“Since the sale of RFPD in 2011, we have spent more than $17 million on dividends,” said Edward J. Richardson, Chairman, Chief Executive Officer and President. “Including share repurchases, we have returned more than $82 million to our shareholders. Our intent now is to further improve shareholder value by investing in our growth initiatives.”
OUTLOOK
“We are pleased with the significant improvement in our financial performance in the fourth quarter of fiscal 2016 as compared to the fourth quarter of fiscal 2015. In addition to a large U.S. government sale, there were other areas of improvement, including strong IMES sales and gross margin and lower S, G&A expenses as a percent of net sales,” said Mr. Richardson. “We are highly focused on revenue growth in fiscal 2017, while carefully managing our cash flow. We have implemented programs to reduce our run rate expenses for fiscal year 2017, and are working on more operational improvement initiatives so we may continue to invest in our growth strategy,” Mr. Richardson concluded.
CONFERENCE CALL INFORMATION
On Thursday, July 21, 2016, at 9:00 a.m. CT, 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 fourth quarter results for fiscal 2016. 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 68976218 approximately five minutes prior to the start of the call. A replay of the call will be available for seven days beginning at 12:00 a.m. CT on July 22, 2016. The telephone numbers for the replay are (USA) (888) 286-8010 and (International) (617) 801-6888; passcode 27292309.
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 July 28, 2015. 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 displays, flat panel detector solutions and replacement parts 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) | ||||||
| May 28, | May 30, | |||||
| 2016 | 2015 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 60,454 | $ | 74,535 | ||
| Accounts receivable, less allowance of $364 and $283 | 24,928 | 20,753 | ||||
| Inventories, net | 45,422 | 38,769 | ||||
| Prepaid expenses and other assets | 1,758 | 1,696 | ||||
| Deferred income taxes | 1,078 | 804 | ||||
| Income tax receivable | 17 | 929 | ||||
| Investments - current | 2,268 | 23,692 | ||||
| Total current assets | 135,925 | 161,178 | ||||
| Non-current assets: | ||||||
| Property, plant and equipment, net | 12,986 | 10,081 | ||||
| Goodwill | 6,332 | — | ||||
| Intangible assets, net | 3,818 | 743 | ||||
| Non-current deferred income taxes | 1,270 | 1,443 | ||||
| Investments - non-current | 7,799 | 11,549 | ||||
| Total non-current assets | 32,205 | 23,816 | ||||
| Total assets | $ | 168,130 | $ | 184,994 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | 14,896 | 15,768 | ||||
| Accrued liabilities | 9,135 | 10,144 | ||||
| Total current liabilities | 24,031 | 25,912 | ||||
| Non-current liabilities: | ||||||
| Non-current deferred income tax liabilities | 1,457 | 1,209 | ||||
| Other non-current liabilities | 967 | 1,221 | ||||
| Total non-current liabilities | 2,424 | 2,430 | ||||
| Total liabilities | 26,455 | 28,342 | ||||
| Stockholders’ equity | ||||||
| Common stock, $0.05 par value; issued and outstanding 10,703 shares at May 28, 2016, and 11,530 shares at May 30, 2015 | 535 | 577 | ||||
| Class B common stock, convertible, $0.05 par value; issued and outstanding 2,141 shares at May 28, 2016, and at May 30, 2015 | 107 | 107 | ||||
| Preferred stock, $1.00 par value, no shares issued | — | — | ||||
| Additional paid-in-capital | 58,969 | 63,252 | ||||
| Common stock in treasury, at cost, no shares at May 28, 2016, and at May 30, 2015 | — | — | ||||
| Retained earnings | 79,292 | 89,141 | ||||
| Accumulated other comprehensive income | 2,772 | 3,575 | ||||
| Total stockholders’ equity | 141,675 | 156,652 | ||||
| Total liabilities and stockholders’ equity | $ | 168,130 | $ | 184,994 | ||
| Richardson Electronics, Ltd. | ||||||||||||||||
| Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| May 28, | May 30, | May 28, | May 30, | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Statements of Comprehensive Loss | ||||||||||||||||
| Net sales | $ | 39,568 | $ | 34,946 | $ | 142,016 | $ | 136,957 | ||||||||
| Cost of sales | 26,180 | 24,728 | 97,181 | 95,819 | ||||||||||||
| Gross profit | 13,388 | 10,218 | 44,835 | 41,138 | ||||||||||||
| Selling, general, and administrative expenses | 13,694 | 12,863 | 51,632 | 49,229 | ||||||||||||
| Gain on disposal of assets | — | — | (244 | ) | (5 | ) | ||||||||||
| Operating loss | (306 | ) | (2,645 | ) | (6,553 | ) | (8,086 | ) | ||||||||
| Other (income) expense: | ||||||||||||||||
| Investment/interest income | (129 | ) | (255 | ) | (562 | ) | (999 | ) | ||||||||
| Foreign exchange (gain) loss | 104 | 100 | 212 | (185 | ) | |||||||||||
| Other, net | 70 | 114 | 17 | 92 | ||||||||||||
| Total other (income) expense | 45 | (41 | ) | (333 | ) | (1,092 | ) | |||||||||
| Loss from continuing operations before income taxes | (351 | ) | (2,604 | ) | (6,220 | ) | (6,994 | ) | ||||||||
| Income tax provision (benefit) | (196 | ) | (501 | ) | 546 | (1,466 | ) | |||||||||
| Loss from continuing operations | (155 | ) | (2,103 | ) | (6,766 | ) | (5,528 | ) | ||||||||
| Loss from discontinued operations, net of tax | — | (118 | ) | — | (31 | ) | ||||||||||
| Net loss | (155 | ) | (2,221 | ) | (6,766 | ) | (5,559 | ) | ||||||||
| Foreign currency translation gain (loss), net of tax | 1,153 | (355 | ) | (759 | ) | (6,504 | ) | |||||||||
| Fair value adjustments on investments gain (loss) | 35 | (8 | ) | (44 | ) | 22 | ||||||||||
| Comprehensive income (loss) | $ | 1,033 | $ | (2,584 | ) | $ | (7,569 | ) | $ | (12,041 | ) | |||||
|
Loss per Common share - Basic: |
||||||||||||||||
| Loss from continuing operations | $ | (0.01 | ) | $ | (0.16 | ) | $ | (0.53 | ) | $ | (0.41 | ) | ||||
| Loss from discontinued operations | — | (0.01 | ) | — | — | |||||||||||
| Total loss per Common share - Basic: | $ | (0.01 | ) | $ | (0.17 | ) | $ | (0.53 | ) | $ | (0.41 | ) | ||||
|
Loss per Class B common share - Basic: |
||||||||||||||||
| Loss from continuing operations | $ | (0.01 | ) | $ | (0.13 | ) | $ | (0.47 | ) | $ | (0.36 | ) | ||||
| Loss from discontinued operations | — | (0.01 | ) | — | — | |||||||||||
| Total loss per Class B common share - Basic: | $ | (0.01 | ) | $ | (0.14 | ) | $ | (0.47 | ) | $ | (0.36 | ) | ||||
|
Loss per Common share - Diluted: |
||||||||||||||||
| Loss from continuing operations | $ | (0.01 | ) | $ | (0.16 | ) | $ | (0.53 | ) | $ | (0.41 | ) | ||||
| Loss from discontinued operations | — | (0.01 | ) | — | — | |||||||||||
| Total loss per Common share - Diluted: | $ | (0.01 | ) | $ | (0.17 | ) | $ | (0.53 | ) | $ | (0.41 | ) | ||||
|
Loss per Class B common share - Diluted: |
||||||||||||||||
| Loss from continuing operations | $ | (0.01 | ) | $ | (0.13 | ) | $ | (0.47 | ) | $ | (0.36 | ) | ||||
| Loss from discontinued operations | — | (0.01 | ) | — | — | |||||||||||
| Total loss per Class B common share - Diluted: | $ | (0.01 | ) | $ | (0.14 | ) | $ | (0.47 | ) | $ | (0.36 | ) | ||||
| Weighted average number of shares: | ||||||||||||||||
| Common shares - Basic | 10,703 | 11,529 | 10,908 | 11,682 | ||||||||||||
| Class B common shares - Basic | 2,141 | 2,141 | 2,141 | 2,151 | ||||||||||||
| Common shares - Diluted | 10,703 | 11,529 | 10,908 | 11,682 | ||||||||||||
| Class B common shares - Diluted | 2,141 | 2,141 | 2,141 | 2,151 | ||||||||||||
| Dividends per common share | $ | 0.060 | $ | 0.060 | $ | 0.240 | $ | 0.240 | ||||||||
| Dividends per Class B common share | $ | 0.054 | $ | 0.054 | $ | 0.220 | $ | 0.220 | ||||||||
| Richardson Electronics, Ltd. | ||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||
| (in thousands) | ||||||||||||
| Fiscal Year Ended | ||||||||||||
| May 28, 2016 | May 30, 2015 | May 31, 2014 | ||||||||||
| Operating activities: | ||||||||||||
| Net loss | $ | (6,766 | ) | $ | (5,559 | ) | $ | (515 | ) | |||
