Richardson Electronics Reports Second Quarter Fiscal 2015 Results and Declares Quarterly Cash Dividend

LAFOX, Ill. — (BUSINESS WIRE) — January 7, 2015 — Richardson Electronics, Ltd. (NASDAQ: RELL), today reported sales and earnings for its second quarter ended November 29, 2014. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.

Net sales for the second quarter of fiscal 2015 were $33.8 million, a 4.5% decrease compared to net sales of $35.4 million in the prior year. Sales for the Company's EDG business increased 2.4% while sales for Canvys and Richardson Healthcare ("Healthcare") were down 22.2% and 31.7%, respectively, compared to the prior year's same quarter. Gross margin decreased to $10.5 million, or 30.9% of net sales during the second quarter of fiscal 2015, compared to $11.0 million, or 31.1% of net sales during the second quarter of fiscal 2014. Operating expenses were $12.6 million for the second quarter of fiscal 2015, compared to $10.5 million for the second quarter of fiscal 2014. The operating expenses for the second quarter include $1.0 million related to the Company's IT implementation as well as investments of $1.1 million in its engineered solutions and healthcare growth initiatives. Operating loss for the second quarter of fiscal 2015 was $2.2 million, compared to operating income for the second quarter of fiscal 2014 of $0.5 million.

Loss from continuing operations for the second quarter of fiscal 2015 was $1.1 million, compared to income from continuing operations of $0.6 million, or $0.04 per diluted common share during the second quarter of fiscal 2014.

“During the second quarter, we made tremendous progress with both our IT implementation and our growth initiatives,” said Edward J. Richardson, Chairman, Chief Executive Officer and President. “We officially introduced Richardson Healthcare in November with the launch of our new website www.rellhealthcare.com. We added critical resources to our sales and engineering teams to ensure we can execute on our strategy to deliver engineered solutions in both Healthcare and EDG. We also made significant investments to support the implementation of our IT system.”

“Our third quarter sales should again be in the range of $34 to $36 million. While we are not satisfied with our current results, we believe our strategy is solid and will provide sustainable long-term growth. We are proud of the commitment our employees have made to ensure our long-term goals are achieved,” said Mr. Richardson.

FINANCIAL SUMMARY � THREE MONTHS ENDED NOVEMBER 29, 2014

  • Net sales for the second quarter of fiscal 2015 were $33.8 million, a decrease of 4.5%, compared to net sales of $35.4 million during the second quarter of fiscal 2014.
  • Gross margin decreased to 30.9% during the second quarter of fiscal 2015, compared to 31.1% from the second quarter of fiscal 2014.
  • Selling, general, and administrative expenses increased to $12.6 million, or 37.3% of net sales for the second quarter of fiscal 2015, compared to $10.5 million for the second quarter of fiscal 2014, or 29.6% of net sales.
  • Operating loss during the second quarter of fiscal 2015 was $2.2 million, compared to operating income of $0.5 million, or 1.5% of net sales, during the second quarter of fiscal 2014.
  • Loss from continuing operations during the second quarter of fiscal 2015 was $1.1 million, compared to income from continuing operations during the second quarter of fiscal 2014 of $0.6 million, or $0.04 per diluted common share.
  • Income from discontinued operations during the second quarter of fiscal 2015 was $0.1 million, or $0.01 per diluted common share, compared to loss from discontinued operations during the second quarter of fiscal 2014 of $0.1 million.
  • Net loss during the second quarter of fiscal 2015 was $1.1 million, compared to net income of $0.5 million, or $0.03 per diluted common share, during the second quarter of fiscal 2014.

FINANCIAL SUMMARY – SIX MONTHS ENDED NOVEMBER 29, 2014

  • Net sales for the first six months of fiscal 2015 were $68.5 million, a decrease of 1.7%, compared to net sales of $69.7 million during the first six months of fiscal 2014.
  • Gross margin increased to 30.8% during the first six months of fiscal 2015, compared to 30.4% from the first six months of fiscal 2014.
  • Selling, general, and administrative expenses increased to $23.8 million, or 34.7% of net sales, for the first six months of fiscal 2015, compared to $20.5 million, or 29.5% of net sales, for the first six months of fiscal 2014.
  • Operating loss during the first six months of fiscal 2015 was $2.7 million, compared to operating income of $0.7 million, or 0.9% of net sales, during the first six months of fiscal 2014.
  • Loss from continuing operations during the first six months of fiscal 2015 was $1.2 million, compared to income from continuing operations of $2.6 million, or $0.18 per diluted common share, during the first six months of fiscal 2014.
  • Income from discontinued operations during the first six months of fiscal 2015 was $0.1 million, or $0.01 per diluted common share, compared to loss from discontinued operations of $0.1 million, during the first six months of fiscal 2014.
  • Net loss during the first six months of fiscal 2015 was $1.1 million, compared to net income of $2.5 million, or $0.17 per diluted common share, during the first six months of fiscal 2014.

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