Richardson Electronics Reports First Quarter Fiscal 2016 Results

Richardson Electronics Reports First Quarter Fiscal 2016 Results and Declares Quarterly Cash Dividend

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, 2015			May 30, 2015
Assets
Current assets:
Cash and cash equivalents	$	68,426		$	74,535
Accounts receivable, less allowance of $283	23,989			20,753
Inventories,net	41,188			38,769
Prepaid expenses and other assets	2,289			1,696
Deferred income taxes	782			804
Income tax receivable	381			929
Investments - current	6,342			23,692
Total current assets	143,397			161,178
Non-current assets:
Property, plant and equipment, net	10,832			10,081
Goodwill	3,746			—
Other Intangibles	6,528			743
Non-current deferred income taxes	1,463			1,443
Investments - non-current	10,511			11,549
Total non-current assets	33,080			23,816
Total assets	$	176,477		$	184,994
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	14,293		$	15,768
Accrued liabilities	9,348			10,144
Total current liabilities	23,641			25,912
Non-current liabilities:
Non-current deferred income tax liabilities	1,179			1,209
Other non-current liabilities	995			1,221
Total non-current liabilities	2,174			2,430
Total liabilities	25,815			28,342
Commitments and contingencies	—			—
Stockholders’ equity
Common stock, $0.05 par value; issued 11,357 shares at August 29, 2015, and 11,530 shares at May 30, 2015	568			577
Class B common stock, convertible, $0.05 par value; issued and outstanding 2,141 shares at August 29, 2015 and at May 30, 2015	107			107
Preferred stock, $1.00 par value, no shares issued	—			—
Additional paid-in-capital	62,312			63,252
Common stock in treasury, at cost, 394 shares at August 29, 2015, and no shares at May 30, 2015	(2,269		)	—
Retained earnings	86,932			89,141
Accumulated other comprehensive income	3,012			3,575
Total stockholders’ equity	150,662			156,652
Total liabilities and stockholders’ equity	$	176,477		$	184,994

Richardson Electronics, Ltd. Unaudited Consolidated Statements of Comprehensive Loss (in thousands, except per share amounts)

	Three Months Ended
	August 29, 2015			August 30, 2014
Statements of Comprehensive Loss
Net Sales	$	37,071		$	34,699
Cost of Sales	25,809			24,041
Gross profit	11,262			10,658
Selling, general, and administrative expenses	12,267			11,182
(Gain) loss on disposal of assets	(1		)	9
Operating loss	(1,004		)	(533		)
Other (income) expense:
Investment/interest income	(191		)	(256		)
Foreign exchange (gain) loss	182			(57		)
Other, net	36			(2		)
Total other income	27			(315		)
Loss before income taxes	(1,031		)	(218		)
Income tax provision (benefit)	368			(135		)
Net loss	(1,399		)	(83		)
Foreign currency translation loss, net of tax	(503		)	(968		)
Fair value adjustments on investments gain (loss)	(60		)	25
Comprehensive loss	$	(1,962	)	$	(1,026	)
Loss per share:
Common shares - Basic	$	(0.10	)	$	(0.01	)
Class B common shares - Basic	$	(0.10	)	$	(0.01	)
Common shares - Diluted	$	(0.10	)	$	(0.01	)
Class B common shares - Diluted	$	(0.10	)	$	(0.01	)
Weighted average number of shares:
Common shares - Basic	11,486			11,822
Class B common shares - Basic	2,141			2,182
Common shares - Diluted	11,486			11,822
Class B common shares - Diluted	2,141			2,182
Dividends per common share	$	0.060		$	0.060
Dividends per Class B common share	$	0.054		$	0.054

Richardson Electronics, Ltd. Consolidated Statements of Cash Flows (in thousands)

	Three Months Ended
	August 29, 2015			August 30, 2014
Operating activities:
Net loss	$	(1,399	)	$	(83	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization	485			366
Gain on sale of investments	(11		)	(3		)
Gain on disposal of assets	(1		)	—
Share-based compensation expense	90			120
Deferred income taxes	1			(79		)
Change in assets and liabilities, net of effect of acquired business:
Accounts receivable	(2,525		)	(372		)
Income tax receivable	548			2,308
Inventories, net	(593		)	(2,110		)
Prepaid expenses and other assets	(581		)	135
Accounts payable	(1,521		)	101
Accrued liabilities	(804		)	(662		)
Non-current deferred income tax liabilities	228			—
Long-term liabilities-accrued pension	(465		)	—
Other	35			(49		)
Net cash used in operating activities	(6,513		)	(328		)
Investing activities:
Cash consideration paid for acquired business	(12,209		)	—
Capital expenditures	(984		)	(834		)
Proceeds from maturity of investments	18,350			30,482
Purchases of investments	—			(32,362		)
Proceeds from sales of available-for-sale securities	100			37
Purchases of available-for-sale securities	(100		)	(37		)
Other	60			(28		)
Net cash provided by (used in) investing activities	5,217			(2,742		)
Financing activities:
Repurchase of common stock	(3,308		)	(488		)
Proceeds from issuance of common stock	—			158
Cash dividends paid	(806		)	(828		)
Other	(4		)	1
Net cash used in financing activities	(4,118		)	(1,157		)
Effect of exchange rate changes on cash and cash equivalents	(695		)	(441		)
Decrease in cash and cash equivalents	(6,109		)	(4,668		)
Cash and cash equivalents at beginning of period	74,535			102,752
Cash and cash equivalents at end of period	$	68,426		$	98,084

Richardson Electronics, Ltd. Net Sales and Gross Profit For the First Quarter of Fiscal 2016 and Fiscal 2015 (in thousands)

By Strategic Business Unit:

Net Sales	Q1			Q1
	FY 2016			FY 2015		% Change
PMT	$	27,195		$	27,438	(0.9%)
Canvys	6,681			5,968		11.9%
Healthcare	3,195			$	1,293	147.1%
Total	$	37,071		$	34,699	6.8%

Gross Profit	Q1			Q1
	FY 2016		% of Net Sales	FY 2015		% of Net Sales
PMT	$	8,138	29.9%	$	8,686	31.7%
Canvys	1,709		25.6%	1,656		27.7%
Healthcare	1,415		44.3%	316		24.4%
Total	$	11,262	30.4%	$	10,658	30.7%

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