• Richardson Electronics Reports Second Quarter Fiscal 2022 Net Income Of $4.1 Million And Declares Quarterly Cash Dividend

    Source: Nasdaq GlobeNewswire / 05 Jan 2022 16:15:00   America/New_York

    PMT, Canvys and Healthcare Revenues Grow Versus Second Quarter FY21

    Second Quarter Highlights

    • Net sales of $54.0 million were up 27.3% from last year’s second quarter.
    • Sales increased for PMG, Canvys, Healthcare and Semiconductor Wafer Fabrication Equipment products in the second quarter of fiscal 2022 versus the second quarter of fiscal 2021.
    • Backlog increased to $146.9 million in the second quarter versus $126.5 million at the end of the first quarter.
    • Gross margin was 32.7% of net sales for the second quarter of fiscal 2022 versus 33.8% of net sales in the prior year’s second quarter primarily due to product mix and higher global freight costs.
    • Operating expenses decreased $0.4 million to $13.1 million compared to the prior year’s second quarter. This decrease was due to lower legal fees, partially offset by increased employee compensation expense, including higher incentive expense due to the substantially improved performance.
    • Operating income was $4.5 million for the second quarter of fiscal 2022 compared to an operating income of $0.9 million in the second quarter of fiscal 2021.
    • Earnings per common share (diluted) were $0.30 for the second quarter of fiscal 2022 compared to $0.05 per common share (diluted) in the second quarter of fiscal 2021.
    • Cash and investments increased to $39.7 million as of November 27, 2021 versus $36.4 million on August 28, 2021.

    LAFOX, Ill., Jan. 05, 2022 (GLOBE NEWSWIRE) -- Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its second quarter ended November 27, 2021. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.

    “Our strong second quarter financial and operating performance is encouraging, as we produced our sixth consecutive quarter of increased revenues and our highest quarterly operating profit in 11 years,” said Edward J. Richardson, Chairman, Chief Executive Officer, and President. “Our second quarter results reflect the success of our multiple growth strategies as well as strong performance of new products, including our new ULTRA3000. In addition, we are experiencing favorable demand trends across many of our global markets. I am also pleased by the significant improvement in profitability, which we believe demonstrates the power of our compelling financial model. With continued growth in our backlog, we remain confident that fiscal year 2022 will be a strong year of sales growth and improved profitability.”

    Second Quarter Results

    Net sales for the second quarter of fiscal 2022 increased 27.3% to $54.0 million compared to net sales of $42.4 million in the prior year’s second quarter due to higher net sales across all three business units. PMT sales increased $8.8 million or 26.7% from last year’s second quarter. Demand within PMT was driven by strong growth from our Power and Microwave new technology partners for various Power and Microwave applications including Power Management and 5G infrastructure, as well as increasing shipments of the ULTRA3000. In addition, sales for certain Electron Tube product lines increased from the second quarter of fiscal 2021. Canvys sales increased by $2.4 million or 36.5% due to strong customer demand in North America and Europe. Richardson Healthcare sales increased $0.3 million or 10.9% primarily due to a significant increase in demand for the ALTA750TM Tubes.

    Gross margin was 32.7% of net sales during the second quarter of fiscal 2022 compared to 33.8% of net sales during the second quarter of fiscal 2021. PMT margin decreased to 33.5% from 34.2% due to a higher mix of lower margin PMG sales. Canvys margin as a percent of net sales decreased to 31.8% from 35.5% because of higher global freight costs. Healthcare gross margin was 24.5% in the second quarter of fiscal 2022 compared to 25.6% in the prior year’s second quarter primarily due to increased component scrap expense.

    Operating expenses were $13.1 million compared to $13.5 million in the second quarter of fiscal 2021. The decrease in operating expenses resulted from lower legal fees, partially offset by higher employee compensation expenses.

    The Company reported operating income of $4.5 million for the second quarter of fiscal 2022 compared to an operating income of $0.9 million in the prior year’s second quarter. Other income for the second quarter of fiscal 2022, including interest income and foreign exchange, was $0.2 million, compared to other expense of $0.1 million in the second quarter of fiscal 2021.

    The income tax provision of $0.6 million for the second quarter of fiscal 2022 reflected a provision for foreign income taxes and the offset of a U.S. tax provision against the valuation allowance. In addition, state income taxes for Illinois increased due to the suspension of net operating loss carryforwards (“NOLs”) until the end of fiscal 2023. Net income for the second quarter of fiscal 2022 was $4.1 million compared to a net income of $0.7 million in the second quarter of fiscal 2021. Earnings per common share (diluted) were $0.30 in the second quarter of fiscal 2022 compared to $0.05 per common share (diluted) in the second quarter of fiscal 2021.

    Cash and investments at the end of the second quarter of fiscal 2022 were $39.7 million compared to $36.4 million at the end of the first quarter of fiscal 2022 and $46.0 million at the end of the second quarter of fiscal 2021. The Company spent $0.8 million during the quarter on capital expenditures primarily related to its Healthcare and manufacturing businesses as well as its IT System, versus $0.6 million during the second quarter of fiscal 2021.

