UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended May 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File No. 0-12906
RICHARDSON ELECTRONICS, LTD.
(Exact name of registrant as specified in its charter)
Delaware 36-2096643
(State of incorporation or organization) (I.R.S. Employer Identification No.)
40W267 Keslinger Road, LaFox, Illinois 60147
(Address of principal executive offices)
Registrant's telephone number including area code: (708) 208-2200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.05 par value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
As of August 25, 1995, there were outstanding 8,299,594 shares of Common
Stock,$.05 par value, and 3,247,118 shares of Class B Common Stock, $.05 par
value, which are convertible into Common Stock on a share for share basis, of
the registrant and the aggregate market value of such shares, held by non-
affiliates of the registrant was approximately $37,900,000.
Portions of the 1995 Annual Report to Stockholders of Registrant for fiscal year
ended May 31, 1995 are incorporated in Parts I, II, and IV of this Report.
Portions of the Registrant's Proxy Statement dated August 31, 1995 for the
Annual Meeting of Stockholders scheduled to be held October 10, 1995 are
incorporated in Part III of this Report. Except as specifically incorporated
herein by reference, the above mentioned Annual report to Stockholders and Proxy
Statement are not deemed filed as part of this report.
Exhibit index located at pages 14 through 21.
PART I
Item 1. Business
The registrant (herein with its subsidiaries referred to as the "Company"
or "Richardson") operates in one industry as a value-added distributor of
electronic components, including vacuum tubes, semiconductors and related
products. These devices are used primarily to control, switch or amplify
electrical power or signals, or as display devices in a variety of industrial,
communication, scientific and other applications. The Company offers a wide
range of value-added services, including labeling, testing and repackaging. The
Company manufactures certain of the electron tubes it distributes. In addition,
the Company distributes a variety of closed circuit television ("CCTV")
equipment and other security systems related products.
Consolidated sales in 1995 set a new record at $208.1 million, up 21% over
the prior year. The Company believes that much of its growth is attributable to
its concentration on specialized areas of the electronics market. Historically,
the Company's primary business was the distribution of electron tubes and it
continues to be a major distributor of these products. In recent years, the
Company has followed the migration of its customers to newer technologies,
capitalizing on its expertise as a value-added distributor. In 1995, due to the
significant increase in new product offerings including solid state components
and cathode ray tubes, these product lines represented 49% of consolidated sales
compared to 23% five years ago. The addition of new product lines is primarily
based upon compatibility with the Company's existing customer base. The Company
also seeks new applications and customers (including, without limitation,
through new and expanded distribution franchises) for its existing product
lines.
A significant portion of the Company's sales are of replacement parts.
Specialized areas of the original equipment industry and research and
development applications are also served by the Company. The marketing and sales
organization of the Company is divided into four strategic business units
(SBUs): Electron Device Group (EDG), Solid State and Components Group (SSC),
Display Products Group (DPG), and Security Systems Division (SSD). EDG
distributes power grid tubes and continuous wave magnetrons for industrial
heating applications and also thyratrons, ignitrons, receiving tubes and special
purpose tubes which are sold to many industries, including automotive, steel,
plastics and textiles companies. EDG also distributes high voltage switch tubes
and x-ray tubes used in x-ray imaging equipment and specialty tubes for
analytical equipment, as well as camera tubes, photomultipliers, switch tubes,
magnetrons, hydrogen thyratrons and imaging equipment to the medical industry.
Power grid tube and camera tube product lines are sold by EDG to the radio and
television broadcast industry. In addition, EDG assists other SBU's to market
cathode ray tubes (CRTs), semiconductors and other products to the broadcast
industry. EDG also serves the avionics, marine, microwave and communications
markets with product lines including traveling wave tubes, klystrons, planar
triodes, hydrogen thyratrons, magnetrons and display storage tubes.
SSC distributes RF transistors and amplifiers, communications modules,
passive components, silicon controlled rectifiers, integrated circuits,
semiconductors, high voltage capacitors, resistors, broadcast amplifiers, and
other RF and microwave semiconductors for avionics, broadcast, communications,
data display and industrial applications. DPG markets data display and
instrumentation CRTs that are used in data display, marine, medical, radar, and
avionic applications. It also distributes flyback transformers and various
components for monitor and terminal repair. SSD distributes CCTV equipment, as
well as fiber optic, microwave, intercommunication, access control and other
security related products, equipment and accessories, for both initial
installation and replacement. In addition, SSD is an approved repair service
organization. Sales trends for each SBU are summarized and analyzed in
Management's Discussion and Analysis on pages 11-13 of the Annual Report to
Stockholders for the Year Ended May 31, 1995 (Annual Report).
