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 November 30, 1999
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 January 13, 1999, there were outstanding 9,442,538 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 Six-Month Periods Ended November 30, 1999
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)
November 30 May 31
1999 1999
--------- ---------
(Unaudited) (Audited)
ASSETS
-------
Current assets:
Cash and equivalents $ 12,069 $ 12,569
Receivables, less allowance of $2,352 and
$2,584 70,768 62,448
Inventories 108,859 107,724
Other 11,979 12,817
--------- ---------
Total current assets 203,675 195,558
Property, plant and equipment 60,506 57,543
Less accumulated depreciation (36,449) (34,496)
--------- ---------
Property, plant and equipment, net 24,057 23,047
Other assets 18,386 17,073
--------- ---------
Total assets $ 246,118 $ 235,678
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
-----------------------------------
Current liabilities:
Accounts payable $ 25,612 $ 21,829
Accrued expenses 12,961 10,259
Notes payable and current portion of
long-term debt 1,415 1,830
--------- ---------
Total current liabilities 39,988 33,918
Long-term debt, less current portion 111,760 113,658
Deferred income taxes 5,173 3,798
Stockholders' equity:
Common stock, $.05 par value; issued
11,442 at November 30, 1999 and 11,390
at May 31, 1999 572 570
Class B common stock, convertible,
$.05 par value; issued 3,233 at
November 30, 1999 and at May 31, 1999 162 162
Additional paid-in capital 82,587 82,309
Common stock in treasury, at cost; 2,000
shares at November 30, 1999 and
May 31, 1999 (11,532) (11,532)
Retained earnings 28,045 23,044
Foreign currency translation adjustment (10,637) (10,249)
--------- ---------
Total stockholders' equity 89,197 84,304
--------- ---------
Total liabilities and stockholders'
Equity $ 246,118 $ 235,678
========= =========
See notes to consolidated condensed financial statements.
(3)
Richardson Electronics, Ltd. and Subsidiaries
Consolidated Condensed Statements of Income
For the three- and Six-Month Periods Ended November 30, 1999 and 1998
(unaudited) (in thousands, except per share amounts)
Three Months Six Months
--------------------- ----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
Net sales $ 97,578 $ 82,232 $193,142 $158,270
Cost of products sold 71,017 58,970 140,913 113,296
--------- --------- --------- ---------
Gross margin 26,561 23,262 52,229 44,974
Selling, general and
administrative expenses 20,042 17,289 39,629 33,895
--------- --------- --------- ---------
Operating income 6,519 5,973 12,600 11,079
Other (income) expense:
Interest expense 2,167 1,727 4,442 3,402
Investment income (290) (80) (417) (233)
Other, net (17) (363) 65 (350)
--------- --------- --------- ---------
1,860 1,284 4,090 2,819
--------- --------- --------- ---------
Income before income taxes 4,659 4,689 8,510 8,260
Income taxes 1,390 1,410 2,540 2,480
--------- --------- --------- ---------
Net income $ 3,269 $ 3,279 $ 5,970 $ 5,780
========= ========= ========= =========
Net income per share - basic:
Net income per share $ 0.26 $ 0.23 $ 0.47 $ 0.40
========= ========= ========= =========
Average shares outstanding 12,647 14,089 12,635 14,289
========= ========= ========= =========
Net income per share - diluted:
Net income per share $ 0.26 $ 0.23 $ 0.47 $ 0.40
========= ========= ========= =========
Average shares outstanding 12,759 14,215 12,722 14,597
========= ========= ========= =========
Dividends per common share $ 0.04 $ 0.04 $ 0.08 $ .08
========= ========= ========= =========
Comprehensive income:
Net income $ 3,269 $ 3,279 $ 5,970 $ 5,780
Foreign currency translation (1,386) 2,420 (388) 995
--------- --------- --------- ---------
Comprehensive income $ 1,883 $ 5,699 $ 5,582 $ 6,775
========= ========= ========= =========
See notes to consolidated condensed financial statements.
