EX-99.1 2 rell-ex991_73.htm EX-99.1 rell-ex991_73.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 FIRST QUARTER FISCAL 2021 RESULTS AND DECLARES QUARTERLY CASH DIVIDEND

 

PMG, North America Display and Semiconductor Wafer Fab Revenues Grow Versus Q1 FY20; All SBUs Grow Versus Q4 FY20

Q1 and FY21 Highlights

 

Net sales of $38.8 million were down less than 5% from last year’s first quarter despite the COVID-19 impact on all three of our strategic business units.

 

Sales increased for PMG, Canvys display solutions in North America and Semiconductor Wafer Fabrication equipment products in the first quarter of fiscal 2021 versus the first quarter of fiscal 2020.

 

Gross margin was 31.8% of net sales for the first quarter of fiscal 2021 versus 31.9% of net sales in the prior year’s first quarter.

 

Operating expenses increased $0.2 million to $13.0 million compared to the prior year’s first quarter. Legal expenses increased by $0.4 million.

 

Operating loss was $0.6 million compared to an operating income of $0.1 million in last year’s first quarter.

 

Cash and investments were $42.5 million as of August 29, 2020 versus $46.5 million at both May 30, 2020 and August 31, 2019.

 

LaFox, IL, OCTOBER 7, 2020: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its first quarter ended August 29, 2020. 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 2021 decreased 4.5% to $38.8 million compared to net sales of $40.7 million in the prior year’s first quarter primarily due to the impact on demand from COVID-19. Richardson Electronics is an “essential business” and continued operating its manufacturing and distribution businesses on a global basis throughout the pandemic under strict safety guidelines. Sales of semiconductor wafer fab equipment specialty products as well as power conversion and RF and microwave components increased from last year’s first quarter, although overall PMT sales decreased $0.3 million or 1.0%. Power grid tube sales were negatively impacted by the pandemic and economic softness. Canvys sales decreased by $0.6 million or 7.8% due to COVID-related pushouts from its European medical OEMs, partially offset by higher North American sales. Richardson Healthcare sales decreased $1.0 million or 34.2% due to reduced or frozen capital expenditure budgets, difficulty reaching


hospital staff and a slow ramp-up of patients returning to hospitals for non-COVID-related care. Decreased sales of refurbished CT systems in Latin America also contributed to the revenue decline. Healthcare sales increased 27.7% versus the fourth quarter of 2020.

 

Gross margin was 31.8% of net sales during the first quarter of fiscal 2021 compared to 31.9% of net sales during the first quarter of fiscal 2020. PMT margin increased to 33.0% from 31.7% due to a favorable product mix and improved manufacturing efficiencies. Also, Canvys margin as a percent of net sales increased to 34.0% from 31.9% as a result of its product mix. Healthcare margin as a percent of net sales was 5.6% in the first quarter of fiscal 2021 due to manufacturing under absorption and inventory reserve costs related to tube development and production improvements on significantly lower net sales.

 

Operating expenses were $13.0 million in the first quarter of fiscal 2021 compared to $12.8 million in the first quarter of fiscal 2020. The increase in operating expenses resulted from higher legal and employee compensation expenses, partially offset by lower travel expenses. Throughout the pandemic, the Company decided to support its employees through regular merit increases and incentive plans, and by avoiding layoffs or furloughs.

 

As a result, the Company reported an operating loss of $0.6 million for the first quarter of fiscal 2021 compared to an operating income of $0.1 million in the prior year’s first quarter. Other expense for the first quarter of fiscal 2021, including interest income and foreign exchange, was $0.4 million, compared to other income of $0.2 million in the first quarter of fiscal 2020.

 

The income tax provision of $0.1 million for the first quarter of fiscal 2021 reflected a provision for foreign income taxes, which was lower than the prior year’s first quarter and no U.S. tax benefit due to the valuation allowance recorded against the net operating loss. Net loss for the first quarter of fiscal 2021 was $1.1 million compared to a net income of $0.2 million in the first quarter of fiscal 2020.

