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 2020 NET INCOME AND DECLARES QUARTERLY CASH DIVIDEND

 

Healthcare and Display Businesses Grow Quarter over Quarter

Highlights

 

Net sales for the first quarter of fiscal 2020 of $40.7 million, down 7.9% from last year’s first quarter, primarily from the decline in the PMT semiconductor wafer fab equipment business.

 

Richardson Healthcare and Canvys net sales increased by 26.8% and 1.4%, respectively.

 

Gross margin increased to 31.9% of net sales for the first quarter of fiscal 2020 versus 31.6% of net sales for the prior year’s first quarter.

 

Operating expenses decreased $0.3 million to $12.8 million for the first quarter of fiscal 2020.

 

Net income of $0.2 million for the first quarter of fiscal 2020 compared to $0.4 million for last year’s first quarter and a net loss in the fourth quarter of fiscal 2019.

 

Earnings per common (diluted) share of $0.01 for the first quarter of fiscal 2020 compared to $0.03 per common (diluted) share for the first quarter of fiscal 2019.

 

Cash and investments of $46.5 million at August 31, 2019 versus $50.0 million at June 1, 2019.

 

LaFox, IL, OCTOBER 9, 2019: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its first quarter ended August 31, 2019. 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 2020 decreased 7.9% to $40.7 million compared to net sales of $44.2 million in the prior year’s first quarter. PMT sales decreased $4.2 million primarily due to the decline in the semiconductor wafer fabrication equipment market, partially offset by higher sales of power conversion and RF and microwave components. Canvys sales increased by $0.1 million or 1.4% due to higher demand in its North American market. Richardson Healthcare sales increased $0.6 million or 26.8% as a result of higher sales of our ALTA750 TM CT tube and replacement parts for diagnostic imaging equipment.

 

Gross margin decreased to $13.0 million, or 31.9% of net sales during the first quarter of fiscal 2020, compared to $14.0 million, or 31.6% of net sales during the first quarter of fiscal 2019. Margin increased as a percent of net sales primarily due to favorable product mix and manufacturing over


absorption in Richardson Healthcare, partially offset by unfavorable product mix and foreign exchange rates for Canvys.

 

Operating expenses were $12.8 million for the first quarter of fiscal 2020 compared to $13.1 million in the first quarter of fiscal 2019. The decrease in operating expenses resulted from lower employee benefits, IT and bad debt expenses. As a result, the Company reported an operating income of $0.1 million for the first quarter of fiscal 2020 compared to operating income of $0.9 million in the prior year’s first quarter.

 

Other income for the first quarter of fiscal 2020, including interest income and foreign exchange, was $0.2 million, compared to other expense of $0.2 million in the first quarter of fiscal 2019.

 

The income tax provision of $0.2 million for the first quarter of fiscal 2020 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.  The tax provision of $0.3 million in last year’s first quarter included a provision for foreign income taxes and no U.S. tax benefit due to the valuation allowance recorded against the net operating loss.

Net income for the first quarter of fiscal 2020 was $0.2 million compared to net income of $0.4 million in the first quarter of fiscal 2019. Earnings per common share (diluted) in the first quarter of fiscal 2020 were $0.01 compared to $0.03 per common share (diluted) in the prior year’s first quarter.

 

“We are pleased with the quarter over quarter growth in our Healthcare business. We are optimistic this trend will continue with increasing customer confidence in the ALTA750 TM CT tube as well as the recent approval to use the CE Mark opening up sales opportunities throughout Europe,“ said Edward J. Richardson, Chairman, Chief Executive Officer, and President. “Revenues resulting from our investments in new power and microwave technologies also continue to increase and Canvys is providing consistent growth helping offset the soft semiconductor wafer fab equipment market,” he concluded.

CASH DIVIDEND

 

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 22, 2019, to common stockholders of record as of November 7, 2019.

 

Cash and investments at the end of the first quarter of fiscal 2020 were $46.5 million compared to $50.0 million at the end of the fourth quarter of fiscal 2019 and $54.8 million at the end of the first quarter of fiscal 2019. The Company spent $0.3 million during the quarter on capital expenditures primarily relating to our IT system and LaFox manufacturing business versus $1.1 million during the first quarter of fiscal 2019. During the first quarter of fiscal 2020, the Company did not repurchase any shares of its common stock. Currently, there are 11.0 million outstanding shares of common stock and 2.1 million outstanding shares of Class B common stock.



