UNITED STATES 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) | July 15, 2003 |
Exact name of registrant as specified in its charter | Richardson Electronics, Ltd. |
State or other jurisdiction of incorporation | Delaware |
Commission file Number | 0-12906 |
IRS Employer Identification No. | 36-2096643 |
Address of principal executive office | 40W267 Keslinger Road, P. O. Box 393, La Fox, IL |
Zip Code | 60147-0393 |
Registrant's telephone number, including area code | 630-208-2200 |
This Current Report on Form 8-K contains a total of 8 pages.
Item 9. Regulation FD Disclosure
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 Sales From Continuing Operations Increased 7.6% in Fiscal 2003
LaFox, IL, Tuesday July 15, 2003: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported results for the fourth quarter and fiscal year ended May 31, 2003. Record year sales were achieved in both the Security Systems Division and Display Systems Group. Security Systems Division sales grew to $92.1 million in fiscal 2003, an increase of 8.2% over the prior year, driven by strong growth in Canada and Europe. The Display Systems Group sales reached $64.2 million in the year, an increase of 5.8% over fiscal 2002, with strength in medical monitors and custom display businesses. RF/Wireless Communications sales grew 9.9% to $222.4 million for the full fiscal year led by renewed growth in the United States and continued strength in Asia. The Industrial Power Group also recorded growth for fiscal 2003, increasing sales 3.9% to $77.5 million.
Sales from continuing operations, which exclude the Medical Glassware Business sold in February 2002, grew 7.6% to $463.2 million in fiscal 2003. The following results by area are stated from continuing operations as listed in the financial tables attached to this document. Sales in Europe and Asia grew to record levels for the year. Sales in Europe reached $100 million, growing 10.1% from fiscal 2002 driven by increases in Security and Display Systems. Strong demand continued in Asia, where sales grew 15.6% in the year to $74.7 million, and all countries recorded growth. Sales in North America grew in fiscal 2003, increasing 8.6% to $255.3 million in the year, led by RF/Wireless Communications sales in the United States and Security Systems Division sales in Canada. Sales in Latin America declined to $20.2 million in the year, a decrease of 24.1% from the prior year, as many countries in this area experienced depressed economic environments.
Fourth Quarter 2003 Results
Sales in the fourth quarter of 2003 were $118.9 million, an increase of 4.4% from the prior year. Net loss in the quarter was $11.2 million, or $0.81 per share, which included after-tax charges of $11.9 million principally related to inventory write-downs, restructuring charges and incremental tax provisions (noted in financial statements). Net loss in the prior year quarter was $9.1 million, or $0.66 per share, which included after-tax charges of $10.3 million primarily for inventory and accounts receivable write-offs. Excluding the above charges, net earnings in the fourth quarter of 2003 were $0.7 million, or $0.05 per share, compared to $1.2 million, or $0.09 per share in the prior year quarter. Details of the charges are provided in a table at the end of this press release.
Fiscal Year 2003 Results
For the full fiscal year 2003, sales were $464.5 million, an increase of 4.7% over the prior year. Including the charges noted above, loss for the year before the cumulative effect of accounting change (noted in financial statements), was $9.7 million, or $0.70 per share. Net loss for the year was $27.6 million, or $2.00 per share. Net loss in the prior year was $11.3 million, or $0.83 per share including the charges noted above and an after-tax charge of $2.9 million associated with the sale of the Medical Glassware Business. Excluding the above charges and cumulative effect of accounting change, net earnings for fiscal year 2003 were $2.2 million, or $0.16 per share, compared to $1.9 million or $0.14 per share, in the prior year. Fluctuations in certain foreign currencies increased 2003 net sales by approximately 1.5% for the fiscal year, however, due to the effect on costs, the impact to net loss was immaterial.
Edward J. Richardson, Chairman of the Board and Chief Executive Officer, said, “We continue to manage through challenging market environments and have made strides in many areas to gain market share and move the business forward. The provision for additional inventory obsolescence and restructuring was driven by the continued economic slowdown and limited demand visibility. This will align our inventory and cost structure to current sales levels.”
“With many markets and economies around the world in a stationary mode, market share gains become the primary source for growth. We believe our global engineered solutions model will continue to provide us with market opportunities for share gains and increased profitability”, Mr. Richardson concluded.