Sales in the global market for electron tubes in which the Company
participates, principally through EDG, is estimated by the Company to be
approximately $2 billion. The Company participates through SSC in specialized
segments of the semiconductor portion of the market by distributing power
semiconductors and RF and microwave semiconductors. According to industry
estimates, European, United States and Japan-based factory sales for power
semiconductors approximate $5 billion. Richardson estimates the portion of this
market it serves at $700 million. DPG estimates factory sales of CRTs in the
global market approximate $5 billion. The Company estimates that annual
wholesale sales for CCTV and related security equipment in which the Company
participates as a distributor, principally through SSD, approximate $320
million. (Estimates are based on applicable industry statistics for calendar
year 1994.)
Sales of solid state components, primarily RF semiconductors, have grown
rapidly in recent years. Semiconductors have been replacing electron tubes in
many applications, such as low power television and radio transmitters. However,
in other applications, including higher power broadcasting and industrial
equipment, electron tubes are more suitable than semiconductors due to the
higher power capabilities of tubes and their ability to withstand severe
environmental and other conditions which often damage semiconductors.
Semiconductors, however, continue to expand the range of their applications.
Consequently, many parts of the electron tube market in which the Company
participates, are declining. The Company countered the trend in the electron
tube market through several initiatives by its EDG unit, including greater
emphasis on international sales and expansion of the sales force serving the
medical replacement market. As a result, EDG sales increased 15% in 1995 after
declining 6% in 1994, and 5% in 1993 (see "Management's Discussion and Analysis
of Results of Operations and Financial Condition - Sales and Gross Margin
Analysis, EDG" in the Annual Report).
The Company has found that a replacement market for power semiconductors
exists and that many of its electron tube customers have semiconductor
requirements as well. In addition SSC's sales to original equipment
manufacturers continue to grow, accounting for approximately 63% of the SBU's
1995 sales. SSC's sales increased 24% in 1995, 34% in 1994 and 15% in 1993 (see
"Management's Discussion and Analysis of Results of Operations and Financial
Condition - Sales Analysis, SSC" in the Annual Report.)
The Company's sales of CRT's and other display products increased 34% in
1995, 42% in 1994 and 17% in 1993 (see "Management's Discussion and Analysis of
Results of Operations and Financial Condition - Sales Analysis, DPG" in the
Annual Report.)
SSD's sales increased 26% in 1995, 2% in 1994 and declined 13% in 1993 (see
"Management's Discussion and Analysis of Results of Operations and Financial
Condition - Sales Analysis, SSD" in the Annual Report.)
Developments in the Past Fiscal Year
In May, 1995, the Company reached an agreement with the U.S. Department of
Justice (DOJ) regarding a claim filed that the Company was civilly liable for
damages and penalties under the False Claims Act and the Lanham Act in
connection with a 1989 Department of Defense contract for night-vision tubes.
The Company paid $4.7 million to the Government in return for a release of
monetary claims in connection with the contract. See Note B of the "Notes to
Consolidated Financial Statements" of the Annual Report.
In 1995, the Company transferred ownership of the Brive, France
manufacturing operations to local management and transferred ownership of the
Brive land and building to the mortgagor in exchange for the release of the
related mortgage obligation. See Other Charges in Note B of the "Notes to
Consolidated Financial Statements" of the Annual Report.
In 1993, the Company developed a plan to reorganize its sales staff on a
specialty basis by SBU wherever possible. This plan was implemented throughout
North America in 1994. During 1995, we expanded the specialty sales concept to
Europe. The Company also made a major commitment to the rapidly expanding CCTV
market in 1995. A new general manager was hired for SSD, and the sales force was
doubled in size.
Products
The following is a description of some of the Company's products:
Power Amplifier / Oscillator Tubes are vacuum or gas filled tubes used in
applications where current or voltage amplification and/or oscillation is
required. Some areas of use are: induction heating, diathermy equipment, sonic
generators, communications and radar systems and power supplies for voltage
regulation or amplification.
RF Power Transistors are "solid state" high-frequency power amplifiers used
in land mobile, aircraft and satellite communications and in many types of
electronic instrumentation.
Cathode Ray Tubes ("CRTs") are vacuum tubes which convert an electrical
signal into a visual image to display information on computer terminals or
televisions used in the medical, scientific and publishing industries as well as
in general business applications. Includes both monochrome and color monitors.
Closed-circuit Television ("CCTV") products include cameras, lenses,
monitors, scanners, time lapse recorders and associated accessories. CCTV
products are used in surveillance applications and monitoring hazardous
environments in the work-place.
Magnetrons are high vacuum oscillator tubes which are used to generate
energy at microwave frequencies. The pulsed magnetron is predominantly used to
generate high energy microwave signals for radar applications. Magnetrons are
also used in heating applications such as microwave ovens and devices used by
the medical industry.
Silicon Controlled Rectifiers (SCR's) and Power Semiconductor Modules are
used in many industrial control applications, and have spawned new applications
because of their ability to switch large amounts of power at high speeds. These
silicon power devices are capable of operating at up to 4,000 volts at 2,000
amperes.
Planar Triodes are high frequency triodes manufactured using a special
process to enable them to operate at several thousand megahertz (MHz). Aircraft
instrumentation and television translators use planar triodes.
