Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Nov. 30, 2019 | Jan. 07, 2020 | |
Document Information [Line Items] | ||
Entity Registrant Name | RICHARDSON ELECTRONICS LTD/DE | |
Entity Central Index Key | 0000355948 | |
Document Type | 10-Q | |
Trading Symbol | RELL | |
Document Period End Date | Nov. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-30 | |
Entity's Reporting Status Current | Yes | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity File Number | 0-12906 | |
Entity Tax Identification Number | 36-2096643 | |
Entity Address, Address Line One | 40W267 Keslinger Road | |
Entity Address, Address Line Two | P.O. Box 393 | |
Entity Address, City or Town | LaFox | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60147-0393 | |
City Area Code | 630 | |
Local Phone Number | 208-2200 | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common stock, $0.05 Par Value | |
Security Exchange Name | NASDAQ | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,038,235 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,096,919 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Nov. 30, 2019 | Jun. 01, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 33,054 | $ 42,019 |
Accounts receivable, less allowance of $278 and $339, respectively | 22,336 | 24,296 |
Inventories, net | 56,169 | 53,232 |
Prepaid expenses and other assets | 2,853 | 3,067 |
Investments - current | 13,000 | 8,000 |
Total current assets | 127,412 | 130,614 |
Non-current assets: | ||
Property, plant and equipment, net | 18,361 | 19,111 |
Intangible assets, net | 2,637 | 2,763 |
Lease ROU asset | 3,991 | |
Non-current deferred income taxes | 575 | 529 |
Total non-current assets | 25,564 | 22,403 |
Total assets | 152,976 | 153,017 |
Current liabilities: | ||
Accounts payable | 15,439 | 16,943 |
Accrued liabilities | 10,836 | 11,273 |
Lease liability current | 1,628 | |
Total current liabilities | 27,903 | 28,216 |
Non-current liabilities: | ||
Non-current deferred income tax liabilities | 241 | 212 |
Lease liability non-current | 2,437 | |
Other non-current liabilities | 718 | 832 |
Total non-current liabilities | 3,396 | 1,044 |
Total liabilities | 31,299 | 29,260 |
Stockholders’ equity | ||
Preferred stock, $1.00 par value, no shares issued | ||
Additional paid-in-capital | 61,436 | 61,012 |
Common stock in treasury, at cost, no shares at November 30, 2019 and June 1, 2019 | ||
Retained earnings | 57,688 | 59,703 |
Accumulated other comprehensive income | 1,896 | 2,390 |
Total stockholders’ equity | 121,677 | 123,757 |
Total liabilities and stockholders’ equity | 152,976 | 153,017 |
Common Stock | ||
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 Class B common stock, convertible, $0.05 par value; issued and outstanding 2,097 shares at August 31, 2019 and June 1, 2019 | 552 | 547 |
Common Class B | ||
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 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 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Nov. 30, 2019 | Jun. 01, 2019 |
Allowance for accounts receivable | $ 278 | $ 339 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, issued (in shares) | 0 | 0 |
Common stock in treasury (in shares) | 0 | 0 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, issued (in shares) | 11,038 | 10,957 |
Common stock, outstanding (in shares) | 11,038 | 10,957 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, issued (in shares) | 2,097 | 2,097 |
Common stock, outstanding (in shares) | 2,097 | 2,097 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2019 | Dec. 01, 2018 | Nov. 30, 2019 | Dec. 01, 2018 | |
Net sales | $ 39,634 | $ 41,314 | $ 80,287 | $ 85,471 |
Cost of sales | 26,954 | 28,343 | 54,656 | 58,547 |
Gross profit | 12,680 | 12,971 | 25,631 | 26,924 |
Selling, general and administrative expenses | 13,161 | 13,425 | 26,008 | 26,524 |
Loss on disposal of assets | 1 | |||
Operating (loss) income | (481) | (454) | (378) | 400 |
Other expense (income): | ||||
Investment/interest income | (123) | (121) | (243) | (247) |
Foreign exchange loss (gain) | 199 | (211) | 89 | 75 |
Other, net | (15) | 4 | (16) | (4) |
Total other expense (income) | 61 | (328) | (170) | (176) |
(Loss) income before income taxes | (542) | (126) | (208) | 576 |
Income tax provision | 80 | 178 | 257 | 449 |
Net (loss) income | (622) | (304) | (465) | 127 |
Foreign currency translation gain (loss), net of tax | 222 | (1,041) | (494) | (1,781) |
Comprehensive loss | $ (400) | $ (1,345) | $ (959) | $ (1,654) |
Weighted average number of shares: | ||||
Common shares - Diluted | 13,135 | 13,049 | 13,111 | 13,167 |
Common Class B | ||||
Net (loss) income per share | ||||
Common shares - Basic | $ (0.04) | $ (0.02) | $ (0.03) | $ 0.01 |
Common shares - Diluted | $ (0.04) | $ (0.02) | $ (0.03) | $ 0.01 |
Weighted average number of shares: | ||||
Common shares - Basic | 2,097 | 2,097 | 2,097 | 2,114 |
Common shares - Diluted | 2,097 | 2,097 | 2,097 | 2,114 |
Dividends per share | $ 0.054 | $ 0.054 | $ 0.108 | $ 0.108 |
Common Stock | ||||
Net (loss) income per share | ||||
Common shares - Basic | (0.05) | (0.02) | (0.04) | 0.01 |
Common shares - Diluted | $ (0.05) | $ (0.02) | $ (0.04) | $ 0.01 |
Weighted average number of shares: | ||||
Common shares - Basic | 11,038 | 10,952 | 11,014 | 10,890 |
Common shares - Diluted | 11,038 | 10,952 | 11,014 | 11,053 |
Dividends per share | $ 0.060 | $ 0.060 | $ 0.120 | $ 0.120 |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2019 | Dec. 01, 2018 | Nov. 30, 2019 | Dec. 01, 2018 | |
Operating activities: | ||||
Net (loss) income | $ (622) | $ (304) | $ (465) | $ 127 |
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 825 | 792 | 1,658 | 1,556 |
Inventory provisions | 120 | 150 | 281 | 365 |
Loss on disposal of assets | 1 | |||
Share-based compensation expense | 182 | 230 | 370 | 395 |
Deferred income taxes | 23 | 97 | (25) | 155 |
Change in assets and liabilities: | ||||
Accounts receivable | (335) | 100 | 1,826 | (98) |
Inventories | (2,062) | (1,908) | (3,419) | (1,831) |
Prepaid expenses and other assets | (423) | (319) | 202 | (282) |
Accounts payable | 2,590 | 1,538 | (1,365) | (3,881) |
Accrued liabilities | 486 | 344 | (390) | 571 |
Other | (165) | 161 | (109) | 174 |
Net cash provided by (used in) operating activities | 619 | 881 | (1,435) | (2,749) |
Investing activities: | ||||
Capital expenditures | (475) | (1,120) | (814) | (2,192) |
Proceeds from maturity of investments | 8,000 | |||
Purchases of investments | (13,000) | (3,000) | (13,000) | (5,300) |
Net cash used in investing activities | (13,475) | (4,120) | (5,814) | (7,492) |
Financing activities: | ||||
Proceeds from issuance of common stock | 59 | 11 | 59 | 203 |
Cash dividends paid | (775) | (770) | (1,550) | (1,534) |
Payment of financing lease principal | (45) | (75) | ||
Other | (4) | |||
Net cash used in financing activities | (765) | (759) | (1,566) | (1,331) |
Effect of exchange rate changes on cash and cash equivalents | 218 | (621) | (150) | (1,034) |
Decrease in cash and cash equivalents | (13,403) | (4,619) | (8,965) | (12,606) |
Cash and cash equivalents at beginning of period | 46,457 | 52,478 | 42,019 | 60,465 |
Cash and cash equivalents at end of period | $ 33,054 | $ 47,859 | $ 33,054 | $ 47,859 |
Unaudited Consolidated Statem_3
Unaudited Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Class B | Common Stock | Par value | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Beginning Balance at Jun. 02, 2018 | $ 135,181 | $ 647 | $ 60,061 | $ 70,107 | $ 4,366 | ||
Beginning Balance (in shares) at Jun. 02, 2018 | 2,137 | 10,806 | |||||
Comprehensive (loss) income | |||||||
Net income (loss) | 127 | 127 | |||||
Foreign currency translation | (1,781) | (1,781) | |||||
Share-based compensation: | |||||||
Restricted stock | 136 | 136 | |||||
Stock options | 259 | 259 | |||||
Options exercised | 203 | 2 | 201 | ||||
Options exercised (in shares) | 37 | ||||||
Restricted stock issuance | 3 | (3) | |||||
Restricted stock issuance (in shares) | 70 | ||||||
Converted Class B to common (in shares) | (40) | 40 | |||||
Dividends paid to: | |||||||
Common ($0.120 and $0.06 per share) | (1,306) | (1,306) | |||||
Class B ($0.108 and $0.054 per share) | (228) | (228) | |||||
Ending Balance at Dec. 01, 2018 | 132,591 | 652 | 60,654 | 68,700 | 2,585 | ||
Ending Balance (in shares) at Dec. 01, 2018 | 2,097 | 10,953 | |||||
Beginning Balance at Sep. 01, 2018 | 134,465 | 652 | 60,413 | 69,774 | 3,626 | ||
Beginning Balance (in shares) at Sep. 01, 2018 | 2,097 | 10,951 | |||||
