      14,859   
               

Class B common shares - basic

      3,048      3,048   
               

Common shares - diluted

      17,917      17,915   
               

Class B common shares - diluted

      3,048      3,048   
               

Dividends per common share

    $ 0.020    $ 0.020   
               

Dividends per Class B common share

    $ 0.018    $ 0.018   
               

 

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Richardson Electronics, Ltd.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)

 

     August 28,
2010		     May 29,
2010		  

Assets

     

Current assets:

     

Cash and cash equivalents

    $ 31,982      $ 29,038   

Accounts receivable, less allowance of $1,492 and $1,592

      102,037        98,691   

Inventories

      85,564        78,730   

Prepaid expenses

      4,758        4,514   

Deferred income taxes

      2,251        2,404   
                

Total current assets

      226,592        213,377   
                

Non-current assets:

     

Property, plant and equipment, net

      16,207        16,675   

Deferred financing costs, net

      —          60   

Non-current deferred income taxes

      3,790        3,571   

Other non-current assets

      319        1,132   
                

Total non-current assets

      20,316        21,438   
                

Total assets

    $ 246,908      $ 234,815   
                

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable

    $ 61,169      $ 61,616   

Accrued liabilities

      18,732        18,807   

Short-term debt

      22,000        19,517   
                

Total current liabilities

      101,901        99,940   
                

Non-current liabilities

     

Long-term income tax liabilities

      3,417        3,475   

Other non-current liabilities

      1,369        1,537   
                

Total non-current liabilities

      4,786        5,012   
                

Total liabilities

      106,687        104,952   
                

Commitments and contingencies

      —          —     

Stockholders’ equity

     

Common stock, $0.05 par value; issued 16,051 shares at August 28, 2010, and 16,029 shares at May 29, 2010

      803        802   

Class B common stock, convertible, $0.05 par value; issued 3,048 shares at August 28, 2010, and at May 29, 2010

      152        152   

Preferred stock, $1.00 par value, no shares issued

      —          —     

Additional paid-in-capital

      121,312        120,998   

Common stock in treasury, at cost, 1,355 shares at August 28, 2010, and at May 29, 2010

      (8,503 )      (8,503 ) 

Retained earnings

      20,953        12,925   

Accumulated other comprehensive income

      5,504        3,489   
                

Total stockholders’ equity

      140,221        129,863   
                

Total liabilities and stockholders’ equity

    $ 246,908      $ 234,815   
                

 

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Richardson Electronics, Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

     Three Months Ended  
     August 28,
2010		     August 29,
2009		  

Operating activities:

     

Net income

    $ 8,376      $ 1,915   

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

     

Depreciation and amortization

      895        1,064   

Loss on retirement of short-term debt

      60        —     

Gain on disposal of assets

      —          (2 ) 

Stock compensation expense

      148        149   

Deferred income taxes

      54        (176 ) 

Accounts receivable

      (1,676 )      5,825   

Inventories

      (6,543 )      (1,820 ) 

Prepaid expenses

      (842 )      (1,676 ) 

Accounts payable

      (710 )      (7,743 ) 

Accrued liabilities

      259        355   

Other

      420        (91 ) 
                

Net cash provided by (used in) operating activities

      441        (2,200 ) 
                

Investing activities:

     

Capital expenditures

      (399 )      (280 ) 

(Gain) loss on sale of investments

      4        (17 ) 

Market value adjustments

      3        —     

Proceeds from sales of available-for-sale securities

      10        39   

Purchases of available-for-sale securities

      (10 )      (39 ) 
                

Net cash used in investing activities

      (392 )      (297 ) 
                

Financing activities:

     

Proceeds from borrowings

      62,300        10,200   

Payments on debt

      (40,300 )      (10,200 ) 

Payments on retirement of short-term debt

      (19,517 )      —     

Proceeds from issuance of common stock

      164        5   

Cash dividends paid

      (348 )      (352 ) 
                

Net cash provided by (used in) financing activities

      2,299        (347 ) 
                

Effect of exchange rate changes on cash and cash equivalents

      596        752   
                

Increase (decrease) in cash and cash equivalents

      2,944        (2,092 ) 

Cash and cash equivalents at beginning of period

      29,038        43,887   
                

Cash and cash equivalents at end of period

    $ 31,982      $ 41,795   
                

 

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Richardson Electronics, Ltd.

Net Sales and Gross Profit

For the First Quarter of Fiscal 2011 and Fiscal 2010

(in thousands)

By Sales Business Unit:

 

     Net Sales     Gross Profit  
               %          % of          % of  
First Quarter    FY 2011    FY 2010    Change     FY 2011    Net Sales     FY 2010    Net Sales  

RFPD

    $ 99,634    $ 79,478    25.4 %    $ 21,201    21.3 %    $ 17,402    21.9 % 

EDG

      27,493      18,796    46.3 %      9,055    32.9 %      6,267    33.3 % 

Canvys

      10,017      11,218    (10.7 %)      2,335    23.3 %      2,800    25.0 % 
                                  

Total

    $ 137,144    $ 109,492    25.3 %    $ 32,591    23.8 %    $ 26,469    24.2 % 
                                  

 

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