Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Aug. 29, 2015 | Oct. 05, 2015 | |
Document Information [Line Items] | ||
Entity Central Index Key | 355,948 | |
Entity Registrant Name | RICHARDSON ELECTRONICS LTD/DE | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 29, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | RELL | |
Current Fiscal Year End Date | --05-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Accelerated Filer | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,725,453 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,140,644 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Aug. 29, 2015 | May. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 68,426 | $ 74,535 |
Accounts receivable, less allowance of $283 | 23,989 | 20,753 |
Inventories, net | 41,188 | 38,769 |
Prepaid expenses and other assets | 2,289 | 1,696 |
Deferred income taxes | 782 | 804 |
Income tax receivable | 381 | 929 |
Investments - current | 6,342 | 23,692 |
Total current assets | 143,397 | 161,178 |
Non-current assets: | ||
Property, plant and equipment, net | 10,832 | 10,081 |
Goodwill | 3,746 | |
Intangibles, net | 6,528 | 743 |
Non-current deferred income taxes | 1,463 | 1,443 |
Investments - non-current | 10,511 | 11,549 |
Total non-current assets | 33,080 | 23,816 |
Total assets | 176,477 | 184,994 |
Current liabilities: | ||
Accounts payable | 14,293 | 15,768 |
Accrued liabilities | 9,348 | 10,144 |
Total current liabilities | 23,641 | 25,912 |
Non-current liabilities: | ||
Non-current deferred income tax liabilities | 1,179 | 1,209 |
Other non-current liabilities | 995 | 1,221 |
Total non-current liabilities | 2,174 | 2,430 |
Total liabilities | $ 25,815 | 28,342 |
Stockholders' equity | ||
Preferred stock, $1.00 par value, no shares issued | ||
Additional paid-in-capital | $ 62,312 | 63,252 |
Common stock in treasury, at cost, 394 shares at August 29, 2015, and no shares at May 30, 2015 | (2,269) | |
Retained earnings | 86,932 | 89,141 |
Accumulated other comprehensive income | 3,012 | 3,575 |
Total stockholders' equity | 150,662 | 156,652 |
Total liabilities and stockholders' equity | 176,477 | 184,994 |
Common Stock [Member] | ||
Stockholders' equity | ||
Common stock, $0.05 par value; issued 11,357 shares at August 29, 2015, and 11,530 shares at May 30 2015; Class B common stock, convertible, $0.05 par value; issued and outstanding 2,141 shares at August 29, 2015, and at May 30, 2015 | 568 | 577 |
Common Class B [Member] | ||
Stockholders' equity | ||
Common stock, $0.05 par value; issued 11,357 shares at August 29, 2015, and 11,530 shares at May 30 2015; Class B common stock, convertible, $0.05 par value; issued and outstanding 2,141 shares at August 29, 2015, and at May 30, 2015 | $ 107 | $ 107 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Aug. 29, 2015 | May. 30, 2015 |
Accounts receivable, allowance | $ 283 | $ 283 |
Preferred stock, par value | $ 1 | $ 1 |
Common stock in treasury | 394 | |
Common Stock [Member] | ||
Common stock, par value | $ 0.05 | $ 0.05 |
Common stock, shares issued | 11,357 | 11,530 |
Common stock, shares outstanding | 11,357 | 11,530 |
Common Class B [Member] | ||
Common stock, par value | $ 0.05 | $ 0.05 |
Common stock, shares issued | 2,141 | 2,141 |
Common stock, shares outstanding | 2,141 | 2,141 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Net sales | $ 37,071 | $ 34,699 |
Cost of sales | 25,809 | 24,041 |
Gross profit | 11,262 | 10,658 |
Selling, general, and administrative expenses | 12,267 | 11,182 |
(Gain) loss on disposal of assets | (1) | 9 |
Operating loss | (1,004) | (533) |
Other (income) expense: | ||
Investment/interest income | (191) | (256) |
Foreign exchange (gain) loss | 182 | (57) |
Other, net | 36 | (2) |
Total other income | 27 | (315) |
Loss before income taxes | (1,031) | (218) |
Income tax provision (benefit) | 368 | (135) |
Net loss | (1,399) | (83) |
Foreign currency translation loss, net of tax | (503) | (968) |
Fair value adjustments on investments gain (loss) | (60) | 25 |
Comprehensive loss | $ (1,962) | $ (1,026) |
Weighted average number of shares: | ||
Common shares - Diluted | 13,627 | 14,004 |
Common Stock [Member] | ||
Other (income) expense: | ||
Loss per Common share - Basic: | $ (.10) | $ (0.01) |
Loss per Common share - Diluted: | $ (0.10) | $ (0.01) |
Weighted average number of shares: | ||
Common shares - Basic | 11,486 | 11,822 |
Common shares - Diluted | 11,486 | 11,822 |
Dividends per common share | $ .060 | $ 0.060 |
Common Class B [Member] | ||
Other (income) expense: | ||
Loss per Common share - Basic: | (0.10) | (0.01) |
Loss per Common share - Diluted: | $ (0.10) | $ (0.01) |
Weighted average number of shares: | ||
Common shares - Basic | 2,141 | 2,182 |
Common shares - Diluted | 2,141 | 2,182 |
Dividends per common share | $ 0.054 | $ 0.054 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Operating activities: | ||
Net loss | $ (1,399) | $ (83) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 485 | 366 |
Gain on sale of investments | (11) | $ (3) |
Gain on disposal of assets | (1) | |
Share-based compensation expense | 90 | $ 120 |
Deferred income taxes | 1 | (79) |
Change in assets and liabilities, net of effect of acquired business: | ||
Accounts receivable | (2,525) | (372) |
Income tax receivable | 548 | 2,308 |
Inventories, net | (593) | (2,110) |
Prepaid expenses and other assets | (581) | 135 |
Accounts payable | (1,521) | 101 |
Accrued liabilities | (804) | $ (662) |
Non-current deferred income tax liabilities | 228 | |
Long term liablities - accrued pension | (465) | |
Other | 35 | $ (49) |
Net cash used in operating activities | (6,513) | $ (328) |
Investing activities: | ||
Cash consideration paid for acquired business | (12,209) | |
Capital expenditures | (984) | $ (834) |
Proceeds from maturity of investments | $ 18,350 | 30,482 |
Purchases of investments | (32,362) | |
Proceeds from sales of available-for-sale securities | $ 100 | 37 |
Purchases of available-for-sale securities | (100) | (37) |
Other | 60 | (28) |
Net cash provided by (used in) investing activities | 5,217 | (2,742) |
Financing activities: | ||
Repurchase of common stock | $ (3,308) | (488) |
Proceeds from issuance of common stock | 158 | |
Cash dividends paid | $ (806) | (828) |
Other | (4) | 1 |
Net cash used in financing activities | (4,118) | (1,157) |
