EX-99.1 2 rell-ex991_162.htm EX-99.1 rell-ex991_162.htm

Exhibit 99.1

Press Release

For Immediate Release

 

For Details Contact:

 

40W267 Keslinger Road

Edward J. Richardson

Robert J. Ben

PO BOX 393

Chairman and CEO

EVP & CFO

LaFox, IL 60147-0393 USA

Phone: (630) 208-2205

(630) 208-2203

(630) 208-2200 | Fax: (630) 208-2550

 

 

RICHARDSON ELECTRONICS REPORTS THIRD QUARTER FISCAL 2020 OPERATING PROFIT AND DECLARES QUARTERLY CASH DIVIDEND

 

Canvys, PMG and CT Tube Revenues Grow Versus Q3 FY19

Q3 FY20 Highlights

 

Net sales of $38.2 million were down 2.0% from last year’s third quarter, primarily a result of lower sales in PMT from softness in the power grid tube business and the effect of the coronavirus on our China shipments. In addition, Healthcare sales were down overall due to continued lower equipment sales in Latin America.

 

Sales increased for PMG and Semiconductor Wafer Fabrication equipment products. Canvys sales increased by 3.5% and Healthcare CT tube revenues were up by 134.7%.

 

Gross margin increased to 33.1% of net sales versus 31.5% of net sales for the prior year’s third quarter due to product mix and manufacturing efficiencies.

 

Operating expenses decreased $0.4 million to $12.7 million compared to prior year.

 

Operating income was $11,000 compared to an operating loss of $0.8 million in last year’s third quarter.

 

Cash and investments were $43.9 million at February 29, 2020 versus $46.1 million at the end of the second quarter of this fiscal year.

 

Manufacturing and distribution operations considered “essential businesses” under current coronavirus shelter-in-place directives; minimal disruption to manufacturing and distribution capacity.

 

LaFox, IL, APRIL 8, 2020: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its third quarter ended February 29, 2020. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend. 

Third Quarter Results

 

Net sales for the third quarter of fiscal 2020 decreased 2.0% to $38.2 million compared to net sales of $39.0 million in the prior year’s third quarter. Canvys sales increased by $0.3 million or 3.5% due to higher demand in its North American market. Sales of semiconductor wafer fab equipment specialty products also increased from last year’s third quarter. Although PMT sales benefited from higher sales of power conversion and RF and microwave components, overall sales for PMT decreased $0.7 million or 2.5%. This was primarily due to economic softness in the power grid tube market and lower sales in China

 


 

due to the coronavirus. We experienced delays in shipments to customers in China during mandatory shelter in place orders as well as delayed receipt of goods originating in China and destined for other locations.  Richardson Healthcare sales decreased $0.2 million or 11.9% as a result of lower sales of equipment in Latin America and non-core diagnostic imaging parts, partially offset by higher sales of our ALTA750 TM CT tube.

 

Gross margin increased to $12.7 million, or 33.1% of net sales during the third quarter of fiscal 2020, compared to $12.3 million, or 31.5% of net sales during the third quarter of fiscal 2019. Margin increased as a percent of net sales primarily due to a favorable product mix and improved manufacturing efficiencies in both PMT and Richardson Healthcare.

 

Operating expenses were $12.7 million for the third quarter of fiscal 2020 compared to $13.1 million in the third quarter of fiscal 2019. The decrease in operating expenses resulted from lower severance, legal and professional services expenses, partially offset by higher research and development expenses for Richardson Healthcare as we invest in additional CT x-ray tube types.  

 

As a result, the Company reported an operating income of $11,000 for the third quarter of fiscal 2020 compared to an operating loss of $0.8 million in the prior year’s third quarter. Other income for the third quarter of fiscal 2020, including interest income and foreign exchange, was $0.1 million, compared to other income of less than $0.1 million in the third quarter of fiscal 2019.