(4)
Richardson Electronics, Ltd. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
For the Six-Month Periods Ended November 30, 1999 and 1998
(in thousands) (unaudited)
1999 1998
--------- ---------
Operating Activities:
Net income $ 5,970 $ 5,780
Non-cash charges to income:
Depreciation 2,317 1,777
Amortization of intangibles and
Financing costs 378 304
Deferred income taxes 1,329 1,739
Shares contributed to employee stock
ownership plan -- 485
--------- ---------
Total non-cash charges 4,024 4,305
--------- ---------
Changes in working capital, net of
effects of currency translation
and business acquisitions:
Accounts receivable (8,487) (886)
Inventories (1,459) (7,041)
Other current assets 875 (1,822)
Accounts payable 3,931 (434)
Other liabilities 2,706 (1,508)
--------- ---------
Net changes in working capital (2,434) (11,691)
--------- ---------
Net cash provided by (used in)
operating activities 7,560 (1,606)
--------- ---------
Financing Activities:
Proceeds from borrowings 4,077 12,064
Payments on debt (6,362) (757)
Proceeds from stock issuance 360 114
Purchases of Common Stock for treasury -- (3,594)
Cash dividends (967) (1,115)
--------- ---------
Net cash (used in) provided by
financing activities (2,892) 6,712
--------- ---------
Investing Activities:
Capital expenditures (3,433) (2,233)
Business acquisitions (655) (893)
Investments, notes receivable and other (1,080) (2,631)
--------- ---------
Net cash used in investing activities (5,168) (5,757)
--------- ---------
Decrease in cash and equivalents (500) (651)
Cash and equivalents at beginning of year 12,569 8,031
--------- ---------
Cash and equivalents at end of period $ 12,069 $ 7,380
========= =========
See notes to consolidated condensed financial statements.
(5)
Richardson Electronics, Ltd. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
Three- and Six-Month Periods Ended November 30, 1999
(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 reflected 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 second quarter and first half of fiscal 2000 (periods ended
November 30, 1999) compared to second quarter and first half of fiscal 1999
(periods ended November 30, 1998).
Note B -- Income Taxes
The income tax provisions for the three- and six-month periods ended
November 30, 1999 and 1998 are based on the estimated annual effective tax rate
of 30%. The effective rate is less than the 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.
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.
(6)
Richardson Electronics, Ltd. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
Three- and Six-Month Periods Ended November 30, 1999
(Unaudited)
SSD serves the commercial security and surveillance industry, with emphasis
on closed circuit television systems, components and related design and
integration services. SSD's customer base includes industrial end-users and
system installers.
SBU's are directed 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. Inter-segment 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 six-month periods
ended November 30, 1999 and 1998 and identifiable assets as of the end of the
respective periods by SBU are summarized in the following tables:
EDG SSC DPG SSD Total
------- ------- ------- ------- --------
Second Quarter
Fiscal 2000
Sales $30,551 $33,697 $12,137 $21,193 $ 97,578
Gross margin 9,188 9,576 3,044 5,026 26,834
Contribution 6,561 6,342 1,954 2,468 17,325
Assets 74,205 59,453 21,175 30,422 185,255
Fiscal 1999
Sales $32,166 $23,223 $ 9,844 $16,999 $ 82,232
Gross margin 9,679 6,457 3,263 4,083 23,482
Contribution 7,577 3,827 2,275 1,900 15,579
Assets 79,650 52,047 19,699 30,490 181,886
First Half
Fiscal 2000
Sales $61,896 $63,086 $26,361 $41,799 $193,142
Gross Margin 18,590 17,776 6,707 9,907 52,980
Contribution 13,427 11,463 4,480 4,957 34,327
Fiscal 1999
Sales $60,794 $45,405 $19,035 $33,036 $158,270
Gross Margin 18,630 12,594 6,285 7,876 45,385
Contribution 14,168 7,463 4,477 3,600 29,708
(7)
Richardson Electronics, Ltd. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
Three- and Six-Month Periods Ended November 30, 1999
(Unaudited)
A reconciliation of gross margin, direct operating contribution and assets
to the relevant consolidated amounts is as follows. (Other assets includes
miscellaneous receivables, manufacturing inventories and sundry assets.)