Effect of exchange rate changes on cash and cash equivalents | (695) | (441) |
Decrease in cash and cash equivalents | (6,109) | (4,668) |
Cash and cash equivalents at beginning of period | 74,535 | 102,752 |
Cash and cash equivalents at end of period | $ 68,426 | $ 98,084 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - 3 months ended Aug. 29, 2015 - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Common Class B [Member] | Par Value [Member] | Additional Paid In Capital | Common Stock in Treasury | Retained Earnings | Accumulated Other Comprehensive Income | Total |
Beginning Balance at May. 30, 2015 | $ 684 | $ 63,252 | $ 89,141 | $ 3,575 | $ 156,652 | |||
Beginning Balance (in shares) at May. 30, 2015 | 11,530 | 2,141 | ||||||
Comprehensive loss | ||||||||
Net loss | (1,399) | (1,399) | ||||||
Foreign currency translation | (503) | (503) | ||||||
Fair value adjustments on investments | (60) | $ (60) | ||||||
Share-based compensation: | ||||||||
Stock options | 90 | |||||||
Common stock: | ||||||||
Repurchase of common stock | $ (3,308) | |||||||
Cancellation of treasury stock | (9) | (1,030) | 1,039 | |||||
Treasury stock (in shares) | (173) | |||||||
Other | (4) | |||||||
Dividends paid to: | ||||||||
Common ($0.06 per share) | (690) | $ (690) | ||||||
Class B ($0.054 per share) | (116) | (116) | ||||||
Ending Balance at Aug. 29, 2015 | $ 675 | $ 62,312 | $ (2,269) | $ 86,932 | $ 3,012 | $ 150,662 | ||
Ending Balance (in shares) at Aug. 29, 2015 | 11,357 | 2,141 |
Consolidated Statement of Stoc7
Consolidated Statement of Stockholders' Equity (Parenthetical) | 3 Months Ended |
Aug. 29, 2015$ / shares | |
Common Stock [Member] | |
Dividends per common share | $ .06 |
Common Class B [Member] | |
Dividends per common share | $ 0.054 |
DESCRIPTION OF THE COMPANY
DESCRIPTION OF THE COMPANY | 3 Months Ended |
Aug. 29, 2015 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF THE COMPANY | 1. DESCRIPTION OF THE COMPANY 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 Companys 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. Our products include electron tubes and related components, microwave generators, subsystems used in semiconductor manufacturing, and visual technology solutions. These products are used to control, switch or amplify electrical power signals, or are used as display devices in a variety of industrial, commercial, medical, and communication applications. On June 15, 2015, Richardson Electronics, Ltd (the Company), acquired certain assets of International Medical Equipment and Services, Inc. (IMES), for a purchase price of $12.2 million. IMES, based in South Carolina, provides reliable, cost-saving solutions worldwide for major brands of CT and MRI equipment. This acquisition positions Richardson Healthcare to provide cost effective diagnostic imaging replacement parts and training to hospitals, diagnostic imaging centers, medical institutions, and independent service organizations. IMES offers an extensive selection of replacement parts, as well as an interactive training center, on-site test bays and experienced technicians who provide 24/7 customer support. Replacement parts are readily available and triple tested to provide peace of mind when uptime is critical. IMES core operations will remain in South Carolina. Richardson Healthcare will expand IMES replacement parts and training offerings geographically leveraging the Companys global infrastructure. We have three operating segments, which we define as follows: Power and Microwave Technologies Group ("PMT"), launched in July 2015, combines EDGs core engineered solutions, power grid and microwave tube business with new RF and power technologies. As a manufacturer and authorized distributor, PMTs strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repairall through our existing global infrastructure. PMTs focus is on products for power, RF and microwave applications for customers in alternative energy, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment. Canvys provides customized display solutions serving the corporate enterprise, financial, industrial, and OEM markets. Healthcare manufactures, distributes and services high value replacement parts for the healthcare market including hospitals, medical centers, independent service organizations, and multi-vendor service providers. Products include power grid tubes, hydrogen thyratrons, klystrons, magnetrons; Image Systems medical displays and workstations for picture archiving and communication systems (PACS); visual solutions for operating rooms/surgical environments; digital radiography solutions including replacement flat panel detectors and upgrades; and additional replacement components currently under development for the diagnostic imaging service market. Through a combination of newly developed products and partnerships, service offerings, and training programs, we believe we can help our customers improve efficiency and deliver better clinical outcomes while lowering the cost of healthcare delivery. We currently have operations in the following major geographic regions: North America, Asia/Pacific, Europe, and Latin America. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Aug. 29, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements. Our fiscal quarter ends on the Saturday nearest the end of the quarter-ending month. The first three months of fiscal 2016 and 2015 contained 13 weeks, respectively. In the opinion of management, all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results of interim periods have been made. All inter-company transactions and balances have been eliminated. The unaudited consolidated financial statements presented herein include the accounts of our wholly owned subsidiaries. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The results of our operations for the three months ended August 29, 2015, are not necessarily indicative of the results that may be expected for the fiscal year ending May 28, 2016. The financial information contained in this report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 30, 2015, that we filed on July 28, 2015. On June 15, 2015, the Company completed the acquisition of IMES. The results of the operations have been consolidated with our results following the acquisition date. For a more complete discussion of the transaction, refer to Note 4. |
