UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended February 29, 2000
OR
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 of incorporation) (I.R.S. Employer Identification No.)
40W267 Keslinger Road, PO Box 393,LaFox, Illinois 60147
(Address of principal executive offices and zip code)
(630) 208-2200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 X No
As of April 13, 2000, there were outstanding 9,497,776 shares of Common
Stock, $.05 par value, and 3,231,675 shares of Class B Common Stock, $.05 par
value, which are convertible into Common Stock on a share-for-share basis.
This Quarterly Report on Form 10-Q contains 17 pages. An exhibit index is at
page 15.
(1)
Richardson Electronics, Ltd. and Subsidiaries
Form 10-Q
For the Three- and Nine-Month Periods Ended February 29, 2000
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets 3
Consolidated Condensed Income Statements 4
Consolidated Condensed Statements of Cash Flows 5
Notes to Consolidated Condensed Financial Statements 6
Management's Discussion and Analysis of Results
of Operations and Financial Condition 9
PART II - OTHER INFORMATION 15
(2)
Richardson Electronics, Ltd. and Subsidiaries
Consolidated Condensed Balance Sheets
(in thousands)
February 29 May 31
2000 1999
--------- ---------
(Unaudited) (Audited)
ASSETS
-------
Current assets:
Cash and equivalents $ 13,895 $ 12,569
Receivables, less allowance of $2,734 and
$2,584 72,478 62,448
Inventories 116,184 107,724
Other 12,960 12,817
--------- ---------
Total current assets 215,517 195,558
Property, plant and equipment 62,225 57,543
Less accumulated depreciation (37,513) (34,496)
--------- ---------
Property, plant and equipment, net 24,712 23,047
Other assets 15,174 17,073
--------- ---------
Total assets $ 255,403 $ 235,678
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
-----------------------------------
Current liabilities:
Accounts payable $ 32,168 $ 21,829
Accrued expenses 11,774 10,259
Notes payable and current portion of
long-term debt 1,617 1,830
--------- ---------
Total current liabilities 45,559 33,918
Long-term debt, less current portion 114,393 113,658
Deferred income taxes 5,189 3,798
Stockholders' equity:
Common stock, $.05 par value; issued 11,493
at February 29, 2000 and 11,390 at
May 31, 1999 574 570
Class B common stock, convertible, $.05 par
value; issued 3,232 at February 29,2000
and 3,233 at May 31, 1999 162 162
Additional paid-in capital 82,965 82,309
Common stock in treasury, at cost; 2,020
shares at February 29, 2000 and 2,000 at
May 31, 1999 (11,732) (11,532)
Retained earnings 30,083 23,044
Foreign currency translation adjustment (11,790) (10,249)
--------- ---------
Total stockholders' equity 90,262 84,304
--------- ---------
Total liabilities and
stockholders' equity $ 255,403 $ 235,678
========= =========
See notes to consolidated condensed financial statements.
(3)
Richardson Electronics, Ltd. and Subsidiaries
Consolidated Condensed Statements of Income
For the three- and Nine-Month Periods
Ended February 29, 2000 and February 28, 1999
(unaudited) (in thousands, except per share amounts)
Three Months Nine Months
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Net sales $ 98,874 $ 77,092 $292,016 $235,362
Cost of products sold 73,094 55,704 214,007 169,000
--------- --------- --------- ---------
Gross margin 25,780 21,388 78,009 66,362
Selling, general and
administrative expenses 20,369 18,331 59,998 52,226
--------- --------- --------- ---------
Operating income 5,411 3,057 18,011 14,136
Other (income) expense:
Interest expense 2,202 2,073 6,644 5,476
Investment income (248) (150) (665) (383)
Other, net (131) 151 (66) (200)
--------- --------- --------- ---------
1,823 2,074 5,913 4,893
--------- --------- --------- ---------
Income before income taxes 3,588 983 12,098 9,243
Income taxes 1,060 290 3,600 2,770
--------- --------- --------- ---------
Net income $ 2,528 $ 693 $ 8,498 $ 6,473
========= ========= ========= =========
Net income per share - basic:
Net income per share $ .20 $ .05 $ .67 $ .46
========= ========= ========= =========
Average shares outstanding 12,680 13,866 12,650 14,148
========= ========= ========= =========
Net income per share - diluted:
Net income per share $ .20 $ .05 $ .67 $ .45
========= ========= ========= =========
Average shares outstanding 12,848 14,039 12,764 14,411
========= ========= ========= =========
Dividends per common share $ .04 $ .04 $ .12 $ .12
========= ========= ========= =========
Comprehensive income:
Net income $ 2,528 $ 693 $ 8,498 $ 6,473
Foreign currency translation (1,153) (3,309) (1,541) (2,314)
--------- --------- --------- ---------
Comprehensive income $ 1,375 $ (2,616) $ 6,957 $ 4,159
========= ========= ========= =========
See notes to consolidated condensed financial statements.