Second Quarter First Half
-------------------- --------------------
FY 2000 FY 1999 FY 2000 FY 1999
--------- --------- --------- ---------
Gross margin - segments total $ 26,834 $ 23,482 $ 52,980 $ 45,385
Manufacturing variances and
other costs (273) (220) (751) (411)
--------- --------- --------- ---------
Gross margin $ 26,561 $ 23,262 $ 52,229 $ 44,974
========= ========= ========= =========
Segment profit contribution $ 17,325 $ 15,579 $ 34,327 $ 29,708
Manufacturing variances and
other costs (273) (220) (751) (411)
Regional selling expenses (3,472) (3,288) (6,985) (6,475)
Administrative expenses (7,061) (6,098) (13,991) (11,743)
--------- --------- --------- ---------
Operating income $ 6,519 $ 5,973 $ 12,600 $ 11,079
========= ========= ========= =========
Segment assets $185,255 $181,886
Cash and equivalents 12,069 7,380
Other current assets 11,979 9,493
Net property 24,057 19,553
Other assets 12,758 6,124
-------- --------
Total assets $246,118 $224,436
======== ========
The Company sells its products to companies in diversified 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 and actual losses have been consistently within
management's estimates.
(8)
Management's Discussion and Analysis
Of Results of Operations and Financial Condition
Three- and Six-Month Periods Ended November 30, 1999
(Unaudited)
Results of Operations
Sales and Gross Margin
Net sales for the second quarter of fiscal 2000 were a record $97.6
million, up 18.7% from last year's second quarter of $82.2 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
-------- -------- ------ -------- ------ -------- ------
Second Quarter
EDG $ 30,551 $ 32,166 -5.0% $ 9,188 30.1% $ 9,679 30.1%
SSC 33,697 23,223 45.1% 9,576 28.4% 6,457 27.8%
DPG 12,137 9,844 23.3% 3,044 25.1% 3,263 33.1%
SSD 21,193 16,999 24.7% 5,026 23.7% 4,083 24.0%
Corporate - - (273) (220)
-------- -------- -------- --------
Total $ 97,578 $ 82,232 18.7% $26,561 27.2% $23,262 28.3%
======== ======== ======== ========
First Half
EDG $ 61,896 $ 60,794 1.8% $18,590 30.0% $18,630 30.6%
SSC 63,086 45,405 38.9% 17,776 28.2% 12,594 27.7%
DPG 26,361 19,035 38.5% 6,707 25.4% 6,285 33.0%
SSD 41,799 33,036 26.5% 9,907 23.7% 7,876 23.8%
Corporate - - (751) (411)
-------- -------- -------- --------
Total $193,142 $158,270 22.0% $52,229 27.0% $44,974 28.4%
======== ======== ======== ========
EDG's second quarter sales decreased 5.0%, as gains in microwave generators
and industrial products were offset by sales declines due to competitive
pressures in medical imaging and other markets.
SSC's second quarter sales increased 45.1% from fiscal 1999 levels, lead
by a 56.7% growth in microwave wireless and interconnect products. Gross
margins as a percent of sales increased to 28.4% in fiscal 2000 from 27.8%
in fiscal 1999 due to strong customer demand. Six month results reflect the
same trends.
Second quarter sales for DPG increased 23.3% 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 25.1% in fiscal 2000 from 33.1% in fiscal 1999,
reflecting the shift in product mix. Sales for the six-month period increased
38.5%, with a similar shift in product mix and gross margins.
(9)
Management's Discussion and Analysis
Of Results of Operations and Financial Condition
Three- and Six-Month Periods Ended November 30, 1999
(Unaudited)
SSD's sales increased 24.7% for the second quarter and 26.5% for the six-
month period, benefitting from the acquisition of Adler Video in December, 1998
and growth in Canadian operations.
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
-------- -------- ------ -------- ------ -------- ------
Second Quarter
North America $ 63,149 $ 51,515 22.6% $16,508 26.1% $14,040 27.3%
Europe 18,953 17,713 7.0% 5,725 30.2% 5,557 31.4%
Asia/Pacific 8,086 5,006 61.5% 2,701 33.4% 1,611 32.2%
Latin America 4,628 4,883 -5.2% 1,209 26.1% 1,395 28.6%
Other 2,762 3,115 -11.3% 691 25.0% 879 28.2%
Corporate - - (273) (220)
-------- -------- -------- --------
Total $ 97,578 $ 82,232 18.7% $26,561 27.2% $23,262 28.3%
======== ======== ======== ========
First Half
North America $125,924 $101,073 24.6% $32,817 26.1% $27,766 27.5%
Europe 36,768 32,901 11.8% 11,079 30.1% 10,478 31.8%
Asia/Pacific 15,276 9,607 59.0% 4,967 32.5% 2,957 30.8%
Latin America 9,600 9,246 3.8% 2,671 27.8% 2,600 28.1%
Other 5,574 5,443 2.4% 1,446 25.9% 1,584 29.1%
Corporate - - (751) (411)
-------- -------- -------- --------
Total $193,142 $158,270 22.0% $52,229 27.0% $44,974 28.4%
======== ======== ======== ========
The Company's North American sales grew 22.6% in the second quarter and
24.6% in the first half, primarily from growth in SSC wireless product sales.
