LAFOX, Ill., July 19, 2017 (GLOBE NEWSWIRE) -- Richardson Electronics, Ltd. (NASDAQ:RELL) today reported financial results for its fourth quarter and fiscal year ended May 27, 2017. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.

Fourth Quarter Results

Net sales for the fourth quarter of fiscal 2017 were $37.4 million compared to net sales of $39.6 million in the prior year’s fourth quarter. Sales decreased $1.3 million for PMT, primarily due to a large government sale in the fourth quarter of 2016. PMT sales were higher in power conversion and RF and microwave components as well as specialty products sold into the semiconductor capital equipment market. Sales decreased by $0.9 million for Richardson Healthcare and sales were flat for Canvys as compared to the fourth quarter of fiscal 2016.

Gross margin decreased to $12.0 million, or 32.1% of net sales during the fourth quarter of fiscal 2017, compared to $13.4 million, or 33.8% of net sales during the fourth quarter of fiscal 2016. Margin declined as a percent of net sales primarily due to an unfavorable product mix in both PMT and Richardson Healthcare.

Operating expenses decreased to $12.2 million for the fourth quarter of fiscal 2017, compared to $13.7 million for the fourth quarter of fiscal 2016. The decrease was due to reduced salaries, benefits and incentive compensation expenses relating to the reduction in force and changes to the incentive structure earlier in fiscal 2017. In addition, IT expenses were lower than in the fourth quarter of fiscal 2016. These reductions were partially offset by $0.2 million in higher research and development expenses for Richardson Healthcare.

In addition, there was a $0.2 million gain on the divestiture of the PACS Displays business completed in May 2017.

As a result, the company reported $39,000 of operating income for the fourth quarter of fiscal 2017, compared to an operating loss of $0.3 million in the prior year’s fourth quarter.

Other expense for the fourth quarter of fiscal 2017, primarily foreign exchange, was $0.2 million, compared to less than $0.1 million for the fourth quarter of fiscal 2016.

The income tax benefit of less than $0.1 million during the fourth quarter of fiscal 2017 reflected an adjustment to a tax reserve due to an expired statute of limitations, an adjustment to the provision for foreign income taxes and no U.S. tax benefit due to the valuation allowance recorded against the net operating loss.

Net loss for the fourth quarter of fiscal 2017 was $0.1 million, compared to a net loss of $0.2 million in the fourth quarter of 2016.

Fiscal 2017 Results

Net sales for fiscal 2017 were $136.9 million, a decrease of 3.6%, compared to net sales of $142.0 million for fiscal 2016.  Sales decreased by $2.9 million for Canvys, primarily due to declines in demand from key customers relating to market conditions.  Sales for PMT decreased by $1.3 million due to the large government sale in fiscal 2016 that was not repeated in fiscal 2017, partially offset by sales from new niche technology suppliers.  Sales for Richardson Healthcare decreased by $0.9 million as a result of lower sales in the PACS Displays business, which was divested on May 25, 2017. 

Gross profit decreased to $43.9 million, compared to $44.8 million for fiscal 2016. However, gross margin increased to 32.1% of net sales for fiscal 2017, compared to 31.6% of net sales for fiscal 2016, mostly as a result of an improved product mix.

Operating expenses decreased to $49.9 million for fiscal 2017, compared to $51.6 million for fiscal 2016.  Fiscal 2017 included $1.3 million in severance expense associated with the reduction in work force during the second quarter of fiscal 2017, which was more than offset by reduced salaries and incentive compensation expenses.  In addition, IT expenses were nearly $0.9 million lower than fiscal 2016.  These reductions were partially offset by $0.5 million in higher research and development expenses for Richardson Healthcare. 

Operating loss for fiscal 2017 was $5.8 million, compared to an operating loss of $6.6 million for fiscal 2016.  After excluding the severance expense of $1.3 million, the operating loss would have been $4.5 million for fiscal year 2017.

Other expense for fiscal 2017, including foreign exchange, was $0.4 million, compared to other income of $0.3 million for fiscal 2016.  

The income tax provision of $0.8 million for fiscal 2017 reflected a provision for foreign income taxes and no U.S. tax benefit due to the valuation allowance recorded against the net operating loss. 

Net loss for fiscal 2017 was $6.9 million, compared to a net loss of $6.8 million for fiscal 2016. 

CASH DIVIDEND

The Company also announced today that its Board of Directors declared a $0.06 quarterly dividend per share to holders of common stock and a $0.054 cash dividend per share to holders of Class B common stock. The dividend will be payable on August 24, 2017, to common stockholders of record on August 7, 2017.

Cash and investments at the end of the fourth quarter of fiscal 2017 were $64.2 million compared to $60.2 million at the end of the third quarter of fiscal 2017 and $70.5 million at the end of the fourth quarter of fiscal 2016. During the fourth quarter of fiscal 2017, the Company did not repurchase any shares of its common stock under the existing share repurchase authorization. Since the sale of RFPD, the Company has spent $65.6 million on share repurchases, nearly $20.0 million on acquisitions, approximately $20.0 million on dividends and $7.3 million on purchases of Richardson Healthcare equipment. Currently, there are 10.7 million outstanding shares of common stock and 2.1 million outstanding shares of Class B common stock.

OUTLOOK

“I am pleased to report an operating profit for the fourth quarter of fiscal 2017 as compared to a $0.3 million operating loss in the fourth quarter of fiscal 2016,” said Edward J. Richardson, Chairman, Chief Executive Officer, and President. “The improvement in overall financial results, including generating an additional $4.0 million in cash flow from operations, is a direct result of our ongoing initiatives aimed at growing revenue, permanently reducing expenses and improving cash flow. We will continue to operate conservatively and preserve cash for investments in areas that will help return the company to profitability,” Mr. Richardson concluded.

CONFERENCE CALL INFORMATION

On Thursday, July 20, 2017, at 9:00 a.m. CT, Edward J. Richardson, Chairman and Chief Executive Officer, and Robert J. Ben, Chief Financial Officer, will host a conference call to discuss the Company’s fourth quarter and fiscal year 2017 results. A question and answer session will be included as part of the call’s agenda. To listen to the call, please dial (888) 419-5570 and enter passcode 85102131 approximately five minutes prior to the start of the call. A replay of the call will be available beginning at 12:00 a.m. CST on July 21, 2017, for seven days. The telephone numbers for the replay are (USA) (888) 286-8010 and (International) (617) 801-6888; passcode 33573773.

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 which 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 July 29, 2016. 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 provider of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; flat panel detector solutions and replacement parts for diagnostic imaging equipment; and customized display solutions. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. The Company’s strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair through its global infrastructure. More information is available at www.rell.com .