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||||||||||
| Depreciation and amortization | 2,381 | 1,707 | 1,094 | |||||||||
| Loss (gain) on sale of investments | 1 | (27 | ) | (27 | ) | |||||||
| Gain on disposal of assets | (244 | ) | (5 | ) | — | |||||||
| Share-based compensation expense | 548 | 726 | 759 | |||||||||
| Deferred income taxes | 201 | (1,604 | ) | (1,005 | ) | |||||||
| Impairment of goodwill | — | — | 1,671 | |||||||||
| Change in assets and liabilities, net of effect of acquired business: | ||||||||||||
| Accounts receivable | (3,521 | ) | (4,495 | ) | 195 | |||||||
| Income tax receivable | 912 | 1,959 | 3,541 | |||||||||
| Inventories, net | (5,175 | ) | (7,519 | ) | 1,517 | |||||||
| Prepaid expenses and other assets | (16 | ) | (888 | ) | 96 | |||||||
| Accounts payable | (899 | ) | 4,207 | (2,072 | ) | |||||||
| Accrued liabilities | (1,027 | ) | 1,480 | (723 | ) | |||||||
| Long-term liabilities-accrued pension | (465 | ) | — | 133 | ||||||||
| Other | 486 | 238 | (51 | ) | ||||||||
| Net cash (used in) provided by operating activities | (13,584 | ) | (9,780 | ) | 4,613 | |||||||
| Investing activities: | ||||||||||||
| Cash consideration paid for acquired business | (12,209 | ) | — | (973 | ) | |||||||
| Capital expenditures | (4,813 | ) | (4,737 | ) | (2,781 | ) | ||||||
| Proceeds from sales of assets | 402 | — | — | |||||||||
| Proceeds from maturity of investments | 27,026 | 33,617 | 342,279 | |||||||||
| Purchases of investments | (2,151 | ) | (35,550 | ) | (331,023 | ) | ||||||
| Proceeds from sales of available-for-sale securities | 268 | 227 | 176 | |||||||||
| Purchases of available-for-sale securities | (268 | ) | (227 | ) | (176 | ) | ||||||
| Other | (20 | ) | (248 | ) | 98 | |||||||
| Net cash provided by (used in) investing activities | 8,235 | (6,918 | ) | 7,600 | ||||||||
| Financing activities: | ||||||||||||
| Repurchase of common stock | (5,015 | ) | (3,945 | ) | (8,739 | ) | ||||||
| Proceeds from issuance of common stock | 142 | 324 | 190 | |||||||||
| Cash dividends paid | (3,079 | ) | (3,260 | ) | (3,341 | ) | ||||||
| Other | (4 | ) | 3 | 37 | ||||||||
| Net cash used in financing activities | (7,956 | ) | (6,878 | ) | (11,853 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (776 | ) | (4,641 | ) | 390 | |||||||
| Increase (decrease) in cash and cash equivalents | (14,081 | ) | (28,217 | ) | 750 | |||||||
| Cash and cash equivalents at beginning of period | 74,535 | 102,752 | 102,002 | |||||||||
| Cash and cash equivalents at end of period | $ | 60,454 | $ | 74,535 | $ | 102,752 | ||||||
| Richardson Electronics, Ltd. | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| For the Fourth Quarter and Fiscal 2016 and Fiscal 2015 | |||||||||||
| (in thousands) | |||||||||||
| By Strategic Business Unit: | |||||||||||
|
Net Sales |
Q4 | Q4 | |||||||||
| FY 2016 | FY 2015 | % Change | |||||||||
| PMT | $ | 30,189 | $ | 26,316 | 14.7% | ||||||
| Canvys | 5,680 | 6,535 | -13.1% | ||||||||
| Healthcare | 3,699 | 2,095 | 76.6% | ||||||||
| Total | $ | 39,568 | $ | 34,946 | 13.2% | ||||||
| YTD | YTD | ||||||||||
| FY 2016 | FY 2015 | % Change | |||||||||
| PMT | $ | 105,554 | $ | 105,748 | -0.2% | ||||||
| Canvys | 23,453 | 24,645 | -4.8% | ||||||||
| Healthcare | 13,009 | 6,564 | 98.2% | ||||||||
| Total | $ | 142,016 | $ | 136,957 | 3.7% | ||||||
|
Gross Profit |
Q4 | Q4 | |||||||||
| FY 2016 | % of Net Sales | FY 2015 | % of Net Sales | ||||||||
| PMT | $ | 10,295 | 34.1% | $ | 8,194 | 31.1% | |||||
| Canvys | 1,578 | 27.8% | 1,528 | 23.4% | |||||||
| Healthcare | 1,515 | 41.0% | 496 | 23.7% | |||||||
| Total | $ | 13,388 | 33.8% | $ | 10,218 | 29.2% | |||||
| YTD | YTD | ||||||||||
| FY 2016 | % of Net Sales | FY 2015 | % of Net Sales | ||||||||
| PMT | $ | 33,088 | 31.3% | $ | 33,098 | 31.3% | |||||
| Canvys | 6,017 | 25.7% | 6,457 | 26.2% | |||||||
| Healthcare | 5,730 | 44.0% | 1,583 | 24.1% | |||||||
| Total | $ | 44,835 | 31.6% | $ | 41,138 | 30.0% | |||||