 

“While our overall results continued to be negatively impacted by the coronavirus, we were pleased with the sales growth in PMG, Canvys North America and in semiconductor wafer fab equipment products as well as higher sales overall compared to the fourth quarter of Fiscal 2020,” said Edward J. Richardson, Chairman, Chief Executive Officer, and President. “We continue to capitalize on all revenue opportunities as well as manage expenses and cash flow appropriately given the ongoing uncertainty in the global economy,” he concluded.

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 November 24, 2020, to common stockholders of record as of November 6, 2020.

 

Cash and investments at the end of the first quarter of fiscal 2021 were $42.5 million compared to $46.5 million at both the end of fiscal 2020 and at the end of the first quarter of fiscal 2020. The Company spent $0.7 million during the quarter on capital expenditures primarily related to its Healthcare business and IT System, versus $0.3 million during the first quarter of fiscal 2020.

 

CONFERENCE CALL INFORMATION

 

On Thursday, October 8, 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 first quarter fiscal year 2021 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: 2286803 approximately 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 8, 2020, for seven days.  The telephone number for the replay is (800) 585-8367; Conference ID: 2286803.

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 3, 2020, 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

 

 

 

August 29, 2020

 

 

May 30, 2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

33,495

 

 

$

30,535

 

Accounts receivable, less allowance of $254 and $334, respectively

 

 

21,591

 

 

 

20,197

 

Inventories, net

 

 

60,160

 

 

 

57,492

 

Prepaid expenses and other assets

 

 

2,390

 

 

 

2,442

 

Investments - current

 

 

9,000

 

 

 

16,000

 

Total current assets

 

 

126,636

 

 

 

126,666

 

Non-current assets:

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

17,611

 

 

 

17,674

 

Intangible assets, net

 

 

2,450

 

 

 

2,505

 

Lease ROU asset

 

 

3,151

 

 

 

3,419

 

Non-current deferred income taxes

 

 

468

 

 

 

456

 

Total non-current assets

 

 

23,680

 

 

 

24,054

 

Total assets

 

$

150,316

 

 

$

150,720

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

14,809

 

 

$

17,372

 

Accrued liabilities

 

 

12,302

 

 

 

10,324

 

Lease liability current

 

 

1,423

 

 

 

1,485

 

Total current liabilities

 

 

28,534

 

 

 

29,181

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Non-current deferred income tax liabilities

 

 

170

 

 

 

161

 

Lease liability non-current

 

 

1,701

 

 

 

1,941

 

Other non-current liabilities

 

 

841

 

 

 

777

 

Total non-current liabilities

 

 

2,712

 

 

 

2,879

 

Total liabilities

 

 

31,246

 

 

 

32,060

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Common stock, $0.05 par value; issued and outstanding 11,111 shares at

   August 29, 2020 and 11,038 shares at May 30, 2020

 

 

556

 

 

 

552

 

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

   2,097 shares at August 29, 2020 and May 30, 2020

 

 

105

 

 

 

105

 

Preferred stock, $1.00 par value, no shares issued

 

 

 

 

 

 

Additional paid-in-capital

 

 

61,946

 

 

 

61,749

 

Retained earnings

 

 

52,837

 

 

 

54,764

 

Accumulated other comprehensive income

 

 

3,626

 

 

 

1,490

 

Total stockholders’ equity

 

 

119,070

 

 

 

118,660

 

Total liabilities and stockholders’ equity

 

$

150,316

 

 

$

150,720

 

 

 


Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except per share amounts)

 

Three Months Ended

 

 

 

August 29, 2020

 

 

August 31, 2019

 

Statements of Comprehensive Income (Loss)

 

 

 

 

 

 

 

 

Net sales

 

$

38,812

 

 

$

40,653

 

Cost of sales

 

 

26,453

 

 

 

27,702

 

Gross profit

 

 

12,359

 

 

 

12,951

 

Selling, general and administrative expenses

 

 

12,976

 

 

 

12,847

 

Loss on disposal of assets

 

 

 

 

 

1

 

Operating (loss) income

 

 

(617

)

 

 

103

 

Other expense (income):

 

 

 

 

 

 

 

 

Investment/interest income

 

 

(18

)

 

 

(120

)

Foreign exchange loss (income)

 

 

442

 

 

 

(110

)

Other, net

 

 

(18

)

 

 

(1

)

Total other expense (income)

 

 

406

 

 

 

(231

)

(Loss) income before income taxes

 

 

(1,023

)

