Richardson Electronics, Ltd. (NASDAQ: RELL) today reported
financial results for its first quarter ended September 1, 2018.
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 2019
increased 19.4% to $44.2 million compared to net sales of $37.0
million in the prior year’s first quarter. There were 13 weeks in
the first quarter of fiscal 2019 compared to 14 weeks in last
year’s first quarter. Sales increased $5.7 million for PMT and $1.4
million for Canvys. PMT sales were higher in power conversion and
RF and microwave components, RF and microwave tubes and specialty
products sold into the semiconductor wafer fabrication capital
equipment market. Sales increased for Canvys due to new program
wins and higher overall demand across both the U.S. and Europe.
Sales also increased for Richardson Healthcare by $0.1 million due
to higher equipment and CT Tube sales, partially offset by lower
sales of diagnostic imaging parts.
Gross margin increased to $14.0 million, or
31.6% of net sales during the first quarter of fiscal 2019,
compared to $12.1 million, or 32.8% of net sales during the first
quarter of fiscal 2018. Margin decreased as a percent of net sales
primarily due to a less favorable product mix in both PMT and
Richardson Healthcare. Canvys margin as a percent of net sales
increased primarily due to an improved product mix and lower costs
on selected products sold.
Operating expenses increased to $13.1 million
for the first quarter of fiscal 2019, compared to $12.3 million for
the first quarter of fiscal 2018. This increase was a result of
additional compensation and other expenses primarily related to the
increase in net sales. Operating expenses as a percent of net sales
decreased to 29.7% in the current quarter from 33.3% in last year’s
first quarter.
The Company reported $0.9 million of operating
income for the first quarter of fiscal 2019 compared to operating
income of $15,000 in the prior year’s first quarter, which included
a $0.2 million gain on the disposal of a building.
Other expense for the first quarter of fiscal
2019, primarily foreign exchange, was $0.2 million, compared to
other expense of $0.1 million for the first quarter of fiscal
2018.
The income tax provision of $0.3 million for the
first quarter of fiscal 2019 reflected a provision for foreign
income taxes based on the current quarter’s geographical
distribution of income and no U.S. tax benefit due to the valuation
allowance recorded against the net operating loss.
Net income for the first quarter of fiscal 2019
was $0.4 million, compared to a net loss of $0.1 million in the
first quarter of fiscal 2018. Earnings per common share (diluted)
in the first quarter of fiscal 2019 were $0.03.
CASH DIVIDEND
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
November 21, 2018, to common stockholders of record as of November
7, 2018.
Cash and investments at the end of the first
quarter of fiscal 2019 were $54.8 million compared to $60.5 million
at the end of fiscal 2018 and $61.4 million at the end of the first
quarter of fiscal 2018. The use of cash in the first quarter of
2019 was primarily due to payments for accounts payable
transactions from the fourth quarter of fiscal 2018. During the
first quarter of fiscal 2019, the Company did not repurchase any
shares of its common stock under the existing share repurchase
authorization. Currently, there are 11.0 million outstanding shares
of common stock and 2.1 million outstanding shares of Class B
common stock.
OUTLOOK
“I am pleased to report an operating income of
$0.9 million for the first quarter of fiscal 2019 as compared to a
$15,000 operating income in the first quarter of fiscal 2018,” said
Edward J. Richardson, Chairman, Chief Executive Officer, and
President. “Achieving a 19.4% increase in revenue over the prior
year is a good start. We will need to stay focused on our key
initiatives as we face a temporary slowdown in the semiconductor
wafer fab market. We continue to be excited about the growth in PMT
associated with our investments in new power and microwave
technologies, as well as the introduction of our new ALTA750TM CT
Tube,” Mr. Richardson concluded.
CONFERENCE CALL INFORMATION
On Thursday, October 11, 2018, 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 results for fiscal year
2019. A question and answer session will be included as part of the
call’s agenda. To listen to the call, please dial (888) 339-2688
and enter passcode 30310391 approximately five minutes prior to the
start of the call. A replay of the call will be available beginning
at 12:00 a.m. CDT on October 12, 2018, for seven days. The
telephone numbers for the replay are (USA) (888) 286-8010 and
(International) (617) 801-6888; passcode 75478104.