High Voltage and Power Capacitors are used in industrial, avionics, medical
and broadcast applications for filtering, high current by-pass, feed through
capacitance for harmonic attenuation, pulse shaping, grid and plate blocking,
tuning of tank circuits, antenna coupling, and energy discharge.
Computer Terminal Components are electronic components used in repair of
computer terminals and monitors, including flyback transformers, semiconductors,
power supplies, controls and switches.
Receiving/Industrial Receiving Tubes are vacuum tubes used to regulate or
amplify small amounts of power in a wide variety of electrical and electronic
equipment. Communications, medical instrumentation, consumer electronics, and
industrial controls are typical applications for this product.
Hydrogen Thyratrons are electron tubes capable of high speed and high
voltage switching. They are used in switching of power to radar magnetrons and
lasers.
Camera Tubes are vacuum tubes used to change a visible light image to
electronic signals which are then transmitted to a monitor for conversion back
to a visible image. Camera tubes are used in broadcast, security and medical
applications.
Thyratrons and Rectifiers are vacuum or gas filled tubes used to control
the flow of electrical current. Thyratrons are used to control ignitrons,
electric motor speed controls, theatrical lighting and machinery such as
printing presses and various types of medical equipment. Rectifiers are used to
restrict electric current flow to one direction in power supply applications.
X-ray Tubes are used in industrial, analytical and medical equipment.
Stationary anode x-ray tubes are used primarily for inspection and non-
destructive testing of solid materials and in crystallography. Rotating anode x-
ray tubes are used primarily in medical applications, including fluoroscopy and
computer-aided tomography (CAT-scan).
Microwave Diodes are specialized diodes intended for use at microwave and
RF frequencies for oscillator, mixer, switching, and power control, and
amplifier applications in broadcast, avionic, telecommunication, medical and
industrial equipment.
Ignitrons are mercury pool tubes used to control the flow of large amounts
of electrical current. Their primary applications are in welding equipment,
power conversion and power rectification equipment.
Distribution and Marketing
The Company buys, warehouses and distributes more than 62,000 types of
tubes and semiconductors ranging in price from $1 to $35,000 for tubes and $.10
to $2,500 for semiconductors and related components. The Company processes
approximately 570 orders per day averaging $1,460 each (for an average total of
$832,000 per day). The Company distributes electron tubes it manufactures as
well as electron tubes, power, RF and microwave semiconductors and related
products purchased from other sources, including Varian Associates, Inc.,
Motorola, Inc., Panasonic Industrial Company, Clinton Electronics Corp., Burle
Industries, Inc., Philips, Powerex, ITT Electron Technology Division, SGS
THOMSON, M/A-COM, Microwave Associates, RF Products, Litton Electron Devices,
Computer Components Source, Joslyn Jennings, MPD Inc., New Japan Radio, General
Electric, Pelco and CEIEC. No single outside supplier currently accounts for
more than 10% of the Company's purchases in any year, other than Varian
Associates, Inc., which accounted for approximately 18%, 17% and 22% of
purchases in fiscal 1995, 1994 and 1993, respectively. The Company believes that
the loss of any one supplier, other than Varian, would not cause a material
adverse impact on its earnings and revenues. On August 14, 1995 Varian announced
the consummation of the sale of its electron device business, the business unit
of Varian with which the Company has principally done business, to a new entity,
Communications and Power Industries, Inc. ("CPII"), having the same management
and operating personnel as Varian's former electron device business. The
Company believes that relationships with CPII will continue to be satisfactory.
The Company has entered into marketing distribution agreements with various
manufacturers in the tube, semiconductor, and CCTV industries. The most
significant is a distributor agreement with the Electron Device Group of Varian
Associates, Inc. (this agreement was assigned to CPII in connection with
Varian's sale of its electron device business) under which the Company is such
group's exclusive distributor of power grid tubes throughout the world with the
exception of the United States and certain Eastern European countries where the
Company is one of such group's stocking distributors. Varian product accounted
for 17%, 18% and 20% of net sales of the Company in fiscal 1995, 1994 and 1993,
respectively.
Customer orders are taken by the regional sales offices and directed to the
Company's headquarters and distribution facility in LaFox, Illinois or to one of
its international distribution centers. The Company utilizes a sophisticated
data processing network which provides on-line, real-time interconnection of all
sales offices, manufacturing facilities and central distribution operations.
Information on stock availability, customers, and competitive market analyses
are instantly obtainable throughout the entire distribution network. Most of the
products distributed by Richardson are critical to the function of the equipment
in which they are used, therefore, Richardson utilizes this system, achieving
same-day shipment on over 90% of its customer orders.
The Company markets its products to manufacturers and end-users in, among
others, the areas of communications, industrial heating, marine, medical care
and avionics. The Company also sells to customers who purchase for resale,
including electronics distributors and service companies. The Company has
established supply contracts, generally for a one-year term, with certain
customers, and is committed pursuant to these contracts to maintain minimum
inventories so as to provide product without significant delay. Management
believes that for the past two fiscal years approximately 20% of the Company's
sales were made under such supply contracts. During the past five years, no
single customer represented more than 10% of the Company's sales.