(4)
Richardson Electronics, Ltd. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
For the Nine-Month Periods Ended
February 29, 2000 and February 28, 1999
(in thousands) (unaudited)
2000 1999
--------- ---------
Operating Activities:
Net income $ 8,498 $ 6,473
Non-cash charges to income:
Depreciation 3,459 2,632
Amortization of intangibles and financing
costs 557 456
Deferred income taxes 1,328 708
Shares contributed to employee stock
ownership plan -- 485
--------- ---------
Total non-cash charges 5,344 4,281
--------- ---------
Changes in working capital, net of effects
of currency translation:
Accounts receivable (10,200) (4,234)
Inventories (7,154) (12,702)
Other current assets (161) (2,161)
Accounts payable 10,730 701
Other liabilities 1,924 (1,588)
--------- ---------
Net changes in working capital (4,861) (19,984)
--------- ---------
Net cash provided by (used in)
operating activities 8,981 (9,230)
--------- ---------
Financing Activities:
Proceeds from borrowings 7,077 28,564
Payments on debt (6,618) (1,348)
Proceeds from stock issuance 461 73
Purchases of Common Stock for treasury -- (6,136)
Cash dividends (1,459) (1,661)
--------- ---------
Net cash (used in) provided by financing
activities (539) 19,492
--------- ---------
Investing Activities:
Capital expenditures (5,140) (3,677)
Business acquisitions (920) (2,460)
Investments, notes receivable and other (1,056) (3,278)
--------- ---------
Net cash used in investing activities (7,116) (9,415)
--------- ---------
Increase in cash and equivalents 1,326 847
Cash and equivalents at beginning of year 12,569 8,031
--------- ---------
Cash and equivalents at end of period $ 13,895 $ 8,878
========= =========
See notes to consolidated condensed financial statements.
(5)
Richardson Electronics, Ltd. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
Note A -- Basis of Presentation
The accompanying unaudited Consolidated Condensed Financial Statements
(Statements) have been prepared in accordance with generally accepted
accounting principles for interim financial information and the instructions to
Form 10-Q. In the opinion of management, all adjustments necessary for a fair
presentation of the results of operations for the periods covered have been re-
flected in the Statements. Certain information and footnotes necessary for a
fair presentation of the financial position and results of operations in
conformity with generally accepted accounting principles have been omitted in
accordance with the aforementioned instructions. It is suggested that the
Statements be read in conjunction with the Financial Statements and Notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal
year ended May 31, 1999.
The accompanying interim consolidated condensed financial statements are
presented for the third quarter and first nine months of fiscal 2000 (periods
ended February 29, 2000) compared to third quarter and first nine months of
fiscal 1999 (periods ended February 28, 1999).
Note B -- Income Taxes
The income tax provisions for the three- and nine-month periods ended
February 29, 2000 and February 28, 1999 are based on the estimated annual
effective tax rate of 30%. The effective rate is less than the U.S. federal
statutory rate of 34% due to U.S. foreign sales corporation tax benefits,
partially offset by state income taxes.
Note C - Industry and Market Information
The marketing and sales structure of the Company is organized into four
strategic business units (SBU's): Electron Device Group (EDG), Solid State and
Components (SSC), Display Products Group (DPG) and Security Systems Division
(SSD).
EDG's principal products, electron tubes, are used to control, switch,
oscillate or amplify electrical power. This technology had been used for more
than 80 years throughout the industrialized world. EDG serves a multitude of
industries including automotive, avionics, communications, marine, plastics,
rubber, steel, textile, medical imaging and wafer fabrication for
semiconductors. EDG's products are largely for replacement markets.
SSC's products include radio frequency and microwave components and power
semiconductors. These products are used in wireless communication and
industrial applications, serving many of the same customers and industries as
EDG. SSC's products are in most cases used in original equipment applications.