CRITICAL ACCOUNTING POLICIES AN
CRITICAL ACCOUNTING POLICIES AND ESTIMATES | 3 Months Ended |
Aug. 29, 2015 | |
Accounting Policies [Abstract] | |
CRITICAL ACCOUNTING POLICIES AND ESTIMATES | 3. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Inventories: At this time, we do not anticipate any material risks or uncertainties related to possible future inventory write-downs. Provisions for obsolete or slow moving inventories are recorded based upon regular analysis of stock rotation privileges, obsolescence, the exiting of certain markets, and assumptions about future demand and market conditions. If future demand, changes in the industry, or market conditions differ from management's estimates, additional provisions may be necessary. The inventory reserve as of August 29, 2015, was $3.1 million compared to $3.0 million as of May 30, 2015. Revenue Recognition: Loss Contingencies: Intangible Assets: Income Taxes: |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Aug. 29, 2015 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 4. ACQUISITION On June 15, 2015, Richardson Electronics, Ltd (the Company), acquired certain assets of International Medical Equipment and Services, Inc. (IMES), for a purchase price of $12.2 million. IMES, based in South Carolina, provides reliable, cost-saving solutions worldwide for major brands of CT and MRI equipment. This acquisition positions Richardson Healthcare to provide cost effective diagnostic imaging replacement parts and training to hospitals, diagnostic imaging centers, medical institutions, and independent service organizations. IMES offers an extensive selection of replacement parts, as well as an interactive training center, on-site test bays and experienced technicians who provide 24/7 customer support. Replacement parts are readily available and triple tested to provide peace of mind when uptime is critical. IMES core operations will remain in South Carolina. Richardson Healthcare plans to expand IMES replacement parts and training offerings geographically to leverage the Companys global infrastructure. The consideration paid by the Company to IMES at closing was $12.2 million in cash. The following table summarizes the preliminary fair values of the assets acquired at the date of the closing of the acquisition (in thousands) Accounts receivable $ 743 Inventories 1,690 Property, plant and equipment 230 Goodwill 3,746 Other intangibles 5,800 Net assets acquired $ 12,209 Intangible assets include trade names with an estimated life of 3 years for $0.7 million, customer relationships with an estimated life of 20 years for $4.5 million, technology with an estimated life of 10 years for $0.4 million, and non-compete agreements with an estimated life of 5 years for $0.2 million. The approximate fair values of the assets acquired related to the IMES acquisition are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as we finalize the valuations of the assets acquired. Such changes could result in material variances between the Companys future financial fair values recorded and expenses associated with these items. In connection with the Agreement, the Company also entered into an Employment, Non-Disclosure, and Non-Compete Agreement (Employment Agreement) with Lee A. McIntyre III as the Companys Executive Vice President, IMES. During the term of his employment, Mr. McIntyre will earn an annual base salary of $300,000. In addition to his base salary, he will be entitled to an annual bonus equal to 20% of the EBITDA of IMES provided that the EBITDA of the business is at least $2.0 million inclusive of the bonus payment. The annual bonus payment will terminate after five years. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Aug. 29, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 5. GOODWILL AND INTANGIBLE ASSETS Changes in the carrying value of goodwill are as follows (in thousands) Goodwill Balance at May 30, 2015 $ Premium Paid for IMES Acquisition 3,746 Balance at August 29, 2015 $ 3,746 Goodwill is initially recorded based on the premium paid for acquisitions and is subsequently tested for impairment, using the first day of our fourth quarter as the measurement date. We test goodwill for impairment annually and whenever events or circumstances indicates an impairment may have occurred, such as a significant adverse change in the business climate, loss of key personnel or a decision to sell or dispose of a reporting unit. The goodwill balance in its entirety relates to our Healthcare segment. Intangible assets are initially recorded at their fair market values determined on quoted market prices in active markets, if available, or recognized valuation models. Intangible assets that have finite useful lives are amortized on a straight-line basis over their useful lives. Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements, and technology acquired in connection with our acquisitions. Intangible assets subject to amortization as well as amortization expense are as follows (in thousands) Intangible Assets Subject to Amortization as of August 29, 2015 May 30, 2015 Gross Amounts: Trade Name $ 729 $ 29 Customer Relationship 5,450 948 Non-compete Agreements 247 47 Technology 400 Total Gross Amounts $ 6,826 $ 1,024 Accumulated Amortization: Trade Name $ 29 $ 29 Customer Relationship 245 221 Non-compete Agreements 24 31 Technology Total Accumulated Amortization $ 298 $ 281 Net Intangibles $ 6,528 $ 743 The amortization expense associated with the intangible assets subject to amortization for the next five years is presented in the following table (in thousands) Amortization Expense Fiscal Year Remaining 2016 $ 567 2017 595 2018 593 2019 360 2020 350 Thereafter 4,063 Total amortization expense $ 6,528 |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Aug. 29, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | 6. INVESTMENTS As of August 29, 2015, we had approximately $16.3 million invested in time deposits and certificates of deposit (CD). Of these, $6.3 million mature in less than twelve months and $10 million mature in more than twelve months. The fair value of these investments is equal to the face value of each time deposit and CD. As of May 30, 2015, we had approximately $34.7 million invested in time deposits and CDs. Of this, $23.7 million mature in less than twelve months and $10.9 million mature in