Comprehensive (loss) income | |||||||
Net income (loss) | (304) | (304) | |||||
Foreign currency translation | (1,041) | (1,041) | |||||
Share-based compensation: | |||||||
Restricted stock | 91 | 91 | |||||
Stock options | 139 | 139 | |||||
Options exercised | 11 | 11 | |||||
Options exercised (in shares) | 2 | ||||||
Dividends paid to: | |||||||
Common ($0.120 and $0.06 per share) | (658) | (658) | |||||
Class B ($0.108 and $0.054 per share) | (112) | (112) | |||||
Ending Balance at Dec. 01, 2018 | 132,591 | 652 | 60,654 | 68,700 | 2,585 | ||
Ending Balance (in shares) at Dec. 01, 2018 | 2,097 | 10,953 | |||||
Beginning Balance at Jun. 01, 2019 | 123,757 | 652 | 61,012 | 59,703 | 2,390 | ||
Beginning Balance (in shares) at Jun. 01, 2019 | 2,097 | 10,957 | |||||
Comprehensive (loss) income | |||||||
Net income (loss) | (465) | (465) | |||||
Foreign currency translation | (494) | (494) | |||||
Share-based compensation: | |||||||
Restricted stock | 214 | 214 | |||||
Stock options | 156 | 156 | |||||
Options exercised | 59 | 1 | 58 | ||||
Options exercised (in shares) | 10 | ||||||
Restricted stock issuance | 4 | (4) | |||||
Restricted stock issuance (in shares) | 71 | ||||||
Dividends paid to: | |||||||
Common ($0.120 and $0.06 per share) | (1,324) | (1,324) | |||||
Class B ($0.108 and $0.054 per share) | (226) | (226) | |||||
Ending Balance at Nov. 30, 2019 | 121,677 | 657 | 61,436 | 57,688 | 1,896 | ||
Ending Balance (in shares) at Nov. 30, 2019 | 2,097 | 11,038 | |||||
Beginning Balance at Aug. 31, 2019 | 122,615 | 656 | 61,200 | 59,085 | 1,674 | ||
Beginning Balance (in shares) at Aug. 31, 2019 | 2,097 | 11,029 | |||||
Comprehensive (loss) income | |||||||
Net income (loss) | (622) | (622) | |||||
Foreign currency translation | 222 | 222 | |||||
Share-based compensation: | |||||||
Restricted stock | 115 | 115 | |||||
Stock options | 67 | 67 | |||||
Options exercised | 59 | 1 | 58 | ||||
Options exercised (in shares) | 10 | ||||||
Restricted stock issuance | (4) | (4) | |||||
Restricted stock issuance (in shares) | (1) | ||||||
Dividends paid to: | |||||||
Common ($0.120 and $0.06 per share) | (662) | (662) | |||||
Class B ($0.108 and $0.054 per share) | (113) | (113) | |||||
Ending Balance at Nov. 30, 2019 | $ 121,677 | $ 657 | $ 61,436 | $ 57,688 | $ 1,896 | ||
Ending Balance (in shares) at Nov. 30, 2019 | 2,097 | 11,038 |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2019 | Dec. 01, 2018 | Nov. 30, 2019 | Dec. 01, 2018 | |
Common Class B | ||||
Dividends per common share | $ 0.054 | $ 0.054 | $ 0.108 | $ 0.108 |
Common Stock | ||||
Dividends per common share | $ 0.06 | $ 0.06 | $ 0.120 | $ 0.120 |
Description of the Company
Description of the Company | 6 Months Ended |
Nov. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [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 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. 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. We have three operating and reportable segments, which we define as follows: Power and Microwave Technologies Group (“PMT”) combines our core engineered solutions capabilities, power grid and microwave tube business with new RF, Wireless and disruptive power technologies. As a manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair—all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, 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, healthcare, industrial and medical original equipment manufacturers markets. Our engineers design, manufacture, source and support a full spectrum of solutions to match the needs of our customers. We offer long term availability and proven custom display solutions that include touch screens, protective panels, custom enclosures, all-in-ones, specialized cabinet finishes and application specific software packages and certification services. We partner with both private label manufacturing companies and leading branded hardware vendors to offer the highest quality display and touch solutions and customized computing platforms. Healthcare manufactures, refurbishes and distributes high value replacement parts for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include Diagnostic Imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI coils, cold heads and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; and additional replacement solutions 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 | 6 Months Ended |
Nov. 30, 2019 | |
Basis Of Presentation [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 second quarter of fiscal 2020 and fiscal 2019 both contained 13 weeks. The first six months of fiscal 2020 and fiscal 2019 both contained 26 weeks. 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 and six months ended November 30, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending May 30, 2020. 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 June 1, 2019, that we filed on August 5, 2019. |
Critical Accounting Policies an
Critical Accounting Policies and Estimates | 6 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Critical Accounting Policies and Estimates | 3. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Inventories, net: Our consolidated inventories were stated at the lower of cost and net realizable value, generally using a weighted-average cost method. Our net inventories include approximately $50.3 million of finished goods, $3.8 million of raw materials and $2.1 million of work-in-progress as of November 30, 2019, as compared to approximately $47.2 million of finished goods, $4.2 million of raw materials and $1.8 million of work-in-progress as of June 1, 2019. 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. Inventory reserves were approximately $4.7 million as of November 30, 2019 and $4.6 million as of June 1, 2019. Revenue Recognition: Our product sales are recognized as revenue upon shipment, when title passes to the customer, when delivery has occurred or services have been rendered and when collectability is reasonably assured. We also record estimated discounts and returns based on our historical experience. Our products are often manufactured to meet the specific design needs of our customers’ applications. Our engineers work closely with customers to ensure that our products will meet their needs. Our customers are under no obligation to compensate us for designing the products we sell. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers Effective June 3, 2018, the Company adopted the standard using the modified retrospective method to all contracts. As a result, financial information for the reporting period beginning June 3, 2018 was reported under the new standard, while comparative financial information has not been adjusted and continues to be reported in accordance with the previous standard. The adoption of this standard did not impact the timing of revenue recognition for our customer sales. The adoption did not result in the recognition of a cumulative adjustment to beginning retained earnings, nor did it have a material impact on the consolidated financial statements. For the Company, the most significant impact of the new standard is the addition of required disclosures within the notes to the financial statements. Loss Contingencies: We accrue a liability for loss contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. If we determine that there is at least a reasonable possibility that a loss may have been incurred, we will include a disclosure describing the contingency. Intangible Assets: 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 over their useful lives either on a straight-line basis or over their projected future cash flows and are tested for impairment when events or changes in circumstances occur that indicate possible impairment. Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements and technology acquired in connection with our acquisitions. Income Taxes: We recognize deferred tax assets and liabilities based on the differences between financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and determine the need for a valuation allowance based on a number of factors, including both positive and negative evidence. These factors include historical taxable income or loss, projected future taxable income or loss, the expected timing of the reversals of existing temporary differences and the implementation of tax planning strategies. In circumstances where we, or any of our affiliates, have incurred three years of cumulative losses which constitute significant negative evidence, positive evidence of equal or greater significance is needed to overcome the negative evidence before a tax benefit is recognized for deductible temporary differences and loss carryforwards. Accrued Liabilities: Accrued liabilities consist of the following (in thousands): November 30, 2019 June 1, 2019 Compensation and payroll taxes $ 3,264 $ 2,846 Accrued severance 500 520 Professional fees 552 471 Deferred revenue 1,624 2,260 Other accrued expenses 4,896 5,176 Accrued Liabilities $ 10,836 $ 11,273 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Nov. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | 4. REVENUE RECOGNITION Richardson has a number of defined revenue streams across our reportable segments. For each of these revenue streams, all products are typically sold directly by the Company to the end customer. Distribution is the Company’s largest revenue stream. The distribution business does not include a separate service bundled with the product sold or sold on top of the product. Distribution typically includes products purchased from our suppliers, stocked in our warehouses and then sold to our customers. Revenue is recognized when control of the promised goods is transferred to our customers, which is simultaneous with the title transferring to the customer, in an amount that reflects the transaction price consideration that we expect to receive in exchange for those goods. Control refers to the ability of the customer to direct the use of, and obtain substantially all of, the remaining benefits from the goods. Our transaction price consideration is fixed, unless otherwise disclosed below as variable consideration. G The Company also sells products that are manufactured or assembled in our manufacturing facility. These products can either be built to the customer’s prints/designs or are products that we stock in our warehouse to sell to any customer that places an order. The manufacturing business does not include a separate service bundled with the product sold or sold in addition to the product. The Company recognizes services revenue when the repair, installation or training is performed. Based on our analysis of services revenue, ASU 2014-09 has an immaterial impact on the timing, amount or characterization of services revenue recognized by the Company. The services we provide are relatively short in duration and typically completed in one to two weeks. Therefore, at each reporting date, the amount of unbilled work performed is insignificant. The services revenue has consistently accounted for less than 5% of the Company’s total revenues and is expected to continue at that level. Contracts with customers A contract is an agreement between two or more parties that creates enforceable rights and obligations. A Contract Liabilities: Contract liabilities and revenue recognized were as follows ( in thousands ): June 1, 2019 Additions Revenue Recognized November 30, 2019 Contract liabilities (deferred revenue) $ 2,260 $ 1,169 $ (1,805 ) $ 1,624 The Company receives advance payments or deposits from our customers before revenue is recognized, resulting in contract liabilities. Contract liabilities are included in accrued liabilities in the consolidated balance sheets. Performance obligations and satisfaction of performance obligation in the contract Each accepted purchase order identifies a distinct good or service as the performance obligation. The goods are generally standard products we purchased from a supplier and stocked on our shelves. They can also be customized products purchased from a supplier or products that are customized or have value added to them in-house prior to shipping to the customer. Our contracts for customized products generally include termination provisions if a customer cancels its order. However, we recognize revenue at a point in time because the termination provisions do not require, upon cancelation, the customer to pay fees that are commensurate with the work performed. Each purchase order explicitly states the goods or service that we promise to transfer to the customer. The promises to the customer are limited only to those goods or service. The performance obligation is our promise to deliver both goods that were produced by the Company and resale of goods that we purchase from our suppliers. Our shipping and handling activities for destination shipments are performed prior to the customer obtaining control. As such, they are not a separate promised service. For shipping point, Richardson is making the election under ASC 606-10-25-18B to Determine the transaction price and variable consideration The transaction price for each product is the amount invoiced to the customer. Each product on a purchase order is a separate performance obligation with an observable standalone selling price. Recognize revenue when the entity satisfies a performance obligation W e recognize revenue when title transfers to the customer, at the shipping point for FOB shipping contracts and at the customer’s delivery location for FOB destination contracts. We believe that the transfer of title best represents when the customer obtains control of the goods. Prior to that date, we do not have right to payment, and the significant risks and rewards remain with us. The significant risks and rewards of ownership of the inventory transfer simultaneously with the transfer of title. The customer’s acceptance of the goods is based on objective measurements, not subjective. Additional considerations Sale with right of return: Our return policy is available to customers in our terms and conditions found on our website www.rell.com. The policy varies by business unit. The Company allows returns with prior written authorization and we allow returns within 10 days of shipment for replacement parts. The Company maintains a reserve for returns based on historical trends that covers all contracts and revenue streams The reserve is considered immaterial at each balance sheet date for further consideration. Returns for defective product are typically covered by our supplier’s warranty, thus, returns for defective product are not factored into our reserve. Warranties: We offer warranties for the limited number of specific products we manufacture. Our warranty terms generally range from one to three years. See Note 7, Warranties, for further information regarding the impact of warranties concerning ASU 2014-09. Principal versus agent considerations: Principal versus agent guidance was considered for customized products that are provided by our suppliers versus manufactured by the Company. Richardson acts as the principal as we are responsible for satisfying the performance obligation. We have primary responsibility for fulfilling the contract, we have inventory risk prior to delivery to our customer, we establish prices, our consideration is not in the form of a commission and we bear the credit risk. The Company recognizes revenue in the gross amount of consideration. See Note 11, Segment Reporting, |
Intangible Assets
Intangible Assets | 6 Months Ended |
Nov. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. INTANGIBLE ASSETS Intangible assets are initially recorded at their fair market values determined by quoted market prices in active markets, if available, or recognized valuation models. Intangible assets that have finite useful lives are amortized over their useful lives and are tested for impairment when events or changes in circumstances occur that indicate possible impairment. 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 were as follows (in thousands) November 30, 2019 June 1, 2019 Gross Amounts: Trade Name $ 659 $ 659 Customer Relationships (1) 3,400 3,394 Non-compete Agreements 177 177 Technology 230 230 Total Gross Amounts $ 4,466 $ 4,460 Accumulated Amortization: Trade Name $ 659 $ 659 Customer Relationships 904 796 Non-compete Agreements 150 139 Technology 116 103 Total Accumulated Amortization $ 1,829 $ 1,697 Net Intangible Assets $ 2,637 $ 2,763 (1) The amortization expense associated with the intangible assets subject to amortization for the next five years is presented in the following table (in thousands) Fiscal Year Amortization Expense Remaining 2020 $ 224 2021 246 2022 251 2023 245 2024 232 Thereafter 1,439 Total amortization expense $ 2,637 The weighted average number of years of amortization expense remaining is 14.2 years. |
Investments
Investments | 6 Months Ended |
