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): October 6, 2021

RICHARDSON ELECTRONICS, LTD.

(Exact name of registrant as specified in charter)

_________________________

Delaware (State or other jurisdiction of incorporation) 0-12906 (Commission File Number) 36-2096643 (IRS Employer Identification No.)

40W267 Keslinger Road, P.O. Box 393, LaFox, Illinois (Address of principal executive offices) 60147-0393
(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, $0.05 Par Value per share	RELL	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operation and Financial Condition.

On October 6, 2021, Richardson Electronics, Ltd. (the “Company”) issued a press release announcing earnings results for the first quarter ended August 28, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

The information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1	Press release issued October 6, 2021, furnished herewith
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: October 6, 2021	By:	/s/ Robert J. Ben
	Name:	Robert J. Ben
	Title:	Chief Financial Officer and Chief Accounting Officer

EX-99.1

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) 208-2320	(630) 208-2203	(630) 208-2200 | Fax: (630) 208-2550

RICHARDSON ELECTRONICS REPORTS FIRST QUARTER FISCAL 2022 NET INCOME OF $2.6 MILLION AND DECLARES QUARTERLY CASH DIVIDEND

PMT, Canvys and Healthcare Revenues Grow Versus Q1 FY21

Q1 Highlights

• Net sales of $53.7 million were up 38.4% from last year’s first quarter and up 6.4% over the fourth quarter of fiscal 2021.

• Sales increased year-over-year for PMG, Canvys, Healthcare and Semiconductor Wafer Fabrication Equipment products in the first quarter of fiscal 2022 versus the first quarter of fiscal 2021.

• Gross margin was30.3% of net sales for the first quarter of fiscal 2022 versus 31.8% of net sales in the prior year’s first quarter due to product mix.

• Operating expenses increased $0.5 million to $13.5 million compared to the prior year’s first quarter. Employee compensation expenses increased, including higher incentive expense due to the substantially improved performance. This increase was partially offset by lower legal fees.

• Operating income was $2.8 million for the first quarter of fiscal 2022 compared to an operating loss of $0.6 million in the first quarter of fiscal 2021.

• Earnings per common share (diluted) were $0.20 for the first quarter of fiscal 2022 compared to a loss of $0.09 per common share (diluted) in the first quarter of fiscal 2021.

• Cash and investments were $36.4 million as of August 28, 2021 versus $43.3 million on May 29, 2021 and $42.5 million on August 29, 2020. The use of cash was related to higher working capital to support sales growth.

LaFox, IL, OCTOBER 6, 2021: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its first quarter ended August 28, 2021. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend. 

First Quarter Results

Net sales for the first quarter of fiscal 2022 increased 38.4% to $53.7 million compared to net sales of $38.8 million in the prior year’s first quarter due to higher net sales across all three business units. PMT sales increased $12.8 million or 42.2% from last year’s first quarter because of higher sales of power conversion and RF and microwave components as well as specialty products for semiconductor wafer fab equipment. Sales for most of the Electron Tube product lines increased from the first quarter of fiscal 2021. Canvys sales increased by $1.7 million or 25.8% due to strong customer demand in Europe. Richardson Healthcare sales increased $0.4 million or 22.0% primarily due to an increase in demand for the ALTA750^TM Tubes, partially offset by lower sales of parts and pre-owned CT scanners in Latin America.

“We are excited by the strong start to fiscal 2022, as we achieved the highest level of quarterly sales in 11 years and the best quarterly earnings per share in nine years,” said Edward J. Richardson, Chairman, Chief Executive Officer, and President. “Our strong first quarter performance is a result of growth initiatives that are starting to take hold and we successfully navigated unprecedented global supply chain and logistics challenges. The first quarter also ended with record backlogs of the ULTRA3000 Pitch Energy Modules for GE Wind Turbines, microwave products and Canvys monitors. As a result, we believe fiscal year 2022 will be a strong year of sales growth and improved profitability.”