(6)
Richardson Electronics, Ltd. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
DPG's products include cathode ray tubes, monitors and related systems
integration. Typical users include hospitals, airports, brokerage offices,
financial institutions, television studios, utilities and assembly lines. DPG's
products are largely for replacement applications and system upgrades.
SSD serves the commercial security and surveillance industry, with em-
phasis on closed circuit television systems, components and related design and
integration services. SSD's customer base includes industrial endusers and
system installers.
SBU's are managed by Vice Presidents and General Managers who report to
the President and Chief Operating Officer. The President evaluates performance
and allocates resources, in part, based on the direct operating contribution of
each SBU. Direct operating contribution is defined as gross margin less product
management and direct selling expenses. In North America and Europe, the sales
force is organized by SBU and, accordingly, these costs are included in direct
expenses. In Latin America, Asia / Pacific and the rest of the world, the
regional sales force is shared and, accordingly, is not included in direct
expenses. Intersegment sales are not significant.
Accounts receivable, inventory, goodwill and certain notes receivable are
identified by SBU. Cash, net property and other assets are not identifiable by
SBU. Accordingly, depreciation, amortization expense and financing costs are
not identifiable by SBU. Operating results for the three- and nine-month
periods ended February 29, 2000 and February 28, 1999 and identifiable assets
as of the end of the respective periods by SBU are summarized in the following
tables (in thousands):
EDG SSC DPG SSD Total
--------- --------- --------- --------- ---------
Third Quarter
Fiscal 2000
Sales $ 29,240 $ 38,463 $ 10,620 $ 20,551 $ 98,874
Gross margin 8,571 10,287 2,700 4,826 26,384
Contribution 6,095 7,309 1,631 2,340 17,375
Assets 74,893 66,420 20,682 33,229 195,224
Fiscal 1999
Sales $ 28,312 $ 21,957 $ 9,040 $ 17,783 $ 77,092
Gross margin 8,723 6,455 2,662 4,030 21,870
Contribution 6,098 3,666 1,688 1,279 12,731
Assets 86,859 53,225 21,656 31,681 193,421
(7)
Richardson Electronics, Ltd. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
EDG SSC DPG SSD Total
--------- --------- --------- --------- ---------
Nine Months
Fiscal 2000
Sales $ 91,136 $101,549 $ 36,981 $ 62,350 $292,016
Gross margin 27,161 28,063 9,407 14,733 79,364
Contribution 19,522 18,772 6,111 7,297 51,702
Fiscal 1999
Sales $ 89,106 $ 67,362 $ 28,075 $ 50,819 $235,362
Gross margin 27,353 19,049 8,947 11,906 67,255
Contribution 20,266 11,129 6,165 4,879 42,439
A reconciliation of gross margin, direct operating contribution and assets
to the relevant consolidated amounts is as follows. (Other assets includes mis-
cellaneous receivables, manufacturing inventories and sundry assets.) (in thou-
sands):
Third Quarter Nine Months
-------------------- --------------------
FY 2000 FY 1999 FY 2000 FY 1999
--------- --------- --------- ---------
Gross margin - segments total $ 26,384 $ 21,870 $ 79,364 $ 67,255
Manufacturing variances and
other costs (604) (482) (1,355) (893)
--------- --------- --------- ---------
Gross margin $ 25,780 $ 21,388 $ 78,009 $ 66,362
========= ========= ========= =========
Segment profit contribution $ 17,375 $ 12,731 $ 51,702 $ 42,439
Manufacturing variances and
other costs (604) (482) (1,355) (893)
Regional selling expenses (3,627) (3,426) (10,612) (9,901)
Administrative expenses (7,733) (5,766) (21,724) (17,509)
--------- --------- --------- ---------
Operating income $ 5,411 $ 3,057 $ 18,011 $ 14,136
========= ========= ========= =========
Segment assets $195,224 $193,421
Cash and equivalents 13,895 8,878
Other current assets 12,960 11,793
Net property 24,712 20,002
Other assets 8,612 1,194
--------- ---------
Total assets $255,403 $235,288
========= =========
The Company sells its products to companies in a wide range of industries
and performs periodic credit evaluations of its customers' financial condition.
Terms are generally on open account, payable net 30 days in North America and
Latin America, and vary throughout Europe and the Far East. Estimates of
credit losses are recorded in the financial statements based on periodic
reviews of outstanding accounts.