The Company emphasizes sales to replacement markets. Some of these markets
may expand as new equipment utilizing electron tubes continues to be sold. For
example: equipment such as video monitors and computer display terminals which
use cathode ray tubes also present expanding market opportunities for
replacement purposes; new communications equipment using microwave devices such
as traveling wave tubes and klystrons and RF transistors continue to be
developed for applications with high power or high-frequency requirements that
tube technology alone can provide.
The Company's backlog of firm orders scheduled for future delivery within
12 months was $46,300,000, $29,700,000 and $22,400,000 as of May 31, 1995, 1994
and 1993, respectively. The Company's backlog primarily consists of commercial
contracts that require future shipping dates, and the 1995 increase reflects
higher contract levels for SSC and DPG. The level of the Company's backlog,
which is not significant to annual sales, does not provide a reliable indicator
of future sales levels.
International
International sales, including export sales, represented approximately 46%
of the Company's fiscal 1995 sales. These sales were $96,644,000, $79,123,000,
and $75,101,000 in fiscal years 1995, 1994 and 1993, respectively. Export sales
from the United States were $38,653,000, $29,667,000 and $28,396,000 in
1995,1994 and 1993. On May 31, 1995, the Company had 51 locations throughout the
world. See Note J of the "Notes to Consolidated Financial Statements" of the
Annual Report for details of the Company's international operations, including
sales, operating income and identifiable assets.
Manufacturing
The Company distributes its manufactured products principally under the
trade names "National", "Cetron" and "Amperex". Located in LaFox, Illinois, the
Company's manufacturing operations, including value-added, accounted for
approximately 6% of its product distribution requirements in fiscal 1995. Such
manufacturing operations contributed sales of approximately $12 million in
fiscal 1995, $30 million in fiscal 1994 and $33 million in fiscal 1993. The
decrease in sales of manufactured products is a result of the transfer of
ownership of the Brive, France manufacturing facility and the phase-down of
manufacturing activity in LaFox, Illinois. (See Note B of the "Notes to
Consolidated Financial Statements" of the Annual Report.)
The products currently manufactured by the Company include thyratrons and
rectifiers, power tubes, ignitrons, electronic display tubes, phototubes, SCR
assemblies and spark gap tubes. The materials used in the manufacturing process
are readily available and consist of glass bulbs and tubing, nickel, stainless
steel and other metals, plastic and metal bases, ceramics, and a wide variety of
fabricated metal components.
Research and Development
The objective of the Company's research and development is to increase the
number of applications for its products and to develop existing technology with
respect to advanced products. The Company emphasizes product development rather
than basic research. The ability of the Company to compete is, in part,
dependent upon its ability to anticipate changing market needs and to provide
the required products.
At present, a staff of 6 persons are involved, on a full- or part-time
basis, in various phases of product development. The Company's expenditures in
this area were $229,000, $358,000 and $584,000 in fiscal 1995, 1994 and 1993.
Employees
As of May 31, 1995, the Company employed 406 individuals on a full time
basis at U.S. locations. Of these, 61 are employed in administrative and
clerical positions, 250 are employed in sales and distribution, and 95 are
employed in value-added and product manufacturing. The Company's foreign
subsidiaries employ an additional 134 individuals engaged in administration,
sales and distribution. All of the Company's employees are non-union.
Competition
Although the Company believes it is a significant distributor of electron
tubes and semiconductors in the United States, it competes worldwide with other
general line distributors and manufacturers and other distributors of electronic
components (including original equipment manufacturers), many of which are
substantially larger and have greater resources than the Company. The Company
also competes against manufacturers of semiconductors, which have replaced
electron tubes in many applications.
Patents and Trademarks
The Company acquired certain manufacturing patents and trademarks in
connection with acquisitions, including the trademarks "National", "Cetron," and
"Amperex." The Company believes that although the patents and trademarks it has
obtained have value, they will not be determinative of the Company's success,
which depends principally upon its marketing technical support, product delivery
and the quality and economic value of its products.
Item 2. Properties
The Company owns facilities on approximately 300 acres in LaFox, Illinois,
consisting of a modern, single and two-story concrete, brick and steel
constructed building containing approximately 255,000 square feet of
manufacturing, warehouse and office space. The Company also owns a four-story
building containing approximately 45,000 square feet of warehouse space on 1.5
acres in Geneva, Illinois. The Company's United Kingdom subsidiary owns a 12,000
square foot single story brick building in Lincoln, England which it utilizes as
a sales office and warehouse hub for European sales distribution. The Company's
Spanish subsidiary owns 3,510 square feet of office and warehouse space in a
55,000 square foot industrial concrete building constructed in 1988 in Madrid,
Spain. The Company's Italian subsidiary owns an office and warehouse facility
located in Florence, Italy which consists of approximately 6,400 square feet of
a brick and concrete industrial building.
