10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2024

☐ 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 or other jurisdiction of
     incorporation or organization)

    (I.R.S. Employer
     Identification No.)

40W267 Keslinger Road, P.O. Box 393

LaFox, Illinois 60147-0393

(Address of principal executive offices)

Registrant’s telephone number, including area code: (630) 208-2200

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.05 Par Value	RELL	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller Reporting Company	☒
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of October 8, 2024, there were 12,331,320 outstanding shares of Common Stock, $0.05 par value and 2,049,238 outstanding shares of Class B Common Stock, $0.05 par value, which are convertible into Common Stock of the registrant on a share for share basis.

TABLE OF CONTENTS


		Page



Part I.	Financial Information

Item 1.	Financial Statements	2
	Unaudited Consolidated Balance Sheets	2
	Unaudited Consolidated Statements of Comprehensive Income	3
	Unaudited Consolidated Statements of Cash Flows	4
	Unaudited Consolidated Statement of Stockholders’ Equity	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22

Part II.	Other Information

Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
Exhibit Index		24
Signatures		25

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Richardson Electronics, Ltd.

Consolidated Balance Sheets

(in thousands, except per share amounts)


	Unaudited		Audited
	August 31, 2024		June 1, 2024
Assets
Current assets:
Cash and cash equivalents	$	23,035	$	24,263
Accounts receivable, less allowance for credit losses of $351 and $323, respectively		30,862		24,845
Inventories, net		110,994		110,149
Prepaid expenses and other assets		2,488		2,397
Total current assets		167,379		161,654
Non-current assets:
Property, plant and equipment, net		20,612		20,681
Intangible assets, net		1,582		1,641
Right of use lease assets		2,538		2,760
Deferred income tax assets		5,555		5,500
Other non-current assets		197		209
Total non-current assets		30,484		30,791
Total assets	$	197,863	$	192,445
Liabilities
Current liabilities:
Accounts payable	$	19,758	$	15,458
Accrued liabilities		15,403		15,404
Lease liabilities current		1,107		1,169
Total current liabilities		36,268		32,031
Non-current liabilities:
Deferred income tax liabilities		79		90
Lease liabilities non-current		1,431		1,591
Other non-current liabilities		1,021		781
Total non-current liabilities		2,531		2,462
Total liabilities		38,799		34,493
Stockholders’ Equity
Common stock, $0.05 par value; 12,331 and 12,254 shares issued and outstanding on August 31, 2024 and June 1, 2024, respectively		617		613
Class B common stock, convertible, $0.05 par value; 2,049 shares issued and outstanding on August 31, 2024 and June 1, 2024		102		102
Preferred stock, $1.00 par value, no shares issued		—		—
Additional paid-in-capital		73,315		72,744
Retained earnings		83,630		83,729
Accumulated other comprehensive income		1,400		764
Total stockholders' equity		159,064		157,952
Total liabilities and stockholders’ equity	$	197,863	$	192,445

Refer to the Notes to Unaudited Consolidated Financial Statements in Part 1, Item 1.

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)


	Three Months Ended
	August 31, 2024			September 2, 2023
Net sales	$	53,725		$	52,581
Cost of sales, exclusive of depreciation and amortization		37,299			35,317
Gross profit		16,426			17,264
Selling, general and administrative expenses, inclusive of depreciation and amortization		16,112			15,792
Gain on disposal of assets		(2	)		—
Operating income		316			1,472
Other (income) expense:
Interest income		(58	)		(71	)
Foreign exchange gain		(277	)		(97	)
Other, net		3			32
Total other income		(332	)		(136	)
Income before income taxes		648			1,608
Income tax provision		58			381
Net income		590			1,227
Foreign currency translation gain (loss), net of tax		636			(41	)
Comprehensive income	$	1,226		$	1,186

Net income per share:
Common shares - Basic	$	0.04		$	0.09
Class B common shares - Basic		0.04			0.08
Common shares - Diluted		0.04			0.09
Class B common shares - Diluted		0.04			0.08

Weighted average number of shares:
Common shares – Basic		12,200			12,171
Class B common shares – Basic		2,049			2,052
Common shares – Diluted		12,431			12,539
Class B common shares – Diluted		2,049			2,052

Refer to the Notes to Unaudited Consolidated Financial Statements in Part 1, Item 1.

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Cash Flows

(in thousands)


	Three Months Ended
	August 31, 2024			September 2, 2023
Operating activities:
Net income	$	590		$	1,227
Adjustments to reconcile net income to cash provided by operating activities:
Unrealized foreign currency gain		(382	)		(37	)
Depreciation and amortization		1,044			998
Inventory provisions		139			85
Share-based compensation expense		593			483

SEC Form 10-Q filed by Richardson Electronics Ltd.