Gross margin was 30.3% of net sales during the first quarter of fiscal 2022 compared to 31.8% of net sales during the first quarter of fiscal 2021. PMT margin decreased to 30.1% from 33.0% due to a higher percentage of lower margin PMG sales. Canvys margin as a percent of net sales decreased to 33.4% from 34.0% becauseof increasing freight costs resulting from the COVID-19 pandemic. Healthcare margin as a percent of net sales was 24.3% in the first quarter of fiscal 2022 compared to 5.6% in the prior year’s first quarter primarily due to improved product mix and manufacturing absorption from increased production of the ALTA750 ^TM Tube.

Operating expenses were $13.5 million compared to $13.0 million in the first quarter of fiscal 2021. The increase in operating expenses resulted from higher employee compensation and travel expenses, partially offset by lower legal expense.

The Company reported operating income of $2.8 million for the first quarter of fiscal 2022 compared to an operating loss of $0.6 million in the prior year’s first quarter. Other expense for the first quarter of fiscal 2022, including interest income and foreign exchange, was less than $0.1 million, compared to other expense of $0.4 million in the first quarter of fiscal 2021.

The income tax provision of $0.2 million for the first quarter of fiscal 2022 reflected a provision for foreign income taxes, which was higher than the prior year’s first quarter, and the offset of a U.S. tax provision against the valuation allowance. Net income for the first quarter of fiscal 2022 was $2.6 million compared to a net loss of $1.1 million in the first quarter of fiscal 2021. Earnings per common share (diluted) were $0.20 in the first quarter of fiscal 2022 compared to a net loss of $0.09 per common share (diluted) in the first quarter of fiscal 2021.

Cash and investments at the end of the first quarter of fiscal 2022 were $36.4 million compared to $43.3 million at the end of fiscal 2021 and $42.5 million at the end of the first quarter of fiscal 2021. Use of cash related to higher working capital to support sales growth. The Company spent $0.8 million during the quarter on capital expenditures primarily related to its Healthcare business and IT System, versus $0.7 million during the first quarter of fiscal 2021.

CASH DIVIDEND DECLARED

The Board of Directors of Richardson Electronics 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 November 24, 2021, to common stockholders of record as of November 5, 2021.

CONFERENCE CALL INFORMATION

On Thursday, October 7, 2021, 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 first quarter fiscal year 2022 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/CANADA) (866) 784-8065 or (International) (602) 563-8684 and enter Conference ID: 3584788approximately five minutes before the start of the call.  A replay of the call will be available beginning at 1:00 p.m. CDT on October 7, 2021, for seven days.  The telephone number for the replay is (855) 859-2056; Conference ID: 3584788.

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 that 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 2, 2021, 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, Ltd. 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
	August 28, 2021		May 29, 2021
Assets
Current assets:
Cash and cash equivalents	$	36,418	$	43,316
Accounts receivable, less allowance of $205 and $202, respectively		29,724		25,096
Inventories, net		67,649		63,508
Prepaid expenses and other assets		2,429		2,385
Total current assets		136,220		134,305
Non-current assets:
Property, plant and equipment, net		17,132		17,067
Intangible assets, net		2,204		2,270
Lease ROU asset		4,116		2,570
Non-current deferred income taxes		534		541
Total non-current assets		23,986		22,448
Total assets	$	160,206	$	156,753
Liabilities
Current liabilities:
Accounts payable	$	17,421	$	16,979
Accrued liabilities		14,534		14,182
Lease liability current		1,297		1,066
Total current liabilities		33,252		32,227
Non-current liabilities:
Non-current deferred income tax liabilities		274		242
Lease liability non-current		2,638		1,358
Other non-current liabilities		1,364		1,366
Total non-current liabilities		4,276		2,966
Total liabilities		37,528		35,193
Stockholders’ equity
Common stock, $0.05 par value; issued and outstanding 11,241 shares on    August 28, 2021 and 11,160 shares on May 29, 2021		562		558
Class B common stock, convertible, $0.05 par value; issued and outstanding    2,097 shares on August 28, 2021 and May 29, 2021		105		105
Preferred stock, $1.00 par value, no shares issued		—		—
Additional paid-in-capital		62,974		62,707
Retained earnings		55,146		53,297
Accumulated other comprehensive income		3,891		4,893
Total stockholders’ equity		122,678		121,560
Total liabilities and stockholders’ equity	$	160,206	$	156,753

Richardson Electronics, Ltd. 