The Company also rents branch sales offices on a short-term basis in or
near Boston, Los Angeles, Miami, New York, Orlando, and San Francisco; and in or
near London, England; Mexico City, Mexico; Milan, Italy; Montreal, Canada; and
Rome, Italy. Additional sales offices, which include warehouse space, leased on
a short-term basis, are located in Houston and San Antonio; and in or near
Amsterdam, The Netherlands; Munich, Germany; Paris, France; Sao Paulo, Brazil;
Singapore; Taipei, Taiwan; Tokyo, Japan; and Toronto, Canada. Additional
warehouse space in Geneva, Illinois is also rented on a short-term basis. The
Company also leases a facility from a trust, of which Edward J. Richardson,
Chairman of the Board of the Company, is the principal beneficiary. Such
facility is used by SSD as its sales office and warehouse. Under the terms of
this lease, the Company is obligated to make rental payments of $68,705 per
year, expiring in 1996. In the opinion of management, the lease is on terms no
less favorable to the Company than similar leases which would be available from
unrelated third parties.
Item 3. Legal Proceedings
No material developments have occurred in the matter of Panache
Broadcasting of Pennsylvania, Inc. v. Richardson Electronics, Ltd. and Varian
Associates, Inc., pending in the United States District Court for the Northern
District of Illinois, Eastern Division, docket no. 90 C 6400. The complaint
alleges violations of Sections 1 and 2 of the Sherman Act and Section 7 of the
Clayton Act As previously reported the matter remains primarily in the
discovery stage and the Court has not determined whether the matter may be
maintained as a class action.
See Part I, Item 1, Business, Developments in the Past Fiscal Year,
regarding the settlement of monetary claims of the United States in connection
with a 1989 contract with the Department of Justice for night-vision tubes. The
Government has not sought any administrative remedies in connection with such
matter and the Company cannot predict whether or not further action will be
taken or the financial impact, if any, of any such action.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of stockholders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended May 31, 1995.
PART II
Item 5. Market for the Registrant's Common Stock and Related Security Holder
Matters
Incorporated herein by reference to pages 15 (for dividend payments), 20
(for dividend restriction) and 24 (for market data) of the Annual Report to
Stockholders for the year ended May 31, 1995.
Item 6. Selected Financial Data
Incorporated herein by reference to page 10 of the Annual Report to
Stockholders for the year ended May 31, 1995.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Incorporated herein by reference to pages 11 to 13 of the Annual Report to
Stockholders for the year ended May 31, 1995.
Item 8. Financial Statements and Supplementary Data
Incorporated herein by reference to pages 14 through 24 of the Annual
Report to Stockholders for the year ended May 31, 1995.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
No event has occurred within the 24 month period prior to the date of the
Company's most recent financial statements, which would require disclosure under
Item 9 of this Report.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning Directors and Executive Officers of the Company is
contained in the Company's Proxy Statement to be used in connection with its
Annual Meeting of Stockholders scheduled to be held October 10, 1995, under the
captions "ELECTION OF DIRECTORS - Information Relating to Directors, Nominees
and Executive Officers," "ELECTION OF DIRECTORS - Affiliations" and "SECTION 16
FILINGS," which information is incorporated herein by reference.
Item 11. Executive Compensation
Incorporated herein by reference is information concerning executive
compensation is contained in the Company's Proxy Statement to be used in
connection with its Annual Meeting of Stockholders scheduled to be held October
10, 1995, under the captions "ELECTION OF DIRECTORS - Directors Compensation"
and "EXECUTIVE COMPENSATION," except for captions "REPORT ON EXECUTIVE
COMPENSATION" and "PERFORMANCE GRAPH."
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information concerning security ownership of certain beneficial owners and
management is contained in the Company's Proxy Statement to be used in
connection with its Annual Meeting of Stockholders scheduled to be held October
10, 1995, under the caption "ELECTION OF DIRECTORS - Information Relating to
Directors, Nominees and Executive Officers" and "PRINCIPAL STOCKHOLDERS," which
information is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related transactions is
contained in the Company's Proxy Statement to be used in connection with its
Annual Meeting of Stockholders scheduled to be held October 10, 1995, under the
caption "EXECUTIVE COMPENSATION - Compensation Committee Interlocks and Insider
Participation," which information is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following consolidated financial statements of the registrant and
its subsidiaries included on pages 14 through 24 of its Annual Report to
Stockholders for the fiscal year ended May 31, 1995 are incorporated herein by
reference:
Filing Method
Report of Independent Accountants E
1. FINANCIAL STATEMENTS:
Consolidated Balance Sheets - May 31, 1995 and 1994 E
Consolidated Statements of Operations - Years ended
May 31, 1995, 1994 and 1993 E
Consolidated Statements of Cash Flows - Years ended
May 31, 1995, 1994 and 1993 E
Consolidated Statements of Stockholders' Equity - Years
ended May 31, 1995, 1994 and 1993 E
Notes to Consolidated Financial Statements E
The following consolidated financial information for the
fiscal years 1995, 1994 and 1993 is submitted herewith:
2. FINANCIAL STATEMENT SCHEDULES:
II Valuation and Qualifying Accounts E
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore, have
been omitted.
(b) REPORTS ON FORM 8-K.
Form 8-K, dated May 31, 1995, reporting under Item 5 - Other Events
a Settlement Agreement with the United States of America entered into
on May 31, 1995.
(c) EXHIBITS
Filing Method
3(a) Restated Certificate of Incorporation of the Company, incor-
porated by reference to Appendix B to the Proxy Statement/
Prospectus dated November 13, 1986, incorporated by reference
to the Company's Registration Statement on Form S-4 Commission
File No. 33-8696. NA
3(b) By laws of the Company, as amended, incorporated by reference
to the Company's Annual Report on Form 10-K for the fiscal year
ended May 31, 1994. NA
4(a) Specimen forms of Common Stock and Class B Common Stock certifi-
cates of the Company incorporated by reference to Exhibit 4(a)
to the Company's Registration Statement on Form S-1, Commission
File No. 33-10834. NA
4(b) Indenture between the Company and Continental Illinois National
Bank and Trust Company of Chicago (including form of 7 1/4%
Convertible Subordinated Debentures due December 15, 2006)
incorporated by reference to Exhibit 4(b) to the Company's
Annual Report on Form 10-K for the fiscal year ended May 31, 1990. NA
10(a) $13,000,000 Senior Term Note dated March 28, 1994 delivered
to American National Bank, incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended February 28, 1994. NA
10(b) $8,000,000 Promissory note dated May 31, 1995 delivered to
American National Bank. E
10(c) Industrial Building Lease, dated April 14, 1993 between
the Company and the American National Bank & Trust, as trustee
under Trust No. 56120 dated February 23, 1983, incorporated
by reference to Exhibit 10(b) to the Company's Annual Report
on Form 10-K for the fiscal year ended May 31, 1993. NA
10(d) The Company's Employees Profit Sharing Plan and Trust
Agreement, (as amended and restated effective June 1, 1989)
dated July 14, 1994 incorporated by reference to Exhibit 10(c)
to the Company's Annual Report on form 10-K for the fiscal
year ended May 31, 1994. NA
10(e) The Company's Amended and Restated Incentive Stock Option
Plan effective April 8, 1987 incorporated by reference to
Exhibit 10(m) to the Company's Annual Report on Form 10-K for
the fiscal year ended May 31, 1987. NA
10(e)(1) First Amendment to the Company's Amended and Restated
Incentive Stock Option Plan effective April 11, 1989 incorpo-
rated by reference to Exhibit 10(l)(1) to the Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1989. NA
10(e)(2) Second Amendment to the Company's Amended and Restated
Incentive Stock Option Plan effective April 11, 1989 incorpo-
rated by reference to Exhibit 10(l)(2) to the Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1991. NA
10(f) The Company's Amended and Restated Employees Stock Purchase
Plan, incorporated by reference to the Company's Proxy Statement
used in connection with its Annual Meeting of Stockholders held
October 2, 1985. NA
10(f)(1) First Amendment to Amended and Restated Employees Stock
Purchase Plan, incorporated by reference to Appendix D to the
Company's Proxy Statement/Prospectus dated November 13, 1986
included in its Registration Statement on Form S-4, Commission
File No. 33-8696. NA
10(f)(2) Second Amendment to Amended and Restated Employees Stock
Purchase Plan, incorporated by reference to Appendix E to the
Company's Proxy Statement/Prospectus dated November 13, 1986
included in its Registration Statement on Form S-4, Commission
File No. 33-8696. NA
10(f)(3) Third Amendment to Amended and Restated Employees Stock
Purchase Plan incorporated by reference to Exhibit 10(m)(3) to
the Company's Annual Report on Form 10-K for the fiscal year
ended May 31, 1990. NA
10(f)(4) Fourth Amendment to Amended and Restated Employees Stock
Purchase Plan incorporated by reference to Exhibit 10(m)(4) to
the Company's Annual Report on Form 10-K for the fiscal year
ended May 31, 1991. NA
10(f)(5) Fifth Amendment to Amended and Restated Employees Stock
Purchase Plan incorporated by reference to Exhibit 10(m)(5) to
the Company's Annual Report on Form 10-K for the fiscal year
ended May 31, 1991. NA
10(g) Employees Stock Ownership Plan and Trust Agreement, effective
as of June 1, 1987, dated July 14, 1994, incorporated by reference
to Exhibit 10(f) to the Company's Annual Report on Form 10-K for
the fiscal year ended May 31, 1994. NA
10(g)(1) First Amendment to Employees Stock Ownership Plan and Trust
Agreement, dated July 12, 1995. E
10(h) Stock Option Plan for Non-Employee Directors incorporated by
reference to Appendix A to the Company's Proxy Statement dated
August 30, 1989 for its Annual Meeting of Stockholders held on
October 18, 1989. NA
10(i) The Company's Employees' Incentive Compensation Plan incorporated
