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

LAFOX, Ill. — (BUSINESS WIRE) — April 8, 2015 — Richardson Electronics, Ltd. (NASDAQ: RELL), today reported sales and earnings for its third quarter ended February 28, 2015. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.

Net sales for the third quarter of fiscal 2015 were $33.5 million, a 1.8% increase compared to net sales of $32.9 million in the prior year. Sales for the Company's EDG and Richardson Healthcare ("Healthcare") businesses increased 4.2% and 3.5%, respectively, while sales for its Canvys division were down 7.4%, compared to the prior year's quarter. Gross margin increased to $9.8 million, or 29.3% of net sales during the third quarter of fiscal 2015, compared to $9.7 million, or 29.3% of net sales during the third quarter of fiscal 2014. Operating expenses were $12.6 million for the third quarter of fiscal 2015, compared to $10.5 million for the third quarter of fiscal 2014. Operating expenses for the third quarter include $1.5 million related to the Company's previously discussed IT implementation and expenses of $1.2 million related to its engineered solutions and healthcare growth initiatives. Operating loss for the third quarter of fiscal 2015 was $2.7 million, compared to an operating loss for the third quarter of fiscal 2014 of $0.9 million.

Loss from continuing operations for the third quarter of fiscal 2015 was $2.2 million, compared to a loss from continuing operations of $0.1 million, during the third quarter of fiscal 2014.

“Although our third quarter results are disappointing, we are continuing to invest in our foundation for future growth with the new IT platform and resources to build our Healthcare infrastructure. On March 1st, we began operating on our new global IT system. We have also made significant investments in our management and engineering teams, as well as investing in advanced equipment to execute our long-term strategy of delivering engineered solutions in both Healthcare and EDG,” said Edward J. Richardson, Chairman, Chief Executive Officer and President.

“Our fourth quarter sales should be in the range of $37 to $39 million. We anticipate that IT expense should begin to decline in FY16. We will continue to invest in strategies which create profitable long-term growth,” said Mr. Richardson.

FINANCIAL SUMMARY – THREE MONTHS ENDED FEBRUARY 28, 2015

  • Net sales for the third quarter of fiscal 2015 were $33.5 million, an increase of 1.8%, compared to net sales of $32.9 million during the third quarter of fiscal 2014.
  • Gross margin was 29.3% of net sales during the third quarter of both fiscal 2015 and 2014.
  • Selling, general, and administrative expenses increased to $12.6 million, or 37.5% of net sales, for the third quarter of fiscal 2015, compared to $10.5 million for the third quarter of fiscal 2014, or 32.0% of net sales. Operating expenses for the third quarter of fiscal 2015 include $1.5 million related to the Company's IT implementation and $1.2 million related to its engineered solution and healthcare growth initiatives.
  • Operating loss during the third quarter of fiscal 2015 was $2.7 million, compared to operating loss of $0.9 million, during the third quarter of fiscal 2014.
  • Loss from continuing operations during the third quarter of fiscal 2015 was $2.2 million, compared to loss from continuing operations during the third quarter of fiscal 2014 of $0.1 million.
  • Net loss during the third quarter of fiscal 2015 was $2.2 million, compared to net loss of $0.5 million, during the third quarter of fiscal 2014.

FINANCIAL SUMMARY – NINE MONTHS ENDED FEBRUARY 28, 2015

  • Net sales for the first nine months of fiscal 2015 were $102.0 million, a decrease of 0.6%, compared to net sales of $102.6 million during the first nine months of fiscal 2014.
  • Gross margin increased slightly to 30.3% during the first nine months of fiscal 2015, compared to 30.1% from the first nine months of fiscal 2014.
  • Selling, general, and administrative expenses increased to $36.4 million, or 35.6% of net sales, for the first nine months of fiscal 2015, compared to $31.1 million, or 30.3% of net sales, for the first nine months of fiscal 2014.
  • Operating loss during the first nine months of fiscal 2015 was $5.4 million, compared to operating loss of $0.2 million, during the first nine months of fiscal 2014.
  • Loss from continuing operations during the first nine months of fiscal 2015 was $3.4 million, compared to income from continuing operations of $2.5 million, or $0.17 per diluted common share, during the first nine months of fiscal 2014.
  • Net loss during the first nine months of fiscal 2015 was $3.3 million, compared to net income of $2.0 million, or $0.13 per diluted common share, during the first nine months of fiscal 2014.

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