Consolidated GAAP (generally accepted accounting principles) Results
Comparison of operations is as follows:
(In millions, except per share amounts)
Fourth Quarter Full Year
2003 2002 2003 2002
Net sales $118.9 $113.9 $464.5 $443.5
Gross margin 14.8 13.0 99.1 94.2
Operating loss (11.8) (11.2) (1.7) (0.4)
Loss before cumulative
effect of accounting change (11.2) (9.1) (9.7) (11.3)
Net loss (11.2) (9.1) (27.6) (11.3)
Loss per share before cumulative
effect of accounting change (0.81) (0.66) (0.70) (0.83)
Net loss per share (0.81) (0.66) (2.00) (0.83)
Average shares outstanding 13.9 13.7 13.8 13.6
Consolidated Results Excluding Charges and Cumulative Effect of Accounting Change
Non-GAAP Measurements
In addition to the GAAP results provided throughout this document, the Company has provided non-GAAP measurements presenting operating results on a basis excluding certain charges, details of which are presented in the table below. The excluded charges principally represent charges for inventory overstock and obsolescence in excess of what management considers being more typical experience and charges for severance. Net income excluding charges reconciliation is noted in the financial statements attached to this document.
Management, as well as certain investors, uses these results of operations, excluding charges, to measure the Company’s current and future financial performance. The non-GAAP measurements do not replace the presentation of Richardson's GAAP financial results. These measurements provide supplemental information to assist management and certain investors in analyzing the Company’s financial position and results of operations. Richardson has chosen to provide this information to investors to enable them to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of core on-going operations.
Excluding charges, a comparison of operations is as follows:
(In millions, except per share amounts)
Fourth Quarter Full Year
2003 2002 2003 2002
Net sales $118.9 $113.9 $464.5 $443.5
Gross margin 28.6 28.3 112.9 109.4
Operating income 3.8 4.3 13.9 15.2
Net income 0.7 1.2 2.2 1.9
Net income per share 0.05 0.09 0.16 0.14
Average shares outstanding 14.0 14.2 14.0 14.1
Charges Description
(In millions) Fourth Quarter Full Year
2003 2002 2003 2002
Inventory charges $13.8 $15.3 $13.8 $15.3
Severance charges 1.5 0.3 1.5 0.3
Other charges 0.8 0.5 0.8 0.5
Loss on medical sale - - - 4.6
Pre-tax charges $16.1 $16.1 $16.1 $20.7
Income tax provision 5.8 5.8 5.8 7.5
After-tax charges 10.3 10.3 10.3 13.2
Valuation allowance 1.6 - 1.6 -
Cumulative effect of
accounting change - - 17.9 -
Total charges $11.9 $10.3 $29.8 $13.2
On Wednesday, July 16, 2003 at 9:00 a.m. CDT, 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 888-273-9890 approximately five minutes prior to the start of the call. A replay of the call will be available from 12:30 p.m. CDT on July 16, 2003 through September 23, 2003. The telephone numbers for the replay are (USA) 800-475-6701 and (International) 320-365-3844; access code 690425.
This release includes certain “forward looking” statements as defined by the SEC. Such statements are not guarantees of future performance since the company's operations involve risks and uncertainties and actual results may differ materially from predictions. Reference is made to the company's Form 10-Q's and 10-K's for a summary of some of the risks that may affect the company's performance.
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 www.rell.com/investor.asp.