CONFERENCE CALL INFORMATION          

 

On Thursday, October 10, 2019, 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 2020 results. A question and answer session will be included as part of the call’s agenda.

 

Participant Instructions

 

Below are the instructions with the general number and access code. Please note that those using these dial-in instructions and access code only, will be logged in as a guest.  If you would like your name announced on the call, please also register using the link below.

Participant Telephone Instructions:

US Toll Free: 1-877-369-5230

US Toll: 1-617-668-3632

Access Code: 0355952#

 

International Dial-in Numbers

Register, receive a unique attendee ID by email and therefore be identified by name during the call (Note, this option cannot be shared by more than one person):

WebEx Entry Link: FY20 1st Quarter Earnings Call for Richardson Electronics

Need urgent assistance? Call 1-301-250-7202

 

A replay of the call will be available beginning at 11:00 a.m. CDT on October 11, 2019.  The toll-free telephone number for the replay is (833) 922-0391.

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. 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 31, 2019

 

 

June 1, 2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

46,457

 

 

$

42,019

 

Accounts receivable, less allowance of $296 and $339, respectively

 

 

21,946

 

 

 

24,296

 

Inventories, net

 

 

54,137

 

 

 

53,232

 

Prepaid expenses and other assets

 

 

2,424

 

 

 

3,067

 

Investments - current

 

 

 

 

 

8,000

 

Total current assets

 

 

124,964

 

 

 

130,614

 

Non-current assets:

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

18,640

 

 

 

19,111

 

Intangible assets, net

 

 

2,696

 

 

 

2,763

 

Lease ROU asset

 

 

4,107

 

 

 

 

Non-current deferred income taxes

 

 

579

 

 

 

529

 

Total non-current assets

 

 

26,022

 

 

 

22,403

 

Total assets

 

$

150,986

 

 

$

153,017

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

12,906

 

 

$

16,943

 

Accrued liabilities

 

 

10,338

 

 

 

11,273

 

Lease liability current

 

 

1,541

 

 

 

 

Total current liabilities

 

 

24,785

 

 

 

28,216

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Non-current deferred income tax liabilities

 

 

216

 

 

 

212

 

Lease liability non-current

 

 

2,678

 

 

 

 

Other non-current liabilities

 

 

692

 

 

 

832

 

Total non-current liabilities

 

 

3,586

 

 

 

1,044

 

Total liabilities

 

 

28,371

 

 

 

29,260

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Common stock, $0.05 par value; issued and outstanding 11,029 shares at

   August 31, 2019 and 10,957 shares at June 1, 2019

 

 

551

 

 

 

547

 

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

   2,097 shares at August 31, 2019 and June 1, 2019

 

 

105

 

 

 

105

 

Preferred stock, $1.00 par value, no shares issued

 

 

 

 

 

 

Additional paid-in-capital

 

 

61,200

 

 

 

61,012

 

Common stock in treasury, at cost, no shares at August 31, 2019 and June 1, 2019

 

 

 

 

 

 

Retained earnings

 

 

59,085

 

 

 

59,703

 

Accumulated other comprehensive income

 

 

1,674

 

 

 

2,390

 

Total stockholders’ equity

 

 

122,615

 

 

 

123,757

 

Total liabilities and stockholders’ equity

 

$

150,986

 

 

$

153,017

 

 


Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive Loss

(in thousands, except per share amounts)

 

 

Three Months Ended

 

 

 

August 31, 2019

 

 

September 1, 2018

 

Statements of Comprehensive Loss

 

 

 

 

 

 

 

 

Net sales

 

$

40,653

 

 

$

44,157

 

Cost of sales

 

 

27,702

 

 

 

30,204

 

Gross profit

 

 

12,951

 

 

 

13,953

 

Selling, general and administrative expenses

 

 

12,847

 

 

 

13,099

 

Loss on disposal of assets

 

 

1

 

 

 

 

Operating income

 

 

103

 

 

 

854

 

Other (income) expense:

 

 

 

 

 

 

 

 

Investment/interest income

 