    FINANCIAL SUMMARY – SIX MONTHS ENDED NOVEMBER 27, 2021

    • Net sales for the first six months of fiscal 2022 were $107.7 million, an increase of 32.6%, compared to net sales of $81.2 million during the first six months of fiscal 2021. Sales increased by $21.6 million or 34.1% for PMT, $4.2 million or 31.1% for Canvys and $0.7 million or 15.3% for Richardson Healthcare.
    • Gross profit increased to $34.0 million during the first six months of fiscal 2022, compared to $26.7 million during the first six months of fiscal 2021. As a percentage of net sales, gross margin decreased to 31.5% of net sales during the first six months of fiscal 2022, compared to 32.9% of net sales during the first six months of fiscal 2021, primarily because of an unfavorable product mix in PMT and higher global freight costs in Canvys, partially offset by improved manufacturing efficiencies for Healthcare.
    • Operating expenses increased to $26.6 million for the first six months of fiscal 2022, compared to $26.5 million for the first six months of fiscal 2021. The increase in operating expenses resulted from higher employee compensation and travel expenses, partially offset by lower legal expenses.
    • Operating income during the first six months of fiscal 2022 was $7.3 million, compared to an operating income of $0.2 million during the first six months of fiscal 2021.
    • Other income for the first six months of fiscal 2022, including interest income and foreign exchange, was $0.1 million, as compared to other expense of $0.5 million in the first six months of fiscal 2021.
    • The income tax provision of $0.7 million during the first six months of fiscal 2022 reflected a provision for foreign income taxes and the offset of a U.S. tax provision against the valuation allowance. In addition, state income taxes for Illinois increased due to the suspension of NOLs until the end of fiscal 2023.
    • Net income for the first six months of fiscal 2022 was $6.8 million, versus a net loss of $0.5 million during the first six months of fiscal 2021. Earnings per common share (diluted) were $0.50 for the first six months of fiscal 2022 compared to a net loss of $0.04 per common share (diluted) for the first six months of fiscal 2021.

    CASH DIVIDEND DECLARED

    The Board of Directors of Richardson Electronics 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 February 23, 2022, to common stockholders of record as of February 4, 2022.

    CONFERENCE CALL INFORMATION

    On Thursday, January 6, 2022, at 9:00 a.m. CST, 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 second quarter fiscal year 2022 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: 2592902 approximately five minutes before the start of the call.  A replay of the call will be available beginning at 1:00 p.m. CST on January 6, 2022, for seven days. The telephone number for the replay is (855) 859-2056; Conference ID: 2592902.

    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 that 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 2, 2021, 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, Ltd. 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 
      November 27,
    2021    		  May 29, 2021 
    Assets        
    Current assets:        
    Cash and cash equivalents $39,665  $43,316 
    Accounts receivable, less allowance of $259 and $202, respectively  27,489   25,096 
    Inventories, net  70,741   63,508 
    Prepaid expenses and other assets  3,380   2,385 
    Total current assets  141,275   134,305 
    Non-current assets:        
    Property, plant and equipment, net  17,091   17,067 
    Intangible assets, net  2,139   2,270 
    Lease ROU asset  3,841   2,570 
    Non-current deferred income taxes  503   541 
    Total non-current assets  23,574   22,448 
    Total assets $164,849  $156,753 
    Liabilities        
    Current liabilities:        
    Accounts payable $18,871  $16,979 
    Accrued liabilities  15,411   14,182 
    Lease liability current  1,252   1,066 
    Total current liabilities  35,534   32,227 
    Non-current liabilities:        
    Non-current deferred income tax liabilities  235   242 
    Lease liability non-current  2,388   1,358 
    Other non-current liabilities  1,279   1,366 
    Total non-current liabilities  3,902   2,966 
    Total liabilities  39,436   35,193 
    Stockholders’ equity        
    Common stock, $0.05 par value; issued and outstanding 11,338 shares on
    November 27, 2021 and 11,160 shares on May 29, 2021    		  567   558 
    Class B common stock, convertible, $0.05 par value; issued and outstanding
    2,097 shares on November 27, 2021 and May 29, 2021    		  105   105 
    Preferred stock, $1.00 par value, no shares issued  —   — 
    Additional paid-in-capital  63,794   62,707 
    Retained earnings  58,476   53,297 
    Accumulated other comprehensive income  2,471   4,893 
    Total stockholders’ equity  125,413   121,560 
    Total liabilities and stockholders’ equity $164,849  $156,753 
             

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

      Three Months Ended  Six Months Ended 
      November
    27, 2021    		  November
    28, 2020    		  November
    27, 2021    		  November
    28, 2020    		 
    Net sales $53,979  $42,418  $107,683  $81,230 
    Cost of sales  36,322   28,075   73,729   54,528 
    Gross profit  17,657   14,343   33,954   26,702 
    Selling, general and administrative expenses  13,135   13,491   26,604   26,467 
    Loss on disposal of assets  2   —   2   — 
    Operating income  4,520   852   7,348   235 
    Other expense (income):                
    Investment/interest income  (8)  (15)  (25)  (33)
    Foreign exchange (gain) loss  (150)  143   (123)  585 
    Other, net  6   (18)  22   (36)
    Total other (income) expense  (152)  110   (126)  516 
    Income (loss) before income taxes  4,672   742   7,474   (281)
    Income tax provision  550   53   717   177 
    Net income (loss)  4,122   689   6,757   (458)
    Foreign currency translation (loss) gain, net of tax  (1,420)  477   (2,422)  2,613 
    Comprehensive income $2,702  $1,166  $4,335  $2,155 
                     