Nov. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 6. INVESTMENTS As of November 30, 2019, we had $13.0 million invested in CDs which mature in less than twelve months. The fair value of these investments was equal to the face value of the CDs. As of June 1, 2019, we had $8.0 million invested in CDs which mature in less than twelve months. The fair value of these investments was equal to the face value of the CDs. |
Warranties
Warranties | 6 Months Ended |
Nov. 30, 2019 | |
Guarantees [Abstract] | |
Warranties | 7. WARRANTIES We offer warranties for the limited number of specific products we manufacture. 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 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 and warranty experience, if a sufficient history exists. 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 $0.4 million as of November 30, 2019 and $0.3 million as of June 1, 2019. |
Lease Obligations, Other Commit
Lease Obligations, Other Commitments, and Contingencies | 6 Months Ended |
Nov. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Lease Obligations, Other Commitments, and Contingencies | 8. LEASE OBLIGATIONS, OTHER COMMITMENTS AND CONTINGENCIES In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company elects the practical expedients (which must be elected as a package and applied consistently to all of our leases) for which we will not reassess: (1) whether any expired or existing contracts are or contains leases, (2) the lease classification for any expired or existing leases and (3) the initial indirect costs for any existing leases. We have also elected the practical expedient to combine lease and non-lease components for all of our leases. We have adopted an accounting policy to not apply the requirements of Topic 842 to leases with a term of 12 months or less, which the Company has within our facility leases. Short-term leases will be reassessed if events occur that disqualify them from short-term status. The new standard was effective for the Company on June 2, 2019. The FASB issued ASU 2018-11, targeted improvements to Topic 842, which includes an option to not restate comparative periods in transition and elect to use the effective date of Topic 842 as the date of initial application of transition. We adopted the new standard applying the new transition method allowed under ASU 2018-11. As a result of adopting Topic 842, at November 30, 2019, we recognized operating right-of-use assets of $3.5 million, finance right-of-use assets of $0.5 million, operating lease liabilities of $3.7 million and finance lease liabilities of $0.4 million. Existing deferred rent of $0.1 million was recorded as an offset to our gross operating lease right-of-use assets. Several leases include renewal clauses which vary in length and may not include specific rent renewal amounts. The Company will revise the value of the right of use assets and associated lease liabilities when the Company is reasonably certain it will renew the lease. The standard did not have a material impact on our results of operations or cash flows. The gross amounts of assets and liabilities related to both operating and finance leases at November 30, 2019 were as follows (in thousands) : Lease Type Amount Operating lease ROU asset $ 3,544 Finance lease ROU asset 447 Total Lease ROU asset $ 3,991 Operating lease liability current $ 1,476 Finance lease liability current 152 Total lease liability current $ 1,628 Operating lease liability non-current $ 2,189 Finance lease liability non-current 248 Total lease liability non-current $ 2,437 The components of lease costs were as follows (in thousands) : Lease Type Classification Three Months Ended November 30, 2019 Six Months Ended November 30, 2019 Consolidated operating lease expense Operating expenses $ 468 $ 946 Consolidated finance lease amortization Operating expenses 16 16 Consolidated finance lease interest Interest expense 5 14 Consolidated finance lease expense 21 30 Net lease cost $ 489 $ 976 The Company recorded $0.5 million and $0.9 million of lease expense in the second quarter and first six months of fiscal 2019, respectively. The approximate future minimum lease payments under operating and finance leases at November 30, 2019 were as follows (in thousands) : Fiscal Year Operating Leases Finance Lease Total Remaining 2020 $ 821 $ 91 $ 912 2021 1,450 181 1,631 2022 677 151 828 2023 449 — 449 2024 309 — 309 Thereafter 241 — 241 Total lease payments 3,947 423 4,370 Less imputed interest 282 22 304 Net minimum lease payments $ 3,665 $ 401 $ 4,066 The approximate future minimum lease payments under operating and finance leases at June 1, 2019 were as follows (in thousands) : Fiscal Year (1) Operating Leases 2020 $ 1,586 2021 1,367 2022 509 2023 340 2024 289 Thereafter 234 (1) On June 2, 2019, the Company elected the modified retrospective method of transition to adopt the new lease standard Topic 842, which resulted in no restatement of prior period results. At June 1, 2019, prior to adoption of the new lease standard, operating lease obligations were not included as a liability on the balance sheet. Therefore, the operating lease obligations were included in the table for comparative purposes only and the total lease liability was not included as it is not applicable. The weighted average remaining lease terms and interest rates of leases held by the Company as of November 30, 2019 were as follows: Lease Type Weighted Average Remaining Lease Term in Years Weighted Average Interest Rate Operating leases 3.3 4.6% Finance lease 2.4 4.6% The cash outflows of the leasing activity of the Company as lessee for the six months ending November 30, 2019 were as follows (in thousands) : Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 367 Operating cash flows from finance lease Operating activities 67 Finance cash flows from finance lease Financing activities 75 |
Income Taxes
Income Taxes | 6 Months Ended |
Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. INCOME TAXES We recorded an income tax provision of $0.3 million and $0.4 million for the first six months of fiscal 2020 and the first six months of fiscal 2019, respectively. The effective income tax rate during the first six months of fiscal 2020 was a tax provision of (123.6)% as compared to a tax provision of 77.9% during the first six months of fiscal 2019. The difference in rate during the first six months of fiscal 2020 as compared to the first six months of fiscal 2019 reflects changes in our geographical distribution of income (loss). The (123.6)% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income (loss) and the movement of the valuation allowance against 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 2009 are closed for examination under the statute of limitation for U.S. federal, U.S. state and local or non-U.S. tax jurisdictions. Our primary foreign tax jurisdictions are Germany and the Netherlands. We have tax years open in Germany beginning in fiscal 2015 and the Netherlands beginning in fiscal 2012. 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. We have provided a deferred tax liability totaling $0.2 million as of November 30, 2019. As of November 30, 2019, our worldwide liability for uncertain tax positions related to continuing operations was $0.1 million, excluding interest and penalties as compared to $0.1 million liabilities for uncertain tax positions as of June 1, 2019. There was no change in recorded uncertain tax positions during the first six months of fiscal 2020. We record penalties and interest related to uncertain tax positions in the income tax expense line item within the consolidated statements of comprehensive loss. The valuation allowance against the net deferred tax assets that will more likely than not be realized was $11.7 million as of June 1, 2019. The valuation allowance against the net deferred tax assets was $11.9 million as of November 30, 2019 as no material additional domestic federal and state net deferred tax assets were generated during the second quarter of fiscal 2020 from losses in the U.S. jurisdiction. A full valuation allowance on the U.S. and state deferred tax assets will be maintained until sufficient positive evidence related to sources of future taxable income exists to support a reversal of the valuation allowance. 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 | 6 Months Ended |
Nov. 30, 2019 | |
