Richardson Electronics Reports First Quarter Fiscal 2013 Results and Declares Cash Dividend

Richardson Electronics Reports First Quarter Fiscal 2013 Results and Declares Cash Dividend

LAFOX, Ill.--(BUSINESS WIRE)-- Richardson Electronics, Ltd. (NAS: RELL) today reported sales and earnings for its first quarter ended September 1, 2012. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.

Net sales for the first quarter of fiscal 2013 were $35.7 million, down 14.1% from net sales of $41.5 million during the first quarter of last year. Gross profit for the first quarter of fiscal 2013 was $10.6 million, or 29.9% of net sales, compared to $12.7 million, or 30.6% of net sales, during the first quarter of fiscal 2012. Operating income during the first quarter of fiscal 2013 was $0.5 million, or 1.4% of net sales, compared to operating income of $2.0 million, or 4.8% of net sales, during the first quarter of last year. Income from continuing operations for the first quarter of fiscal 2013 was $0.7 million, or $0.05 per diluted common share, compared to income from continuing operations of $1.0 million, or $0.06 per diluted common share during the first quarter of last year.


"Global economic conditions continued to weaken as we progressed through the first quarter contributing to the decline in our overall sales volume. However, backlog is improving within both our EDG and Canvys businesses. EDG continues to strengthen its service capabilities which will drive incremental end user sales of both laser and industrial tubes. In addition, we remain optimistic that healthcare reform and our continued focus on custom solutions for OEMs will provide new display opportunities for Canvys," said Edward J. Richardson, Chairman, Chief Executive Officer and President.

"We believe our second quarter sales should be in the range of $36 to $38 million. We remain focused on building our business to achieve sustainable growth over the long term," said Mr. Richardson.

FINANCIAL SUMMARY ─ THREE MONTHS ENDED SEPTEMBER 1, 2012

  • Net sales for the first quarter of fiscal 2013 were $35.7 million, down 14.1%, compared to net sales of $41.5 million during the first quarter of last year.

  • Gross margin as a percentage of net sales decreased to 29.9% during the first quarter of fiscal 2013 compared to 30.6% during the first quarter of last year.

  • SG&A expenses during the first quarter of fiscal 2013 were $10.1 million, or 28.5% of net sales, compared to $10.8 million, or 25.9% of net sales, during the first quarter of last year.

  • Operating income during the first quarter of fiscal 2013 was $0.5 million, or 1.4% of net sales, compared to operating income of $2.0 million, or 4.8% of net sales, during the first quarter of last year.

  • Income from continuing operations during the first quarter of fiscal 2013 was $0.7 million, or $0.05 per diluted common share, compared to income from continuing operations of $1.0 million, or $0.06 per diluted common share, during the first quarter of last year.

  • Loss from discontinued operations, net of tax, was $0.1 million, during the first quarter of fiscal 2013 compared to income from discontinued operations, net of tax, of $2.6 million, or $0.15 per diluted common share, during the first quarter of last year.

  • Net income during the first quarter of fiscal 2013 was $0.6 million, or $0.04 per diluted common share, compared to net income of $3.6 million, or $0.21 per diluted common share, during the first quarter of last year.

CASH USED FOR SHARE REPURCHASES

"Cash and investments at the end of our first quarter were $150.9 million. We used $5.6 million to repurchase 0.5 million shares during the first quarter. As of today, we have repurchased a total of 3.2 million shares for $40.1 million under our share repurchase authorization and currently have $34.9 million remaining. With our strong balance sheet, we are committed to returning value to our shareholders through a combination of cash dividends, share repurchases, and strategic acquisitions," said Mr. Richardson.

Share repurchases may be made on the open market or in privately negotiated transactions, subject to market conditions and trading restrictions. This authorization has no expiration and may be cancelled at any time.

CASH DIVIDEND

The Company also announced today that its Board of Directors declared a $0.06 dividend per share to all holders of common stock and a $0.054 cash dividend per share to all holders of Class B common stock. The dividend will be payable on November 27, 2012, to all common stockholders of record on November 13, 2012. The Company currently has 12,512,927 million outstanding shares of common stock and 2,889,882 outstanding shares of Class B common stock.

CONFERENCE CALL INFORMATION

On Thursday, October 11, 2012, at 9:00 a.m. CT, Edward J. Richardson, Chairman and Chief Executive Officer, and Kathleen S. Dvorak, Chief Financial Officer, will host a conference call to discuss the Company's first quarter results for fiscal 2013. 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 95966127 approximately five minutes prior to the start of the call. A replay of the call will be available beginning at 11:00 a.m. CT on October 11, 2012, for seven days. The telephone numbers for the replay are (USA) 888-286-8010 and (International) 617-801-6888; access code 51866673.