 

The income tax provision of $0.2 million for the third quarter of fiscal 2020 reflected a provision for foreign income taxes, which was lower than the prior year’s third quarter provision and no U.S. tax benefit due to the valuation allowance recorded against the net operating loss.  

Net loss for the third quarter of fiscal 2020 was $0.1 million compared to a net loss of $1.1 million in the third quarter of fiscal 2019.

 

“Despite the challenges caused by the coronavirus, we are pleased to see continued growth in Canvys and the power and microwave technologies group.  We also saw an increase in ALTA750 TM CT tube sales,” said Edward J. Richardson, Chairman, Chief Executive Officer, and President. “Given the fluid situation in the global economy, we will continue to protect our cash and closely manage operating expenses and cash flow in line with economic conditions. Currently, our manufacturing and distribution operations in LaFox, Illinois and our display operations in Marlborough, Massachusetts are considered ‘Essential Businesses’ under the states’ Shelter in Place directives. As such, we continue to operate while respecting guidelines for social distancing,” he concluded.

 

FINANCIAL SUMMARY – NINE MONTHS ENDED FEBRUARY 29, 2020

 

 

Net sales for the first nine months of fiscal 2020 were $118.5 million, a decrease of 4.8%, compared to net sales of $124.5 million during the first nine months of fiscal 2019. Sales decreased by $7.7 million or 7.9% for PMT, but increased by $1.7 million or 8.3% for Canvys. Sales for Richardson Healthcare were the same as last year.

 

Gross margin decreased to $38.3 million during the first nine months of fiscal 2020, compared to $39.2 million during the first nine months of fiscal 2019. As a percentage of net sales, gross margin increased to 32.3% of net sales during the first nine months of fiscal 2020, compared to 31.5% of net sales during the first nine months of fiscal 2019, primarily as a result of a favorable product mix in Richardson Healthcare and improved manufacturing efficiencies for both PMT and Healthcare.

 

Operating expenses decreased to $38.7 million for the first nine months of fiscal 2020, compared to $39.6 million for the first nine months of fiscal 2019. The decrease was due to lower severance, legal and professional services expenses, partially offset by higher research and development expenses for Richardson Healthcare in line with ongoing CT x-ray tube development.

 


 

 

Operating loss during the first nine months of fiscal 2020 was $0.4 million, the same as during the first nine months of fiscal 2019.

 

Other income for the first nine months of fiscal 2020, including interest income and foreign exchange, was $0.2 million, the same as in the first nine months of fiscal 2019.

 

The income tax provision of $0.4 million during the first nine months of fiscal 2020 reflected a provision for foreign income taxes, which was lower than in the prior year’s first nine months and no U.S. tax benefit due to the valuation allowance recorded against the net operating loss.

 

Net loss for the first nine months of fiscal 2020 was $0.6 million, compared to a net loss of $1.0 million during the first nine months of fiscal 2019.

CASH DIVIDEND AND POSITION

 

The Company also announced today that its Board of Directors declared a $0.06 quarterly dividend per share to holders of common stock and a $0.054 cash dividend per share to holders of Class B common stock. The dividend will be payable on May 27, 2020, to common stockholders of record as of May 6, 2020.

 

Cash and investments at the end of the third quarter of fiscal 2020 were $43.9 million compared to $46.1 million at the end of the second quarter of fiscal 2020 and $49.4 million at the end of the third quarter of fiscal 2019. The Company spent $0.4 million during the quarter on capital expenditures primarily related to our IT System, Facilities and LaFox manufacturing business versus $1.0 million during the third quarter of fiscal 2019.

 

CONFERENCE CALL INFORMATION          

 

On Thursday, April 9, 2020, at 9:00 a.m. CDT, Edward J. Richardson, Chairman and Chief Executive Officer, and Robert J. Ben, Chief Financial Officer, will host a conference call to discuss the Company’s third quarter fiscal year 2020 results.  A question and answer session will be included as part of the call’s agenda.

 

Participant Instructions

 

To listen to the call, please dial (USA) (866) 800-8648 or (International) (617) 614-2702 and enter passcode 95925021 approximately five minutes prior to the start of the call.  A replay of the call will be available beginning at 10:00 a.m. CDT on April 10, 2020, for seven days.  The telephone numbers for the replay are (USA) (888) 286-8010 and (International) (617) 801-6888; passcode 69273455.

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 filed on August 5, 2019 and other reports we file with the Securities and Exchange Commission. 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 leading global provider of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; high value flat panel detector solutions, replacement parts, tubes and service training for diagnostic imaging

 


 

equipment; and customized display solutions. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. The Company’s strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair through its global infrastructure. More information is available at www.rell.com.

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

 


 

Richardson Electronics, Ltd. 

Consolidated Balance Sheets

(in thousands, except per share amounts)

 

Unaudited

 

 

Audited

 

 

 

February 29, 2020

 

 

June 1, 2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

30,875

 

 

$

42,019

 

Accounts receivable, less allowance of $194 and $339, respectively

 

 

23,074

 

 

 

24,296

 

Inventories, net

 

 

56,677

 

 

 

53,232

 

Prepaid expenses and other assets

 

 

2,910

 

 

 

3,067

 

Investments - current

 

 

13,000

 

 

 

8,000

 

Total current assets

 

 

126,536

 

 

 

130,614

 

Non-current assets:

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

17,999

 

 

 

19,111

 

Intangible assets, net

 

 

2,572

 

 

 

2,763

 

Lease ROU asset

 

 

3,727

 

 

 

 

Non-current deferred income taxes

 

 

574

 

 

 

529

 

Total non-current assets

 

 

24,872

 

 

 

22,403

 

Total assets

 

$

151,408

 

 

$

153,017

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

14,675

 

 

$

16,943

 

Accrued liabilities

 

 

11,002

 

 

 

11,273

 

Lease liability current

 

 

1,566

 

 

 

 

Total current liabilities

 

 

27,243

 

 

 

28,216

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Non-current deferred income tax liabilities

 

 

314

 

 

 

212

 

Lease liability non-current

 

 

2,204

 

 

 

 

Other non-current liabilities

 

 

742

 

 

 

832

 

Total non-current liabilities

 

 

3,260

 

 

 

1,044

 

Total liabilities

 

 

30,503

 

 

 

29,260

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Common stock, $0.05 par value; issued and outstanding 11,038 shares at

   February 29, 2020 and 10,957 shares at June 1, 2019

 

 

552

 

 

 

547

 

Class B common stock, convertible, $0.05 par value; issued and outstanding

   2,097 shares at February 29, 2020 and June 1, 2019

 

 

105

 

 

 

105

 

Preferred stock, $1.00 par value, no shares issued

 

 

 

 

 

 

Additional paid-in-capital

 

 

61,593

 

 

 

61,012

 

Common stock in treasury, at cost, no shares at February 29, 2020 and

   June 1, 2019

 

 

 

 

 

 

Retained earnings

 

 

56,819

 

 

 

59,703

 

Accumulated other comprehensive income

 

 

1,836

 

 

 

2,390

 

Total stockholders’ equity

 

 

120,905

 

 

 

123,757

 

Total liabilities and stockholders’ equity

 

$

151,408

 

 

$

153,017

 

 

 


 

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive Loss

(in thousands, except per share amounts)

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

February 29, 2020

 

 

March 2, 2019

 

 

February 29, 2020

 

 

March 2, 2019

 

Statements of Comprehensive Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

38,249

 

 

$

39,018

 

 

$

118,536

 

 

$

124,489

 

Cost of sales

 

 

25,579

 

 

 

26,719

 

 

 

80,235

 

 

 

85,266

 

Gross profit

 

 

12,670

 

 

 

12,299

 

 

 

38,301

 

 

 

39,223

 

Selling, general and administrative expenses

 

 

12,659

 

 

 

13,097

 

 

 

38,667

 

 

 

39,621

 

Loss on disposal of assets

 

 

 

 

 

 

 

 

1

 

 

 

 

Operating income (loss)

 

 

11

 

 

 

(798

)

 

 

(367

)

 

 

(398

)

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment/interest income

 

 

(97

)

 

 

(155

)

 

 

(340

)

 

 

(402

)

Foreign exchange loss

 

 

28

 

 

 

130

 

 

 

117

 

 

 

205

 

Other, net

 

 

(8

)

 

 

 

 

 

(24

)

 

 

(4

)

Total other income

 

 

(77

)

 

 

(25

)

 

 

(247

)

 

 

(201

)

Income (loss)  before income taxes

 

 

88

 

 

 

(773

)

 

 

(120

)

 

 

(197

)

Income tax provision

 

 

181

 

 

 

305

 

 

 

438

 

 

 

754

 

Net loss

 

 

(93

)

 

 

(1,078

)

 

 

(558

)

 

 

(951

)

Foreign currency translation (loss) gain, net of tax

 

 

(60

)

 

 

541

 

 

 

(554

)

 

 

(1,240

)

Comprehensive loss

 

$

(153

)

 

$

(537

)

 

$

(1,112

)

 

$

(2,191

)

Net loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares - Basic

 

$

(0.01

)

 

$

(0.08

)

 

$

(0.04

)

 

$

(0.07

)

Class B common shares - Basic

 

$

(0.01

)

 

$

(0.08

)

 

$

(0.04

)

 

$

(0.07

)

Common shares - Diluted

 

$

(0.01

)

 

$

(0.08

)

 

$

(0.04

)

 

$

(0.07

)

Class B common shares - Diluted

 

$

(0.01

)

 

$

(0.08

)

 

$

(0.04

)

 

$

(0.07

)

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares – Basic

 

 

11,038

 

 

 

10,953

 

 

 

11,022

 

 

 

10,911

 

Class B common shares – Basic

 

 

2,097

 

 

 

2,097

 

 

 

2,097

 

 

 

2,108

 

Common shares – Diluted

 

 

11,038

 

 

 

10,953

 

 

 

11,022

 

 

 

10,911

 

Class B common shares – Diluted

 

 

2,097

 

 

 

2,097

 

 

 

2,097

 

 

 

2,108

 

Dividends per common share

 

$

0.060

 

 

$

0.060

 

 

$

0.180

 

 

$

0.180

 

Dividends per Class B common share

 

$

0.054

 

 

$

0.054

 

 

$

0.162

 

 

$

0.162

 

 

 


 

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

February 29, 2020

 

 

March 2, 2019

 

 

February 29, 2020

 

 

March 2, 2019

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(93

)

 

$

(1,078

)

 

$

(558

)

 

$

(951

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

856

 

 

 

794

 

 

 

2,514

 

 

 

2,350

 

Inventory provisions

 

 

221

 

 

 

203

 

 

 

502

 

 

 

568

 

Loss on disposal of assets

 

 

 

 

 

 

 

 

1

 

 

 

 

Share-based compensation expense

 

 

157

 

 

 

176

 

 

 

527

 

 

 

571

 

Deferred income taxes

 

 

76

 

 

 

113

 

 

 

51

 

 

 

268

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(760

)

 

 

(478

)

 

 

1,066

 

 

 

(576

)

Inventories

 

 

(754

)

 

 

(1,484

)

 

 

(4,173

)

 

 

(3,315

)

Prepaid expenses and other assets

 

 

(56

)

 

 

614

 

 

 

146

 

 

 

332

 

Accounts payable

 

 

(726

)

 

 

(1,561

)

 

 

(2,091

)

 

 

(5,442

)

Accrued liabilities

 

 

152

 

 

 

309

 

 

 

(238

)

 

 

880

 

Other

 

 

2

 

 

 

(86

)

 

 

(107

)

 

 

88

 

Net cash used in operating activities

 

 

(925

)

 

 

(2,478

)

 

 

(2,360

)

 

 

(5,227

)

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(430

)

 

 

(974

)

 

 

(1,244

)

 

 

(3,166

)

Proceeds from maturity of investments

 

 

 

 

 

2,300

 

 

 

8,000

 

 

 

2,300

 

Purchases of investments

 

 

 

 

 

(12,500

)

 

 

(13,000

)

 

 

(17,800

)

Net cash used in investing activities

 

 

(430

)

 

 

(11,174

)

 

 

(6,244

)

 

 

(18,666

)

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

 

16

 

 

 

59

 

 

 

219

 

Cash dividends paid

 

 

(776

)

 

 

(771

)

 

 

(2,326

)

 

 

(2,305

)

Payment of financing lease principal

 

 

(46

)

 

 

 

 

 

(121

)

 

 

 

Net cash used in financing activities

 

 

(822

)

 

 

(755

)

 

 

(2,388

)

 

 

(2,086

)

Effect of exchange rate changes on cash and cash

   equivalents

 

 

(2

)

 

 

417

 

 

 

(152

)

 

 

(617

)

Decrease in cash and cash equivalents

 

 

(2,179

)

 

 

(13,990

)

 

 

(11,144

)

 

 

(26,596

)

Cash and cash equivalents at beginning of period

 

 

33,054

 

 

 

47,859

 

 

 

42,019

 

 

 

60,465

 

Cash and cash equivalents at end of period

 

$

30,875

 

 

$

33,869

 

 

$

30,875

 

 

$

33,869

 

 

 

 

 

 

 

 


 

 

Richardson Electronics, Ltd.

Net Sales and Gross Profit

For the Third Quarter and First Nine Months of Fiscal 2020 and Fiscal 2019

($ in thousands)

 

 

 

 

By Strategic Business Unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 FY 2020

 

 

 

 

 

 

Q3 FY 2019

 

 

% Change

 

PMT

 

$

28,988

 

 

 

 

 

 

$

29,725

 

 

 

-2.5

%

Canvys

 

 

7,200

 

 

 

 

 

 

 

6,954

 

 

 

3.5

%

Healthcare

 

 

2,061

 

 

 

 

 

 

 

2,339

 

 

 

-11.9

%

Total

 

$

38,249

 

 

 

 

 

 

$

39,018

 

 

 

-2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD FY 2020

 

 

 

 

 

 

YTD FY 2019

 

 

% Change

 

PMT

 

$

89,158

 

 

 

 

 

 

$

96,822

 

 

 

-7.9

%

Canvys

 

 

22,333

 

 

 

 

 

 

 

20,625

 

 

 

8.3

%

Healthcare

 

 

7,045

 

 

 

 

 

 

 

7,042

 

 

 

0.0

%

Total

 

$

118,536

 

 

 

 

 

 

$

124,489

 

 

 

-4.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

Q3 FY 2020

 

 

% of Net Sales

 

 

Q3 FY 2019

 

 

% of Net Sales

 

PMT

 

$

9,519

 

 

 

32.8

%

 

$

9,406

 

 

 

31.6

%

Canvys

 

 

2,362

 

 

 

32.8

%

 

 

2,281

 

 

 

32.8

%

Healthcare

 

 

789

 

 

 

38.3

%

 

 

612

 

 

 

26.2

%

Total

 

$

12,670

 

 

 

33.1

%

 

$

12,299

 

 

 

31.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD FY 2020

 

 

% of Net Sales

 

 

YTD FY 2019

 

 

% of Net Sales

 

PMT

 

$

28,547

 

 

 

32.0

%

 

$

30,520

 

 

 

31.5

%

Canvys

 

 

7,268

 

 

 

32.5

%

 

 

6,726

 

 

 

32.6

%

Healthcare

 

 

2,486

 

 

 

35.3

%

 

 

1,977

 

 

 

28.1

%

Total

 

$

38,301

 

 

 

32.3

%

 

$

39,223

 

 

 

31.5

%