Richardson Electronics Reports First Quarter Results; Declares Quarterly Cash Dividend
Rhea-AI Summary
Richardson Electronics (NASDAQ: RELL) reported a 2.2% increase in Q1 FY25 net sales, marking the first quarterly year-over-year increase since Q3 FY23. The company achieved positive operating cash flow for the second consecutive quarter, ending with $23.0 million in cash and no debt. Management expects year-over-year sales growth and higher profitability for FY25.
Key highlights include:
- Net sales of $53.7 million, up from $52.6 million in Q1 FY24
- Gross margin of 30.6%, compared to 32.8% in Q1 FY24
- Operating income of $0.3 million, down from $1.5 million in Q1 FY24
- Net income of $0.6 million, or $0.04 per diluted share
- EBITDA of $1.7 million, compared to $2.6 million in Q1 FY24
The company also declared a quarterly cash dividend of $0.06 per share for common stock holders.
Positive
- First quarterly year-over-year net sales increase since Q3 FY23, up 2.2%
- Positive operating cash flow for the second consecutive quarter
- Strong balance sheet with $23.0 million in cash and no debt
- 84% year-over-year increase in GES sales
- 48.7% year-over-year increase in Healthcare sales
- Management expects year-over-year sales growth and higher profitability for FY25
- Declared quarterly cash dividend of $0.06 per share
Negative
- Operating income decreased to $0.3 million from $1.5 million in Q1 FY24
- Gross margin declined to 30.6% from 32.8% in Q1 FY24
- EBITDA decreased to $1.7 million from $2.6 million in Q1 FY24
- 4.3% decrease in PMT sales
- Canvys sales declined due to challenging market conditions in North America and Europe
- Backlog decreased to $137.4 million from $147.8 million at the end of Q4 FY24
News Market Reaction 1 Alert
On the day this news was published, RELL declined 2.56%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Q1 FY25 net sales increase
Richardson Electronics ended Q1 with positive operating cash flow for the second consecutive quarter,
Management expects YoY sales growth and higher profitability for FY25
LAFOX, Ill., Oct. 09, 2024 (GLOBE NEWSWIRE) -- Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its first quarter ended August 31, 2024. The Company also announced that its Board of Directors declared a
“Our first quarter results are encouraging and benefited from the strategies underway to drive sales growth, improve profitability, and generate positive operating cash flow,” said Edward J. Richardson, Chairman, CEO, and President. "For the first quarter of fiscal 2025, new program wins, combined with improving demand trends for legacy programs, drove an
“We also remain focused on improving inventory management and we expect sales growth throughout fiscal 2025 to reduce inventory levels over the next several quarters. For the first quarter we generated positive operating cash flow for the second straight quarter and ended the quarter with no debt and
First Quarter Results
Net sales for the first quarter of fiscal 2025 were
This growth in net sales for the first quarter of fiscal 2025 was due to higher sales in GES and Healthcare. GES sales increased
Sales growth for the first quarter of fiscal 2025 was partially offset by a
Backlog totaled
Gross margin for the first quarter was
Operating expenses were
Operating income was
Income tax provision was
Net income for the first quarter of fiscal 2025 was
The Company maintained its solid financial footing, reporting cash and cash equivalents of
CASH DIVIDEND DECLARED
The Board of Directors of Richardson Electronics declared a
NON-GAAP FINANCIAL MEASURE
In addition to the results reported in accordance with generally accepted accounting principles in the United States (GAAP) included throughout this press release, the Company has provided information regarding “EBITDA” (a “non-GAAP financial measure”). This non-GAAP financial measure reflects earnings before interest, income tax, depreciation and amortization expenses. Detailed reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in this press release.
Management believes that the disclosure of this non-GAAP financial measure provides useful information to investors in assessing the Company’s financial performance excluding items that are not considered by the Company to be indicative of the Company’s ongoing results. Our management uses this non-GAAP financial measure along with the most directly comparable GAAP financial measure in evaluating our financial performance and when planning, forecasting and analyzing future periods. The non-GAAP financial measure presented herein, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies. The non-GAAP financial measure incorporated herein is not intended to be used as a substitute for the related GAAP measurements. The non-GAAP financial measure should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.
CONFERENCE CALL INFORMATION
The Company will host a conference call and question-and-answer session on Thursday, October 10, 2024, at 9:00 a.m. Central Time, to discuss its first quarter fiscal-year 2025 results.