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 loss were based on the following amounts ( in thousands, except per share amounts Three Months Ended November 30, 2019 December 1, 2018 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net loss $ (622 ) $ (622 ) $ (304 ) $ (304 ) Less dividends: Common stock 662 662 658 658 Class B common stock 113 113 112 112 Undistributed losses $ (1,397 ) $ (1,397 ) $ (1,074 ) $ (1,074 ) Common stock undistributed losses $ (1,193 ) $ (1,193 ) $ (916 ) $ (916 ) Class B common stock undistributed losses (204 ) (204 ) (158 ) (158 ) Total undistributed losses $ (1,397 ) $ (1,397 ) $ (1,074 ) $ (1,074 ) Denominator for Basic and Diluted EPS: Common stock weighted average shares 11,038 11,038 10,952 10,952 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,097 2,097 2,097 2,097 Effect of dilutive securities Dilutive stock options — — Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 13,135 13,049 Net loss per share: Common stock $ (0.05 ) $ (0.05 ) $ (0.02 ) $ (0.02 ) Class B common stock $ (0.04 ) $ (0.04 ) $ (0.02 ) $ (0.02 ) Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the second quarter of fiscal 2020 and fiscal 2019 were 860 and 117, respectively. Six Months Ended November 30, 2019 December 1, 2018 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net (loss) income $ (465 ) $ (465 ) $ 127 $ 127 Less dividends: Common stock 1,324 1,324 1,306 1,306 Class B common stock 226 226 228 228 Undistributed losses $ (2,015 ) $ (2,015 ) $ (1,407 ) $ (1,407 ) Common stock undistributed losses $ (1,720 ) $ (1,720 ) $ (1,198 ) $ (1,200 ) Class B common stock undistributed losses (295 ) (295 ) (209 ) (207 ) Total undistributed losses $ (2,015 ) $ (2,015 ) $ (1,407 ) $ (1,407 ) Denominator for Basic and Diluted EPS: Common stock weighted average shares 11,014 11,014 10,890 10,890 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,097 2,097 2,114 2,114 Effect of dilutive securities Dilutive stock options — 163 Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 13,111 13,167 Net (loss) income per share: Common stock $ (0.04 ) $ (0.04 ) $ 0.01 $ 0.01 Class B common stock $ (0.03 ) $ (0.03 ) $ 0.01 $ 0.01 Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the first six months of fiscal 2020 were 916. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Nov. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | 11. SEGMENT REPORTING In accordance with ASC 280-10, Segment Reporting, we have identified three reportable segments as follows: PMT combines our core engineered solutions capabilities, power grid and microwave tube business with new RF, Wireless and disruptive power technologies. As a manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair—all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, 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, healthcare, industrial and medical original equipment manufacturers markets. Our engineers design, manufacture, source and support a full spectrum of solutions to match the needs of our customers. We offer long term availability and proven custom display solutions that include touch screens, protective panels, custom enclosures, all-in-ones, specialized cabinet finishes and application specific software packages and certification services. We partner with both private label manufacturing companies and leading branded hardware vendors to offer the highest quality display and touch solutions and customized computing platforms. Healthcare manufactures, refurbishes and distributes high value replacement parts for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include Diagnostic Imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI coils, cold heads and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; and additional replacement solutions 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 Six Months Ended November 30, 2019 December 1, 2018 November 30, 2019 December 1, 2018 PMT Net Sales $ 29,603 $ 32,328 $ 60,170 $ 67,097 Gross Profit 9,349 10,107 19,028 21,114 Canvys Net Sales $ 7,856 $ 6,498 $ 15,133 $ 13,671 Gross Profit 2,585 2,132 4,906 4,445 Healthcare Net Sales $ 2,175 $ 2,488 $ 4,984 $ 4,703 Gross Profit 746 732 1,697 1,365 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 Six Months Ended November 30, 2019 December 1, 2018 November 30, 2019 December 1, 2018 Net Sales North America $ 15,306 $ 16,825 $ 32,540 $ 33,848 Asia/Pacific 9,277 8,520 17,800 18,062 Europe 13,210 13,393 26,134 28,149 Latin America 1,859 2,559 3,837 5,373 Other (1) (18 ) 17 (24 ) 39 Total $ 39,634 $ 41,314 $ 80,287 $ 85,471 Gross Profit North America $ 5,797 $ 6,518 $ 12,104 $ 13,105 Asia/Pacific 3,056 2,701 5,649 5,706 Europe 4,015 4,215 8,146 8,738 Latin America 644 955 1,344 2,021 Other (1) (832 ) (1,418 ) (1,612 ) (2,646 ) Total $ 12,680 $ 12,971 $ 25,631 $ 26,924 (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 | 6 Months Ended |
Nov. 30, 2019 | |
Litigation [Abstract] | |
Litigation | 12. LITIGATION On October 15, 2018, Varex Imaging Corporation (“Varex”) filed its original Complaint (Case No. 1:18-cv-06911) against Richardson Electronics Ltd. (“Richardson”) in the Northern District of Illinois, which was subsequently amended on November 27, 2018. Varex alleged counts of infringement of U.S. Patent Nos. 6,456,692 and 6,519,317. Subsequently, on October 24, 2018, Varex TM |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Nov. 30, 2019 | |
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 November 30, 2019, we held investments that were required to be measured at fair value on a recurring basis. Our investments consisted of CDs where face value was equal to fair value. Investments measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of November 30, 2019 were as follows ( in thousands Level 1 CDs 13,000 |
Related Party Transaction
Related Party Transaction | 6 Months Ended |
Nov. 30, 2019 | |
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 (former owner of IMES), has an ownership interest in LDL, LLC. The lease agreement provides for monthly payments over five years with total future minimum lease payments of $0.1 million. Rental expense related to this lease amounted to $0.1 million for the six months ended November 30, 2019 and for the six months ended December 1, 2018. 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 _2
Critical Accounting Policies and Estimates (Policies) | 6 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Inventories, Net | Inventories, net: Our consolidated inventories were stated at the lower of cost and net realizable value, generally using a weighted-average cost method. Our net inventories include approximately $50.3 million of finished goods, $3.8 million of raw materials and $2.1 million of work-in-progress as of November 30, 2019, as compared to approximately $47.2 million of finished goods, $4.2 million of raw materials and $1.8 million of work-in-progress as of June 1, 2019. 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. Inventory reserves were approximately $4.7 million as of November 30, 2019 and $4.6 million as of June 1, 2019. |
Revenue Recognition | Revenue Recognition: Our product sales are recognized as revenue upon shipment, when title passes to the customer, when delivery has occurred or services have been rendered and when collectability is reasonably assured. We also record estimated discounts and returns based on our historical experience. Our products are often manufactured to meet the specific design needs of our customers’ applications. Our engineers work closely with customers to ensure that our products will meet their needs. Our customers are under no obligation to compensate us for designing the products we sell. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers Effective June 3, 2018, the Company adopted the standard using the modified retrospective method to all contracts. As a result, financial information for the reporting period beginning June 3, 2018 was reported under the new standard, while comparative financial information has not been adjusted and continues to be reported in accordance with the previous standard. The adoption of this standard did not impact the timing of revenue recognition for our customer sales. The adoption did not result in the recognition of a cumulative adjustment to beginning retained earnings, nor did it have a material impact on the consolidated financial statements. For the Company, the most significant impact of the new standard is the addition of required disclosures within the notes to the financial statements. |
Loss Contingencies | Loss Contingencies: We accrue a liability for loss contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. If we determine that there is at least a reasonable possibility that a loss may have been incurred, we will include a disclosure describing the contingency. |