 

(120

)

 

 

(126

)

Foreign exchange loss

 

 

(110

)

 

 

286

 

Other, net

 

 

(1

)

 

 

(8

)

Total other (income) expense

 

 

(231

)

 

 

152

 

Income before income taxes

 

 

334

 

 

 

702

 

Income tax provision

 

 

177

 

 

 

271

 

Net income

 

 

157

 

 

 

431

 

Foreign currency translation loss, net of tax

 

 

(716

)

 

 

(740

)

Comprehensive loss

 

$

(559

)

 

$

(309

)

Net income per share

 

 

 

 

 

 

 

 

Common shares - Basic

 

$

0.01

 

 

$

0.03

 

Class B common shares - Basic

 

$

0.01

 

 

$

0.03

 

Common shares - Diluted

 

$

0.01

 

 

$

0.03

 

Class B common shares - Diluted

 

$

0.01

 

 

$

0.03

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

Common shares – Basic

 

 

10,990

 

 

 

10,829

 

Class B common shares – Basic

 

 

2,097

 

 

 

2,132

 

Common shares – Diluted

 

 

10,990

 

 

 

10,982

 

Class B common shares – Diluted

 

 

2,097

 

 

 

2,132

 

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 31, 2019

 

 

September 1, 2018

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

157

 

 

$

431

 

Adjustments to reconcile net income to cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

833

 

 

 

764

 

Inventory provisions

 

 

161

 

 

 

215

 

Loss on disposal of assets

 

 

1

 

 

 

 

Share-based compensation expense

 

 

188

 

 

 

165

 

Deferred income taxes

 

 

(48

)

 

 

58

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

2,161

 

 

 

(198

)

Inventories

 

 

(1,357

)

 

 

77

 

Prepaid expenses and other assets

 

 

625

 

 

 

37

 

Accounts payable

 

 

(3,955

)

 

 

(5,419

)

Accrued liabilities

 

 

(876

)

 

 

227

 

Other

 

 

56

 

 

 

13

 

Net cash used in operating activities

 

 

(2,054

)

 

 

(3,630

)

Investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(339

)

 

 

(1,072

)

Proceeds from maturity of investments

 

 

8,000

 

 

 

 

Purchases of investments

 

 

 

 

 

(2,300

)

Net cash provided by (used in) investing activities

 

 

7,661

 

 

 

(3,372

)

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

 

192

 

Cash dividends paid

 

 

(775

)

 

 

(764

)

Payment of financing lease principal

 

 

(30

)

 

 

 

Other

 

 

4

 

 

 

 

Net cash used in financing activities

 

 

(801

)

 

 

(572

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(368

)

 

 

(413

)

Increase (decrease) in cash and cash equivalents

 

 

4,438

 

 

 

(7,987

)

Cash and cash equivalents at beginning of period

 

 

42,019

 

 

 

60,465

 

Cash and cash equivalents at end of period

 

$

46,457

 

 

$

52,478

 

 


Richardson Electronics, Ltd.

Net Sales and Gross Profit

For the First Quarter of Fiscal 2020 and Fiscal 2019

($ in thousands)

By Strategic Business Unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 FY 2020

 

 

 

 

 

 

Q1 FY 2019

 

 

% Change

 

PMT

 

$

30,567

 

 

 

 

 

 

$

34,769

 

 

 

-12.1

%

Canvys

 

 

7,277

 

 

 

 

 

 

 

7,173

 

 

 

1.4

%

Healthcare

 

 

2,809

 

 

 

 

 

 

 

2,215

 

 

 

26.8

%

Total

 

$

40,653

 

 

 

 

 

 

$

44,157

 

 

 

-7.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

Q1 FY 2020

 

 

% of Net Sales

 

 

Q1 FY 2019

 

 

% of Net Sales

 

PMT

 

$

9,679

 

 

 

31.7

%

 

$

11,007

 

 

 

31.7

%

Canvys

 

 

2,321

 

 

 

31.9

%

 

 

2,313

 

 

 

32.2

%

Healthcare

 

 

951

 

 

 

33.9

%

 

 

633

 

 

 

28.6

%

Total

 

$

12,951

 

 

 

31.9

%

 

$

13,953

 

 

 

31.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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