SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 18, 2003
RICHARDSON ELECTRONICS, LTD
(Exact Name of Registrant as Specified in Charter)
Delaware 0-12906 36-2096643
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
40W267 Keslinger Road, P.O. Box 393, La Fox, IL 60147-0393 (Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (630) 208-2200
Item 9. Regulation FD Disclosure
For Immediate Release
For Details Contact:
Ed Richardson Dario Sacomani
Chairman and Chief Executive Officer Senior Vice President and
Richardson Electronics, Ltd. Chief Financial Officer
Phone: (630) 208-2340 Richardson Electronics, Ltd.
E-mail: info@rell.com
Richardson Reports 7.6% Sales Growth in the Second Quarter
LaFox, IL, Thursday December 18, 2003: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported results for the second quarter of fiscal 2004, which ended November 29, 2003. Sales in the second quarter of 2004 were $128.1 million, an increase of 7.6% from the prior year. Net income was $1.6 million, or $0.11 per share, in the quarter compared to $1.2 million, or $0.09 per share, in the same quarter last year.
Each of the Company's business units recorded sales growth over the prior year for the fourth consecutive quarter led by strong, broad-based demand in the Industrial Power Group and Security Systems Division. The sales increase was 14.5% and 8.8%, respectively. RF/Wireless Communications sales increased 7.3% over the prior year primarily due to stronger demand in network access and fiber products. Sales in the Display Systems Group were slightly up 0.2% in the quarter with sales of medical monitors and stereo monitors for satellite imagery increasing, offset by declines in custom displays due to the timing of project based business.
For the quarter, the Company achieved record sales levels in Europe of $31.6 million and in Asia of $25.2 million. For Europe, the sales represented an increase of 23.5% over the prior year with all four business units recording growth. Strong demand in wireless and industrial power products led the sales growth in Asia which increased 27.7% from the prior year. The Company's sales in North America declined 3.2% in the quarter, primarily due to the completion of a large wireless infrastructure project in the prior year. Sales in Latin America decreased 8.0% over the prior year, mostly due to reduced demand in Central America, partially offset by increases in Mexico and Brazil.
For the six-month period, sales increased 8.7% from the prior year to $247.4 million. Net income was $2.1 million, or $0.15 per share, in the six months compared to $1.5 million, or $0.11 per share a year ago, before the cumulative effect of accounting change which affected the prior year's six months as noted in the financial tables at the end of this release.
As part of its fiscal second quarter financial reporting process, the Company identified an accounting error that occurred in a foreign subsidiary which affected previously reported interest expense for the prior seven quarters. The correcting adjustment included a cumulative charge of $0.7 million in the second quarter of fiscal 2004.
"We are pleased to report another solid quarter of sales and net income growth with positive cash flow," Edward J. Richardson, Chairman of the Board and Chief Executive Officer, said. "Our engineered solutions strategy is providing increasing levels of new opportunities for all of our strategic business units. Demand continues to strengthen as new orders increased 18% sequentially from the prior quarter, providing a solid order backlog for continued growth."
On Friday, December 19, 2003 at 9:00 a.m. CST, Mr. Edward J. Richardson, Chairman and Chief Executive Officer will host a conference call to discuss the release. A question and answer session will be included as part of the call's agenda. To listen to the call, please dial 800-450-0788 approximately five minutes prior to the start of the call. A replay of the call will be available from 12:30 p.m. on December 19, 2003 through March 23, 2004. The telephone numbers for the replay are (USA) 800-475-6701 and (International) 320-365-3844; access code 712128.
This release includes certain "forward-looking" statements as defined by the SEC. Statements in this press release regarding the Company's business, which 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 "Risk Factors" in the Company's Annual Report on Form 10-K for the most recently ended fiscal year. 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
Richardson Electronics, Ltd. is a global provider of "engineered solutions," serving the RF and wireless communications, industrial power conversion, security and display systems markets. The Company delivers engineered solutions for its customers' needs through product manufacturing, systems integration, prototype design and manufacture, testing and logistics. Press announcements and other information about Richardson are available on the World Wide Web at http://www.rell.com/investor.asp.
Richardson Electronics, Ltd.
Consolidated Condensed Statements of Operations
Six Months Ended November 29, 2003
(in thousands, except per share amounts, unaudited)
Three Months
Six Months
FY 2004
FY 2003
FY 2004
FY 2003
Net sales $ 128,051 $ 118,958 $ 247,357 $ 227,572 Cost of products sold 97,109
90,045
187,300
171,505
Gross margin 30,942 28,913 60,057 56,067 Selling, general and administrative expense 25,395
24,458
51,240
48,704
Operating income 5,547 4,455 8,817 7,363 Other expenses, net (Note 1) 3,136
2,595
5,616
5,059
Income before income tax and cumulative effect of accounting change 2,411 1,860 3,201 2,304 Income tax 844
670
1,128
830
Income before cumulative effect of accounting change 1,567 1,190 2,073 1,474 Cumulative effect of accounting change, net of tax (Note 2) -
-
-
(17,862)
Net income (loss) $ 1,567
$ 1,190
$ 2,073
$ (16,388)
Income (loss) per share - basic:
Income per share before cumulative effect of accounting change
$ .11
$ .09
$ .15
$ .11 Cumulative effect of accounting change, net of tax -
-
-
(1.30)
Net income (loss) per share $ .11
$ .09
$ .15
$ (1.19)
Average shares outstanding 13,979
13,740
13,952
13,734
Income (loss) per share - diluted:
Income per share before cumulative effect of accounting change
$ .11
$ .09
$ .15
$ .11 Cumulative effect of accounting change, net of tax -
-
-
(1.28)
Net income (loss) per share $ .11
$ .09
$ .15
$ (1.17)
Average shares outstanding 14,361
13,871
14,281
14,004
Dividends per common share $ .04
$ .04
$ .08
$ .08
Notes:
- During fiscal quarter ended November 29, 2003, the Company identified an accounting error that occurred in a foreign subsidiary which affected previously reported interest expense for seven prior fiscal quarters resulting in a cumulative charge of $738 included in the financial results for the three- and six-month periods ended November 29, 2003.
- During the quarter ended November 30, 2002, the Company adopted SFAS 142, "Goodwill and Other intangible Assets" effective June 1, 2002 and as result recorded a cumulative effect adjustment of $17,862, net of taxes of $3,725 to write-off impaired goodwill.
Richardson Electronics, Ltd.
Sales and Gross Margin
Second Quarter Fiscal 2004, Ended November 29, 2003
(in thousands, unaudited)
By Business Unit: Sales
Gross Margin
FY 2004
FY 2003
% Change
FY 2004
GM% of Sales
FY 2003
GM% of Sales
Second Quarter
RFWC
IPG
SSD
DSG
Other
$ 57,705
27,868
26,109
14,864
1,505
$ 53,762
24,331
23,989
14,833
2,043
7.3%
14.5%
8.8%
0.2%
$ 12,846
8,678
6,664
3,727
(973)
22.3%
31.1%
25.5%
25.1%
$ 12,031
7,540
6,013
3,993
(664)
22.4%
31.0%
25.1%
26.9%
Total $128,051
$118,958
7.6% $ 30,942
24.2% $ 28,913
24.3% Full Year
RFWC
IPG
SSD
DSG
Other
$107,520
53,718
51,281
30,943
3,895
$100,878
47,778
46,396
28,122
4,398
6.6%
12.4%
10.5%
10.0%
$ 24,028
16,347
13,025
7.986
(1,329)
22.3%
30.4%
25.4%
25.8%
$ 22,786
15,080
11,447
7,596
(842)
22.6%
31.6%
24.7%
27.0%
Total $247,357
$227,572
8.7% $ 60,057
24.3% $ 56,067
24.6% By Geographic Area: Sales
Gross Margin
FY 2004
FY 2003
% Change
FY 2004
GM% of Sales
FY 2003
GM% of Sales
Second Quarter
North America
Europe
Asia/Pacific
Latin America
Corporate
$ 65,702
31,576
25,160
4,572
1,041
$ 67,898
25,575
19,701
4,969
815
-3.2%
23.5%
27.7%
-8.0%
$ 17,064
9,009
5,648
1,118
(1,897)
26.0%
28.5%
22.4%
24.5%
$ 17,573
7,101
4,468
1,509
(1.738)
25.9%
27.8%
22.7%
30.4%
Total $ 128,051
$118,958
7.6% $ 30,942
24.2% $ 28,913
24.3% Full Year
North America
Europe
Asia/Pacific
Latin America
Corporate
$ 131,133
56,942
47,490
9,677
2,115
$ 129,167
48,932
37,932
10,036
1,505
1.5%
16.4%
25.2%
-3.6%
$ 34,620
16,386
10,587
2,301
(3,837)
26.4%
28.8%
22.3%
23.8%
$ 33,987
13,334
8,803
2,791
(2,848)
26.3%
27.3%
23.2%
27.8%
Total $ 247,357
$ 227,572
8.7% $ 60,057
24.3% $ 56,067
24.6%
Note: Fiscal 2002 data has been reclassified to conform with the current presentation.
Europe includes Sales and Gross margins to Middle East and Africa.
Corporate primarily consists of Freight and Corporate provisions.
Richardson Electronics, Ltd.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
November 29,
2003
May 31,
2003
ASSETS Current assets: Cash and equivalents $ 20,764 $ 17,498 Accounts receivable, net 93,865 85,355 Inventories 91,298 95,896 Other 25,163
26,320
Total current assets 231,090 225,069 Property, plant and equipment, net 30,556 31,088 Goodwill and intangible assets 6,023 6,129 Other assets 3,501
3,269
Total assets $ 271,170
$ 265,555
LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 29,572 $ 23,660 Other accrued liabilities 20,830
17,467
Total current liabilities 50,402 41,127 Long-term debt 134,784 138,396 Other liabilities 6,710
10,318
Total liabilities 191,896 189,841 Stockholders' equity 79,274
75,714
Total liabilities and equity $ 271,170
$ 265,555
Note: May 31, 2003, data has been reclassified to conform with the current presentation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RICHARDSON ELECTRONICS, LTD Dated: December 18, 2003 By:
/s/ DARIO SACOMANI
Name: Dario Sacomani Title:Senior Vice President and
Chief Financial Officer