(8)
Richardson Electronics, Ltd. and Subsidiaries
Management's Discussion and Analysis
of Results of Operations and Financial Condition
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
Results of Operations
Sales and Gross Margin
Net sales for the third quarter of fiscal 2000 were a record $98.9
million, up 28.3% from last year's third quarter of $77.1 million. Sales,
percentage change from the prior year, gross margins and gross margin percent
of sales by SBU are summarized in the following table. Gross margins for each
SBU include provisions for returns and overstock. Provisions for LIFO,
manufacturing charges and other costs are included under the caption
"Corporate" (in thousands).
Sales Gross Margin
---------------------------- --------------------------------
% GM % of GM % of
FY 2000 FY 1999 Change FY 2000 Sales FY 1999 Sales
--------- --------- ------ --------- ----- --------- -----
Third Quarter
EDG $ 29,240 $ 28,312 3.3% $ 8,571 29.3% $ 8,723 30.8%
SSC 38,463 21,957 75.2% 10,287 26.7% 6,455 29.4%
DPG 10,620 9,040 17.5% 2,700 25.4% 2,662 29.4%
SSD 20,551 17,783 15.6% 4,826 23.5% 4,030 22.7%
Corporate - - (604) (482)
--------- --------- --------- ---------
Total $ 98,874 $ 77,092 28.3% $ 25,780 26.1% $ 21,388 27.7%
========= ========= ========= =========
Nine Months
EDG $ 91,136 $ 89,106 2.3% $ 27,161 29.8% $ 27,353 30.7%
SSC 101,549 67,362 50.8% 28,063 27.6% 19,049 28.3%
DPG 36,981 28,075 31.7% 9,407 25.4% 8,947 31.9%
SSD 62,350 50,819 22.7% 14,733 23.6% 11,906 23.4%
Corporate - - (1,355) (893)
--------- --------- --------- ---------
Total $292,016 $235,362 24.1% $ 78,009 26.7% $ 66,362 28.2%
========= ========= ========= =========
EDG's third quarter sales increased 3.3%, primarily in microwave gen-
erators and industrial products.
SSC's third quarter sales increased 75.2% from fiscal 1999 levels, lead by
81.6% growth in microwave wireless and interconnect products. Gross margins as
a percent of sales were 26.7% in fiscal 2000 compared to 29.4% in fiscal 1999.
Current quarter margins were reduced by 1.3 percentage points related to start-
up inefficiencies and component shortages on an engineering design and assembly
contract. These issues were resolved by the end of the quarter. Margins were
also affected by several large sales at lower rates and increased sales of
Motorola product. The third quarter fiscal 1999 gross margin rate was 1.0
percentage point higher than the historical rate for this business, primarily
as a result of favorable variances on value-added operations. Nine month
results reflect similar trends.
(9)
Richardson Electronics, Ltd. and Subsidiaries
Management's Discussion and Analysis
of Results of Operations and Financial Condition
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
Third quarter sales for DPG increased 17.5% in fiscal 2000 from 1999
levels. Growth was attributable to new initiatives in both flat-panel and
conventional monitor sales, as well as related systems integration revenues for
medical imaging, financial services and industrial markets. Gross margins as a
percent of sales decreased to 25.4% in fiscal 2000 from 29.4% in fiscal 1999,
reflecting the shift in product mix. Sales for the nine-month period increased
31.7%, with a similar shift in product mix and gross margins.
SSD's sales increased 15.6% for the third quarter reflecting product and
geographic expansion. Gross margins improved to 23.5% from 22.7%. Sales for the
nine-month period increased 22.7%, benefiting from growth in Canadian, U.S. and
European operations, as well as the acquisition of Adler Video in December,
1998.
Sales, percentage change from the prior year, gross margins and gross
margin percent of sales by geographic area are summarized in the following
table. Prior year amounts have been restated to be comparable to the current
year's classifications. The caption, "other", includes sales to export
distributors and to countries where the Company does not have offices,
including Eastern Europe and the Middle East. Provisions for LIFO,
manufacturing charges and other costs are included under the caption
"Corporate" (in thousands).
