8-K

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 1, 2011

RICHARDSON ELECTRONICS, LTD.

(Exact name of registrant as specified in charter)

Delaware	0-12906	36-2096643
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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 2.01 Completion of Acquisition or Disposition of Assets.

As previously reported, on October 1, 2010, Richardson Electronics, Ltd., a Delaware corporation (the “Company”), certain subsidiaries of the Company (collectively with the Company, the “Sellers”), and Arrow Electronics, Inc., a New York corporation (“Arrow”) entered into an Acquisition Agreement (the “Acquisition Agreement”). Pursuant to the Acquisition Agreement, Arrow agreed to acquire all of the assets primarily used or held for use in, and certain liabilities of, the Company’s RF, Wireless & Power Division (“RFPD”), as well as certain other Company assets, including its information technology assets (the “Transaction”). On March 1, 2011, the Company and Arrow closed the Transaction. The total consideration paid by Arrow at the closing of the Transaction was $238.8 million which included an estimated pre-closing working capital adjustment. The final purchase price is subject to a post-closing working capital adjustment.

Item 8.01 Other Events.

On March 1, 2011, the Company issued a press release announcing the closing of the Transaction. A copy of the press release is furnished with this report as Exhibit 99.1 and is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The following pro forma financial statements giving effect to the disposition of RFPD pursuant to the Agreement are attached hereto as Exhibit 99.2 and incorporated by reference herein:

(i) Unaudited Pro Forma Condensed Consolidated Balance Sheet as of November 27, 2010

(ii) Unaudited Pro Forma Condensed Consolidated Income Statement for the fiscal year ended May 29, 2010

(d) Exhibits

99.1 Press Release regarding the closing of the sale of RFPD, dated March 1, 2011.

99.2 Unaudited Pro Forma Condensed Consolidated Financial Statements for Richardson Electronics, Ltd.

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 7, 2011	By:	/s/ Kathleen S. Dvorak
	Name:	Kathleen S. Dvorak
	Title:	Chief Financial Officer

EXHIBIT INDEX

99.1	Press Release regarding the closing of the sale of RFPD, dated March 1, 2011.
99.2	Unaudited Pro Forma Condensed Consolidated Financial Information for Richardson Electronics, Ltd.

EX-99.1

Exhibit 99.1

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 COMPLETES THE SALE OF ITS

RF, WIRELESS AND POWER DIVISION

TO ARROW ELECTRONICS, INC.

LaFox, IL, March 1, 2011 – Richardson Electronics, Ltd. (NASDAQ: RELL) today announced that it has completed the sale of its RF, Wireless and Power Division (RFPD) and certain other assets to Arrow Electronics, Inc. (NYSE: ARW) for $238.8 million in cash, subject to a post-closing working capital adjustment.

RFPD is a leading global provider of engineered solutions and a global distributor of electronic components to the RF and wireless communications market and the industrial power conversion market. RFPD designs, manufactures and distributes discrete devices, components, and assemblies used in RF and wireless infrastructure communications networks, digital broadcasting, defense applications and power conversion. Revenues for RFPD were $356 million in fiscal year 2010.

“We are pleased to have completed the sale of our RFPD division to Arrow. This transaction provides an excellent return on our investment. We will now focus on realigning our cost structure to fit the remaining businesses while we begin executing our growth strategy,” said Edward J. Richardson, Chairman and CEO of Richardson Electronics, Ltd.

ABOUT RICHARDSON ELECTRONICS, LTD.

Richardson Electronics, Ltd. is a global provider of engineered solutions and a global distributor of electronic components to the 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 Select Market under the ticker symbol RELL.

EX-99.2

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As previously reported on October 1, 2010, Richardson Electronics, Ltd. (the “Company,” “we,” “our”), and Arrow Electronics, Inc. (“Arrow”) entered into an Acquisition Agreement (the “Acquisition Agreement”). Pursuant to the Acquisition Agreement, Arrow agreed to acquire all of the assets primarily used or held for use in, and certain liabilities of, the Company’s RF, Wireless & Power Division (“RFPD”), as well as certain other Company assets, including its information technology assets (the “Transaction”).

For the quarterly period ended November 27, 2010, the Company reported RFPD as a discontinued operation in the unaudited condensed consolidated balance sheet as of November 27, 2010, and the unaudited condensed consolidated statements of income for the three and six months ended November 27, 2010, and the consolidated statements of income for the three and six months ended November 28, 2009.

On March 1, 2011, the Company and Arrow closed the Transaction. The total consideration paid by Arrow on the closing date was $238.8 million which included an estimated pre-closing working capital adjustment. The final purchase price is subject to a post-closing working capital adjustment.

The following unaudited condensed consolidated financial statements are presented to illustrate the effects of the Transaction. The unaudited pro forma condensed consolidated balance sheet as of November 27, 2010, illustrates the estimated effects of the Transaction as if the sale had occurred on May 29, 2010, and includes the retention of net proceeds and an adjustment to retained earnings for the estimated gain on the sale of the Transaction. The unaudited pro forma condensed consolidated statement of income for the fiscal year ended May 29, 2010, illustrate the estimated effects of the Transaction as if the Transaction took place on May 30, 2009, the last day of our fiscal year 2009.

