Stocks Intraday Alert -Richardson Electronics, Ltd. (NASDAQ:RELL)
On Wednesday, Shares of Richardson Electronics, Ltd. (NASDAQ:RELL), gained -1.42% to $5.70. The 52-week range of the share price is from $5.66 – $7.24. The beta value for this stock stands at 0.72 points, while its earnings per share (EPS) was $-0.66. The company has total market capitalization of $71.55M and a total of 10.70M outstanding shares.
Richardson Electronics, Ltd. (RELL) recently stated financial results for its third quarter ended February 25, 2017. The Company also declared that its Board of Directors declared a $0.06 per share quarterly cash dividend.
Third Quarter Results:
Net sales for the third quarter of fiscal 2017 were $32.30M, a boost of 3.30%, and contrast to net sales of $31.30M in the prior year’s third quarter. Sales raised $1.80M for PMT, mainly because of higher sales from new technology partners in power conversion and RF and microwave components in addition to raised sales of specialty products sold into the semiconductor capital equipment market. This increase was partially offset by decreases of $0.40M in Richardson Healthcare and $0.40M in Canvys over the same period last year.
Gross margin rose to $10.70M, or 33.10% of net sales during the third quarter of fiscal 2017, contrast to $9.80M, or 31.20% of net sales during the third quarter of fiscal 2016. Margin improved as a percent of net sales mainly because of higher PMT and Canvys margins as a result of an improved product mix.
Operating expenses reduced to $12.0M for the third quarter of fiscal 2017, contrast to $12.50M for the third quarter of fiscal 2016. The decrease was because of reduced salaries, benefits and incentive compensation expenses. In addition, IT expenses were lower than in the third quarter of fiscal 2016.
As a result, operating loss for the third quarter of fiscal 2017 was $1.30M, contrast to an operating loss of $2.70M in the prior year’s third quarter.
Other expense for the both the third quarter of fiscal 2017 and fiscal 2016, counting foreign exchange, was $0.10M.
The income tax benefit of less than $0.10M during the third quarter of fiscal 2017 reflected an adjustment to the provision for foreign income taxes and no U.S. tax benefit because of the valuation allowance recorded against the net operating loss.
Net loss for the third quarter of fiscal 2017 was $1.40M, contrast to a net loss of $2.90M in the third quarter of 2016.
FINANCIAL SUMMARY – NINE MONTHS ENDED FEBRUARY 25, 2017:
- Net sales for the first nine months of fiscal 2017 were $99.50M, a decrease of 2.90%, and contrast to net sales of $102.40M during the first nine months of fiscal 2016. Sales reduced by $2.90M for Canvys, mainly because of declines in demand from key customers regarding market conditions.
- Gross margin rose to $31.90M, or 32.10% of net sales during the first nine months of fiscal 2017, contrast to $31.40M, or 30.70% of net sales during the first nine months of fiscal 2016, mostly as a result of an improved product mix.
- Operating expenses reduced to $37.70M for the first nine months of fiscal 2017, contrast to $37.90M for the first nine months of fiscal 2016. The first nine months of fiscal 2017 included $1.30M in severance expense associated with the reduction in work force during the second quarter of fiscal 2017, mostly offset by reduced salaries and incentive compensation expenses. In addition, IT expenses were nearly $0.80M lower than the first nine months of fiscal 2016.
- Operating loss during the first nine months of fiscal 2017 was $5.80M, contrast to an operating loss of $6.20M during the first nine months of fiscal 2016. After apart from the severance expense of $1.30M, the operating loss would have been $4.50M for the first nine months of fiscal year 2017.
- Other expense for the first nine months of fiscal 2017, counting foreign exchange, was $0.20M, contrast to other income of $0.40M for the first nine months of fiscal 2016.
- The income tax provision of $0.80M for the first nine months of fiscal 2017 reflected a provision for foreign income taxes and no U.S. tax benefit because of the valuation allowance recorded against the net operating loss.
- Net loss for the first nine months of fiscal 2017 was $6.80M, contrast to a net loss of $6.60M during the first nine months of fiscal 2016.
CASH DIVIDEND:
The Company also declared recently 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 May 24, 2017, to common stockholders of record on May 9, 2017.
Cash and investments at the end of the third quarter of fiscal 2017 were $60.20M contrast to $70.50M at the end of the fourth quarter of fiscal 2016. During the third 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 $65.60M on share repurchases, nearly $20.0M on acquisitions, nearly $19.0M on dividends and $5.40M on purchases of Richardson Healthcare equipment. Presently, there are 10.70M outstanding shares of common stock and 2.10M outstanding shares of Class B common stock.
OUTLOOK:
“We are happy with the increase in net sales and gross margin in addition to a decrease in operating expenses in the third quarter of fiscal 2017 as contrast to the third quarter of fiscal 2016,” said Edward J. Richardson, Chairman, Chief Executive Officer, and President. “We continue to focus on programs to grow revenue in the healthcare and power and microwave technologies markets, permanently take cost out of the organization, improve cash flow, and return the Company to profitability,” Mr. Richardson concluded.
Technical Analysis:
The average true range of the stock is recorded at 0.26 and the relative strength index of the stock stands 38.53. The stock price is going above to its 52-week low with +16.50% and down from its 52-week high with -19.68%.
The stock has shown weekly performance of -4.36% and monthly performance stands at -5.16%. The stock price is trading downbeat from its 200 days moving average with -6.02% and down from 50 days moving average with -5.77%.
Analyst recommendation for this stock stands at 5.00.