Intangible Assets | Intangible Assets: 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 over their useful lives either on a straight-line basis or over their projected future cash flows and are tested for impairment when events or changes in circumstances occur that indicate possible impairment. Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements and technology acquired in connection with our acquisitions. |
Income Taxes | Income Taxes: We recognize deferred tax assets and liabilities based on the differences between financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and determine the need for a valuation allowance based on a number of factors, including both positive and negative evidence. These factors include historical taxable income or loss, projected future taxable income or loss, the expected timing of the reversals of existing temporary differences and the implementation of tax planning strategies. In circumstances where we, or any of our affiliates, have incurred three years of cumulative losses which constitute significant negative evidence, positive evidence of equal or greater significance is needed to overcome the negative evidence before a tax benefit is recognized for deductible temporary differences and loss carryforwards. |
Accrued Liabilities | Accrued Liabilities: Accrued liabilities consist of the following (in thousands): November 30, 2019 June 1, 2019 Compensation and payroll taxes $ 3,264 $ 2,846 Accrued severance 500 520 Professional fees 552 471 Deferred revenue 1,624 2,260 Other accrued expenses 4,896 5,176 Accrued Liabilities $ 10,836 $ 11,273 |
Lease Obligations, Other Commitments and Contingencies | In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company elects the practical expedients (which must be elected as a package and applied consistently to all of our leases) for which we will not reassess: (1) whether any expired or existing contracts are or contains leases, (2) the lease classification for any expired or existing leases and (3) the initial indirect costs for any existing leases. We have also elected the practical expedient to combine lease and non-lease components for all of our leases. We have adopted an accounting policy to not apply the requirements of Topic 842 to leases with a term of 12 months or less, which the Company has within our facility leases. Short-term leases will be reassessed if events occur that disqualify them from short-term status. |
Critical Accounting Policies _3
Critical Accounting Policies and Estimates (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): November 30, 2019 June 1, 2019 Compensation and payroll taxes $ 3,264 $ 2,846 Accrued severance 500 520 Professional fees 552 471 Deferred revenue 1,624 2,260 Other accrued expenses 4,896 5,176 Accrued Liabilities $ 10,836 $ 11,273 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Contract Liabilities and Revenue Recognized | Contract Liabilities: Contract liabilities and revenue recognized were as follows ( in thousands ): June 1, 2019 Additions Revenue Recognized November 30, 2019 Contract liabilities (deferred revenue) $ 2,260 $ 1,169 $ (1,805 ) $ 1,624 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Subject to Amortization | Intangible assets subject to amortization were as follows (in thousands) November 30, 2019 June 1, 2019 Gross Amounts: Trade Name $ 659 $ 659 Customer Relationships (1) 3,400 3,394 Non-compete Agreements 177 177 Technology 230 230 Total Gross Amounts $ 4,466 $ 4,460 Accumulated Amortization: Trade Name $ 659 $ 659 Customer Relationships 904 796 Non-compete Agreements 150 139 Technology 116 103 Total Accumulated Amortization $ 1,829 $ 1,697 Net Intangible Assets $ 2,637 $ 2,763 (1) |
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) Fiscal Year Amortization Expense Remaining 2020 $ 224 2021 246 2022 251 2023 245 2024 232 Thereafter 1,439 Total amortization expense $ 2,637 |
Lease Obligations, Other Comm_2
Lease Obligations, Other Commitments, and Contingencies (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Gross Amount Assets and Liabilities Related to Operating and Finance Leases | The gross amounts of assets and liabilities related to both operating and finance leases at November 30, 2019 were as follows (in thousands) : Lease Type Amount Operating lease ROU asset $ 3,544 Finance lease ROU asset 447 Total Lease ROU asset $ 3,991 Operating lease liability current $ 1,476 Finance lease liability current 152 Total lease liability current $ 1,628 Operating lease liability non-current $ 2,189 Finance lease liability non-current 248 Total lease liability non-current $ 2,437 |
Components of Lease Costs | The components of lease costs were as follows (in thousands) : Lease Type Classification Three Months Ended November 30, 2019 Six Months Ended November 30, 2019 Consolidated operating lease expense Operating expenses $ 468 $ 946 Consolidated finance lease amortization Operating expenses 16 16 Consolidated finance lease interest Interest expense 5 14 Consolidated finance lease expense 21 30 Net lease cost $ 489 $ 976 |
Schedule Of Future Minimum Lease Payments under Operating and Finance Leases | The approximate future minimum lease payments under operating and finance leases at November 30, 2019 were as follows (in thousands) : Fiscal Year Operating Leases Finance Lease Total Remaining 2020 $ 821 $ 91 $ 912 2021 1,450 181 1,631 2022 677 151 828 2023 449 — 449 2024 309 — 309 Thereafter 241 — 241 Total lease payments 3,947 423 4,370 Less imputed interest 282 22 304 Net minimum lease payments $ 3,665 $ 401 $ 4,066 The approximate future minimum lease payments under operating and finance leases at June 1, 2019 were as follows (in thousands) : Fiscal Year (1) Operating Leases 2020 $ 1,586 2021 1,367 2022 509 2023 340 2024 289 Thereafter 234 (1) On June 2, 2019, the Company elected the modified retrospective method of transition to adopt the new lease standard Topic 842, which resulted in no restatement of prior period results. At June 1, 2019, prior to adoption of the new lease standard, operating lease obligations were not included as a liability on the balance sheet. Therefore, the operating lease obligations were included in the table for comparative purposes only and the total lease liability was not included as it is not applicable. |
Schedule of Weighted Average Remaining Lease Terms and Interest Rates of Leases | The weighted average remaining lease terms and interest rates of leases held by the Company as of November 30, 2019 were as follows: Lease Type Weighted Average Remaining Lease Term in Years Weighted Average Interest Rate Operating leases 3.3 4.6% Finance lease 2.4 4.6% |
Schedule of Cash Outflows of Leasing Activity | The cash outflows of the leasing activity of the Company as lessee for the six months ending November 30, 2019 were as follows (in thousands) : Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 367 Operating cash flows from finance lease Operating activities 67 Finance cash flows from finance lease Financing activities 75 |
Calculation of Earnings Per S_2
Calculation of Earnings Per Share (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The earnings per share (“EPS”) presented in our unaudited consolidated statements of comprehensive loss were based on the following amounts ( in thousands, except per share amounts Three Months Ended November 30, 2019 December 1, 2018 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net loss $ (622 ) $ (622 ) $ (304 ) $ (304 ) Less dividends: Common stock 662 662 658 658 Class B common stock 113 113 112 112 Undistributed losses $ (1,397 ) $ (1,397 ) $ (1,074 ) $ (1,074 ) Common stock undistributed losses $ (1,193 ) $ (1,193 ) $ (916 ) $ (916 ) Class B common stock undistributed losses (204 ) (204 ) (158 ) (158 ) Total undistributed losses $ (1,397 ) $ (1,397 ) $ (1,074 ) $ (1,074 ) Denominator for Basic and Diluted EPS: Common stock weighted average shares 11,038 11,038 10,952 10,952 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,097 2,097 2,097 2,097 Effect of dilutive securities Dilutive stock options — — Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 13,135 13,049 Net loss per share: Common stock $ (0.05 ) $ (0.05 ) $ (0.02 ) $ (0.02 ) Class B common stock $ (0.04 ) $ (0.04 ) $ (0.02 ) $ (0.02 ) Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the second quarter of fiscal 2020 and fiscal 2019 were 860 and 117, respectively. Six Months Ended November 30, 2019 December 1, 2018 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net (loss) income $ (465 ) $ (465 ) $ 127 $ 127 Less dividends: Common stock 1,324 1,324 1,306 1,306 Class B common stock 226 226 228 228 Undistributed losses $ (2,015 ) $ (2,015 ) $ (1,407 ) $ (1,407 ) Common stock undistributed losses $ (1,720 ) $ (1,720 ) $ (1,198 ) $ (1,200 ) Class B common stock undistributed losses (295 ) (295 ) (209 ) (207 ) Total undistributed losses $ (2,015 ) $ (2,015 ) $ (1,407 ) $ (1,407 ) Denominator for Basic and Diluted EPS: Common stock weighted average shares 11,014 11,014 10,890 10,890 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,097 2,097 2,114 2,114 Effect of dilutive securities Dilutive stock options — 163 Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 13,111 13,167 Net (loss) income per share: Common stock $ (0.04 ) $ (0.04 ) $ 0.01 $ 0.01 Class B common stock $ (0.03 ) $ (0.03 ) $ 0.01 $ 0.01 Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the first six months of fiscal 2020 were 916. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results by Segment | Operating results by segment are summarized in the following table ( in thousands Three Months Ended Six Months Ended November 30, 2019 December 1, 2018 November 30, 2019 December 1, 2018 PMT Net Sales $ 29,603 $ 32,328 $ 60,170 $ 67,097 Gross Profit 9,349 10,107 19,028 21,114 Canvys Net Sales $ 7,856 $ 6,498 $ 15,133 $ 13,671 Gross Profit 2,585 2,132 4,906 4,445 Healthcare Net Sales $ 2,175 $ 2,488 $ 4,984 $ 4,703 Gross Profit 746 732 1,697 1,365 |
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 Six Months Ended November 30, 2019 December 1, 2018 November 30, 2019 December 1, 2018 Net Sales North America $ 15,306 $ 16,825 $ 32,540 $ 33,848 Asia/Pacific 9,277 8,520 17,800 18,062 Europe 13,210 13,393 26,134 28,149 Latin America 1,859 2,559 3,837 5,373 Other (1) (18 ) 17 (24 ) 39 Total $ 39,634 $ 41,314 $ 80,287 $ 85,471 Gross Profit North America $ 5,797 $ 6,518 $ 12,104 $ 13,105 Asia/Pacific 3,056 2,701 5,649 5,706 Europe 4,015 4,215 8,146 8,738 Latin America 644 955 1,344 2,021 Other (1) (832 ) (1,418 ) (1,612 ) (2,646 ) Total $ 12,680 $ 12,971 $ 25,631 $ 26,924 (1) Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs and other unallocated expenses. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
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 November 30, 2019 were as follows ( in thousands Level 1 CDs 13,000 |
Description of the Company - Ad
Description of the Company - Additional Information (Details) | 6 Months Ended |
Nov. 30, 2019Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Critical Accounting Policies _4
Critical Accounting Policies and Estimates - Additional Information (Details) - USD ($) $ in Millions | Nov. 30, 2019 | Jun. 01, 2019 |
Accounting Policies [Abstract] | ||
Finished goods | $ 50.3 | $ 47.2 |
Raw material | 3.8 | 4.2 |
Work in progress | 2.1 | 1.8 |
Inventory valuation reserves | $ 4.7 | $ 4.6 |
Critical Accounting Policies _5
Critical Accounting Policies and Estimates - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Jun. 01, 2019 |
Accrued Liabilities: | ||
Compensation and payroll taxes | $ 3,264 | $ 2,846 |
Accrued severance | 500 | 520 |
Professional fees | 552 | 471 |
Deferred revenue | 1,624 | 2,260 |
Other accrued expenses | 4,896 | 5,176 |
Accrued Liabilities | $ 10,836 | $ 11,273 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) | 6 Months Ended |
Nov. 30, 2019 | |
Maximum | |
Revenue Recognition [Line Items] | |
Services revenue recognized as percentage of aggregate revenue | 5.00% |
Term of product warranty | 3 years |
Minimum | |
Revenue Recognition [Line Items] | |
Term of product warranty | 1 year |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Contract Liabilities and Revenue Recognized (Details) $ in Thousands | 6 Months Ended |
Nov. 30, 2019USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Contract Liabilities (Deferred Revenue), Beginning Balance | $ 2,260 |
Contract Liabilities (Deferred Revenue), Additions | 1,169 |
Contract Liabilities (Deferred Revenue), Revenue Recognized | (1,805) |
Contract Liabilities (Deferred Revenue), Ending Balance | $ 1,624 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Jun. 01, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | $ 4,466 | $ 4,460 | |
Finite Lived Intangible Assets Accumulated Amortization | 1,829 | 1,697 | |
Intangible assets, net | 2,637 | 2,763 | |
Trade Names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | 659 | 659 | |
Finite Lived Intangible Assets Accumulated Amortization | 659 | 659 | |
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | [1] | 3,400 | 3,394 |
Finite Lived Intangible Assets Accumulated Amortization | 904 | 796 | |
Non-compete Agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | 177 | 177 | |
Finite Lived Intangible Assets Accumulated Amortization | 150 | 139 | |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | 230 | 230 | |
Finite Lived Intangible Assets Accumulated Amortization | $ 116 | $ 103 | |
[1] | Change from prior periods reflect impact of foreign currency translation. |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of the Amortization Expense for the Next Five Years (Details) $ in Thousands | Nov. 30, 2019USD ($) |
Fiscal Year | |
Remaining 2020 | $ 224 |
2021 | 246 |
2022 | 251 |
2023 | 245 |
2024 | 232 |
Thereafter | 1,439 |
Total amortization expense | $ 2,637 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) | 6 Months Ended |
Nov. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Weighted average number of years of amortization expense | 14 years 2 months 12 days |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Millions | Nov. 30, 2019 | Jun. 01, 2019 |
Certificate of Deposits | ||
Schedule Of Investments [Line Items] | ||
Investment, less than twelve months | $ 13 | $ 8 |
Warranties - Additional Informa
Warranties - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Nov. 30, 2019 | Jun. 01, 2019 | |
Product Warranty Liability [Line Items] | ||
Warranty reserves | $ 0.4 | $ 0.3 |
Minimum | ||
Product Warranty Liability [Line Items] | ||
Warranty term | 1 year | |
Maximum | ||
Product Warranty Liability [Line Items] | ||
Warranty term | 3 years |
Lease Obligations, Other Comm_3
Lease Obligations, Other Commitments, and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 01, 2018 | Dec. 01, 2018 | Nov. 30, 2019 | |
Lessee Lease Description [Line Items] | |||
Operating right-of-use assets | $ 3,544 | ||
Finance right-of-use assets | 447 | ||
Operating lease liabilities | 3,665 | ||
Finance lease liabilities | 401 | ||
Lease expense | $ 500 | $ 900 | |
ASU 2016-02 | |||
Lessee Lease Description [Line Items] | |||
Operating right-of-use assets | 3,500 | ||
Finance right-of-use assets | 500 | ||
Operating lease liabilities | 3,700 | ||
Finance lease liabilities | 400 | ||
ASU 2016-02 | Adjustment | |||
Lessee Lease Description [Line Items] | |||
Existing deferred rent | $ 100 |
Lease Obligations, Other Comm_4
Lease Obligations, Other Commitments, and Contingencies - Schedule of Gross Amount Assets and Liabilities Related to Operating and Finance Leases (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Jun. 01, 2019 |
Lease Type | ||
Operating lease ROU asset | $ 3,544 | |
Finance lease ROU asset | 447 | |
Total Lease ROU asset | 3,991 | |
Operating lease liability current | 1,476 | |
Finance lease liability current | 152 | |
Total lease liability current | 1,628 | |
Operating lease liability non-current | 2,189 | |
Finance lease liability non-current | 248 | |
Total lease liability non-current | $ 2,437 |
Lease Obligations, Other Comm_5
Lease Obligations, Other Commitments, and Contingencies - Components of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Nov. 30, 2019 | Nov. 30, 2019 | |
Lease Type | ||
Consolidated operating lease expense | $ 468 | $ 946 |
Consolidated finance lease amortization | 16 | 16 |
Consolidated finance lease interest | 5 | 14 |
Consolidated finance lease expense | 21 | 30 |
Net lease cost | $ 489 | $ 976 |
Lease Obligations, Other Comm_6
Lease Obligations, Other Commitments, and Contingencies - Schedule of Future Minimum Lease Payments Under Operating and Finance Leases (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Jun. 01, 2019 | |
Operating Leases | |||
Remaining 2020 | $ 821 | ||
2021 | 1,450 | ||
2022 | 677 | ||
2023 | 449 | ||
2024 | 309 | ||
Thereafter | 241 | ||
Total lease payments | 3,947 | ||
Less imputed interest | 282 | ||
Net minimum lease payments | 3,665 | ||
Finance Lease | |||
Remaining 2020 | 91 | ||
2021 | 181 | ||
2022 | 151 | ||
