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http://finance.yahoo.com/news/Richardson-Electronics-bw-14886420.html?.v=1
Buzz up! Print Related:Richardson Electronics Ltd.
LAFOX, Ill.--(BUSINESS WIRE)--Richardson Electronics, Ltd. (NASDAQ:RELL - News) today reported net sales for the third quarter ended February 28, 2009, of $110.3 million, a 20.6% decrease from net sales of $138.9 million for the third quarter of fiscal 2008. The net loss for the third quarter of fiscal 2009 was $11.4 million, compared to a net loss of $2.2 million in the prior year. The net loss of $11.4 million for the third quarter of fiscal 2009 includes $9.7 million of significant charges primarily due to the write-off of $5.8 million of software development costs as a result of the decision that it would be too costly and disruptive to proceed with the related system implementation. Excluding the $9.7 million of significant charges, net loss would have been $1.7 million. A complete reconciliation of these items is provided within this press release under the heading “Certain Non-GAAP Financial Information.”
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Gross margin was $23.7 million, or 21.5%, during the third quarter of fiscal 2009, which includes $2.0 million of expense for increased inventory reserves related to exiting certain markets and product lines, low-margin customers, and the analog to digital broadcast conversion. The gross margin percentage during the third quarter reflects the fact that sales within the Company’s higher-margin businesses, specifically the Electron Device Group and Canvys, declined at a faster rate than sales for the RF, Wireless and Power Division.
Selling, general, and administrative (“SG&A”) costs during the third quarter of fiscal 2009 were $27.7 million, or 25.1% of net sales. The SG&A costs for the third quarter of fiscal 2009 include $1.2 million of severance expense and $0.7 million of expense related to the write-off of a long-term note receivable. Excluding these items, SG&A for the third quarter would have been $25.8 million.
“Given our sales decline, we aggressively reduced our operating cost structure. We accelerated staffing reductions, acted upon underperforming business lines and customers, and reduced discretionary spending. We believe these actions, the majority of which are permanent, should lead to significantly improved financial performance,” said Edward J. Richardson, Chairman, Chief Executive Officer and President of Richardson Electronics, Ltd.
FINANCIAL SUMMARY ─ THREE MONTHS ENDED FEBRUARY 28, 2009
Net sales for the third quarter of fiscal 2009 were $110.3 million, down 20.6%, compared to net sales of $138.9 million during the third quarter of last year.
Gross margin as a percent of net sales decreased to 21.5% during the third quarter of fiscal 2009, compared to 22.5% during the third quarter of last year. The gross margin percent of 21.5% includes $2.0 million of additional inventory reserves recorded during the third quarter.
SG&A expenses decreased to $27.7 million during the third quarter of fiscal 2009, including $1.2 million of severance expense and $0.7 million of expense related to the write-off of a note receivable, compared to $32.0 million during the third quarter of last year.
Operating loss during the third quarter of fiscal 2009 was $9.7 million, compared to an operating loss of $0.7 million during the third quarter of last year.
Net loss during the third quarter of fiscal 2009 was $11.4 million versus a net loss of $2.2 million during the third quarter of last year.
FINANCIAL SUMMARY ─ NINE MONTHS ENDED FEBRUARY 28, 2009
Net sales for the first nine months of fiscal 2009 were $381.8 million, down 7.6%, compared to net sales of $413.3 million during the first nine months of last year.
Gross margin as a percent of net sales decreased slightly to 23.5% during the first nine months of fiscal 2009, compared to 23.6% during the first nine months of last year.
SG&A decreased to $84.1 million during the first nine months of fiscal 2009, compared to $93.3 million during the first nine months of last year.
Operating loss during the first nine months of fiscal 2009 was $0.3 million, compared to operating income of $4.4 million during the first nine months of last year.
Net loss during the first nine months of fiscal 2009 was $1.8 million, compared to a net loss of $3.2 million during the first nine months of last year.
FOCUS ON WORKING CAPITAL MANAGEMENT AND CASH FLOWS
Cash flows used in operating activities were $2.0 million during the third quarter of fiscal 2009, compared to cash flows used in operating activities of $0.4 million during the third quarter of last year.
“Despite the challenges of the current global economy and market conditions, we have maintained a strong cash position. Improvements in working capital, combined with stronger financial performance will allow us to return positive operating cash flow during the fourth quarter,” said Kathleen S. Dvorak, Executive Vice President and Chief Financial Officer.
During the third quarter, the Company did not repurchase any shares of its common stock under the share repurchase program. The share repurchase program was approved by the Company’s Board of Directors in January 2009. The share repurchase program does not have an expiration date and may be cancelled at any time.
OUTLOOK
“Despite the weakening economy, our focus for the fourth quarter and for fiscal 2010 will continue to be on capturing new sales opportunities while keeping tight controls on expenses. We believe that our lower cost structure positions us to significantly improve profitability as the industry and overall economic conditions improve,” concluded Mr. Richardson.
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