News Column

Richardson Electronics Reports Fourth Quarter and Fiscal 2014 Results and Declares Quarterly Cash Dividend

August 6, 2014



By a News Reporter-Staff News Editor at Electronics Newsweekly -- Richardson Electronics, Ltd. (NASDAQ: RELL), reported sales and earnings for its fourth quarter and fiscal year ended May 31, 2014. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend. Fiscal 2014 Results Net sales for fiscal 2014 were $138.0 million, a 2.2% decrease compared to net sales of $141.1 million in the prior year. Gross margin was $41.0 million, or 29.7% of net sales during fiscal 2014, compared to $41.5 million, or 29.5% of net sales during fiscal 2013.

Operating expenses were $43.5 million for fiscal 2014, compared to $41.5 for fiscal 2013. Operating expenses included employee termination costs of $1.2 million, $1.1 million related to potential acquisitions, $0.4 million investment in new product development, and system implementation expenses of $0.8 million.

Operating loss of $4.2 million in fiscal 2014 included a goodwill impairment charge of $1.7 million.

Loss from continuing operations for fiscal 2014 was $0.3 million, compared to income of $0.5 million from continuing operations for fiscal 2013.

Cash provided by operating activities totaled $4.6 million for fiscal 2014, compared to cash provided by operating activities of $8.6 million in fiscal 2013. Fourth Quarter Results Net sales for the fourth quarter of fiscal 2014 were $35.4 million, a 0.6% increase compared to net sales of $35.2 million in the prior year. Sales for the Company's EDG business were up 3.8% while sales for its Canvys division were down 9.1%, compared to the prior year's quarter. Gross margin was $10.2 million, or 28.7% of net sales during the fourth quarter of fiscal 2014, compared to $10.2 million, or 29.1% of net sales during fiscal 2013.

Operating expenses were $12.4 million for the fourth quarter of fiscal 2014, compared to $11.8 million for the fourth quarter of fiscal 2013. The fourth quarter of fiscal 2014 operating expenses included employee termination costs of $1.2 million, $0.5 million related to potential acquisitions, $0.2 million investment in new product development, and system implementation expenses of $0.5 million.

Operating loss for the fourth quarter of fiscal 2014 was $3.9 million compared to operating loss of $1.6 million for the fourth quarter of fiscal 2013. The fiscal 2014 fourth quarter operating loss included a $1.7 million goodwill impairment charge.

Loss from continuing operations for the fourth quarter of fiscal 2014 was $2.8 million compared to loss from continuing operations for the fourth quarter of fiscal 2013 of $1.4 million. FINANCIAL SUMMARY - FISCAL 2014 Net sales for fiscal 2014 were $138.0 million, down 2.2%, compared to net sales of $141.1 during fiscal 2013.

Gross margin increased to 29.7% during fiscal 2014 compared to 29.5% during fiscal 2013.

Selling, general, and administrative expenses increased to $43.5 million, or 31.5% of net sales, for fiscal 2014 compared to $41.5 million, or 29.4% of net sales, for fiscal 2013.

Operating loss during fiscal 2014 was $4.2 million compared to breakeven for fiscal 2013.

Other income for fiscal 2014 was $3.5 million compared to other income of $0.6 million for fiscal 2013. Other income for fiscal 2014 included $2.5 million of proceeds from a class action lawsuit settlement.

Loss from continuing operations during fiscal 2014 was $0.3 million versus income of $0.5 million during fiscal 2013.

Loss from discontinued operations, net of tax, was $0.2 million during fiscal 2014 compared to income from discontinued operations, net of tax, of $0.8 million during fiscal 2013, or $0.05 per diluted common share.

Net loss during fiscal 2014 was $0.5 million compared to net income of $1.2 million, or $0.08 per diluted common share, during fiscal 2013. FINANCIAL SUMMARY - FOURTH QUARTER Net sales for the fourth quarter of fiscal 2014 were $35.4 million, up 0.6%, compared to net sales of $35.2 million during the fourth quarter of fiscal 2013.

Gross margin decreased to 28.7% during the fourth quarter of fiscal 2014 compared to 29.1% during last year's fourth quarter.

Selling, general, and administrative expenses increased to $12.4 million, or 35.1% of net sales for the fourth quarter of fiscal 2014 compared to $11.8 million for the fourth quarter of fiscal 2013, or 33.7% of net sales.

Operating loss during the fourth quarter of fiscal 2014 was $3.9 million compared to operating loss of $1.6 million for the fourth quarter of fiscal 2013.

Other income for the fourth quarter of fiscal 2014 was $0.2 million compared to income of $0.3 million for the fourth quarter of fiscal 2013.

Loss from continuing operations during the fourth quarter of fiscal 2014 was $2.8 million compared to loss from continuing operations for the fourth quarter of fiscal 2013 of $1.4 million.

Income from discontinued operations, net of tax, was $0.4 million during the fourth quarter of fiscal 2014 compared to income from discontinued operations, net of tax, of $1.2 million during the fourth quarter of fiscal 2013.

Net loss during the fourth quarter of fiscal 2014 was $2.5 million compared to net loss of $0.2 million during the fourth quarter of fiscal 2013. CASH DIVIDEND The Company also announced that its Board of Directors declared a $0.06 quarterly 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 August 22, 2014, to common stockholders of record on August 8, 2014.

"Cash and investments at the end of our fourth quarter were $136.0 million. As of today, the Company currently has 11.8 million outstanding shares of common stock and 2.2 million outstanding shares of Class B common stock. With our strong balance sheet, we are committed to returning value to our shareholders," said Edward Richardson, Chairman, Chief Executive Officer, and President. OUTLOOK "We believe sales for fiscal 2015 will be in the range of $140 to $150 million. We will continue to use our cash and investments to make strategic acquisitions, invest in growth initiatives, and repurchase our stock. During the last several years, our small strategic acquisitions have provided additional resources, customers, and knowledge-based support to EDG.

Keywords for this news article include: Legal Issues, Investment and Finance, Richardson Electronics Ltd.

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Source: Electronics Newsweekly


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