• Richardson Electronics Reports First Quarter Fiscal 2024 And Declares Quarterly Cash Dividend

    来源: Nasdaq GlobeNewswire / 11 10月 2023 15:15:00   America/Chicago

    First Quarter Highlights

    • Net sales of $52.6 million were down $15.0 million, or 22.2% from last year’s first quarter primarily due to a near-term reduction in sales to semiconductor wafer fab customers, and a timing-related reduction in ultracapacitor module sales to replace lead acid batteries in existing wind turbines. A challenging economic backdrop accounted for the remainder of the year-over-year decline in sales.
    • Backlog totaled $148.1 million in the first quarter versus $160.4 million at the end of the fourth quarter of fiscal 2023.
    • Gross margin was 32.8% of net sales for the first quarter of fiscal 2024, compared to 34.1% in the prior year’s first quarter. The decrease was driven primarily by a less profitable mix of sales. Gross margin increased 4.9 percentage points from the fourth quarter of fiscal 2023 because of improved product mix.
    • Operating income was $1.5 million in the first quarter of fiscal 2024 compared to $8.8 million for the first quarter of fiscal 2023.
    • Income tax provision was $0.4 million or an effective tax rate of 23.7% for the first quarter of fiscal 2024 versus income tax provision of $2.1 million or an effective tax rate of 25.0% in last year’s first quarter.
    • Earnings per common share (diluted) were $0.09 compared to earnings per common share (diluted) of $0.45 in the first quarter of fiscal 2023.
    • The Company’s balance sheet remains strong with no debt outstanding, and cash and investments of $24.1 million as of September 2, 2023.

    LAFOX, Ill., Oct. 11, 2023 (GLOBE NEWSWIRE) -- Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its first quarter ended September 2, 2023. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.

    “As expected, our first quarter results were challenged primarily by weaker demand from our semiconductor wafer fab customers and lower sales of power modules for existing wind turbines. While we expect the semiconductor wafer fab market to remain difficult until the third quarter of calendar 2024, we expect to see improving sales trends within our GES business in the coming quarters. Our confidence in our GES business is reflected in our current pipeline of existing projects and new sales opportunities globally. These opportunities include expected sales in the second half of this fiscal year for our power management systems for wind turbines and electric locomotives applications,” said Edward J. Richardson, Chairman, Chief Executive Officer, and President.

    “As we wait for certain of our global markets to improve and several large sales opportunities to close, we are focused on controlling costs and operating expenses, improving our operating cash flow through prudent working capital management, and investing in large, multi-year sales opportunities within our GES business. While the near-term macro-economic environment remains uncertain, we are confident in the direction we are headed and the long-term growth strategies we are pursuing to drive higher margin, and higher sales of engineered solutions to a growing number of global customers,” concluded Mr. Richardson.

    First Quarter Results

    Net sales for the first quarter of fiscal 2024 decreased 22.2% to $52.6 million compared to net sales of $67.6 million in the prior year’s first quarter due to lower net sales in PMT, GES, Canvys and Healthcare. PMT sales decreased $9.6 million or 21.2% from last year’s first quarter primarily due to lower sales of manufactured products for our semiconductor wafer fabrication equipment customers. Net sales for GES decreased $4.1 million from last year’s first quarter primarily due to lower sales of ultracapacitor modules for wind turbines; replacement of lead acid batteries in existing wind turbines is often project-based and timing is difficult to predict. Canvys sales decreased by $0.5 million or 5.0% primarily due to lower customer demand in North America. Richardson Healthcare sales decreased $0.7 million or 22.1% primarily due to lower demand in the quarter for parts and equipment.

    Gross margin was 32.8% of net sales during the first quarter of fiscal 2024, compared to 34.1% during the first quarter of fiscal 2023. PMT gross margin decreased to 32.2% from 34.3% due to product mix and manufacturing under absorption. Healthcare gross margin decreased to 31.6% in the first quarter of fiscal 2024 compared to 36.7% in the prior year’s first quarter as a result of an increase in scrap expense and manufacturing under absorption. GES gross margin increased to 36.0% from 35.5% due to product mix. Canvys margin increased to 34.0% from 31.4% because of product mix and lower freight costs.

    Operating expenses were $15.8 million compared to $14.2 million in the first quarter of fiscal 2023. The increase in operating expenses resulted from higher employee compensation expenses, primarily salaries.

    The Company reported operating income of $1.5 million for the first quarter of fiscal 2024 compared to operating income of $8.8 million in the prior year’s first quarter. Other income for the first quarter of fiscal 2024, including interest income and foreign exchange, was $0.1 million, compared to other expense of $0.3 million in the first quarter of fiscal 2023.