Sales Gross Margin
---------------------------- --------------------------------
% GM % of GM % of
FY 2000 FY 1999 Change FY 2000 Sales FY 1999 Sales
--------- --------- ------ --------- ----- --------- -----
Third Quarter
North America $ 64,589 $ 49,302 31.0% $ 16,361 25.3% $ 13,264 26.9%
Europe 18,692 15,849 17.9% 5,374 28.8% 4,965 31.3%
Asia/Pacific 7,685 6,100 26.0% 2,494 32.5% 1,981 32.5%
Latin America 4,331 3,610 20.0% 1,196 27.6% 1,014 28.1%
Other 3,577 2,231 60.3% 959 26.8% 646 29.0%
Corporate - - (604) (482)
--------- --------- --------- ---------
Total $ 98,874 $ 77,092 28.3% $ 25,780 26.1% $ 21,388 27.7%
========= ========= ========= =========
Nine Months
North America $190,513 $150,375 26.7% $ 49,178 25.8% $ 41,030 27.3%
Europe 55,460 48,750 13.8% 16,453 29.7% 15,443 31.7%
Asia/Pacific 22,961 15,707 46.2% 7,461 32.5% 4,938 31.4%
Latin America 13,931 12,856 8.4% 3,867 27.8% 3,614 28.1%
Other 9,151 7,674 19.2% 2,405 26.3% 2,230 29.1%
Corporate - - (1,355) (893)
--------- --------- --------- ---------
Total $292,016 $235,362 24.1% $ 78,009 26.7% $ 66,362 28.2%
========= ========= ========= =========
North American, European and Asia / Pacific sales growth in the quarter and
year-to-date results reflect the growth in each of the Company's strategic
business units, led by demand for SSC's RF wireless products. Latin American
sales increased 20.0% in the third quarter, comparing favorably to the 8.4%
growth in the nine-month period, primarily benefiting from growth in the sale
of broadcast products.
(10)
Richardson Electronics, Ltd. and Subsidiaries
Management's Discussion and Analysis
of Results of Operations and Financial Condition
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
Selling, General, and Administrative Expenses
Selling, general and administrative expenses improved as a percentage of
sales, declining to 20.6% from 23.8% in the third quarter comparisons and to
20.5% from 22.2% for the first nine months, reflecting the strong sales growth
and the Company's continued emphasis on its program to maximize operating
efficiencies. In the fourth quarter of fiscal 1999, the Company recorded a
$500,000 provision for potential losses on certain Latin American accounts re-
ceivable. During fiscal 2000, the Company recorded additional provisions of
$469,000 as prospects for a partial recovery on these receivables diminished.
These accounts are now fully reserved.
Interest and Other Expenses
Interest costs in fiscal 2000 compared to fiscal 1999 reflect higher bor-
rowing levels resulting from the Company's repurchase of 2.0 million shares of
Common Stock in the second half of fiscal 1999 and higher interest rates on the
Company's revolving credit debt. Other expenses included foreign exchange gains
of $107,000 in the third quarter of fiscal 2000, compared to foreign exchange
losses of $201,000 in the prior year period.
Net Results
Net income for the quarter was $2.5 million or $.20 per share, assuming
dilution, compared to $693,000 or $.05 per share in the prior year. Net income
for the first nine months was $8.5 million or $.67 per share, assuming
dilution, compared to $6.5 million or $.45 per share. Earnings per share
comparisons are favorably affected by the reduction in average shares
outstanding (see "Liquidity and Capital Resources).
Liquidity and Capital Resources
Cash provided by operations was $9.0 million in the first nine months of
fiscal 2000, compared to cash used in operations of $9.2 million in the prior
year period. The Company increased its investment in working capital by $4.9
million in the current year compared to a $20.0 million increase last year.
Accounts receivable increased $10.2 million in 2000 and $4.2 million in 1999
reflecting the increase in sales from the prior year. Inventory turnovers
improved in the third quarter of fiscal 2000 to 2.66 from 2.06 a year ago as
the Company continued its program to improve asset utilization. The increase in
inventories of $7.2 million in fiscal 2000, primarily for product line
(11)
Richardson Electronics, Ltd. and Subsidiaries
Management's Discussion and Analysis
of Results of Operations and Financial Condition
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
expansion, compared to an increase of $12.7 million in 1999. Accounts payable
increased by $10.7 million in fiscal 2000 due to the timing of inventory
purchases.
In the prior year, the Company repurchased 2.0 million shares of its
Common Stock on the open market at an average cost of $5.76 per share. Inter-
est payments for the first nine months were $7.7 million, compared to $6.7 mil-
lion in the first nine months of fiscal 1999.