    Net income (loss) per share:                
    Common shares - Basic $0.31  $0.05  $0.52  $(0.04)
    Class B common shares - Basic  0.28   0.05   0.46   (0.03)
    Common shares - Diluted  0.30   0.05   0.50   (0.04)
    Class B common shares - Diluted  0.27   0.05   0.45   (0.03)
                     
    Weighted average number of shares:                
    Common shares – Basic  11,270   11,111   11,232   11,090 
    Class B common shares – Basic  2,097   2,097   2,097   2,097 
    Common shares – Diluted  11,697   11,128   11,568   11,090 
    Class B common shares – Diluted  2,097   2,097   2,097   2,097 
                     
    Dividends per share:                
    Common share $0.060  $0.060  $0.120  $0.120 
    Class B common share  0.054   0.054   0.108   0.108 

            

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

      Three Months Ended  Six Months Ended 
      November
    27, 2021    		  November
    28, 2020    		  November
    27, 2021    		  November
    28, 2020    		 
    Operating activities:                
    Net income (loss) $4,122  $689  $6,757  $(458)
    Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:                
    Depreciation and amortization  859   873   1,688   1,746 
    Inventory provisions  57   215   140   452 
    Share-based compensation expense  153   178   372   379 
    Loss on disposal of assets  2   —   2   — 
    Deferred income taxes  (23)  (55)  12   (53)
    Change in assets and liabilities:                
    Accounts receivable  1,862   687   (3,146)  (167)
    Inventories  (4,225)  613   (9,182)  (1,008)
    Prepaid expenses and other assets  (994)  (381)  (1,056)  (272)
    Accounts payable  1,695   211   2,302   (2,523)
    Accrued liabilities  1,032   1,633   1,512   3,412 
    Other  91   (236)  357   (438)
    Net cash provided by (used in) operating activities  4,631   4,427   (242)  1,070 
    Investing activities:                
    Capital expenditures  (770)  (562)  (1,607)  (1,280)
    Proceeds from maturity of investments  —   —   —   16,000 
    Purchases of investments  —   —   —   (9,000)
    Net cash (used in) provided by investing activities  (770)  (562)  (1,607)  5,720 
    Financing activities:                
    Proceeds from issuance of common stock  672   —   724   — 
    Cash dividends paid  (792)  (780)  (1,578)  (1,560)
    Payment of financing lease principal  (46)  (46)  (91)  (91)
    Net cash used in financing activities  (166)  (826)  (945)  (1,651)
    Effect of exchange rate changes on cash and cash equivalents  (448)  489   (857)  1,349 
    Increase (decrease) in cash and cash equivalents  3,247   3,528   (3,651)  6,488 
    Cash and cash equivalents at beginning of period  36,418   33,495   43,316   30,535 
    Cash and cash equivalents at end of period $39,665  $37,023  $39,665  $37,023 
                     

    Richardson Electronics, Ltd. 
    Unaudited Net Sales and Gross Profit
    For the Second Quarter and First Six Months of Fiscal 2022 and 2021
    ($ in thousands)

    By Strategic Business Unit:               
                     
    Net Sales                
      Q2 FY 2022      Q2 FY 2021  % Change 
    PMT $41,737      $32,929   26.7%
    Canvys  9,150       6,701   36.5%
    Healthcare  3,092       2,788   10.9%
    Total $53,979      $42,418   27.3%
                     
      YTD FY 2022      YTD FY 2021  % Change 
    PMT $84,746      $63,181   34.1%
    Canvys  17,591       13,413   31.1%
    Healthcare  5,346       4,636   15.3%
    Total $107,683      $81,230   32.6%
                     
                     
                     
    Gross Profit   
      Q2 FY 2022  % of Net Sales  Q2 FY 2021  % of Net Sales 
    PMT $13,986   33.5% $11,251   34.2%
    Canvys  2,912   31.8%  2,379   35.5%
    Healthcare  759   24.5%  713   25.6%
    Total $17,657   32.7% $14,343   33.8%
                     
      YTD FY 2022  % of Net Sales  YTD FY 2021  % of Net Sales 
    PMT $26,917   31.8% $21,222   33.6%
    Canvys  5,730   32.6%  4,663   34.8%
    Healthcare  1,307   24.4%  817   17.6%
    Total $33,954   31.5% $26,702   32.9%
                     


    For Details Contact: 40W267 Keslinger Road
    Edward J. RichardsonRobert J. BenPO BOX 393
    Chairman and CEOEVP & CFOLaFox, IL 60147-0393 USA
    Phone: (630) 208-2320(630) 208-2203(630) 208-2200 | Fax: (630) 208-2550
       

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