    Income tax provision was $0.4 million or a 23.7% effective tax rate versus an income tax provision of $2.1 million or a 25.0% effective tax rate in the prior year’s first quarter.

    Net income for the first quarter of fiscal 2024 was $1.2 million compared to net income of $6.3 million in the first quarter of fiscal 2023. Earnings per common share (diluted) were $0.09 in the first quarter of fiscal 2024 compared to earnings per common share (diluted) of $0.45 in the first quarter of fiscal 2023.

    Cash and investments were $24.1 million as of September 2, 2023 versus $25.0 million on May 27, 2023. The use of cash during the first quarter of fiscal 2024 primarily resulted from $1.1 million of capital expenditures related to our facilities, manufacturing business, and IT system.

    CASH DIVIDEND DECLARED

    The Board of Directors of Richardson Electronics declared a $0.06 quarterly cash dividend per share to holders of common stock and a $0.054 cash dividend per share to holders of Class B common stock. The dividend will be payable on November 29, 2023, to common stockholders of record as of November 10, 2023.

    CONFERENCE CALL INFORMATION

    On Thursday, October 12, 2023, at 9:00 a.m. Central Time, Edward J. Richardson, Chairman and Chief Executive Officer, and Robert J. Ben, Chief Financial Officer, will host a conference call to discuss the Company’s first quarter fiscal 2024 results. A question-and-answer session will be included as part of the call’s agenda.

    Participant Instructions

    Participants may register for the call here. While not required, it is recommended you join 10 minutes prior to the event start. A replay of the call will be available beginning at 1:00 p.m. Central Time on October 12, 2023, for seven days. Registration instructions are also on our website at www.rell.com.

    In addition, the webcast link is available here.

    FORWARD-LOOKING STATEMENTS

    This release includes certain “forward-looking” statements as defined by the Securities and Exchange Commission. Statements in this press release regarding the Company’s business that are not historical facts represent “forward-looking” statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K filed on July 31, 2023, and other reports we file with the Securities and Exchange Commission. The Company assumes no responsibility to update the “forward-looking” statements in this release as a result of new information, future events or otherwise.

    ABOUT RICHARDSON ELECTRONICS, LTD.

    Richardson Electronics, Ltd. is a leading global manufacturer of engineered solutions, green energy products, power grid and microwave tubes, and related consumables; power conversion and RF and microwave components including green energy solutions; high-value replacement parts, tubes, and service training for diagnostic imaging equipment; and customized display solutions. Nearly 60% of our products are manufactured in LaFox, Illinois, Marlborough, Massachusetts, or Donaueschingen, Germany, or by one of our manufacturing partners throughout the world. All our partners manufacture to our strict specifications and per our supplier code of conduct. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. The Company’s strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair through its global infrastructure. More information is available at www.rell.com.

    Richardson Electronics common stock trades on the NASDAQ Global Select Market under the ticker symbol RELL.

    Richardson Electronics, Ltd.
    Consolidated Balance Sheets
    (in thousands, except per share amounts)
     
      
      Unaudited  Audited 
      September 2, 2023  May 27, 2023 
    Assets      
    Current assets:      
    Cash and cash equivalents $24,124  $24,981 
    Accounts receivable, less allowance of $197 and $191, respectively  25,578   30,067 
    Inventories, net  113,597   110,402 
    Prepaid expenses and other assets  2,270   2,633 
    Total current assets  165,569   168,083 
    Non-current assets:      
    Property, plant and equipment, net  21,030   20,823 
    Intangible assets, net  1,830   1,892 
    Right of Use lease asset  2,346   2,457 
    Deferred income taxes  4,525   4,526 
    Other non-current assets  216   267 
    Total non-current assets  29,947   29,965 
    Total assets $195,516  $198,048 
    Liabilities      
    Current liabilities:      
    Accounts payable $21,188  $23,535 
    Accrued liabilities  10,900   12,026 
    Lease liability current  1,076   1,028 
    Total current liabilities  33,164   36,589 
    Non-current liabilities:      
    Non-current deferred income tax liabilities  98   98 
    Lease liability non-current  1,270   1,429 
    Other non-current liabilities  630   612 
    Total non-current liabilities  1,998   2,139 
    Total liabilities  35,162   38,728 
    Stockholders’ Equity      
    Common stock, $0.05 par value; issued and outstanding 12,225 shares on
    September 2, 2023 and 12,140 shares on May 27, 2023
      611   607 
    Class B common stock, convertible, $0.05 par value; issued and outstanding
    2,052 shares on September 2, 2023 and 2,052 shares on May 27, 2023
      103   103 
    Preferred stock, $1.00 par value, no shares issued      
    Additional paid-in-capital  71,638   70,951 
    Retained earnings  87,428   87,044 
    Accumulated other comprehensive income  574   615 
    Total stockholders equity  160,354   159,320 
    Total liabilities and stockholders’ equity $195,516  $198,048 