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 2, 2018. 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 |
| |
|
September
1,2018 |
|
|
June 2,
2018 |
|
Assets |
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
52,478 |
|
|
$ |
60,465 |
| Accounts receivable, less allowance of $315 and
$309, respectively |
|
|
22,885 |
|
|
|
22,892 |
| Inventories, net |
|
|
50,267 |
|
|
|
50,720 |
| Prepaid expenses and other assets |
|
|
3,691 |
|
|
|
3,747 |
| Investments - current |
|
|
2,300 |
|
|
|
— |
| Total current assets |
|
|
131,621 |
|
|
|
137,824 |
| Non-current assets: |
|
|
|
|
|
|
|
| Property, plant and equipment, net |
|
|
18,975 |
|
|
|
18,232 |
| Goodwill |
|
|
6,332 |
|
|
|
6,332 |
| Intangible assets, net |
|
|
2,949 |
|
|
|
3,014 |
| Non-current deferred income taxes |
|
|
855 |
|
|
|
927 |
| Total non-current assets |
|
|
29,111 |
|
|
|
28,505 |
|
Total assets |
|
$ |
160,732 |
|
|
$ |
166,329 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
14,145 |
|
|
$ |
19,603 |
| Accrued liabilities |
|
|
10,917 |
|
|
|
10,343 |
| Total current liabilities |
|
|
25,062 |
|
|
|
29,946 |
| Non-current liabilities: |
|
|
|
|
|
|
|
| Non-current deferred income tax liabilities |
|
|
281 |
|
|
|
281 |
| Other non-current liabilities |
|
|
924 |
|
|
|
921 |
| Total non-current liabilities |
|
|
1,205 |
|
|
|
1,202 |
|
Total liabilities |
|
|
26,267 |
|
|
|
31,148 |
|
Stockholders’ equity |
|
|
|
|
|
|
|
| Common stock, $0.05 par value; issued and
outstanding 10,951 shares at September 1, 2018 and 10,806
shares at June 2, 2018 |
|
|
547 |
|
|
|
540 |
| Class B common stock, convertible, $0.05 par value;
issued and outstanding 2,097 shares at September 1, 2018 and 2,137
shares at June 2, 2018 |
|
|
105 |
|
|
|
107 |
| Preferred stock, $1.00 par value, no shares
issued |
|
|
— |
|
|
|
— |
| Additional paid-in-capital |
|
|
60,413 |
|
|
|
60,061 |
| Common stock in treasury, at cost, no shares at
September 1, 2018 and June 2, 2018 |
|
|
— |
|
|
|
— |
| Retained earnings |
|
|
69,774 |
|
|
|
70,107 |
| Accumulated other comprehensive income |
|
|
3,626 |
|
|
|
4,366 |
| Total stockholders’ equity |
|
|
134,465 |
|
|
|
135,181 |
|
Total liabilities and stockholders’ equity |
|
$ |
160,732 |
|
|
$ |
166,329 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
| Richardson Electronics,
Ltd.Unaudited Consolidated Statements of
Comprehensive (Loss) Income(in thousands, except per share
amounts) |
| |
|
|
|
| |
|
Three Months
Ended |
|
| |
|
September
1,2018 |
|
|
September
2,2017 |
|
|
Statements of Comprehensive (Loss) Income |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
44,157 |
|
|
$ |
36,995 |
|
|
Cost of sales |
|
|
30,204 |
|
|
|
24,847 |
|
| Gross profit |
|
|
13,953 |
|
|
|
12,148 |
|
|
Selling, general and administrative expenses |
|
|
13,099 |
|
|
|
12,324 |
|
|
Gain on disposal of assets |
|
|
— |
|
|
|
(191 |
) |
| Operating income |
|
|
854 |
|
|
|
15 |
|
|
Other (income) expense: |
|
|
|
|
|
|
|
|
| Investment/interest income |
|
|
(126 |
) |
|
|
(134 |
) |
| Foreign exchange loss |
|
|
286 |
|
|
|
201 |
|
| Other, net |
|
|
(8 |
) |
|
|
(4 |
) |
| Total other expense |
|
|
152 |
|
|
|
63 |
|
|
Income (loss) before income taxes |
|
|
702 |
|
|
|
(48 |
) |
|
Income tax provision |
|
|
271 |
|
|
|
64 |
|
| Net income (loss) |
|
|
431 |
|
|
|
(112 |
) |
|
Foreign currency translation (loss) gain, net of tax |
|
|
(740 |
) |
|
|
2,121 |
|
|
Fair value adjustments on investments loss |
|
|
— |
|
|
|
(14 |
) |
| Comprehensive (loss) income |
|
$ |
(309 |
) |
|
$ |
1,995 |
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
Common shares - Basic |
|
$ |
0.03 |
|
|
$ |
(0.01 |
) |
|
Class B common shares - Basic |
|
$ |
0.03 |
|
|
$ |
(0.01 |
) |
|
Common shares – Diluted |
|
$ |
0.03 |
|
|
$ |
(0.01 |
) |
|
Class B common shares - Diluted |
|
$ |
0.03 |
|
|
$ |
(0.01 |
) |
|
Weighted average number of shares: |
|
|
|
|
|
|
|
|
|
Common shares – Basic |
|
|
10,829 |
|
|
|