more than twelve months. The fair value of these investments is equal to the face value of each time deposit and CD. We also have investments in equity securities, all of which are classified as available-for-sale and are carried at their fair value based on quoted market prices. Our investments, which are included in non-current assets, had a carrying amount of $0.5 million at August 29, 2015, and $0.6 million at May 30, 2015. Proceeds from the sale of securities were $0.1 million during the first quarter of fiscal 2016 and less than $0.1 million during the first quarter of fiscal 2015. We reinvested proceeds from the sale of securities, and the cost of the equity securities sold was based on a specific identification method. Gross realized gains and losses on those sales were $0.1 million during the first quarter of fiscal 2016 and less than $0.1 million during the first quarter of fiscal 2015. Net unrealized holding gains of less than $0.1 million during the first quarter of fiscal 2016 and fiscal 2015, have been included in accumulated other comprehensive loss. |
WARRANTIES
WARRANTIES | 3 Months Ended |
Aug. 29, 2015 | |
Guarantees [Abstract] | |
WARRANTIES | 7. WARRANTIES We offer warranties for the limited number of specific products we manufacture. We also provide extended warranties for some products we sell that lengthen the period of coverage specified in the manufacturers original warranty. Our warranty terms generally range from one to three years. We estimate the cost to perform under the warranty obligation and recognize this estimated cost at the time of the related product sale. We record expense related to our warranty obligations as cost of sales in our consolidated statements of comprehensive income (loss). Each quarter, we assess actual warranty costs incurred on a product-by-product basis and compare the warranty costs to our estimated warranty obligation. With respect to new products, estimates are based generally on knowledge of the products, the extended warranty period, and warranty experience. Warranty reserves are established for costs that are expected to be incurred after the sale and delivery of products under warranty. Warranty reserves are included in accrued liabilities on our consolidated balance sheets. The warranty reserves are determined based on known product failures, historical experience, and other available evidence. Warranty reserves were approximately $0.2 million as of August 29, 2015, and as of May 30, 2015. |
LEASE OBLIGATIONS, OTHER COMMIT
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES | 3 Months Ended |
Aug. 29, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES | 8. LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES We lease certain warehouse and office facilities and office equipment under non-cancelable operating leases. Rent expense during the first three months of fiscal 2016 was $0.5 million and $0.4 million during the first three months of fiscal 2015. Our future lease commitments for minimum rentals, including common area maintenance charges and property taxes during the next five years are as follows (in thousands) Fiscal Year Payments Remaining 2016 $ 1,040 2017 643 2018 341 2019 273 2020 224 Thereafter 264 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Aug. 29, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9. INCOME TAXES The effective income tax rate during the first three months of fiscal 2016 was a tax provision of (35.7%), as compared to a tax provision of 61.8% during the first three months of fiscal 2015. The difference in rate during the first three months of fiscal 2016, as compared to the first three months of fiscal 2015, reflects the impact of changes in our geographical distribution of income (loss), the recording of additional valuation allowance against all of our U.S. state and federal net deferred tax assets, and our positions with respect to ASC 740-30, Income Taxes - Other Considerations or Special Areas (ASC 740-30). The (35.7%) effective income tax rate differs from the federal statutory rate of 34.0% as a result of our geographical distribution of income (loss), the increase in uncertain tax positions as a result of an income tax audit in Germany, and the recording of a valuation allowance against all of our U.S. state and federal net deferred tax assets. In the normal course of business, we are subject to examination by taxing authorities throughout the world. Generally, years prior to fiscal 2011 are closed for examination under the statute of limitation for U.S. federal, U.S. state and local, or non-U.S. tax jurisdictions. We are also currently under examination in Germany (fiscal 2009 through 2011) and Thailand (fiscal 2008 through 2011). Our primary foreign tax jurisdictions are Germany and the Netherlands. We have tax years open in Germany beginning in fiscal 2008 and the Netherlands beginning in fiscal 2010. We have historically determined that certain undistributed earnings of our foreign subsidiaries, to the extent of cash available, will be repatriated to the U.S. Accordingly, we have provided a deferred tax liability totaling $5.0 million as of August 29, 2015, on foreign earnings of $37.6 million. In addition, as of August 29, 2015, approximately $20.9 million of cumulative positive earnings of some of our foreign subsidiaries are still considered permanently reinvested pursuant to ASC 740-30. Due to various tax attributes that are continuously changing, it is not practicable to determine what, if any, tax liability might exist if such earnings were to be repatriated. As of August 29, 2015, our worldwide liability for uncertain tax positions related to continuing operations is $0.2 million, excluding interest and penalties, as compared to no liabilities for uncertain tax positions as of May 30, 2015. We record penalties and interest relating to uncertain tax positions in the income tax expense line item within the unaudited consolidated statements of income and comprehensive income. It is not expected that there will be a change in the unrecognized tax benefits within the next 12 months. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant component of objective evidence evaluated was the cumulative income or loss incurred in each jurisdiction over the three-year period ended August 29, 2015. Such objective evidence limits the ability to consider other subjective evidence such as future income projections. We considered other positive evidence in determining the need for a valuation allowance in the U.S. including the repatriation of foreign earnings which we do not consider permanently reinvested in certain of our foreign subsidiaries. The weight of this positive evidence is not sufficient to outweigh other negative evidence in evaluating our need for a valuation allowance in the U.S. jurisdiction. On the basis of this evaluation, as of August 29, 2015, a valuation allowance of $5.5 million has been established to record only the portion of the deferred tax asset that will more likely than not be realized. The valuation allowance relates to deferred tax assets in foreign jurisdictions where historical taxable losses have been incurred as well as valuation allowance for all domestic federal and state net deferred tax assets considering the cumulative losses for the U.S. jurisdiction. Our valuation allowance increased $0.3 million for additional domestic federal and state net deferred tax assets generated during the first quarter of fiscal 2016 due to additional losses in the U.S. jurisdiction. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. |
CALCULATION OF EARNINGS PER SHA
CALCULATION OF EARNINGS PER SHARE | 3 Months Ended |
Aug. 29, 2015 | |
Earnings Per Share [Abstract] | |
CALCULATION OF EARNINGS PER SHARE | 10. CALCULATION OF EARNINGS PER SHARE We have authorized 17,000,000 shares of common stock, and 3,000,000 shares of Class B common stock. The Class B common stock has 10 votes per share and has transferability restrictions; however, Class B common stock may be converted into common stock on a share-for-share basis at any time. With respect to dividends and distributions, shares of common stock and Class B common stock rank equally and have the same rights, except that Class B common stock cash dividends are limited to 90% of the amount of Class A common stock cash dividends. In accordance with ASC 260-10, Earnings Per Share The earnings per share (EPS) presented in our unaudited consolidated statements of comprehensive income (loss) are based on the following amounts ( in thousands, except per share amounts For the Three Months Ended August 29, 2015 August 30, 2014 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net loss $ (1,399 ) $ (1,399 ) $ (83 ) $ (83 ) Less dividends: Common stock 690 690 710 710 Class B common stock 116 116 118 118 Undistributed losses $ (2,205 ) $ (2,205 ) $ (911 ) $ (911 ) Common stock undistributed losses $ (1,888 ) $ (1,888 ) $ (781 ) $ (781 ) Class B common stock undistributed losses (317 ) (317 ) (130 ) (130 ) Total undistributed losses $ (2,205 ) $ (2,205 ) $ (911 ) $ (911 ) Denominator for basic and diluted EPS: Common stock weighted average shares 11,486 11,486 11,822 11,822 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,141 2,141 2,182 2,182 Effect of dilutive securities Dilutive stock options Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 13,627 14,004 Net loss per share: Common stock $ (0.10 ) $ (0.10 ) $ (0.01 ) $ (0.01 ) Class B common stock $ (0.10 ) $ (0.10 ) $ (0.01 ) $ (0.01 ) Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the first quarter of fiscal 2016 and fiscal 2015 were 887,564 and 674,564, respectively. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Aug. 29, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 11. SEGMENT REPORTING During the first quarter of fiscal 2015, we created a new strategic business unit called Healthcare. As hospitals remain under pressure to reduce costs while serving a much larger customer base, there is a growing demand for independent sources of high value replacement parts for diagnostic imaging. Having access to parts that are tested and in stock enables hospitals to terminate expensive service contracts with OEM and instead use third party service providers or in-house technicians. With our global infrastructure, technical sales team, and experience servicing the healthcare market, we are well positioned to take advantage of this market opportunity. Over time, our plan is to expand our position from being the leader in power grid tubes to a key player in the high growth, high profile healthcare industry. In accordance with ASC 280-10, Segment Reporting, we have identified three reportable segments: PMT, Canvys, and Healthcare. Power and Microwave Technologies Group ("PMT"), launched in July 2015, combines EDGs core engineered solutions, power grid and microwave tube business with new RF and power technologies. As a manufacturer and authorized distributor, PMTs strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repairall through our existing global infrastructure. PMTs focus is on products for power, RF and microwave applications for customers in alternative energy, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment. Canvys provides customized display solutions serving the corporate enterprise, financial, industrial, and OEM markets. Healthcare manufactures, distributes and services high value replacement parts for the healthcare market including hospitals, medical centers, independent service organizations, and multi-vendor service providers. Products include power grid tubes, hydrogen thyratrons, klystrons, magnetrons; Image Systems medical displays and workstations for picture archiving and communication systems (PACS); visual solutions for operating rooms/surgical environments; digital radiography solutions including replacement flat panel detectors and upgrades; and additional replacement components currently under development for the diagnostic imaging service market. Through a combination of newly developed products and partnerships, service offerings, and training programs, we believe we can help our customers improve efficiency and deliver better clinical outcomes while lowering the cost of healthcare delivery. The CEO evaluates performance and allocates resources primarily based on the gross profit of each segment. Operating results by segment are summarized in the following table ( in thousands Three Months Ended August 29, 2015 August 30, 2014 PMT Net Sales $ 27,195 $ 27,438 Gross Profit 8,138 8,686 Canvys Net Sales $ 6,681 $ 5,968 Gross Profit 1,709 1,656 Healthcare Net Sales $ 3,195 $ 1,293 Gross Profit 1,415 316 Geographic net sales information is primarily