    Richardson Electronics, Ltd.
    Unaudited Consolidated Statements of Comprehensive Income
    (in thousands, except per share amounts)
     
      Three Months Ended 
      September 2, 2023  August 27, 2022 
    Net sales $52,581  $67,557 
    Cost of sales  35,317   44,530 
    Gross profit  17,264   23,027 
    Selling, general and administrative expenses  15,792   14,248 
    Operating income  1,472   8,779 
    Other (income) expense:      
    Investment/interest income  (71)  (25)
    Foreign exchange (gain) loss  (97)  374 
    Other, net  32   (2)
    Total other (income) expense  (136)  347 
    Income before income taxes  1,608   8,432 
    Income tax provision  381   2,108 
    Net income  1,227   6,324 
    Foreign currency translation loss, net of tax  (41)  (2,315)
    Comprehensive income $1,186  $4,009 
           
    Net income per share:      
    Common shares - Basic $0.09  $0.47 
    Class B common shares - Basic  0.08   0.42 
    Common shares - Diluted  0.09   0.45 
    Class B common shares - Diluted  0.08   0.40 
           
    Weighted average number of shares:      
    Common shares - Basic  12,171   11,715 
    Class B common shares - Basic  2,052   2,053 
    Common shares - Diluted  12,539   12,331 
    Class B common shares - Diluted  2,052   2,053 
           
    Dividends per share:      
    Common share  0.060   0.060 
    Class B common share  0.054   0.054 


    Richardson Electronics, Ltd.
    Unaudited Consolidated Statements of Cash Flows
    (in thousands)
     
      
      Three Months Ended 
      September 2, 2023  August 27, 2022 
    Operating activities:      
    Net income $1,227  $6,324 
    Adjustments to reconcile net income to cash provided by (used in) operating activities:      
    Depreciation and amortization  998   883 
    Inventory provisions  85   71 
    Share-based compensation expense  483   311 
    Deferred income taxes  (5)  1 
    Change in assets and liabilities:      
    Accounts receivable  4,462   (3,496)
    Inventories  (3,151)  (10,468)
    Prepaid expenses and other assets  409   (1,199)
    Accounts payable  (2,365)  1,495 
    Accrued liabilities  (1,124)  2,209 
    Other  (4)  638 
    Net cash provided by (used in) operating activities  1,015   (3,231)
    Investing activities:      
    Capital expenditures  (1,141)  (1,442)
    Net cash used in investing activities  (1,141)  (1,442)
    Financing activities:      
    Proceeds from issuance of common stock  327   1,385 
    Cash dividends paid on Common and Class B Common shares  (843)  (819)
    Other  (119)  (69)
    Net cash (used in) provided by financing activities  (635)  497 
    Effect of exchange rate changes on cash and cash equivalents  (96)  (686)
    Decrease in cash and cash equivalents  (857)  (4,862)
    Cash and cash equivalents at beginning of period  24,981   35,495 
    Cash and cash equivalents at end of period $24,124  $30,633 


    Richardson Electronics, Ltd.
    Unaudited Net Sales and Gross Profit
    For the First Quarter of Fiscal 2024 and 2023
    ($ in thousands)
     
    By Strategic Business Unit:           
                 
    Net Sales            
      Q1 FY 2024     Q1 FY 2023  % Change 
    PMT $35,744     $45,354   -21.2%
    GES  4,394      8,511   -48.4%
    Canvys  9,889      10,413   -5.0%
    Healthcare  2,554      3,279   -22.1%
    Total $52,581     $67,557   -22.2%
                 
    Gross Profit   
      Q1 FY 2024  % of Net Sales  Q1 FY 2023  % of Net Sales 
    PMT $11,511   32.2% $15,535   34.3%
    GES  1,580   36.0%  3,022   35.5%
    Canvys  3,365   34.0%  3,266   31.4%
    Healthcare  808   31.6%  1,204   36.7%
    Total $17,264   32.8% $23,027   34.1%


    For Details Contact: 
    Edward J. RichardsonRobert J. Ben
    Chairman and CEOEVP & CFO
    Phone: (630) 208-2320(630) 208-2203

    40W267 Keslinger Road
    PO BOX 393
    LaFox, IL 60147-0393 USA
    (630) 208-2200 | Fax: (630) 208-2550


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