Exhibit 99.1
For Immediate Release For Details Contact: Ed Richardson Chairman and Chief Executive Officer Richardson Electronics, Ltd. Phone: (630) 208-2340 E-mail:info@rell.com | Corporate Headquarters 40W267 Keslinger Road PO Box 393 LaFox, IL 60147-0393 USA Phone: (630) 208-2200 Fax: (630) 208-2550 |
Richardson Reports First Quarter Fiscal 2008 Results
LaFox, IL, Wednesday, October 10, 2007:Richardson Electronics, Ltd. (NASDAQ: RELL), a global provider of engineered solutions used in the RF, Wireless & Power Conversion; Electron Device; and Display Systems markets, today reported its first quarter results for the period ended September 1, 2007. Sales in the first quarter of fiscal 2008 were $129.5 million down from $139.4 million in the first quarter last year. Gross margin improved to 25.2% in the quarter as compared with 24.6% in the first quarter of fiscal 2007. The Company had a net loss of $0.4 million in the first quarter of fiscal 2008, or $0.02 per diluted common share, as compared to a net loss of $1.1 million, or $0.06 per diluted common share, last fiscal year. The net loss in the first quarter of fiscal 2008 included a charge of $0.6 million associated with the extinguishment of the Company’s credit facility on July 27, 2007.
“While sales fell short of our expectations during the first quarter, we are optimistic of the prospects for operating performance improvement during the remainder of fiscal 2008,” said Edward J. Richardson, Chairman, Chief Executive Officer and President. “We are encouraged by the strengthening of our gross margins during the first quarter of fiscal 2008.”
Other Financial Highlights:
• | Sales by Business Unit: |
• | Sales for RF, Wireless & Power Division were $84.3 million in the first quarter of fiscal 2008, down 7.7% as compared to last year, due primarily to a decrease in demand for network access, infrastructure, and passive/interconnect products, which was partially offset by an increase in demand for power conversion products. |
• | Sales in the Electron Device Group were essentially flat at $24.6 million. |
• | Sales in the Display Systems Group were 11.2% lower for the first quarter of fiscal 2008 at $19.4 million due to lower sales of medical monitors and a decline in project business for custom displays. |
• | Sales by Geography: |
• | Sales in Europe increased 1.8% to $34.2 million due to sales growth in wireless, power conversion, and display systems products. |
• | Asia/Pacific sales declined to $38.1 million during the first quarter of fiscal 2008, a 3.5% decrease over the prior year, due to a decline in sales for network access and wireless infrastructure products, partially offset by an increase in sales for power conversion products. |
• | Sales in North America decreased 12.5% to $52.8 million in the first quarter of fiscal 2008 mainly due to a decline in display system and wireless products. |
• | Sales in Latin America decreased 17.7% to $4.1 million in the first quarter of fiscal 2008. |
• | Gross profit declined to $32.6 million in the first quarter of fiscal 2008 as compared with $34.4 million last year. |
• | SG&A expenses decreased slightly to $30.0 million during the first quarter of fiscal 2008 as compared with $30.3 million in the same period last year. |
• | Operating income was $2.7 million in the first quarter of fiscal 2008. |
On Thursday, October 11, 2007 at 9:00 a.m. CDT, Mr. Edward J. Richardson, Chairman and Chief Executive Officer, will host a conference call to discuss the Company’s first quarter financial results. A question and answer session will be included as part of the call’s agenda. To listen to the call, please dial 866-814-8470 approximately five minutes prior to the start of the call. A replay of the call will be available from 12:30 p.m. on October 11, 2007 through January 9, 2008. The telephone numbers for the replay are (USA) 800-475-6701 and (International) 320-365-3844; access code 889789.
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 for the most recently ended fiscal year. 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
Richardson Electronics, Ltd. is a global provider of “Engineered Solutions,” serving the RF, Wireless & Power Conversion; Electron Device; and Display Systems markets. The Company delivers engineered solutions for its customers’ needs through product manufacturing, systems integration, prototype design and manufacture, testing and logistics. Press announcements and other information about Richardson are available on the World Wide Web athttp://www.rell.com/investor.asp.
Richardson Electronics, Ltd.