European sales grew 7.0% in the second quarter and 11.8% in the first half,
despite weakness in certain of these economies. Sales in Asia / Pacific
increased 61.5% in the second quarter and 59.0% in the for the first six-months
reflecting continued economic recovery in this region. Latin American sales
results reflect the economic slowdown in Brazil and neighboring countries.
(10)
Management's Discussion and Analysis
Of Results of Operations and Financial Condition
Three- and Six-Month Periods Ended November 30, 1999
(Unaudited)
Selling, General, and Administrative Expenses
Selling, general and administrative expenses improved as a percentage of
sales, declining from 21.0% to 20.5% in the second quarter and from 21.4% to
20.5% for the first half as the Company continued to emphasize its program to
maximize operating efficiencies.
Interest and Other Expenses
Interest costs in fiscal 2000 compared to fiscal 1999 reflect higher
borrowing levels resulting from the Company's repurchase of 2.0 million shares
of Common Stock in the second half of fiscal 1999. Other expenses included
foreign exchange losses of $106,000 in the first half of fiscal 2000, compared
to a foreign exchange gain of $293,000 in the prior year.
Net Results
Net income for the quarter was $3.3 million or $.26 per share, assuming
dilution, compared to $3.3 million or $.23 per share in the prior year. Net
income for the first half was $6.0 million or $.47 per share, assuming dilution,
compared to $5.8 million or $.40 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 $7.6 million in the first half of fiscal
2000, compared to cash used in operations of $1.6 million in the first half last
year. The Company increased its investment in working capital by $2.4 million
in the first half of fiscal 2000 compared to a $11.7 million increase last year.
Accounts receivable increased $8.5 million in 2000 and $.8 million in 1999
reflecting the increase in sales from the prior year. Inventory turnovers
improved in the second quarter of fiscal 2000 to 2.68 from 2.23 a year ago as
the Company continued its program to improve asset utilization. The increase in
inventories of $1.5 million in 2000, primarily for product line expansion,
compared to an increase of $7.0 million in 1999. Accounts payable increased by
$3.9 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. Interest
payments for the first half were $4.2 million, compared to $3.5 million in the
first half 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 November 30, 1999.
(11)
Management's Discussion and Analysis
Of Results of Operations and Financial Condition
Three- and Six-Month Periods Ended November 30, 1999
(Unaudited)
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 significant impacts on transaction processing costs,
pricing policies and foreign currency exchange risk management.
The Company has verified that its transaction processing systems can
accommodate 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.
Impact of Year 2000
As of January 13, 2000, all of the Company's business computer systems are
working properly. No problems related to the year 2000 date are currently in
evidence and none are foreseen at this time. No impact to the supply chain
serviced by the Company is expected.
(12)
Management's Discussion and Analysis
Of Results of Operations and Financial Condition
Three- and Six-Month Periods Ended November 30, 1999
(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 Company'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)
Management's Discussion and Analysis
Of Results of Operations and Financial Condition
Three- and Six-Month Periods Ended November 30, 1999
(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-takover
measures available to the Company, dividend policies, as well as voting control
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 18.
(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: January 13, 2000 By \s\
------------------
William J. Garry
Senior Vice President and
Chief Financial Officer
(16)
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0
<COMMON> 570
<OTHER-SE> 83734
<TOTAL-LIABILITY-AND-EQUITY> 235678
<SALES> 193142
<TOTAL-REVENUES> 193142
<CGS> 140913
<TOTAL-COSTS> 140913
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 338
<INTEREST-EXPENSE> 4442
<INCOME-PRETAX> 8510
<INCOME-TAX> 2540
<INCOME-CONTINUING> 5970
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5970
<EPS-BASIC> .47
<EPS-DILUTED> .47
</TABLE>