10,712 |
|
|
Class B common shares – Basic |
|
|
2,132 |
|
|
|
2,137 |
|
|
Common shares – Diluted |
|
|
10,982 |
|
|
|
10,712 |
|
|
Class B common shares – Diluted |
|
|
2,132 |
|
|
|
2,137 |
|
|
Dividends per common share |
|
$ |
0.060 |
|
|
$ |
0.060 |
|
|
Dividends per Class B common share |
|
$ |
0.054 |
|
|
$ |
0.054 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| Richardson Electronics,
Ltd.Unaudited Consolidated Statements of Cash
Flows(in thousands) |
| |
|
|
|
| |
|
Three Months
Ended |
|
| |
|
September
1,2018 |
|
|
September
2,2017 |
|
|
Operating activities: |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
431 |
|
|
$ |
(112 |
) |
|
Adjustments to reconcile net income (loss) to cash used in
operating activities: |
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
|
764 |
|
|
|
732 |
|
| Inventory provisions |
|
|
215 |
|
|
|
162 |
|
| Gain on sale of investments |
|
|
— |
|
|
|
(25 |
) |
| Gain on disposal of assets |
|
|
— |
|
|
|
(191 |
) |
| Share-based compensation expense |
|
|
165 |
|
|
|
101 |
|
| Deferred income taxes |
|
|
58 |
|
|
|
(4 |
) |
|
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
| Accounts receivable |
|
|
(198 |
) |
|
|
2,047 |
|
| Inventories |
|
|
77 |
|
|
|
(2,613 |
) |
| Prepaid expenses and other assets |
|
|
37 |
|
|
|
(258 |
) |
| Accounts payable |
|
|
(5,419 |
) |
|
|
(2,755 |
) |
| Accrued liabilities |
|
|
227 |
|
|
|
726 |
|
| Other |
|
|
13 |
|
|
|
(267 |
) |
| Net cash used in operating
activities |
|
|
(3,630 |
) |
|
|
(2,457 |
) |
|
Investing activities: |
|
|
|
|
|
|
|
|
| Capital expenditures |
|
|
(1,072 |
) |
|
|
(1,015 |
) |
| Proceeds from sale of assets |
|
|
— |
|
|
|
276 |
|
| Proceeds from maturity of investments |
|
|
— |
|
|
|
4,000 |
|
| Purchases of investments |
|
|
(2,300 |
) |
|
|
— |
|
| Proceeds from sales of available-for-sale
securities |
|
|
— |
|
|
|
151 |
|
| Purchases of available-for-sale securities |
|
|
— |
|
|
|
(151 |
) |
| Other |
|
|
— |
|
|
|
(3 |
) |
| Net cash (used in) provided by investing
activities |
|
|
(3,372 |
) |
|
|
3,258 |
|
|
Financing activities: |
|
|
|
|
|
|
|
|
| Proceeds from issuance of common stock |
|
|
192 |
|
|
|
— |
|
| Cash dividends paid |
|
|
(764 |
) |
|
|
(758 |
) |
| Net cash used in financing
activities |
|
|
(572 |
) |
|
|
(758 |
) |
| Effect of exchange rate changes on cash and cash
equivalents |
|
|
(413 |
) |
|
|
1,059 |
|
| (Decrease) increase in cash and cash
equivalents |
|
|
(7,987 |
) |
|
|
1,102 |
|
| Cash and cash equivalents at beginning of
period |
|
|
60,465 |
|
|
|
55,327 |
|
| Cash and cash equivalents at end of
period |
|
$ |
52,478 |
|
|
$ |
56,429 |
|
| |
|
|
|
|
|
|
|
|
| Richardson Electronics,
Ltd. |
|
| Net Sales and Gross
Profit |
|
| For the First Quarter of
Fiscal 2019 and Fiscal 2018 |
|
| (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| By Strategic Business Unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Q1 FY19 |
|
|
|
|
|
Q1 FY18 |
|
% Change |
|
|
PMT |
$ |
34,769 |
|
|
|
|
|
$ |
29,124 |
|
|
19.4 |
% |
|
Canvys |
|
7,173 |
|
|
|
|
|
|
5,765 |
|
|
24.4 |
% |
|
Healthcare |
|
2,215 |
|
|
|
|
|
|
2,106 |
|
|
5.2 |
% |
| Total |
$ |
44,157 |
|
|
|
|
|
$ |
36,995 |
|
|
19.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
| |
Q1 FY19 |
|
% of Net Sales |
|
|
Q1 FY18 |
|
% of Net
Sales |
|
|
PMT |
$ |
11,007 |
|
|
31.7 |
% |
|
$ |
9,574 |
|
|
32.9 |
% |
|
Canvys |
|
2,313 |
|
|
32.2 |
% |
|
|
1,546 |
|
|
26.8 |
% |
|
Healthcare |
|
633 |
|
|
28.6 |
% |
|
|
1,028 |
|
|
48.8 |
% |
| Total |
$ |
13,953 |
|
|
31.6 |
% |
|
$ |
12,148 |
|
|
32.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Details Contact: |
|
|
|
|
|
Edward J. Richardson |
Robert J. Ben |
|
|
|
|
Chairman and CEO |
EVP
& CFO |
|
|
|
|
Phone: (630) 208-2205 |
(630) 208-2203 |
|
|
|
Richardson Electronics (NASDAQ:RELL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Richardson Electronics (NASDAQ:RELL)
Historical Stock Chart
From Sep 2023 to Sep 2024