The unaudited pro forma condensed consolidated financial statements presented are for informational purposes only and do not purport to present what our results would have been had the Transaction actually occurred on the dates presented or to project our results of operations or financial position for any future period. The pro forma financial statements are based upon currently available information, preliminary estimates, and certain assumptions that are believed to be reasonable and represent all material information that is necessary to fairly present the pro forma financial statements.

The unaudited pro forma condensed consolidated financial statements, including the notes thereto, should be read in conjunction with: (i) our audited consolidated financial statements and the notes thereto for the year ended May 29, 2010, and (ii) our unaudited consolidated financial statements and the notes thereto for the three and six months ended November 27, 2010.

Richardson Electronics, Ltd.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

(in thousands)

	Q2 FY 2011
	As of November 27, 2010
	As Reported			Pro Forma Adjustments			Notes		Pro forma
Assets
Current Assets:
Cash and cash equivalents	$	33,033		$	197,457			(a)	$	230,490
Receivables		22,008			—					22,008
Inventories		26,491			—					26,491
Prepaid expenses		1,388			—					1,388
Deferred income taxes		346			—					346
Discontinued Assets		173,168			(173,168	)		(b)		—
Total current assets		256,434			24,289					280,723
Non-current assets:
Property, plant and equipment, net		5,752			—					5,752
Non-Current deferred income taxes		1,550			—					1,550
Other non-current assets		358			—					358
Total non-current assets		7,660			—					7,660
Total assets	$	264,094		$	24,289				$	288,383
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	18,750		$	—				$	18,750
Accrued liabilities		10,864			—					10,864
Current portion of long-term debt		18,000			—					18,000
Discontinued Liabilities		60,990			(60,990	)		(c)		—
Total Current Liabilities		108,604			(60,990	)				47,614
Non-current liabilities:
Long-term income tax liabilities		346			—					346
Other non-current Liabilities		494			—					494
Discontinued operations—non-current liabilities		3,265			(3,265	)		(d)		—
Total Non-Current Liabilities		4,105			(3,265	)				840
Total liabilities	$	112,709		$	(64,255	)			$	48,454
Stockholders’ Equity
Common stock		814								814
Class B common stock		152								152
Additional paid-in-capital		123,065								123,065
Common stock in treasury		(8,665	)							(8,665	)
Retained earnings (accumulated deficit)		28,061			88,544			(e)		116,605
Accumulated other comprehensive income		7,958								7,958
Total stockholders’ equity	$	151,385		$	88,544				$	239,929
Total liabilities and stockholders’ equity	$	264,094		$	24,289				$	288,383

Richardson Electronics, Ltd.

Unaudited As Reported and Pro Forma Condensed Consolidated Income Statements

(in thousands, except per share amounts)

	YTD Q2 FY 2011			FY 2010
	For the six months ended November 27, 2010			For the twelve months ended May 29, 2010
	As Reported			As Reported			Pro Forma Adjustments			Notes	Pro Forma
Net sales	$	78,490		$	491,847		$	356,475		(f)	$	135,372
Cost of sales		55,304			373,836			279,748		(f)		94,088
Gross margin		23,186			118,011			76,727				41,284
% of net sales		29.5	%		24.0	%		21.5	%			30.5	%
Selling, general, and administrative expenses		21,743			95,841			52,241		(f)		43,600
% of net sales		27.7	%		19.5	%		14.7	%			32.2	%
(Gain) loss on disposal of assets		2			19			(1	)			20
Operating Income (Loss)		1,441			22,151			24,487				(2,336	)
% of net sales		1.8	%		4.5	%		6.9	%			-1.7	%
Other (income) expense
Interest expense		106			3,973			2,834		(g)		1,139
Investment income		—			(113	)		(81	)	(g)		(32	)
Foreign exchange loss		316			1,116			—				1,116
Other, net		(10	)		73			—				73
Total		412			5,049			2,753				2,296
Income (loss) before taxes		1,029			17,102			21,734				(4,632	)
Income tax provision (benefit)		408			(166	)		214		(h)		(380	)
Income (loss) from continuing operations	$	621		$	17,268		$	21,520			$	(4,252	)
Income (loss) from continuing operations:
Per common share - basic	$	0.04		$	0.99		$	1.23			$	(0.24	)
Per common share - diluted	$	0.03		$	0.96		$	1.20			$	(0.24	)
Per Class B common shares - basic	$	0.03		$	0.89		$	1.11			$	(0.22	)
Per Class B common shares - diluted	$	0.03		$	0.88		$	1.11			$	(0.23	)
Weighted average number of shares:
Common shares - basic		14,725			14,766			14,766				14,766
Common shares - diluted		18,010			18,915			18,915				14,766
Class B common shares - basic		3,038			3,048			3,048				3,048
Class B common shares - diluted		3,038			3,048			3,048				3,048

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

1. Basis of Presentation

As previously reported, on October 1, 2010, Richardson Electronics, Ltd. (the “Company,” “we,” “our”), and Arrow Electronics, Inc. (“Arrow”) entered into an Acquisition Agreement (the “Acquisition Agreement”). Pursuant to the Acquisition Agreement, Arrow agreed to acquire all of the assets primarily used or held for use in, and certain liabilities of, the Company’s RF, Wireless & Power Division (“RFPD”), as well as certain other Company assets, including its information technology assets (the “Transaction”).

On March 1, 2011, the Company and Arrow closed the Transaction. The total consideration paid by Arrow on the closing date was $238.8 million which included an estimated pre-closing working capital adjustment. The final purchase price is subject to a post-closing working capital adjustment.

The following unaudited condensed consolidated financial statements are presented to illustrate the effects of the Transaction. The unaudited pro forma condensed consolidated balance sheet as of November 27, 2010, illustrates the estimated effects of the Transaction as if the sale had occurred on May 29, 2010, and includes the retention of net proceeds and an adjustment to retained earnings for the estimated gain on the sale of the Transaction. The unaudited pro forma condensed consolidated statement of income for the fiscal year ended May 29, 2010, illustrate the estimated effects of the Transaction as if the Transaction took place on May 30, 2009, the last day of our fiscal year 2009.

The unaudited pro forma condensed consolidated income statements do not reflect any of the following:

Interest Income

We have not yet determined how we will use the proceeds. We may use them for a variety of purposes, including any or all of the following: bolt-on acquisitions, repurchases of outstanding shares of common stock, dividends to stockholders, and general corporate purposes.

We have not included any interest income in the unaudited pro forma condensed consolidated statements of income for the fiscal year ended May 29, 2010. Assuming we invest the cash proceeds, estimated interest income for the fiscal year ended May 29, 2010, would have been approximately $1.9 million. The interest rate assumed is 0.9% and was based on the average interest rates for the one year Certificate of Deposit Index.

Material non-recurring charges or credits

We expect to incur severance charges relating to the realignment of our cost structure after the consummation of the Transaction which we believe will be material to our consolidated financial statements. We are not yet able to estimate the severance expense and related tax effects and have therefore excluded them from our unaudited pro forma condensed consolidated income statement.

2. Notes to Unaudited Pro Forma Adjustments

(a) To record the net proceeds from the Transaction. This includes purchase price, estimated pre-closing working capital adjustment, estimated taxes and other expenses directly related to the Transaction which includes legal fees and other professional fees.

(Amounts in 000’s)

	Q2 FY 11 As of 11/27/2010
Purchase Price	$	211,788
Working Capital Adjustment		16,567
Total Consideration	$	228,355
Transaction Costs		3,000
Net Proceeds (before tax)	$	225,355
Taxes on Gain from Sale **		27,898
Net Proceeds (after tax)	$	197,457

** See Footnote (e)

(b) This adjustment includes all assets both current and non-current that are either included in the Transaction or become discontinued as a result of the Transaction.

(c) This adjustment includes all current liabilities that are either included in the Transaction or become discontinued as a result of the Transaction.

(d) This adjustment includes all non-current liabilities that become discontinued as a result of the Transaction.

(e) To record adjustments to Retained Earnings to reflect the gain on sale, and the elimination of discontinued assets and liabilities.

(Amounts in 000’s)

	Q2 FY 11 As of 11/27/2010
Purchase Price	$	211,788
Working Capital Adjustment		16,567
Transaction Costs		3,000
Net Proceeds (before tax)	$	225,355
RFPD Net Assets:
Receivables		85,558
Inventory		62,050
Property, Plant, and Equipment		8,457
Other assets		1,651
Payables		47,641
Net Assets	$	110,075
Gain on Sale	$	115,280
Taxes on Gain from Sale **		27,898
Net Gain on Sale	$	87,382
	Q2 FY 11 As of 11/27/2010
Net gain on sale	$	87,382
Discontinued assets		(15,452	)
Discontinued liabilities		16,614
Total Pro Forma adjustment to Retained Earnings	$	88,544

** The estimated effective tax rate on the gain was calculated using the federal statutory rate of 35% and the state rate of 1.8%, adjusted for the following items: foreign taxes at other rates (-2.6%); net decrease in valuation allowance from the realization of deferred tax assets (-9.4%); and other miscellaneous benefits (-0.6%). After these adjustments, the overall effective tax rate on the gain was estimated to be approximately 25%.

(f) To record adjustments that eliminate revenue, cost of sales, and selling, general and administrative costs (SG&A) that relate to RFPD. This includes support function personnel costs such as information technology, finance, and supply chain that transfer with the Transaction. This adjustment also includes costs that become discontinued as a result of the Transaction.

(g) To record an adjustment to eliminate interest expense allocated to RFPD based on the net assets of RFPD to be sold in connection with the Transaction.

(h) To record an adjustment to eliminate the tax provision resulting from the Transaction. The tax rate was calculated using the federal statutory rate, adjusted for state income taxes, foreign taxes at other rates, and adjustments to our valuation allowance for deferred tax assets. After these adjustments, the pro forma effective tax rate from income from continuing operations was 8.2% for the year ended May 29, 2010.