RICHARDSON ELECTRONICS, LTD. [RELL] Filings

10-Q 1 rell-20230225.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 25, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from To

Commission File Number: 0-12906

RICHARDSON ELECTRONICS, LTD.

(Exact name of registrant as specified in its charter)

Delaware

36-2096643

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

40W267 Keslinger Road, P.O. Box 393

LaFox, Illinois 60147-0393

(Address of principal executive offices)

Registrant’s telephone number, including area code: (630) 208-2200

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.05 Par Value	RELL	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller Reporting Company	☒
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of April 4, 2023, there were outstanding 12,085,774 shares of Common Stock, $0.05 par value and 2,051,488 shares of Class B Common Stock, $0.05 par value, which are convertible into Common Stock of the registrant on a share for share basis.

TABLE OF CONTENTS


		Page



Part I.	Financial Information

Item 1.	Financial Statements	2
	Unaudited Consolidated Balance Sheets	2
	Unaudited Consolidated Statements of Comprehensive Income	3
	Unaudited Consolidated Statements of Cash Flows	4
	Unaudited Consolidated Statement of Stockholders’ Equity	5
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

Part II.	Other Information

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Exhibit Index		29
Signatures		30

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Richardson Electronics, Ltd.

Unaudited Consolidated Balance Sheets

(in thousands, except per share amounts)


	Unaudited		Audited
	February 25, 2023		May 28, 2022
Assets
Current assets:
Cash and cash equivalents	$	24,645	$	35,495
Accounts receivable, less allowance of $189 and $186, respectively		42,151		29,878
Inventories, net		101,409		80,390
Prepaid expenses and other assets		2,639		2,448
Investments - current		—		5,000
Total current assets		170,844		153,211
Non-current assets:
Property, plant and equipment, net		19,335		16,961
Intangible assets, net		1,957		2,010
Lease ROU asset		2,378		3,239
Other non-current assets		339		—
Non-current deferred income taxes		4,350		4,398
Total non-current assets		28,359		26,608
Total assets	$	199,203	$	179,819
Liabilities
Current liabilities:
Accounts payable	$	24,686	$	23,987
Accrued liabilities		16,502		16,110
Lease liability current		996		1,109
Total current liabilities		42,184		41,206
Non-current liabilities:
Non-current deferred income tax liabilities		84		85
Lease liability non-current		1,382		1,915
Other non-current liabilities		613		766
Total non-current liabilities		2,079		2,766
Total liabilities		44,263		43,972
Stockholders’ Equity
Common stock, $0.05 par value; issued and outstanding 12,085 shares on February 25, 2023 and 11,649 shares on May 28, 2022		604		582
Class B common stock, convertible, $0.05 par value; issued and outstanding 2,052 shares on February 25, 2023 and 2,053 shares on May 28, 2022		103		103
Preferred stock, $1.00 par value, no shares issued		—		—
Additional paid-in-capital		70,383		66,331
Retained earnings		83,760		68,031
Accumulated other comprehensive income		90		800
Total stockholders’ equity		154,940		135,847
Total liabilities and stockholders’ equity	$	199,203	$	179,819

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)


	Three Months Ended						Nine Months Ended
	February 25, 2023			February 26, 2022			February 25, 2023			February 26, 2022
Net sales	$	70,364		$	55,308		$	203,826		$	162,991
Cost of sales		47,959			37,739			136,543			111,468
Gross profit		22,405			17,569			67,283			51,523
Selling, general and administrative expenses		14,779			13,946			43,704			40,550
Loss (gain) on disposal of assets		13			—			(12	)		2
Operating income		7,613			3,623			23,591			10,971
Other expense (income):
Investment/interest income		(76	)		(11	)		(179	)		(36	)
Foreign exchange (income) loss		(292	)		121			305			(2	)
Other, net		(14	)		17			(29	)		39
Total other (income) expense		(382	)		127			97			1
Income before income taxes		7,995			3,496			23,494			10,970
Income tax provision		1,655			609			5,281			1,326
Net income		6,340			2,887			18,213			9,644
Foreign currency translation gain (loss), net of tax		629			69			(710	)		(2,353	)
Comprehensive income	$	6,969		$	2,956		$	17,503		$	7,291

Net income per share:
Common shares - Basic	$	0.46		$	0.22		$	1.33		$	0.73
Class B common shares - Basic		0.41			0.19			1.19			0.66
Common shares - Diluted		0.44			0.21			1.27			0.71
Class B common shares - Diluted		0.40			0.19			1.15			0.64

Weighted average number of shares:
Common shares – Basic		12,047			11,497			11,893			11,320
Class B common shares – Basic		2,052			2,074			2,053			2,089
Common shares – Diluted		12,666			12,027			12,524			11,724
Class B common shares – Diluted		2,052			2,074			2,053			2,089