Unaudited Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)

	Three Months Ended
	August 28, 2021			August 29, 2020
Net sales	$	53,704		$	38,812
Cost of sales		37,407			26,453
Gross profit		16,297			12,359
Selling, general and administrative expenses		13,469			12,976
Operating income (loss)		2,828			(617	)
Other expense (income):
Investment/interest income		(17	)		(18	)
Foreign exchange loss		27			442
Other, net		16			(18	)
Total other expense		26			406
Income (loss) before income taxes		2,802			(1,023	)
Income tax provision		167			124
Net income (loss)		2,635			(1,147	)
Foreign currency translation (loss) gain, net of tax		(1,002	)		2,136
Comprehensive income	$	1,633		$	989
Net income (loss) per share:
Common shares - Basic	$	0.20		$	(0.09	)
Class B common shares - Basic		0.18			(0.08	)
Common shares - Diluted		0.20			(0.09	)
Class B common shares - Diluted		0.18			(0.08	)
Weighted average number of shares:
Common shares – Basic		11,194			11,070
Class B common shares – Basic		2,097			2,097
Common shares – Diluted		11,467			11,070
Class B common shares – Diluted		2,097			2,097
Dividends per share:
Common share	$	0.060		$	0.060
Class B common share		0.054			0.054

Richardson Electronics, Ltd. 

Unaudited Consolidated Statements of Cash Flows

(in thousands)

	Three Months Ended
	August 28, 2021			August 29, 2020
Operating activities:
Net income (loss)	$	2,635		$	(1,147	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization		829			873
Inventory provisions		83			237
Share-based compensation expense		219			201
Deferred income taxes		35			2
Change in assets and liabilities:
Accounts receivable		(5,008	)		(854	)
Inventories		(4,957	)		(1,621	)
Prepaid expenses and other assets		(62	)		109
Accounts payable		607			(2,734	)
Accrued liabilities		480			1,779
Other		266			(202	)
Net cash used in operating activities		(4,873	)		(3,357	)
Investing activities:
Capital expenditures		(837	)		(718	)
Proceeds from maturity of investments		—			16,000
Purchases of investments		—			(9,000	)
Net cash (used in) provided by investing activities		(837	)		6,282
Financing activities:
Proceeds from issuance of common stock		52			—
Cash dividends paid		(786	)		(780	)
Payment of financing lease principal		(45	)		(45	)
Net cash used in financing activities		(779	)		(825	)
Effect of exchange rate changes on cash and cash equivalents		(409	)		860
(Decrease) increase in cash and cash equivalents		(6,898	)		2,960
Cash and cash equivalents at beginning of period		43,316			30,535
Cash and cash equivalents at end of period	$	36,418		$	33,495

Richardson Electronics, Ltd. 

Unaudited Net Sales and Gross Profit

For the First Quarter of Fiscal 2022 and 2021

($ in thousands)

By Strategic Business Unit:
Net Sales
	Q1 FY 2022					Q1 FY 2021		% Change
PMT	$	43,009				$	30,252		42.2	%
Canvys		8,441					6,712		25.8	%
Healthcare		2,254					1,848		22.0	%
Total	$	53,704				$	38,812		38.4	%
Gross Profit
	Q1 FY 2022		% of Net Sales			Q1 FY 2021		% of Net Sales
PMT	$	12,931		30.1	%	$	9,971		33.0	%
Canvys		2,818		33.4	%		2,284		34.0	%
Healthcare		548		24.3	%		104		5.6	%
Total	$	16,297		30.3	%	$	12,359		31.8	%

XML

Document and Entity Information	Oct. 06, 2021
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 06, 2021
Entity Registrant Name	RICHARDSON ELECTRONICS LTD/DE
Entity Central Index Key	0000355948
Entity Emerging Growth Company	false
Title of 12(b) Security	Common stock, $0.05 Par Value per share
Trading Symbol	RELL
Security Exchange Name	NASDAQ
Entity File Number	0-12906
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-2096643
Entity Address, Address Line One	40W267 Keslinger Road
Entity Address, Address Line Two	P.O. Box 393
Entity Address, City or Town	LaFox
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60147-0393
City Area Code	630
Local Phone Number	208-2200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false