Richardson Electronics, Ltd. | |||||||||||||||||||||||||||||||||
Consolidated Condensed Statements of Operations | |||||||||||||||||||||||||||||||||
Fourth Quarter and Fiscal Year Ended May 31, 2003 | |||||||||||||||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||
Three Months |
Full Year |
||||||||||||||||||||||||||||||||
FY 2003 | FY 2002 | FY 2003 | FY 2002 | ||||||||||||||||||||||||||||||
Net sales | $ 118,935 | $ 113,881 | $ 464,517 | $ 443,492 | |||||||||||||||||||||||||||||
Cost of products sold | 104,114 |
100,850 |
365,427 |
349,326 |
|||||||||||||||||||||||||||||
Gross margin | 14,821 | 13,031 | 99,090 | 94,166 | |||||||||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||||||||||||
expense | 26,594 |
24,238 |
100,749 |
94,519 |
|||||||||||||||||||||||||||||
Operating loss | (11,773) | (11,207) | (1,659) | (353) | |||||||||||||||||||||||||||||
Other expenses, net | 3,228 |
2,972 |
11,049 |
17,256 |
|||||||||||||||||||||||||||||
Loss before income taxes and | |||||||||||||||||||||||||||||||||
cumulative effect of accounting change | (15,001) | (14,179) | (12,708) | (17,609) | |||||||||||||||||||||||||||||
Income taxes(Note 1) | (3,838) |
(5,104) |
(3,012) |
(6,339) |
|||||||||||||||||||||||||||||
Loss before cumulative | |||||||||||||||||||||||||||||||||
effect of accounting change | (11,163) | (9,075) | (9,696) | (11,270) | |||||||||||||||||||||||||||||
Cumulative effect of accounting change, | |||||||||||||||||||||||||||||||||
net of tax(Note 2) | - |
- |
(17,862) |
- |
|||||||||||||||||||||||||||||
Net loss | $ (11,163) |
$ (9,075) |
$ (27,558) |
$ (11,270) |
|||||||||||||||||||||||||||||
Loss per share - basic: | |||||||||||||||||||||||||||||||||
Loss per share before | |||||||||||||||||||||||||||||||||
cumulative effect of accounting change | $ (.81) | $ (.66) | $ (.70) | $ (.83) | |||||||||||||||||||||||||||||
Cumulative effect of accounting | |||||||||||||||||||||||||||||||||
change, net of tax | - |
- |
(1.30) |
- |
|||||||||||||||||||||||||||||
Net loss per share | $ (.81) |
$ (.66) |
$ (2.00) |
$ (.83) |
|||||||||||||||||||||||||||||
Average shares outstanding | 13,860 | 13,684 | 13,809 | 13,617 | |||||||||||||||||||||||||||||
Loss per share - diluted: | |||||||||||||||||||||||||||||||||
Loss per share before | |||||||||||||||||||||||||||||||||
cumulative effect of accounting change | $ (.81) | $ (.66) | $ (.70) | $ (.83) | |||||||||||||||||||||||||||||
Cumulative effect of accounting | |||||||||||||||||||||||||||||||||
change, net of tax | - |
- |
(1.30) |
- |
|||||||||||||||||||||||||||||
Net loss per share | $ (.81) |
$ (.66) |
$ (2.00) |
$ (.83) |
|||||||||||||||||||||||||||||
Average shares outstanding | 13,860 | 13,684 | 13,809 | 13,617 | |||||||||||||||||||||||||||||
Dividends per common share | $ .04 |
$ .04 |
$ .16 |
$ .16 |
|||||||||||||||||||||||||||||
Note (1) | During the quarter ended May 31, 2003, the Company recorded incremental tax provisions of $1,586 to establish | ||||||||||||||||||||||||||||||||
a valuation allowance relating the Company's deferred tax assets outside the United States. | |||||||||||||||||||||||||||||||||
Note (2) | 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. Additionally, effective June, 1, 2002 the Company no longer amortized goodwill. | |||||||||||||||||||||||||||||||||