The Company's loan agreements contain various financial and operating
covenants which set benchmark levels for tangible net worth, debt / tangible
net worth ratio and annual debt service coverage. The Company was in compliance
with these covenants at February 29, 2000.
Cash reserves, investments, funds from operations and credit lines are
expected to be adequate to meet the operational needs and future dividends of
the Company. The policy regarding payment of dividends is reviewed periodically
by the Board of Directors in light of the Company's operating needs and capital
structure.
Euro Currency Conversion
On January 1, 1999, eleven member states of the European Union began conversion
to a common currency, the euro. From January 1, 1999 until January 1, 2002,
companies operating in Europe must be able to process business transactions
either in legacy currencies or in Euros. After January 1, 2002, all
transactions will be processed only in Euros. These changes could have signifi-
cant impacts on transaction processing costs, pricing policies and foreign cur-
rency exchange risk management.
The Company has verified that its transaction processing systems can ac-
commodate the euro currency and dual currency processing requirements without
significant additional costs. While the exact impact on pricing is
indeterminable, the Company believes that since most of its pricing is based on
U.S. dollar costs, the effect of conversion to the euro will not be
significant.
The Company expects to adopt the euro as the functional currency for each
of its subsidiaries within the European Union. While it is possible that this
change may result in reduced volatility of reported results due to foreign
currency translation, this benefit cannot be quantified at this time.
(12)
Richardson Electronics, Ltd. and Subsidiaries
Management's Discussion and Analysis
of Results of Operations and Financial Condition
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995
Investors should consider carefully the following risk factors, in
addition to the other information included and incorporated by reference in
this quarterly report on Form 10-Q. All statements other than statements of
historical facts included in this report are statements that constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934. The
words "expect," "estimate," "anticipate," "predict," "believe" and similar
expressions and variations thereof are intended to identify forward-looking
statements. Such statements appear in a number of places in this report and
include statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things: (i)
trends affecting the Company's financial condition or results of operations;
(ii) the Company's financing plans; (iii) the Com-pany's business and growth
strategies, including potential acquisitions; and (iv) other plans and
objectives for future operations. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties and that actual results may differ materially from
those predicted in the forward-looking statements or which may be anticipated
from historical results or trends. In addition to the information contained in
the Company's other filings with the Securities and Exchange Commission,
factors which could affect future performance include, among others, the
following:
- - Competitive pressures may increase or change through industry consolidation,
entry of new competitors, marketing changes or otherwise. There can be no
assurance that the Company will be able to continue to compete effectively with
existing or potential competitors.
- - Technological changes may affect the marketability of inventory on hand.
- - General economic or business conditions, domestic and foreign, may be less
favorable than expected, resulting in lower sales or lower profit margins than
expected.
- - Changes in relationships with customers or vendors, the ability to develop
new relationships or the business failure of several customers or vendors may
affect sales or profitability.
- - Political, legislative or regulatory changes may adversely affect the busi-
nesses in which the Company operates.
- - Changes in securities markets, interest rates or foreign exchange rates may
adversely affect the Company's performance or stock price.
(13)
Richardson Electronics, Ltd. and Subsidiaries
Management's Discussion and Analysis
of Results of Operations and Financial Condition
Three- and Nine-Month Periods Ended February 29, 2000
(Unaudited)
- - The failure to obtain or retain key executive or technical personnel could
affect future performance.
- - The Company's growth strategy includes expansion through acquisitions. There
can be no assurance that the Company will be able to successfully complete
further acquisitions or that past or future acquisitions will not have an
adverse impact on the Company's operations.
- - The potential future sale of Common Stock shares, possible anti-takeover
measures available to the Company, dividend policies, as well as voting con-
trol of the Company by Edward J. Richardson, Chairman of the Board and Chief
Executive Officer may affect the stock price.
- - The continued availability of financing on favorable terms can not be
assured.
(14)
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material developments have occurred in the matters
reported under the category "Legal Proceedings" in the Registrant's
Report on Form 10-K for the fiscal year ended May 31, 1999.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule - page 17.
(b) Reports on Form 8-K - None
(15)
PART II - OTHER INFORMATION
SIGNATURE
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 thereunto duly authorized.
RICHARDSON ELECTRONICS, LTD.
Date April 13, 2000 By _______________________
William J. Garry
Senior Vice President and
Chief Financial Officer
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