grouped by customer destination into five areas: North America; Asia/Pacific; Europe; Latin America; and Other. Net sales and gross profit by geographic region are summarized in the following table ( in thousands Three Months Ended August 29, 2015 August 30, 2014 Net Sales North America $ 17,792 $ 14,699 Asia/Pacific 6,132 6,505 Europe 11,358 11,049 Latin America 1,607 2,321 Other (1) 182 125 Total $ 37,071 $ 34,699 Gross Profit North America $ 6,199 $ 5,183 Asia/Pacific 1,956 2,119 Europe 3,341 3,719 Latin America 625 878 Other (1) (859 ) (1,241 ) Total $ 11,262 $ 10,658 (1) Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs, and other unallocated expenses. We sell our products to customers in diversified industries and perform periodic credit evaluations of our customers financial condition. Terms are generally on open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe, and Latin America. Estimates of credit losses are recorded in the financial statements based on monthly reviews of outstanding accounts. |
LITIGATION
LITIGATION | 3 Months Ended |
Aug. 29, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | 12. LITIGATION We are involved in several pending judicial proceedings concerning matters arising in the ordinary course of business. While the outcome of litigation is subject to uncertainties, based on information available at the time the financial statements were issued, we determined disclosure of contingencies relating to any of our pending judicial proceedings was not necessary because there is less than a reasonable possibility that a material loss will be incurred. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Aug. 29, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 13. FAIR VALUE MEASUREMENTS ASC 820, Fair Value Measurements and Disclosures ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists; therefore requiring an entity to develop its own assumptions. As of August 29, 2015, we held investments that are required to be measured at fair value on a recurring basis. Our investments consist of time deposits and CDs, where face value is equal to fair value, and equity securities of publicly traded companies for which market prices are readily available. Investments measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of August 29, 2015, and May 30, 2015, were as follows ( in thousands Level 1 August 29, 2015 Time deposits/CDs $ 16,315 Equity securities 538 Total $ 16,853 May 30, 2015 Time deposits/CDs $ 34,665 Equity securities 576 Total $ 35,241 |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 3 Months Ended |
Aug. 29, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | 14. Related Party Transaction On June 15, 2015, the Company entered into a lease agreement for the IMES facility with LDL, LLC. The Executive Vice President of IMES, Lee A. McIntyre III, has an ownership interest in LDL, LLC. The lease agreement provides for monthly payments over five years with total future minimum lease payments of $0.7 million. Rental expense related to this lease amounted to less than $0.1 million for the three months ended August 29, 2015. The Company shall be entitled to extend the term of the lease for a period of an additional five years by notifying the landlord in writing of its intention to do so within six months of the expiration of the initial term. |
CRITICAL ACCOUNTING POLICIES 22
CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Policies) | 3 Months Ended |
Aug. 29, 2015 | |
Accounting Policies [Abstract] | |
Inventories | Inventories: At this time, we do not anticipate any material risks or uncertainties related to possible future inventory write-downs. Provisions for obsolete or slow moving inventories are recorded based upon regular analysis of stock rotation privileges, obsolescence, the exiting of certain markets, and assumptions about future demand and market conditions. If future demand, changes in the industry, or market conditions differ from management's estimates, additional provisions may be necessary. The inventory reserve as of August 29, 2015, was $3.1 million compared to $3.0 million as of May 30, 2015. |
Revenue Recognition | Revenue Recognition: |
Loss Contingencies | Loss Contingencies: |
Intangible Assets | Intangible Assets: |
Income Taxes | Income Taxes: |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Business Combinations [Abstract] | |
Fair value of assets acquired | The consideration paid by the Company to IMES at closing was $12.2 million in cash. The following table summarizes the preliminary fair values of the assets acquired at the date of the closing of the acquisition (in thousands) Accounts receivable $ 743 Inventories 1,690 Property, plant and equipment 230 Goodwill 3,746 Other intangibles 5,800 Net assets acquired $ 12,209 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying value of Goodwill | Changes in the carrying value of goodwill are as follows (in thousands) Goodwill Balance at May 30, 2015 $ Premium Paid for IMES Acquisition 3,746 Balance at August 29, 2015 $ 3,746 |
Intangible assets subject to amortization | Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements, and technology acquired in connection with our acquisitions. Intangible assets subject to amortization as well as amortization expense are as follows (in thousands) Intangible Assets Subject to Amortization as of August 29, 2015 May 30, 2015 Gross Amounts: Trade Name $ 729 $ 29 Customer Relationship 5,450 948 Non-compete Agreements 247 47 Technology 400 Total Gross Amounts $ 6,826 $ 1,024 Accumulated Amortization: Trade Name $ 29 $ 29 Customer Relationship 245 221 Non-compete Agreements 24 31 Technology Total Accumulated Amortization $ 298 $ 281 Net Intangibles $ 6,528 $ 743 |
Schedule of the amortization expense for the next five years | The amortization expense associated with the intangible assets subject to amortization for the next five years is presented in the following table (in thousands) Amortization Expense Fiscal Year Remaining 2016 $ 567 2017 595 2018 593 2019 360 2020 350 Thereafter 4,063 Total amortization expense $ 6,528 |
LEASE OBLIGATIONS, OTHER COMM25
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of the future lease commitments for minimum rentals | Our future lease commitments for minimum rentals, including common area maintenance charges and property taxes during the next five years are as follows (in thousands) Fiscal Year Payments Remaining 2016 $ 1,040 2017 643 2018 341 2019 273 2020 224 Thereafter 264 |