Dividends per share:
Common share	$	0.060		$	0.060		$	0.180		$	0.180
Class B common share		0.054			0.054			0.162			0.162

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Cash Flows

(in thousands)


	Three Months Ended						Nine Months Ended
	February 25, 2023			February 26, 2022			February 25, 2023			February 26, 2022
Operating activities:
Net income	$	6,340		$	2,887		$	18,213		$	9,644
Adjustments to reconcile net income to cash used in operating activities:
Depreciation and amortization		912			872			2,688			2,560
Inventory provisions		115			88			310			228
Share-based compensation expense		206			142			730			514
Loss (gain) on disposal of assets		13			—			(12	)		2
Deferred income taxes		(1	)		26			27			38
Change in assets and liabilities:
Accounts receivable		(7,189	)		(4,209	)		(12,694	)		(7,355	)
Inventories		(3,638	)		(3,113	)		(21,764	)		(12,295	)
Prepaid expenses and other assets		(153	)		(2	)		(578	)		(1,058	)
Accounts payable		(12	)		1,902			784			4,204
Accrued liabilities		(661	)		563			486			2,075
Other		(192	)		(370	)		397			(13	)
Net cash used in operating activities		(4,260	)		(1,214	)		(11,413	)		(1,456	)
Investing activities:
Capital expenditures		(2,230	)		(554	)		(4,973	)		(2,161	)
Proceeds from maturity of investments		5,000			—			5,000			—
Proceeds from sale of assets		—			—			193			—
Net cash provided by (used in) investing activities		2,770			(554	)		220			(2,161	)
Financing activities:
Proceeds from issuance of common stock		511			1,906			3,413			2,630
Cash dividends paid		(834	)		(806	)		(2,484	)		(2,384	)
Other		—			(45	)		(69	)		(136	)
Net cash (used in) provided by financing activities		(323	)		1,055			860			110
Effect of exchange rate changes on cash and cash equivalents		352			195			(517	)		(662	)
Decrease in cash and cash equivalents		(1,461	)		(518	)		(10,850	)		(4,169	)
Cash and cash equivalents at beginning of period		26,106			39,665			35,495			43,316
Cash and cash equivalents at end of period	$	24,645		$	39,147		$	24,645		$	39,147

Richardson Electronics, Ltd.

Unaudited Consolidated Statement of Stockholders’ Equity

(in thousands, except per share amounts)


	Common		Class B Common			Par Value		Additional Paid In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total
Balance May 28, 2022:		11,649		2,053		$	685	$	66,331		$	68,031	$	800		$	135,847
Comprehensive income:
Net income		—		—			—		—			18,213		—			18,213
Foreign currency translation		—		—			—		—			—		(710	)		(710	)
Share-based compensation:
Restricted stock		—		—			—		402			—		—			402
Stock options		—		—			—		328			—		—			328
Common stock:
Options exercised		386		—			20		3,393			—		—			3,413
Restricted stock issuance		49		—			2		(71	)		—		—			(69	)
Class B converted to Common		1		(1	)		—		—			—		—			—

RICHARDSON ELECTRONICS, LTD. [RELL] Filings
10-Q	[2023-04-06]
10-Q	[2023-01-05]
10-Q	[2022-10-06]
10-K	[2022-08-01]
10-Q	[2022-04-07]
10-Q	[2022-01-06]
10-Q	[2021-10-07]
10-K	[2021-08-02]
10-Q	[2021-04-08]
10-Q	[2021-01-07]
10-Q	[2020-10-08]
10-K	[2020-08-03]
10-Q	[2020-04-09]
10-Q	[2020-01-09]
10-Q	[2019-10-10]
10-K	[2019-08-05]
10-Q	[2019-04-11]
10-Q	[2019-01-10]
10-Q	[2018-10-11]
10-K	[2018-08-02]
10-Q	[2018-04-12]
10-Q	[2018-01-11]
10-Q	[2017-10-12]
10-K	[2017-07-31]
10-Q	[2017-04-06]
10-Q	[2017-01-05]
10-Q	[2016-10-06]
10-K	[2016-07-29]
10-Q	[2016-04-07]
10-Q	[2016-01-07]
10-Q	[2015-10-08]
10-K	[2015-07-28]
10-Q	[2015-04-10]
10-Q	[2015-01-08]
10-Q	[2014-10-09]
10-K	[2014-07-25]
10-Q	[2014-04-10]
10-Q	[2014-01-09]
10-Q	[2013-10-10]
10-K	[2013-07-26]
10-Q	[2013-04-11]
10-Q	[2013-01-10]
10-Q	[2012-10-11]
10-K	[2012-07-27]
10-Q	[2012-04-12]
10-Q	[2012-01-12]