Condensed Consolidated Statement of Operations
(Unaudited)(in thousands, except per share amounts)
Three months ended | ||||||||
Statements of Operations | September 1, 2007 | September 2, 2006 | ||||||
Net sales | $ | 129,465 | $ | 139,437 | ||||
Cost of sales | 96,827 | 105,085 | ||||||
Gross profit | 32,638 | 34,352 | ||||||
Selling, general, and administrative expenses | 29,966 | 30,313 | ||||||
(Gain) loss on disposal of assets | 1 | (19 | ) | |||||
Operating income | 2,671 | 4,058 | ||||||
Other (income) expense: | ||||||||
Interest expense | 2,676 | 1,610 | ||||||
Investment income | (371 | ) | (77 | ) | ||||
Foreign exchange loss | 444 | 387 | ||||||
Retirement of long-term debt expenses | — | 2,540 | ||||||
Other, net | (1 | ) | 14 | |||||
Total other expense | 2,748 | 4,474 | ||||||
Loss from continuing operations before income taxes | (77 | ) | (416 | ) | ||||
Income tax provision | 314 | 392 | ||||||
Loss from continuing operations | (391 | ) | (808 | ) | ||||
Income (loss) from discontinued operations, net of provision for income tax of $16 and $792, respectively | 31 | (291 | ) | |||||
Net loss | $ | (360 | ) | $ | (1,099 | ) | ||
Net loss per common share – basic: | ||||||||
Loss from continuing operations | $ | (0.02 | ) | $ | (0.05 | ) | ||
Income (loss) from discontinued operations | 0.00 | (0.01 | ) | |||||
Net loss per common share – basic | $ | (0.02 | ) | $ | (0.06 | ) | ||
Net loss per Class B common share – basic: | ||||||||
Loss from continuing operations | $ | (0.02 | ) | $ | (0.04 | ) | ||
Income (loss) from discontinued operations | 0.00 | (0.02 | ) | |||||
Net loss per Class B common share – basic | $ | (0.02 | ) | $ | (0.06 | ) | ||
Net loss per common share – diluted: | ||||||||
Loss from continuing operations | $ | (0.02 | ) | $ | (0.05 | ) | ||
Income (loss) from discontinued operations | 0.00 | (0.01 | ) | |||||
Net loss per common share – diluted | $ | (0.02 | ) | $ | (0.06 | ) | ||
Net loss per Class B common share – diluted: | ||||||||
Loss from continuing operations | $ | (0.02 | ) | $ | (0.04 | ) | ||
Income (loss) from discontinued operations | 0.00 | (0.02 | ) | |||||
Net loss per Class B common share – diluted | $ | (0.02 | ) | $ | (0.06 | ) | ||
Weighted average number of shares: | ||||||||
Common shares - basic | 14,840 | 14,400 | ||||||
Class B common shares - basic | 3,048 | 3,093 | ||||||
Common shares - diluted | 14,840 | 14,400 | ||||||
Class B common shares - diluted | 3,048 | 3,093 | ||||||
Richardson Electronics, Ltd.
Net Sales and Gross Profit
For the First Quarter of Fiscal 2008 and 2007
(Unaudited, in thousands)
By Business Unit: | |||||||||||||||||||||||
Net Sales | Gross Profit | ||||||||||||||||||||||
First Quarter | FY 2008 | FY 2007 | % Change | FY 2008 | GP% of Sales | FY 2007 | GP% of Sales | ||||||||||||||||
RF, Wireless & Power Division | $ | 84,306 | $ | 91,332 | (7.7 | %) | $ | 20,372 | 24.2 | % | $ | 21,463 | 23.5 | % | |||||||||
Electron Device Group | 24,583 | 24,674 | (0.4 | %) | 7,789 | 31.7 | % | 7,711 | 31.3 | % | |||||||||||||
Display Systems Group | 19,389 | 21,829 | (11.2 | %) | 4,440 | 22.9 | % | 4,965 | 22.7 | % | |||||||||||||
Corporate | 1,187 | 1,602 | 37 | 213 | |||||||||||||||||||
Total | $ | 129,465 | $ | 139,437 | (7.2 | %) | $ | 32,638 | 25.2 | % | $ | 34,352 | 24.6 | % | |||||||||
By Geographic Area: | |||||||||||||||||||||||
Net Sales | Gross Profit | ||||||||||||||||||||||
First Quarter | FY 2008 | FY 2007 | % Change | FY 2008 | GP% of Sales | FY 2007 | GP% of Sales | ||||||||||||||||
North America | $ | 52,807 | $ | 60,384 | (12.5 | %) | $ | 14,133 | 26.8 | % | $ | 15,552 | 25.8 | % | |||||||||
Asia/Pacific | 38,129 | 39,506 | (3.5 | %) | 9,487 | 24.9 | % | 9,567 | 24.2 | % | |||||||||||||
Europe | 34,202 | 33,599 | 1.8 | % | 9,253 | 27.1 | % | 9,047 | 26.9 | % | |||||||||||||
Latin America | 4,094 | 4,975 | (17.7 | %) | 1,267 | 30.9 | % | 1,468 | 29.5 | % | |||||||||||||
Corporate | 233 | 973 | (1,502 | ) | (1,282 | ) | |||||||||||||||||
Total | $ | 129,465 | $ | 139,437 | (7.2 | %) | $ | 32,638 | 25.2 | % | $ | 34,352 | 24.6 | % | |||||||||
Note: | Europe includes net sales and gross profit to the Middle East and Africa. |
Latin America includes net sales and gross profit to Mexico.
Corporate consists of freight, other non-specific net sales and gross profit, and customer cash discounts.
Richardson Electronics, Ltd.
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
Unaudited 2007 | June 2, 2007 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 21,781 | $ | 17,436 | ||||
Restricted cash | — | 61,899 | ||||||
Receivables, less allowance of $1,601 and $1,574 | 97,316 | 105,709 | ||||||
Inventories | 118,144 | 110,174 | ||||||
Prepaid expenses | 4,547 | 5,129 | ||||||
Deferred income taxes | 2,477 | 2,131 | ||||||
Current assets of discontinued operations held for sale | 220 | 242 | ||||||
Total current assets | 244,485 | 302,720 | ||||||
Non-current assets: | ||||||||
Property, plant and equipment, net | 30,075 | 29,703 | ||||||
Goodwill | 11,710 | 11,611 | ||||||
Other intangible assets, net | 838 | 1,581 | ||||||
Non-current deferred income taxes | 843 | 389 | ||||||
Assets held for sale | 978 | 1,004 | ||||||
Other assets | 1,831 | 2,058 | ||||||
Non-current assets of discontinued operations held for sale | 5 | 5 | ||||||
Total non-current assets | 46,280 | 46,351 | ||||||
Total assets | $ | 290,765 | $ | 349,071 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 64,328 | $ | 55,530 | ||||
Accrued liabilities | 20,649 | 31,330 | ||||||
Current portion of long-term debt | — | 65,711 | ||||||
Current liabilities of discontinued operations held for sale | 253 | 2,737 | ||||||
Total current liabilities | 85,230 | 155,308 | ||||||
Non-current liabilities: | ||||||||
Long-term debt, less current portion | 59,883 | 55,683 | ||||||
Long-term income tax liabilities | 6,954 | — | ||||||
Non-current liabilities | 1,528 | 1,535 | ||||||
Total non-current liabilities | 68,365 | 57,218 | ||||||
Total liabilities | 153,595 | 212,526 | ||||||
Commitments and contingencies | — | — | ||||||
Stockholders’ equity | ||||||||
Common stock, $0.05 par value; issued 15,929 shares at September 1, 2007 and 15,920 shares at June 2, 2007 | 797 | 796 | ||||||
Class B common stock, convertible, $0.05 par value; issued 3,048 at September 1, 2007 and June 2, 2007 | 152 | 152 | ||||||
Preferred stock, $1.00 par value, no shares issued | — | — | ||||||
Additional paid-in-capital | 119,260 | 118,880 | ||||||
Common stock in treasury, at cost, 1,122 shares at September 1, 2007 and 1,179 shares at June 2, 2007 | (6,651 | ) | (6,989 | ) | ||||
Retained earnings | 20,569 | 21,631 | ||||||
Accumulated other comprehensive income | 3,043 | 2,075 | ||||||
Total stockholders’ equity | 137,170 | 136,545 | ||||||
Total liabilities and stockholders’ equity | $ | 290,765 | $ | 349,071 | ||||