CALCULATION OF EARNINGS PER S26
CALCULATION OF EARNINGS PER SHARE (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Earnings Per Share [Abstract] | |
Calculation of earnings per share | The earnings per share (EPS) presented in our unaudited consolidated statements of comprehensive income (loss) are based on the following amounts ( in thousands, except per share amounts For the Three Months Ended August 29, 2015 August 30, 2014 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net loss $ (1,399 ) $ (1,399 ) $ (83 ) $ (83 ) Less dividends: Common stock 690 690 710 710 Class B common stock 116 116 118 118 Undistributed losses $ (2,205 ) $ (2,205 ) $ (911 ) $ (911 ) Common stock undistributed losses $ (1,888 ) $ (1,888 ) $ (781 ) $ (781 ) Class B common stock undistributed losses (317 ) (317 ) (130 ) (130 ) Total undistributed losses $ (2,205 ) $ (2,205 ) $ (911 ) $ (911 ) Denominator for basic and diluted EPS: Common stock weighted average shares 11,486 11,486 11,822 11,822 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,141 2,141 2,182 2,182 Effect of dilutive securities Dilutive stock options Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 13,627 14,004 Net loss per share: Common stock $ (0.10 ) $ (0.10 ) $ (0.01 ) $ (0.01 ) Class B common stock $ (0.10 ) $ (0.10 ) $ (0.01 ) $ (0.01 ) |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Segment Reporting [Abstract] | |
Schedule of operating results by segment | Operating results by segment are summarized in the following table ( in thousands Three Months Ended August 29, 2015 August 30, 2014 PMT Net Sales $ 27,195 $ 27,438 Gross Profit 8,138 8,686 Canvys Net Sales $ 6,681 $ 5,968 Gross Profit 1,709 1,656 Healthcare Net Sales $ 3,195 $ 1,293 Gross Profit 1,415 316 |
Schedule of net sales and gross profit by Geographic Region | Net sales and gross profit by geographic region are summarized in the following table ( in thousands Three Months Ended August 29, 2015 August 30, 2014 Net Sales North America $ 17,792 $ 14,699 Asia/Pacific 6,132 6,505 Europe 11,358 11,049 Latin America 1,607 2,321 Other (1) 182 125 Total $ 37,071 $ 34,699 Gross Profit North America $ 6,199 $ 5,183 Asia/Pacific 1,956 2,119 Europe 3,341 3,719 Latin America 625 878 Other (1) (859 ) (1,241 ) Total $ 11,262 $ 10,658 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Aug. 29, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of investments measured at fair value on a recurring basis | Investments measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of August 29, 2015, and May 30, 2015, were as follows ( in thousands Level 1 August 29, 2015 Time deposits/CDs $ 16,315 Equity securities 538 Total $ 16,853 May 30, 2015 Time deposits/CDs $ 34,665 Equity securities 576 Total $ 35,241 |
CRITICAL ACCOUNTING POLICIES 29
CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Details Narrative) - USD ($) $ in Thousands | Aug. 29, 2015 | May. 30, 2015 |
Accounting Policies [Abstract] | ||
Finished Goods Included in inventories | $ 35,800 | $ 33,700 |
Raw material and Work in progress included in inventories | 5,400 | 5,100 |
Inventory Reserves | $ 3,100 | $ 3,000 |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) $ in Thousands | Jun. 15, 2015 | Aug. 29, 2015 | Aug. 30, 2014 |
Cash consideration paid for acquired businesses | $ (12,209) | ||
Intangibles assets acquired | $ 5,800 | ||
Trade Names [Member] | |||
Intangibles assets acquired | $ 700 | ||
Finite lived intangible asset useful life | 3 years | ||
Customer Relationships [Member] | |||
Intangibles assets acquired | $ 4,500 | ||
Finite lived intangible asset useful life | 20 years | ||
Technology-Based Intangible Assets [Member] | |||
Intangibles assets acquired | $ 400 | ||
Finite lived intangible asset useful life | 10 years | ||
Noncompete Agreements [Member] | |||
Intangibles assets acquired | $ 200 | ||
Finite lived intangible asset useful life | 5 years | ||
IMES [Member] | Executive Vice President [Member] | |||
Executive base compensation | $ 300 | ||
Annual bonus based on percent of EBITDA | 20.00% | ||
Minimum EBITDA to receive annual bonus | $ 2,000 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | Jun. 15, 2015USD ($) |
Business Combinations [Abstract] | |
Accounts receivable | $ 743 |
Inventories | 1,690 |
Property, plant and equipment | 230 |
Goodwill | 3,746 |
Other intangibles | 5,800 |
Net assets acquired | $ 12,209 |
GOODWILL AND INTANGIBLE ASSET32
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) | 3 Months Ended |
Aug. 29, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite Lived Intangible Assets Remaining Amortization Expense Period | 17 years 9 months 18 days |
GOODWILL AND INTANGIBLE ASSET33
GOODWILL AND INTANGIBLE ASSETS (Detail) - USD ($) $ in Thousands | Aug. 29, 2015 | May. 30, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross | $ 6,826 | $ 1,024 |
Finite Lived Intangible Assets Accumulated Amortization | 298 | 281 |
Intangible Assets, Net (Including Goodwill) | 6,528 | 743 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross | 729 | 29 |
Finite Lived Intangible Assets Accumulated Amortization | 29 | 29 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross | 5,450 | 948 |
Finite Lived Intangible Assets Accumulated Amortization | 245 | 221 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross | 247 | 47 |
Finite Lived Intangible Assets Accumulated Amortization | 24 | $ 31 |
Technology-Based Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite Lived Intangible Assets Gross | $ 400 |
GOODWILL AND INTANGIBLE ASSET34
GOODWILL AND INTANGIBLE ASSETS (Details 1) $ in Thousands | Aug. 29, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2,016 | $ 567 |
2,017 | 595 |
2,018 | 593 |
2,019 | 360 |
2,020 | 350 |
Thereafter | 4,063 |
Total amortization expense | $ 6,528 |
INVESTMENTS (Details Narrative)
INVESTMENTS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 29, 2015 | Aug. 30, 2014 | May. 30, 2015 | May. 30, 2014 | |
Investment [Line Items] | ||||
Investment, less than twelve months | $ 6,342 | $ 23,692 | ||
Investment, greater than twelve months | 10,511 | 11,549 | ||
Available for sale - equity securities | 500 | $ 600 | ||
Available for sale securities - gross unrealized gains and losses | 100 | |||