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 27, 2012, and in the Company's Proxy Statement on Schedule 14A filed on August 30, 2012. 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, and customized display solutions serving customers in the alternative energy, 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. More information is available online 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,

June 2,

2012

2012

Assets

Current assets:

Cash and cash equivalents

$

41,238

$

43,893

Accounts receivable, less allowance of $1,085 and $1,058

20,537

19,727

Inventories

35,437

34,675

Prepaid expenses and other assets

1,453

806

Deferred income taxes

2,041

2,095

Income tax receivable

6,417

6,572

Investments - current

98,714

105,009

Discontinued operations - assets

358

514

Total current assets

206,195

213,291

Non-current assets:

Property, plant and equipment, net

4,201

4,375

Goodwill

1,337

1,261

Other intangibles

278

355

Non-current deferred income taxes

1,448

1,458

Investments - non-current

10,975

10,683

-

Total non-current assets

18,239

18,132

Total assets

$

224,434

$

231,423

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

11,192

$

12,611

Accrued liabilities

8,521

8,466

Discontinued operations - liabilities

178

253

Total current liabilities

19,891

21,330

Non-current liabilities:

Long-term income tax liabilities

6,943

7,306

Other non-current liabilities

1,290

1,213

Discontinued operations - non-current liabilities

1,380

1,361

Total non-current liabilities

9,613

9,880

Total liabilities

29,504

31,210

Commitments and contingencies

-

-

Stockholders' equity

Common stock, $0.05 par value; issued 12,651 shares at September 1, 2012, and 13,074 shares at June 2, 2012

633

654

Class B common stock, convertible, $0.05 par value; issued 2,890 shares at September 1, 2012 and 2,920 shares at June 2, 2012

144

146

Preferred stock, $1.00 par value, no shares issued

-

-

Additional paid-in-capital

82,912

88,217

Common stock in treasury, at cost, 25 shares at September 1, 2012, and 18 shares at June 2, 2012

(305

)

(216

)

Retained earnings

103,872

104,139

Accumulated other comprehensive income

7,674

7,273

Total stockholders' equity

194,930

200,213

Total liabilities and stockholders' equity

$

224,434

$

231,423

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)

Three Months Ended

September 1,

September 3,

2012

2011

Net sales

$

35,650

$

41,511

Cost of sales

25,004

28,809

Gross profit

10,646

12,702

Selling, general, and administrative expenses

10,149

10,772

Gain on disposal of assets

(4

)

(70

)

Operating income

501

2,000

Other (income) expense:

Investment/interest income

(383

)

(364

)

Foreign exchange (gain) loss

(37

)

781

Other, net

(23

)

(21

)

Total other (income) expense

(443

)

396

Income from continuing operations before income taxes

944

1,604

Income tax provision

210

575

Income from continuing operations

734

1,029

Income (loss) from discontinued operations, net of tax

(87

)

2,602

Net income

647

3,631

Foreign currency translation gain, net of tax

400

1,368

Fair value adjustments on investments

1

(48

)

Comprehensive income

$

1,048

$

4,951

Net income per Common share - Basic:

Income from continuing operations

$

0.05

$

0.06

Income (loss) from discontinued operations

(0.01

)

0.15

Total net income per Common share - Basic:

$

0.04

$

0.21

Net income per Class B common share - Basic:

Income from continuing operations

$

0.04

$

0.05

Income from discontinued operations

-

0.14

Total net income per Class B common share - Basic:

$

0.04

$

0.19

Net income per Common share - Diluted:

Income from continuing operations

$

0.05

$

0.06

Income (loss) from discontinued operations

(0.01

)

0.15

Total net income per Common share - Diluted:

$

0.04

$

0.21

Net income per Class B common share - Diluted:

Income from continuing operations

$

0.04

$

0.05

Income from discontinued operations

-

0.14

Total net income per Class B common share - Diluted:

$

0.04

$

0.19

Weighted average number of shares:

Common shares - Basic

12,772

14,343

Class B common shares - Basic

2,913

2,952

Common shares - Diluted

15,787

17,469

Class B common shares - Diluted

2,913

2,952

Dividends per common share

$

0.060

$

0.050

Dividends per Class B common share

$

0.054

$

0.045

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended

September 1,

September 3,

2012

2011

Operating activities: