LAFOX, Ill. — (BUSINESS WIRE) — October 8, 2014 — Richardson Electronics, Ltd. (NASDAQ: RELL) today reported sales and earnings for its first quarter ended August 30, 2014. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.

Net sales for the first quarter of fiscal 2015 were $34.7 million, a 1.3% increase compared to net sales of $34.3 million in the prior year. The sales increase primarily reflects growth in the EDG business of 7.7% offset by a decline in the Canvys division. Gross margin increased slightly to $10.7 million, or 30.7% of net sales during the first quarter of fiscal 2015, compared to $10.2 million, or 29.8% of net sales during fiscal 2014. Operating expenses increased to $11.2 million during the first quarter of fiscal 2015, compared to $10.1 million during the fiscal 2014. The $1.1 million increase in expense is due to investments in new business units and new products to provide future growth along with incremental expenses associated with our new ERP system implementation. As a result, operating loss for the first quarter of fiscal 2015 was $0.5 million, compared to operating income for the first quarter of fiscal 2014 of $0.1 million.

Loss from continuing operations for the first quarter of fiscal 2015 was $0.1 million, compared to income from continuing operations of $2.0 million, or $0.14 per diluted common share during the first quarter of last year.

“We are pleased that EDG is beginning to see growth across multiple product lines and markets. Our solid vendor partnerships, coupled with the investments we are making in engineering, product development, and manufacturing capabilities, should enable us to continue increasing revenues in high growth niche markets.

We have now formalized Richardson Healthcare as a strategic business unit to focus on providing the highest quality replacement parts for diagnostic imaging equipment. Through our investments and focus on power management and healthcare, we believe our operating results will improve over the next several years as we leverage our global infrastructure and existing customer relationships,” said Edward J. Richardson, Chairman, Chief Executive Officer and President.

“We anticipate our second quarter sales should be in the range of $34 to $36 million. We remain focused on building our business to achieve sustainable growth over the long term,” said Mr. Richardson.

FINANCIAL SUMMARY ─ THREE MONTHS ENDED AUGUST 30, 2014

• Net sales for the first quarter of fiscal 2015 were $34.7 million, an increase of 1.3%, compared to net sales of $34.3 million during the first quarter of fiscal 2014.
• Gross margin increased to 30.7% during the first quarter of fiscal 2015, compared to 29.8% during the first quarter of fiscal 2014.
• Selling, general, and administrative expenses increased to $11.2 million, or 32.2% of net sales, for the first quarter of fiscal 2015, compared to $10.1 million, or 29.4% of net sales, for the first quarter of fiscal 2014.
• Operating loss during the first quarter of fiscal 2015 was $0.5 million, compared to an operating income of $0.1 million, or 0.4% of net sales during the first quarter of fiscal 2014.
• Loss from continuing operations during the first quarter of fiscal 2015 was $0.1 million, versus income from continuing operations of $2.0 million, or $0.14 per diluted common share, during the first quarter of fiscal 2014.
• Net loss during the first quarter of fiscal 2015 was $0.1 million, compared to net income of $2.0 million, or $0.14 per diluted common share, during the first quarter of fiscal 2014.

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 November 21, 2014, to common stockholders of record on November 7, 2014.

“Cash and investments at the end of our first quarter of fiscal 2015 were $133.2 million. As of today, the Company currently has 11.8 million outstanding shares of common stock and 2.1 million outstanding shares of Class B common stock. With our strong balance sheet, we are committed to returning value to our shareholders,” said Mr. Richardson.

CONFERENCE CALL INFORMATION

On Thursday, October 9, 2014, at 9:00 a.m. CT, Edward J. Richardson, Chairman and Chief Executive Officer, and Kathleen S. Dvorak, Chief Financial Officer, will host a conference call to discuss the Company's first quarter results for fiscal 2015. A question and answer session will be included as part of the call's agenda. To listen to the call, please dial (888) 339-2688 and enter passcode 35240832 approximately five minutes prior to the start of the call. A replay of the call will be available beginning at 11:00 a.m. CT on October 9, 2014, for seven days. The telephone numbers for the replay are (USA) (888) 286-8010 and (International) (617) 801-6888; passcode 87050145.