Available for sale securities - gross realized gains and losses | 100 | |||
Net unrealized holding gains included in AOCI | 100 | $ 100 | ||
Less than [Member] | ||||
Investment [Line Items] | ||||
Available for sale securities - gross unrealized gains and losses | 100 | |||
Available for sale securities - gross realized gains and losses | $ 100 | |||
Time Deposits and Cetificate of Deposits[Member] | ||||
Investment [Line Items] | ||||
Investments, carrying value | 16,300 | $ 34,700 | ||
Investment, less than twelve months | 6,300 | 23,700 | ||
Investment, greater than twelve months | $ 10,000 | $ 10,900 |
WARRANTIES (Details Narrative)
WARRANTIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | May. 30, 2015 | |
Warranties [Line Items] | ||
Warranty reserves | $ 200 | $ 200 |
Minimum [Member] | ||
Warranties [Line Items] | ||
Warranty term | 1 year | |
Maximum [Member] | ||
Warranties [Line Items] | ||
Warranty term | 3 years |
LEASE OBLIGATIONS, OTHER COMM37
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense under operating leases | $ 500 | $ 400 |
LEASE OBLIGATIONS, OTHER COMM38
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES (Details) $ in Thousands | Aug. 29, 2015USD ($) |
Future Lease Obligations [Abstract] | |
Remaining 2,016 | $ 1,040 |
2,017 | 643 |
2,018 | 341 |
2,019 | 273 |
2,020 | 224 |
Thereafter | $ 264 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | (35.70%) | 61.80% |
Federal statutory tax rate | 34.00% | |
Deferred Tax Liabilities, Undistributed Foreign Earnings | $ 5,000 | |
Cumulative positive earnings of foreign subsidiaries | 37,600 | |
Permanently reinvested cumulative earnnings of foreign subsidiaries | 20,900 | |
Liability for uncertain tax positions related to continuing operations, excluding interest and penalties | 200 | |
Deferred tax valuation allowance | 5,500 | |
Change in valuation allowance | $ 300 |
CALCULATION OF EARNINGS PER S40
CALCULATION OF EARNINGS PER SHARE (Details Narrative) - shares | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Computation Of Earnings Per Share [Line Items] | ||
Limit of cash dividends Class B common stock | 90.00% | |
Common stock options anti-dilutive | 887,564 | 674,564 |
Common Stock [Member] | ||
Computation Of Earnings Per Share [Line Items] | ||
Common stock shares, authorized | 17,000,000 | |
Common Class B [Member] | ||
Computation Of Earnings Per Share [Line Items] | ||
Common stock shares, authorized | 3,000,000 |
CALCULATION OF EARNINGS PER S41
CALCULATION OF EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Numerator for Basic and Diluted Earnings Per Share [Abstract] | ||
Net loss | $ (1,399) | $ (83) |
Less dividends: | ||
Common ($0.06 per share) | 690 | 710 |
Class B ($0.054 per share) | 116 | 118 |
Undistributed losses, basic | (2,205) | (911) |
Undistributed losses, diluted | $ (2,205) | $ (911) |
Denominator for Basic and Diluted Earnings Per Share [Abstract] | ||
Weighted Average Number of Shares Outstanding, Diluted | 13,627 | 14,004 |
Common Stock [Member] | ||
Less dividends: | ||
Undistributed losses, basic | $ (1,888) | $ (781) |
Undistributed losses, diluted | $ (1,888) | $ (781) |
Denominator for Basic and Diluted Earnings Per Share [Abstract] | ||
Weighted Average Number of Shares Outstanding, Basic | 11,486 | 11,822 |
Weighted Average Number of Shares Outstanding, Diluted | 11,486 | 11,822 |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Earnings Per Share, Basic | $ (.10) | $ (0.01) |
Earnings Per Share, Diluted | $ (0.10) | $ (0.01) |
Common Class B [Member] | ||
Less dividends: | ||
Undistributed losses, basic | $ (317) | $ (130) |
Undistributed losses, diluted | $ (317) | $ (130) |
Denominator for Basic and Diluted Earnings Per Share [Abstract] | ||
Weighted Average Number of Shares Outstanding, Basic | 2,141 | 2,182 |
Weighted Average Number of Shares Outstanding, Diluted | 2,141 | 2,182 |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Earnings Per Share, Basic | $ (0.10) | $ (0.01) |
Earnings Per Share, Diluted | $ (0.10) | $ (0.01) |
SEGMENT REPORTING (Detail)
SEGMENT REPORTING (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 29, 2015 | Aug. 30, 2014 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 37,071 | $ 34,699 |
Gross Profit | 11,262 | 10,658 |
PMT [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 27,195 | 27,438 |
Gross Profit | 8,138 | 8,686 |
Canvys [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 6,681 | 5,968 |
Gross Profit | 1,709 | 1,656 |
Healthcare [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 3,195 | 1,293 |
Gross Profit | $ 1,415 | $ 316 |
SEGMENT REPORTING (Details 1)
SEGMENT REPORTING (Details 1) - USD ($) $ in Thousands | 3 Months Ended | ||
Aug. 29, 2015 | Aug. 30, 2014 | ||
Segment Reporting Information [Line Items] | |||
Net sales | $ 37,071 | $ 34,699 | |
Total, Gross Profit | 11,262 | 10,658 | |
North America [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 17,792 | 14,699 | |
Total, Gross Profit | 6,199 | 5,183 | |
Asia Pacific [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 6,132 | 6,505 | |
Total, Gross Profit | 1,956 | 2,119 | |
Europe [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 11,358 | 11,049 | |
Total, Gross Profit | 3,341 | 3,719 | |
Latin America [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,607 | 2,321 | |
Total, Gross Profit | 625 | 878 | |
Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | [1] | 182 | 125 |
Total, Gross Profit | [1] | $ (859) | $ (1,241) |
[1] | Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs, and other unallocated expenses. |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring [Member] - Fair Value, Inputs, Level 1 [Member] - USD ($) $ in Thousands | Aug. 29, 2015 | May. 30, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Time deposits/CDs | $ 16,315 | $ 34,665 |
Equity securities | 538 | 576 |
Investments, Fair Value Disclosure | $ 16,853 | $ 35,241 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details Narrative) - USD ($) $ in Thousands | Jun. 15, 2015 | Jun. 15, 2014 | Aug. 29, 2015 | Aug. 30, 2014 |
Rental expense | $ 500 | $ 400 | ||
IMES [Member] | Less than [Member] | ||||
Rental expense | $ 100 | |||
IMES [Member] | Executive Vice President [Member] | ||||
Total future minimum lease payments | $ 700 | |||
Lease term | 5 years | |||
Renewal term | 5 years |