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 11, 2024, 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 August 5, 2024, 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
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 | |||||||
| August 31, 2024 | June 1, 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 23,035 | $ | 24,263 | ||||
| Accounts receivable, less allowance for credit losses of | 30,862 | 24,845 | ||||||
| Inventories, net | 110,994 | 110,149 | ||||||
| Prepaid expenses and other assets | 2,488 | 2,397 | ||||||
| Total current assets | 167,379 | 161,654 | ||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | 20,612 | 20,681 | ||||||
| Intangible assets, net | 1,582 | 1,641 | ||||||
| Right of use lease assets | 2,538 | 2,760 | ||||||
| Deferred income tax assets | 5,555 | 5,500 | ||||||
| Other non-current assets | 197 | 209 | ||||||
| Total non-current assets | 30,484 | 30,791 | ||||||
| Total assets | $ | 197,863 | $ | 192,445 | ||||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 19,758 | $ | 15,458 | ||||
| Accrued liabilities | 15,403 | 15,404 | ||||||
| Lease liabilities current | 1,107 | 1,169 | ||||||
| Total current liabilities | 36,268 | 32,031 | ||||||
| Non-current liabilities: | ||||||||
| Deferred income tax liabilities | 79 | 90 | ||||||
| Lease liabilities non-current | 1,431 | 1,591 | ||||||
| Other non-current liabilities | 1,021 | 781 | ||||||
| Total non-current liabilities | 2,531 | 2,462 | ||||||
| Total liabilities | 38,799 | 34,493 | ||||||
| Stockholders’ Equity | ||||||||
| Common stock, and outstanding on August 31, 2024 and June 1, 2024, respectively | 617 | 613 | ||||||
| Class B common stock, convertible, and outstanding on August 31, 2024 and June 1, 2024 | 102 | 102 | ||||||
| Preferred stock, | — | — | ||||||
| Additional paid-in-capital | 73,315 | 72,744 | ||||||
| Retained earnings | 83,630 | 83,729 | ||||||
| Accumulated other comprehensive income | 1,400 | 764 | ||||||
| Total stockholders' equity | 159,064 | 157,952 | ||||||
| Total liabilities and stockholders’ equity | $ | 197,863 | $ | 192,445 | ||||
| Richardson Electronics, Ltd. Unaudited Consolidated Statements of Comprehensive Income (in thousands, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| August 31, 2024 | September 2, 2023 | |||||||
| Net sales | $ | 53,725 | $ | 52,581 | ||||
| Cost of sales, exclusive of depreciation and amortization | 37,299 | 35,317 | ||||||
| Gross profit | 16,426 | 17,264 | ||||||
| Selling, general and administrative expenses, inclusive of depreciation and amortization | 16,112 | 15,792 | ||||||
| Gain on disposal of assets | (2 | ) | — | |||||
| Operating income | 316 | 1,472 | ||||||
| Other (income) expense: | ||||||||
| Interest income | (58 | ) | (71 | ) | ||||
| Foreign exchange gain | (277 | ) | (97 | ) | ||||
| Other, net | 3 | 32 | ||||||
| Total other income | (332 | ) | (136 | ) | ||||
| Income before income taxes | 648 | 1,608 | ||||||
| Income tax provision | 58 | 381 | ||||||
| Net income | 590 | 1,227 | ||||||
| Foreign currency translation gain (loss), net of tax | 636 | (41 | ) | |||||
| Comprehensive income | $ | 1,226 | $ | 1,186 | ||||
| Net income per share: | ||||||||
| Common shares - Basic | $ | 0.04 | $ | 0.09 | ||||
| Class B common shares - Basic | 0.04 | 0.08 | ||||||
| Common shares - Diluted | 0.04 | 0.09 | ||||||
| Class B common shares - Diluted | 0.04 | 0.08 | ||||||
| Weighted average number of shares: | ||||||||
| Common shares – Basic | 12,200 | 12,171 | ||||||
| Class B common shares – Basic | 2,049 | 2,052 | ||||||
| Common shares – Diluted | 12,431 | 12,539 | ||||||
| Class B common shares – Diluted | 2,049 | 2,052 | ||||||
| Richardson Electronics, Ltd. Unaudited Consolidated Statements of Cash Flows (in thousands) | ||||||||
| Three Months Ended | ||||||||