 

 

334

 

Income tax provision

 

 

124

 

 

 

177

 

Net (loss) income

 

 

(1,147

)

 

 

157

 

Foreign currency translation gain (loss), net of tax

 

 

2,136

 

 

 

(716

)

Comprehensive income (loss)

 

$

989

 

 

$

(559

)

Net (loss) income per share

 

 

 

 

 

 

 

 

Common shares - Basic

 

$

(0.09

)

 

$

0.01

 

Class B common shares - Basic

 

$

(0.08

)

 

$

0.01

 

Common shares - Diluted

 

$

(0.09

)

 

$

0.01

 

Class B common shares - Diluted

 

$

(0.08

)

 

$

0.01

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

Common shares – Basic

 

 

11,070

 

 

 

10,990

 

Class B common shares – Basic

 

 

2,097

 

 

 

2,097

 

Common shares – Diluted

 

 

11,070

 

 

 

10,990

 

Class B common shares – Diluted

 

 

2,097

 

 

 

2,097

 

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

 

 

 

August 29, 2020

 

 

August 31, 2019

 

Operating activities:

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(1,147

)

 

$

157

 

Adjustments to reconcile net (loss) income to cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

873

 

 

 

833

 

Inventory provisions

 

 

237

 

 

 

161

 

Loss on disposal of assets

 

 

 

 

 

1

 

Share-based compensation expense

 

 

201

 

 

 

188

 

Deferred income taxes

 

 

2

 

 

 

(48

)

Change in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(854

)

 

 

2,161

 

Inventories

 

 

(1,621

)

 

 

(1,357

)

Prepaid expenses and other assets

 

 

109

 

 

 

625

 

Accounts payable

 

 

(2,734

)

 

 

(3,955

)

Accrued liabilities

 

 

1,779

 

 

 

(876

)

Other

 

 

(202

)

 

 

56

 

Net cash used in operating activities

 

 

(3,357

)

 

 

(2,054

)

Investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(718

)

 

 

(339

)

Proceeds from maturity of investments

 

 

16,000

 

 

 

8,000

 

Purchases of investments

 

 

(9,000

)

 

 

 

Net cash provided by investing activities

 

 

6,282

 

 

 

7,661

 

Financing activities:

 

 

 

 

 

 

 

 

Cash dividends paid

 

 

(780

)

 

 

(775

)

Payment of financing lease principal

 

 

(45

)

 

 

(30

)

Other

 

 

 

 

 

4

 

Net cash used in financing activities

 

 

(825

)

 

 

(801

)

Effect of exchange rate changes on cash and cash equivalents

 

 

860

 

 

 

(368

)

Increase in cash and cash equivalents

 

 

2,960

 

 

 

4,438

 

Cash and cash equivalents at beginning of period

 

 

30,535

 

 

 

42,019

 

Cash and cash equivalents at end of period

 

$

33,495

 

 

$

46,457

 

 

 

 

 

 

 

 

 

 

 

 


Richardson Electronics, Ltd.

Net Sales and Gross Profit

For the First Quarter of Fiscal 2021 and Fiscal 2020

($ in thousands)

 

By Strategic Business Unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 FY 2021

 

 

 

 

 

 

Q1 FY 2020

 

 

% Change

 

PMT

 

$

30,252

 

 

 

 

 

 

$

30,567

 

 

 

-1.0

%

Canvys

 

 

6,712

 

 

 

 

 

 

 

7,277

 

 

 

-7.8

%

Healthcare

 

 

1,848

 

 

 

 

 

 

 

2,809

 

 

 

-34.2

%

Total

 

$

38,812

 

 

 

 

 

 

$

40,653

 

 

 

-4.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

Q1 FY 2021

 

 

% of Net Sales

 

 

Q1 FY 2020

 

 

% of Net Sales

 

PMT

 

$

9,971

 

 

 

33.0

%

 

$

9,679

 

 

 

31.7

%

Canvys

 

 

2,284

 

 

 

34.0

%

 

 

2,321

 

 

 

31.9

%

Healthcare

 

 

104

 

 

 

5.6

%

 

 

951

 

 

 

33.9

%

Total

 

$

12,359

 

 

 

31.8

%

 

$

12,951

 

 

 

31.9

%