Total lease payments | 423 | ||
Less imputed interest | 22 | ||
Net minimum lease payments | 401 | ||
Total | |||
Remaining 2020 | 912 | ||
2021 | 1,631 | ||
2022 | 828 | ||
2023 | 449 | ||
2024 | 309 | ||
Thereafter | 241 | ||
Total lease payments | 4,370 | ||
Less imputed interest | 304 | ||
Net minimum lease payments | $ 4,066 | ||
Operating Leases | |||
2020 | [1] | $ 1,586 | |
2021 | [1] | 1,367 | |
2022 | [1] | 509 | |
2023 | [1] | 340 | |
2024 | [1] | 289 | |
Thereafter | [1] | $ 234 | |
[1] | On June 2, 2019, the Company elected the modified retrospective method of transition to adopt the new lease standard Topic 842, which resulted in no restatement of prior period results. At June 1, 2019, prior to adoption of the new lease standard, operating lease obligations were not included as a liability on the balance sheet. Therefore, the operating lease obligations were included in the table for comparative purposes only and the total lease liability was not included as it is not applicable. |
Lease Obligations, Other Comm_7
Lease Obligations, Other Commitments, and Contingencies - Schedule of Weighted Average Lease Terms and Interest Rates of Leases (Details) | Nov. 30, 2019 |
Commitments And Contingencies Disclosure [Abstract] | |
Weighted average remaining lease term in years, operating leases | 3 years 3 months 18 days |
Weighted average remaining lease term in years, finance lease | 2 years 4 months 24 days |
Weighted average interest rate, operating leases | 4.60% |
Weighted average interest rate, finance lease | 4.60% |
Lease Obligations, Other Comm_8
Lease Obligations, Other Commitments, and Contingencies - Schedule of Cash Outflows of Leasing Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Nov. 30, 2019 | Nov. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 367 | |
Operating cash flows from finance lease | 67 | |
Finance cash flows from finance lease | $ 45 | $ 75 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2019 | Dec. 01, 2018 | Nov. 30, 2019 | Dec. 01, 2018 | Jun. 01, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Income tax provision | $ 80 | $ 178 | $ 257 | $ 449 | |
Effective income tax rate | (123.60%) | 77.90% | |||
U.S. statutory tax rate | 21.00% | ||||
Deferred tax liability, undistributed foreign earnings | 200 | $ 200 | $ 200 | ||
Liability for uncertain tax positions related to continuing operations, excluding interest and penalties | 100 | 100 | |||
Liability for uncertain tax provisions | 0 | 0 | 100 | ||
Deferred tax valuation allowance | $ 11,900 | $ 11,900 | $ 11,700 |
Calculation of Earnings Per S_3
Calculation of Earnings Per Share - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |
Nov. 30, 2019shares | Dec. 01, 2018shares | Nov. 30, 2019Numbershares | |
Schedule Of Earning Per Share [Line Items] | |||
Limit of cash dividends Class B common stock (percent) | 90.00% | ||
Common stock options anti-dilutive | 860,000 | 117,000 | 916,000 |
Common Stock | |||
Schedule Of Earning Per Share [Line Items] | |||
Common stock shares, authorized | 17,000,000 | 17,000,000 | |
Common Class B | |||
Schedule Of Earning Per Share [Line Items] | |||
Common stock shares, authorized | 3,000,000 | 3,000,000 | |
Number of votes per share | Number | 10 |
Calculation of Earnings Per S_4
Calculation of Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2019 | Dec. 01, 2018 | Nov. 30, 2019 | Dec. 01, 2018 | |
Numerator for Basic and Diluted Earnings Per Share: | ||||
Net (loss) income | $ (622) | $ (304) | $ (465) | $ 127 |
Undistributed losses, Basic | (1,397) | (1,074) | (2,015) | (1,407) |
Undistributed losses, Diluted | $ (1,397) | $ (1,074) | $ (2,015) | $ (1,407) |
Denominator for Basic and Diluted Earnings Per Share: | ||||
Effect of dilutive securities dilutive stock options | 163 | |||
Weighted Average Number of Shares Outstanding, Diluted | 13,135 | 13,049 | 13,111 | 13,167 |
Basic | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Net (loss) income | $ (622) | $ (304) | $ (465) | $ 127 |
Diluted | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Net (loss) income | (622) | (304) | (465) | 127 |
Common Class B | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Undistributed losses, Basic | (204) | (158) | (295) | (209) |
Undistributed losses, Diluted | $ (204) | $ (158) | $ (295) | $ (207) |
Denominator for Basic and Diluted Earnings Per Share: | ||||
Weighted Average Number of Shares Outstanding, Basic | 2,097 | 2,097 | 2,097 | 2,114 |
Weighted Average Number of Shares Outstanding, Diluted | 2,097 | 2,097 | 2,097 | 2,114 |
Net (loss) income per share: | ||||
Earnings Per Share, Basic | $ (0.04) | $ (0.02) | $ (0.03) | $ 0.01 |
Earnings Per Share, Diluted | $ (0.04) | $ (0.02) | $ (0.03) | $ 0.01 |
Common Class B | Basic | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Less dividends | $ 113 | $ 112 | $ 226 | $ 228 |
Common Class B | Diluted | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Less dividends | 113 | 112 | 226 | 228 |
Common Stock | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Undistributed losses, Basic | (1,193) | (916) | (1,720) | (1,198) |
Undistributed losses, Diluted | $ (1,193) | $ (916) | $ (1,720) | $ (1,200) |
Denominator for Basic and Diluted Earnings Per Share: | ||||
Weighted Average Number of Shares Outstanding, Basic | 11,038 | 10,952 | 11,014 | 10,890 |
Weighted Average Number of Shares Outstanding, Diluted | 11,038 | 10,952 | 11,014 | 11,053 |
Net (loss) income per share: | ||||
Earnings Per Share, Basic | $ (0.05) | $ (0.02) | $ (0.04) | $ 0.01 |
Earnings Per Share, Diluted | $ (0.05) | $ (0.02) | $ (0.04) | $ 0.01 |
Common Stock | Basic | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Less dividends | $ 662 | $ 658 | $ 1,324 | $ 1,306 |
Common Stock | Diluted | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Less dividends | $ 662 | $ 658 | $ 1,324 | $ 1,306 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 6 Months Ended |
Nov. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Operating Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2019 | Dec. 01, 2018 | Nov. 30, 2019 | Dec. 01, 2018 | |
Segment Reporting Information [Line Items] | ||||
Net Sales | $ 39,634 | $ 41,314 | $ 80,287 | $ 85,471 |
Gross Profit | 12,680 | 12,971 | 25,631 | 26,924 |
PMT | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 29,603 | 32,328 | 60,170 | 67,097 |
Gross Profit | 9,349 | 10,107 | 19,028 | 21,114 |
Canvys | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 7,856 | 6,498 | 15,133 | 13,671 |
Gross Profit | 2,585 | 2,132 | 4,906 | 4,445 |
Healthcare | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 2,175 | 2,488 | 4,984 | 4,703 |
Gross Profit | $ 746 | $ 732 | $ 1,697 | $ 1,365 |
Segment Reporting - Schedule _2
Segment Reporting - Schedule of Net Sales and Gross Profit by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2019 | Dec. 01, 2018 | Nov. 30, 2019 | Dec. 01, 2018 | ||
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 39,634 | $ 41,314 | $ 80,287 | $ 85,471 | |
Gross Profit | 12,680 | 12,971 | 25,631 | 26,924 | |
North America | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 15,306 | 16,825 | 32,540 | 33,848 | |
Gross Profit | 5,797 | 6,518 | 12,104 | 13,105 | |
Asia/Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 9,277 | 8,520 | 17,800 | 18,062 | |
Gross Profit | 3,056 | 2,701 | 5,649 | 5,706 | |
Europe | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 13,210 | 13,393 | 26,134 | 28,149 | |
Gross Profit | 4,015 | 4,215 | 8,146 | 8,738 | |
Latin America | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 1,859 | 2,559 | 3,837 | 5,373 | |
Gross Profit | 644 | 955 | 1,344 | 2,021 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | [1] | (18) | 17 | (24) | 39 |
Gross Profit | [1] | $ (832) | $ (1,418) | $ (1,612) | $ (2,646) |
[1] | Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs and other unallocated expenses. |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Investments Measured at Fair Value on a Recurring Basis (Details) $ in Thousands | Nov. 30, 2019USD ($) |
Fair Value Measurements, Recurring | Level 1 | Certificate of Deposits | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Investments measured at fair value | $ 13,000 |
Related Party Transaction - Add
Related Party Transaction - Additional Information (Details) - Lessor - LDL, LLC - Lee A. McIntyre III - USD ($) $ in Millions | 6 Months Ended | |
Nov. 30, 2019 | Dec. 01, 2018 | |
Total future minimum lease payments | $ 0.1 | |
Lease term | 5 years | |
Renewal term | 5 years | |
Rental expense | $ 0.1 | $ 0.1 |