by reference to Appendix A to the Company's Proxy Statement dated
August 31, 1990 for its Annual Meeting of Stockholders held on
October 9, 1990. NA
10(i)(1) First Amendment to Employees Incentive Compensation Plan
incorporated by reference to Exhibit 10(p)(1) to the Company's
Annual Report on Form 10-K for the fiscal year ended May 31, 1991. NA
10(j) Richardson Electronics, Ltd. Employees' 1994 Incentive Compen-
sation Plan incorporated by reference to Exhibit A to the Company's
Proxy Statement dated August 31, 1994 for its Annual Meeting of
Stockholders held on October 11, 1994. NA
10(k) Correspondence outlining Agreement between the Company and Arnold
R. Allen with respect to Mr. Allen's employment by the Company,
incorporated by reference to Exhibit 10(v) to the Company's Annual
Report on Form 10-K, for the fiscal year ended May 31, 1985. NA
10(k)(1) Letter dated February 3, 1992 between the Company and Arnold
R. Allen outlining Mr. Allen's engagement as a consultant by the
Company, incorporated by reference to Exhibit 10 (r)(1) to the
Company's Annual Report on Form 10-K, for the fiscal year ended
May 31, 1992. NA
10(k)(2) Letter dated April 1, 1993 between the Company and Arnold
R. Allen regarding Mr. Allen's engagement as consultant by the
Company, incorporated by reference to Exhibit 10(i)(2) to the
Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1994. NA
10(l) Letter dated January 14, 1992 between the Company and Jacques
Bouyer setting forth the terms of Mr. Bouyer's engagement as a
management consultant by the Company for Europe, incorporated by
reference to Exhibit 10(t)(1) to the Company's Annual Report on
Form 10-K for the fiscal year ended on May 31, 1992. NA
10(l)(1) Letter dated January 15, 1992 between the Company and Jacques
Bouyer setting forth the terms of Mr. Bouyer's engagement as a
management consultant by the Company for the United States,
incorporated by reference to Exhibit 10(t)(1) to the Company's
Annual Report on Form 10-K for the fiscal year ended on
May 31, 1992. NA
10(m) Letter dated November 27, 1992 between the Company and Ad
Ketelaars setting forth the terms of Mr. Ketelaars' employment
by the Company, incorporated by reference to Exhibit 10(k) to
the Company's Annual Report on Form 10-K for the fiscal year
ended on May 31, 1994. NA
10(n) Letter dated January 13, 1994 between the Company and Samuel
Rubinovitz setting forth the terms of Mr. Rubinovitz' engagement
as management consultant by the Company incorporated by reference
to Exhibit 10(m) to the Company's Annual Report on Form 10-K for
the fiscal year ended on May 31, 1994. NA
10(o) Letter dated April 4, 1994 between the Company and Bart F.
Petrini setting forth the terms of Mr. Petrini's employment by
the Company, incorporated by reference to Exhibit 10(o) to the
Company's Annual Report on Form 10-K for the fiscal year ended
on May 31, 1994. NA
10(p) Letter dated May 20, 1994 between the Company and William J.
Garry setting forth the terms of Mr. Garry's employment by the
Company, incorporated by reference to Exhibit 10(p) to the
Company's Annual Report on Form 10-K for the fiscal year ended
on May 31, 1994. NA
10(q) Letter dated October 17, 1994 between the Company and Flint Cooper
setting forth the terms of Mr. Cooper's employment by the Company,
incorporated by reference to Exhibit 10 to the Company's Quarterly
Report on Form 10-Q for the quarter ended November 30, 1994. NA
10(r) The Company's Directors and Officers Liability Insurance Policy
issued by Chubb Group of Insurance Companies Policy Number
8125-64-60A incorporated by reference to Exhibit 10(u) to the
Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1991. NA
10(r)(1) The Company's Directors and Officers Liability Insurance
Policy renewal issued by Chubb Group of Insurance Companies
Policy Number 8125-64-60D. E
10(r)(2) The Company's Excess Directors and Officers Liability
and Corporate Indemnification Policy issued St. Paul Mercury
Insurance Company Policy Number 900DX0134. E
10(r)(3) The Company's Directors and Officers Liability Insurance
Policy issued by CNA Insurance Companies Policy Number DOX600028634. E
10(s)(1) Distributor Agreement, executed August 8, 1991, between
Registrant and Varian Associates, Inc., incorporated by reference
to Exhibit 10(d) of the Company's Current Report on Form 8-K for
September 30, 1991. NA
10(s)(2) Amendment, dated as of September 30, 1991, between Registrant
and Varian Associates, Inc., incorporated by reference to
Exhibit 10(e) of the Company's Current Report on Form 8-K for
September 30, 1991. NA
10(s)(3) First Amendment to Distributor Agreement between Varian
Associates, Inc. and the Company as of April 10, 1992, incorpo-