| August 31, 2024 | September 2, 2023 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 590 | $ | 1,227 | ||||
| Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
| Unrealized foreign currency gain | (382 | ) | (37 | ) | ||||
| Depreciation and amortization | 1,044 | 998 | ||||||
| Inventory provisions | 139 | 85 | ||||||
| Share-based compensation expense | 593 | 483 | ||||||
| Gain on disposal of assets | (2 | ) | — | |||||
| Deferred income taxes | (58 | ) | (5 | ) | ||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable | (5,858 | ) | 4,462 | |||||
| Inventories | (124 | ) | (3,151 | ) | ||||
| Prepaid expenses and other assets | (29 | ) | 409 | |||||
| Accounts payable | 4,164 | (2,365 | ) | |||||
| Accrued liabilities | (95 | ) | (1,124 | ) | ||||
| Other | 430 | 33 | ||||||
| Net cash provided by operating activities | 412 | 1,015 | ||||||
| Investing activities: | ||||||||
| Capital expenditures | (926 | ) | (1,141 | ) | ||||
| Proceeds from sale of property, plant & equipment | 7 | — | ||||||
| Net cash used in investing activities | (919 | ) | (1,141 | ) | ||||
| Financing activities: | ||||||||
| Proceeds from issuance of common stock | 144 | 327 | ||||||
| Cash dividends paid on common and Class B common stock | (850 | ) | (843 | ) | ||||
| Proceeds from revolving credit facility | 1,000 | — | ||||||
| Repayment of revolving credit facility | (1,000 | ) | — | |||||
| Other | (162 | ) | (119 | ) | ||||
| Net cash used in financing activities | (868 | ) | (635 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 147 | (96 | ) | |||||
| Decrease in cash and cash equivalents | (1,228 | ) | (857 | ) | ||||
| Cash and cash equivalents at beginning of period | 24,263 | 24,981 | ||||||
| Cash and cash equivalents at end of period | $ | 23,035 | $ | 24,124 | ||||
| Richardson Electronics, Ltd. Unaudited Net Sales and Gross Profit For the First Quarter of Fiscal 2025 and 2024 ($ in thousands) | ||||||||||||
| By Strategic Business Unit | ||||||||||||
| Net Sales | Three Months Ended | FY25 vs. FY24 % Change | ||||||||||
| August 31, 2024 | September 2, 2023 | |||||||||||
| PMT | $ | 34,202 | $ | 35,744 | -4.3 | % | ||||||
| GES | 8,086 | 4,394 | 84.0 | % | ||||||||
| Canvys | 7,638 | 9,889 | -22.8 | % | ||||||||
| Healthcare | 3,799 | 2,554 | 48.7 | % | ||||||||
| Total | $ | 53,725 | $ | 52,581 | 2.2 | % | ||||||
| Gross Profit | Three Months Ended | |||||||||||||||
| August 31, 2024 | % of Net Sales | September 2, 2023 | % of Net Sales | |||||||||||||
| PMT | $ | 10,202 | 29.8 | % | $ | 11,511 | 32.2 | % | ||||||||
| GES | 2,374 | 29.4 | % | 1,580 | 36.0 | % | ||||||||||
| Canvys | 2,621 | 34.3 | % | 3,365 | 34.0 | % | ||||||||||
| Healthcare | 1,229 | 32.4 | % | 808 | 31.6 | % | ||||||||||
| Total | $ | 16,426 | 30.6 | % | $ | 17,264 | 32.8 | % | ||||||||
| Richardson Electronics, Ltd. Unaudited Reconciliation Between GAAP and Non-GAAP Financial Measures For the First Quarter of Fiscal 2025 and 2024 ($ in thousands) | ||||||||
| EBITDA | ||||||||
| Three Months Ended | ||||||||
| August 31, 2024 | September 2, 2023 | |||||||
| Net income | $ | 590 | $ | 1,227 | ||||
| Income tax expense | 58 | 381 | ||||||
| Depreciation & amortization | 1,044 | 998 | ||||||
| EBITDA | $ | 1,692 | $ | 2,606 | ||||
| For Details Contact: | 40W267 Keslinger Road | |
| Edward J. Richardson | Robert J. Ben | PO BOX 393 |
| Chairman and CEO | EVP & CFO | LaFox, IL 60147-0393 USA |
| Phone: (630) 208-2320 | (630) 208-2203 | (630) 208-2200 | Fax: (630) 208-2550 |
FAQ
What was Richardson Electronics' (RELL) net sales growth in Q1 FY25?
How much cash did Richardson Electronics (RELL) have at the end of Q1 FY25?
What was Richardson Electronics' (RELL) earnings per share in Q1 FY25?
Did Richardson Electronics (RELL) declare a dividend for Q1 FY25?
What was the year-over-year change in Richardson Electronics' (RELL) GES sales for Q1 FY25?