Operating loss for the three months and the full year ended May 31, 2002, included goodwill amortization of | |||||||||||||||||||||||||||||||||
$188,000 and $577,000, respectively. | |||||||||||||||||||||||||||||||||
Note (3) | Net income excluding charges reconciliation | Three Months | Full Year | ||||||||||||||||||||||||||||||
FY 2003 | FY 2002 | FY 2003 | FY 2002 | ||||||||||||||||||||||||||||||
Reported net loss | $ (11,163) | $ (9,075) | $ (27,558) | $ (11,270) | |||||||||||||||||||||||||||||
Cumulative effect of account change | 17,862 | ||||||||||||||||||||||||||||||||
Inventory charge | 8,838 | 9,780 | 8,838 | 9,780 | |||||||||||||||||||||||||||||
Restructuring and other charge | 1,452 | 509 | 1,452 | 509 | |||||||||||||||||||||||||||||
Valuation allowance tax provision | 1,586 | 1,586 | |||||||||||||||||||||||||||||||
Loss on medical business sale | 2,913 | ||||||||||||||||||||||||||||||||
Net income excluding charges | $ 713 | $ 1,214 | $ 2,180 | $ 1,932 | |||||||||||||||||||||||||||||
Net income per share excluding charges | $ .05 | $ .09 | $ .16 | $ .14 | |||||||||||||||||||||||||||||
Richardson Electronics, Ltd. | |||||||||
Sales and Gross Margin | |||||||||
Fourth Quarter and Fiscal Year Ended May 31, 2003 | |||||||||
(In thousands, unaudited) | |||||||||
By Business Unit: | |||||||||
Sales |
Gross Margin |
||||||||
FY 2003 | FY 2002 | % Change | FY 2003 | GM% of Sales | FY 2002 | GM% of Sales | |||
Fourth Quarter | |||||||||
RFWC | $56,045 | $55,958 | 0.2% | $12,477 | 22.3% | $12,650 | 22.6% | ||
IPG | 20,364 | 19,558 | 4.1% | 6,418 | 31.5% | 6,151 | 31.5% | ||
SSD | 22,489 | 21,854 | 2.9% | 5,633 | 25.0% | 5,244 | 24.0% | ||
DSG | 18,022 | 14,278 | 26.2% | 4,241 | 23.5% | 3,872 | 27.1% | ||
Medical Glassware | 129 | 1,028 | -87.5% | (54) | -41.9% | 214 | 20.8% | ||
Corporate | 1,886 | 1,205 | (13,894) | (15,100) | |||||
Total | $118,935 | $113,881 | 4.4% | $14,821 | 12.5% | $13,031 | 11.4% | ||
Excluding MG | $118,806 | $112,853 | 5.3% | $14,875 | 12.5% | $12,817 | 11.4% | ||
Full Year | |||||||||
RFWC | $222,448 | $202,409 | 9.9% | $49,889 | 22.4% | $47,467 | 23.5% | ||
IPG | 77,487 | 74,578 | 3.9% | 25,321 | 32.7% | 24,356 | 32.7% | ||
SSD | 92,090 | 85,087 | 8.2% | 22,939 | 24.9% | 20,080 | 23.6% | ||
DSG | 64,191 | 60,697 | 5.8% | 16,218 | 25.3% | 15,864 | 26.1% | ||
Medical Glassware | 1,269 | 12,940 | -90.2% | 164 | 12.9% | 2,727 | 21.1% | ||
Corporate | 7,032 | 7,781 | (15,441) | (16,328) | |||||
Total | $464,517 | $443,492 | 4.7% | $99,090 | 21.3% | $94,166 | 21.2% | ||
Excluding MG | $463,248 | $430,552 | 7.6% | $98,926 | 21.4% | $91,439 | 21.2% | ||
By Area: | |||||||||
Sales |
Gross Margin |
||||||||
FY 2003 | FY 2002 | % Change | FY 2003 | GM% of Sales | FY 2002 | GM% of Sales | |||
Fourth Quarter | |||||||||
North America | $62,456 | $60,389 | 3.4% | $15,801 | 25.3% | $15,337 | 25.4% | ||
Europe | 27,041 | 23,971 | 12.8% | 7,089 | 26.2% | 6,106 | 25.5% | ||
Asia / Pacific | 20,571 | 18,487 | 11.3% | 4,323 | 21.0% | 4,064 | 22.0% | ||
Latin America | 5,467 | 8,136 | -32.8% | 1,153 | 21.1% | 2,192 | 26.9% | ||
Other | 1,514 | 1,693 | -10.6% | 349 | 23.1% | 432 | 25.5% | ||
Corporate | 1,886 | 1,205 | (13,894) | (15,100) | |||||
Total | $118,935 | $113,881 | 4.4% | $14,821 | 12.5% | $13,031 | 11.4% | ||
Full Year | |||||||||
North America | $255,916 | $241,767 | 5.9% | $64,913 | 25.4% | $61,832 | 25.6% | ||
