Richardson Electronics Ltd (RELL) Reports Q1 Fiscal 2024 Earnings: Net Sales Down 22.2% YoY
Richardson Electronics Ltd (NASDAQ:RELL) reported Q1 fiscal 2024 net sales of $52.6 million, down 22.2% from the same period last year.
The company's gross margin was 32.8% of net sales, a decrease from 34.1% in Q1 fiscal 2023.
Operating income for Q1 fiscal 2024 was $1.5 million, compared to $8.8 million in Q1 fiscal 2023.
The company declared a $0.06 per share quarterly cash dividend.
Richardson Electronics Ltd (NASDAQ:RELL) released its Q1 fiscal 2024 earnings report on October 11, 2023. The company reported net sales of $52.6 million, a decrease of 22.2% from the same period last year. This decrease was primarily due to a reduction in sales to semiconductor wafer fab customers and a timing-related reduction in ultracapacitor module sales.
Financial Highlights
The company's gross margin was 32.8% of net sales for Q1 fiscal 2024, compared to 34.1% in the prior year's first quarter. The decrease was primarily due to a less profitable mix of sales. Operating income for the quarter was $1.5 million, compared to $8.8 million for the same period in fiscal 2023. The company's balance sheet remains strong with no debt outstanding, and cash and investments of $24.1 million as of September 2, 2023.
Income Statement Summary
Earnings per common share (diluted) were $0.09, compared to earnings per common share (diluted) of $0.45 in the first quarter of fiscal 2023. The income tax provision was $0.4 million or an effective tax rate of 23.7% for the first quarter of fiscal 2024, compared to an income tax provision of $2.1 million or an effective tax rate of 25.0% in last year's first quarter.
Company's Commentary
As expected, our first quarter results were challenged primarily by weaker demand from our semiconductor wafer fab customers and lower sales of power modules for existing wind turbines. While we expect the semiconductor wafer fab market to remain difficult until the third quarter of calendar 2024, we expect to see improving sales trends within our GES business in the coming quarters. Our confidence in our GES business is reflected in our current pipeline of existing projects and new sales opportunities globally. These opportunities include expected sales in the second half of this fiscal year for our power management systems for wind turbines and electric locomotives applications, said Edward J. Richardson, Chairman, Chief Executive Officer, and President.
Dividend Declaration
The Board of Directors of Richardson Electronics declared a $0.06 quarterly cash 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 29, 2023, to common stockholders of record as of November 10, 2023.
Balance Sheet Summary
As of September 2, 2023, the company had total assets of $195.5 million, with total liabilities of $35.2 million and total stockholders' equity of $160.4 million. The company had no outstanding debt and had cash and investments of $24.1 million.
This article first appeared on GuruFocus.
