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™ 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™ 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 ProfitFor 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 |
% |
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 (NASDAQ:RELL)
Historical Stock Chart
From Feb 2024 to Mar 2024
Richardson Electronics (NASDAQ:RELL)
Historical Stock Chart
From Mar 2023 to Mar 2024