Europe | 100,388 | 92,351 | 8.7% | 26,389 | 26.3% | 24,261 | 26.3% | ||
Asia / Pacific | 74,746 | 65,534 | 14.1% | 16,705 | 22.3% | 14,906 | 22.7% | ||
Latin America | 20,506 | 28,943 | -29.2% | 5,065 | 24.7% | 7,736 | 26.7% | ||
Other | 5,929 | 7,116 | -16.7% | 1,459 | 24.6% | 1,759 | 24.7% | ||
Corporate | 7,032 | 7,781 | (15,441) | (16,328) | |||||
Total | $464,517 | $443,492 | 4.7% | $99,090 | 21.3% | $94,166 | 21.2% | ||
Note : Fiscal year 2002 data has been reclassified to conform with the current presentation. | |||||||||
Richardson Electronics, Ltd. | |||||||||
Area Sales and Gross Margin From Continuing Operations | |||||||||
Fourth Quarter and Fiscal Year Ended May 31, 2003 | |||||||||
(In thousands, unaudited) | |||||||||
By Area - Continuing Operations: | |||||||||
Sales | Gross Margin | ||||||||
FY 2003 | FY 2002 | % Change | FY 2003 | GM% of Sales | FY 2002 | GM% of Sales | |||
Fourth Quarter | |||||||||
North America | $62,366 | $60,212 | 3.6% | $15,832 | 25.4% | $15,294 | 25.4% | ||
Europe | 26,940 | 23,807 | 13.2% | 7,012 | 26.0% | 6,069 | 25.5% | ||
Asia / Pacific | 20,571 | 18,454 | 11.5% | 4,327 | 21.0% | 4,064 | 22.0% | ||
Latin America | 5,466 | 7,523 | -27.3% | 1,151 | 21.1% | 2,032 | 27.0% | ||
Other | 1,514 | 1,693 | -10.6% | 349 | 23.1% | 432 | 25.5% | ||
Corporate | 1,949 | 1,164 | (13,796) | (15,074) | |||||
Total | $118,806 | $112,853 | 5.3% | $14,875 | 12.5% | $12,817 | 11.4% | ||
Full Year | |||||||||
North America | $255,257 | $234,980 | 8.6% | $64,757 | 25.4% | $60,059 | 25.6% | ||
Europe | 100,037 | 90,844 | 10.1% | 26,204 | 26.2% | 23,928 | 26.3% | ||
Asia / Pacific | 74,742 | 64,659 | 15.6% | 16,706 | 22.4% | 14,738 | 22.8% | ||
Latin America | 20,232 | 26,663 | -24.1% | 4,979 | 24.6% | 7,018 | 26.3% | ||
Other | 5,908 | 7,103 | -16.8% | 1,458 | 24.7% | 1,761 | 24.8% | ||
Corporate | 7,072 | 6,303 | (15,178) | (16,065) | |||||
Total | $463,248 | $430,552 | 7.6% | $98,926 | 21.4% | $91,439 | 21.2% | ||
Note : Fiscal year 2002 data has been reclassified to conform with the current presentation. |
Richardson Electronics, Ltd. | ||||||||||||||||||||
Consolidated Condensed Balance Sheets | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
May 31 | May 31 | |||||||||||||||||||
2003 | 2002 | |||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and equivalents | $ 17,498 | $ 15,485 | ||||||||||||||||||
Accounts receivable, net | 85,355 | 84,156 | ||||||||||||||||||
Inventories | 95,896 | 107,159 | ||||||||||||||||||
Other | 26,320 |
20,999 |
||||||||||||||||||
Total current assets | 225,069 | 227,799 | ||||||||||||||||||
Property, plant and equipment, net | 31,088 | 28,827 | ||||||||||||||||||
Goodwill | 5,137 | 24,914 | ||||||||||||||||||
Other assets | 4,261 |
5,296 |
||||||||||||||||||
Total assets | $ 265,555 |
$ 286,836 |
||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ 23,660 | $ 27,387 | ||||||||||||||||||
Other accrued liabilities | 16,926 |
13,669 |
||||||||||||||||||
Total current liabilities | 40,586 | 41,056 | ||||||||||||||||||
Long-term debt | 138,396 | 132,218 | ||||||||||||||||||
Other liabilities | 10,318 |
13,959 |
||||||||||||||||||
Total liabilities | 189,300 | 187,233 | ||||||||||||||||||
Stockholders' equity | 76,255 |
99,603 |
||||||||||||||||||
Total liabilities and equity | $ 265,555 |
$ 286,836 |
||||||||||||||||||