rated by reference to Exhibit 10(v)(5) of the Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1992. NA
10(s)(4) Consent to Assignment and Assignment dated August 4, 1995
between Registrant and Varian Associates Inc. E
10(s)(5) Final Judgment, dated April 1, 1992, in the matter of United
States of America v. Richardson Electronics, Ltd., filed in the
United States District Court for the Northern District of Illinois,
Eastern Division, as Docket No. 91 C 6211 incorporated by reference
to Exhibit 10(v)(7) to the Company's Annual Report on Form 10-K for
the fiscal year ended May 31, 1992. NA
10(t) Trade Mark License Agreement dated as of May 1, 1991 between
North American Philips Corporation and the Company incorporated
by reference to Exhibit 10(w)(3) of the Company's Annual Report
on Form 10-K for the fiscal year ended May 31, 1991. NA
10(u) Agreement among the City of Brive, Richardson Electronics, Ltd.,
Richardson Electronique S.A., Covelec S.A., and Messrs. Denis
Dumont and Patrick Pertzborn, delivered February 23, 1995,
translated from French, incorporated by reference to Exhibit 10(a)
to the Company's Report on Form 8-K dated February 23, 1995. NA
10(v) Agreement among Richardson Electronics, Ltd., Richardson
Electronique S.A., Covelec S.A., and Messrs. Denis Dumont
and Patrick Pertzborn, delivered February 23, 1995, translated
from French, incorporated by reference to Exhibit 10(b) to the
Company's Report on Form 8-K dated February 23, 1995. NA
10(w) Settlement Agreement by and between the United States of
America and Richardson Electronics, Ltd. dated May 31, 1995
incorporated by reference to Exhibit 10(a) to the Company's
Report on From 8-K dated May 31, 1995. NA
11 Statement re computation of net income per share. E
13 Annual Report to Stockholders for fiscal year ending May 31, 1995
(except for the pages and information thereof expressly
incorporated by reference in this Form 10-K, the Annual Report
to Stockholders is provided solely for the information of the
Securities and Exchange Commission and is not deemed "filed" as
part of this Form 10-K). E
21 Subsidiaries of the Company. E
23 Consent of Independent Auditors. E
27 Financial Data Schedules. E
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RICHARDSON ELECTRONICS, LTD.
By: /s/
Edward J. Richardson,
Chairman of the Board and
President
By: /s/
William J. Garry
Vice President and
Date: August 25, 1995 Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
/s/ /s/
Edward J. Richardson, Chairman Dennis R. Gandy, Director
of the Board (principal executive August 25, 1995
officer), President and Director
August 25, 1995
/s/ /s/
Joel Levine, Director Scott Hodes, Director
August 15, 1995 August 25, 1995
/s/ /s/
William J. Garry, Vice President Samuel Rubinovitz, Director
and Chief Financial Officer August 25, 1995
(principal financial and accounting
officer) and Director
August 25, 1995
/s/ /s/
Arnold R. Allen, Director Kenneth J. Douglas, Director
August 14, 1995 August 14, 1995
/s/ /s/
Jacques Bouyer, Director Harold L. Purkey
August 25, 1995 August 25, 1995
Richardson Electronics, Ltd. and Subsidiaries
Schedule II - Valuation and Qualifying Accounts
(in thousands)
COL. A COL. B COL. C COL. D COL. E
ADDITIONS
Balance at <F1> <F2> Balance at
DESCRIPTION Beginning Charged to Charged to Deductions - End of
of Period Expenses Other Accts Describe Period
--------- --------- --------- --------- ---------
Year ended May 31, 1995:
Allowance for sales returns and
doubtful accounts $ 1,405 $ 199 $ -- $ 219 <F1> $ 1,385
Assets held for disposition $ 15,832 $ -- $ -- $ 15,832 <F2> $ --
Liabilities related to disposition $ 5,568 $ -- $ -- $ 5,568 <F2> $ --
Accrual for phase-down of
domestic manufacturing $ 2,598 $ -- $ -- $ 870 <F3> $ 1,728
Year ended May 31, 1994:
Allowance for sales returns and
doubtful accounts $ 1,456 $ 199 $ -- $ 250 <F1> $ 1,405
Assets held for disposition $ -- $ 15,832 $ -- $ -- $ 15,832
Liabilities related to disposition $ -- $ 5,568 $ -- $ -- $ 5,568
Accrual for phase-down of
domestic manufacturing $ 2,954 $ 5,100 $ -- $ 5,456 <F3> $ 2,598
Year ended May 31, 1993:
Allowance for sales returns and
doubtful accounts $ 1,435 $ 328 $ -- $ 307 <F1> $ 1,456
Accrual for phase-down of
domestic manufacturing $ 4,510 $ -- $ -- $ 1,556 <F4> $ 2,954
<FN>
<F1> Uncollectible amounts written off, net of recoveries and foreign currency
translation.
<F2> Asset write offs and costs incurred for the divestiture of the Company's
Brive, France, manufacturing operations.
<F3> Costs incurred for the phase-down of domestic manufacturing and the
disposition of manufactured inventory.
<F4> Costs incurred for the phase-down of domestic manufacturing and the transfer
of certain product lines to the Brive, France facility.
</FN>