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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended May 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File No. 0-12906
RICHARDSON ELECTRONICS, LTD.
(Exact name of registrant as specified in its charter)
Delaware 36-2096643
(State 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: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.05 par value
(Cover page continued)
(1)
Portions of the 2000 Annual Report to Stockholders of registrant for fiscal
year ended May 31, 2000 are incorporated in Parts I, II, and IV of this
Report. Portions of the registrant's Proxy Statement dated September 5, 2000
for the Annual Meeting of Stockholders scheduled to be held October 3, 2000,
which will be filed pursuant to Regulation 14(A), are incorporated by
reference in Part III of this Report. Except as specifically incorporated
herein by reference, the above mentioned Annual Report to Stockholders and
Proxy Statement are not deemed filed as part of this report.
The exhibit index is located at pages 17 through 24.
(2)
PART I
Item 1. Business
Introduction and Business Strategy
Richardson Electronics, Ltd. is a specialized global distributor serving the
RF and wireless communications, industrial power conversion, medical imaging,
security and display systems markets. The Company provides "engineered
solutions" to its customers through product manufacturing, systems
integration, prototype design and assembly, testing and logistics. The
Company's products include radio frequency ("RF") and microwave components,
power semiconductors, electron tubes, microwave generators, data display
monitors and electronic security products and systems. These products are
used to control, switch or amplify electrical power or signals, or as
display, recording or alarm devices in a variety of industrial,
communication, security and medical imaging applications.
The Company's objective is to be the preeminent international supplier of
niche electronic components to industrial and commercial users. To fulfill
this objective, the Company employs the following basic strategies:
Capitalize on Engineering and Manufacturing Expertise. Richardson believes
that its success is largely attributable to its core engineering and
manufacturing competency and skill in identifying cost competitive solutions
for its customers. Historically, the Company's primary business was the
distribution and manufacture of electron tubes and it continues to be a major
supplier of these products. Today, the Company out-sources manufacturing
requirements for products sold in volume, but retains its engineering and
manufacturing expertise. Richardson uses this expertise to identify
engineered solutions for customers' applications, not only in electron tube
technology but also in each product area in which it specializes.
Approximately 45% of the Company's sales are derived from products the
Company electronically or physically modifies or sells under its own brand
names.
Specialize in Selected Niche Markets. The Company specializes in selected
niche markets that demand technical service and where price is not the
primary competitive factor. Richardson seldom competes against commodity
distributors. In many parts of its business, the Company's principal
competitors are not other distributors but rather original equipment
manufacturers ("OEMs"). The Company offers engineered solutions to its
customers including the design, prototype manufacturing and/or electrical or
mechanical modification and distribution of approximately 80,000 products
ranging in price from $1 to $100,000 each. The Company estimates that over
60% of its sales are attributable to products intended for replacement and
repair applications, in contrast to use as components in new original
equipment.
Leverage Customer Base. The Company strives to grow by offering new products
to its existing customer base. The Company has followed the migration of its
customers from electron tubes to newer technologies, primarily
semiconductors. Sales of products other than electron tubes represented 76.4%
of sales in the year ended May 31, 2000, compared to 50.0% five years ago.
(3)
Maintain Superior Customer Service. The Company maintains more than 300,000
part numbers in its inventory database. More than 80% of all orders received
by 6:00 p.m. are shipped complete the same day.
Provide Global Service. Richardson has kept pace with the globalization of
the electronics industry and addresses the growing demands in lesser
developed countries for modern business and industrial equipment, related
parts, service and technical assistance. Today, the Company's operations are
worldwide in scope through 70 sales offices, including 41 located outside of
the United States. In fiscal 2000, 47.8% of sales were to customers based
outside of the United States.
Maintain State-of-the-Art Information Systems. Through a global information
systems network, all offices have real-time access to the Company's database
including customer information, product cross-referencing, market analysis,
stock availability and quotation activity. Customers have on-line access to
product information and purchasing capability via Richardson's web site. The
Company offers electronic data interchange to those customers requiring this
service.
Growth Strategy
Richardson's long range plan for growth and profit maximization is defined in
three broad categories, discussed in the following paragraphs:
Internal Growth. The Company believes that, in most circumstances, internal
growth provides the best means of expanding its business. Both geographic and
product line expansion have and will continue to be employed. In many
instances, Richardson's original product line, electron tubes, provides the
foundation for establishing new customer relationships, particularly in
developing countries where older technologies are still predominately
employed. From that base, the Company can identify and capitalize on new
market opportunities for its other products. Over the last five years the
Company has tripled the number of sales offices to 70 to support its new
business development efforts.
Expansion of the Company's product offerings is an on-going program. Of
particular note, the following areas have recently generated significant
sales gains: amplifiers, transmitters and pallets for wireless communication:
microwave generators; medical imaging components; flat panel displays and
monitors; and CCTV security systems.
Continuous Operational Improvement. During the last five years, the Company
embarked on a vigorous program to improve operating efficiencies and asset
utilization. Incentive programs were revised to heighten Richardson managers'
commitment to these goals. As a result, selling, general and administrative
expenses as a percent of sales were reduced from 23.4% in fiscal 1995 to
20.0% in 2000. Inventory turns improved from 1.7 to 2.9 over the same period.
Additional programs are ongoing, including a significant investment in a full
suite of enterprise resource planning modules scheduled for installation over
the next two years. The Company believes European logistics and stocking
levels may offer additional opportunities for cost savings.
Acquisitions. The Company has a successful record of acquiring and
integrating businesses. Since 1980, the Company has acquired 31 companies or
significant product lines. The Company evaluates acquisition opportunities on
an ongoing
(4)
basis. The Company's acquisition criteria require that a target provide
either (i) product line growth opportunities permitting Richardson to
leverage its existing customer base or (ii) additional geographic coverage of
Richardson's existing product offerings. In the last five years, the
Company's acquisition pace has accelerated with the purchases of 14
businesses including, most significantly, Tubemaster (medical imaging -
Medical), Compucon (interconnect devices for RF applications - Wireless), TRL
Engineering (amplifier pallet design and engineering - Wireless), Pixelink
and Eternal Graphics (dispay systems integration - Display) and Burtek,
Security Service International and Adler Video (security systems - Security).
Strategic Business Units
The marketing, sales, product management and purchasing functions of
Richardson are organized in individual strategic business units with specific
financial targets. Over the past several years, the Company has been
transitioning the organization to a market-focused strategy from a product-
driven approach. By the end of fiscal 2000, this transition was complete and
the strategic business units were renamed to be consistent with the market
served: RF & Wireless Communication Group ("Wireless"), Industrial Power
Group ("Industrial"), Medical Systems Group ("Medical"), Display Systems
Group ("Display"), and Security Systems Division ("Security"). Common
logistics, information systems, finance, legal, human resources and general
administrative functions support the entire organization. The Company's
support organization is highly centralized with most corporate functions
located at its administrative headquarters and principal stocking facility in
LaFox, Illinois.
RF & Wireless Communications Group
The RF & Wireless Communications Group serves the rapidly expanding global RF
and wireless communications market and the radio and television broadcast
industry. Our product and sales team of RF and wireless engineers assists our
customers in designing circuits, selecting cost effective components,
planning reliable and timely supply, prototype testing and assembly.
Growth in wireless applications is accelerating as the demand for all types
of wireless communication gains in popularity. In addition to voice
communication, the demand for high-speed data transmission will require major
investments in both system upgrades and new systems to handle broader
bandwidth.
Richardson supports these growth opportunities by partnering with many of the
key RF and wireless component manufacturers. A key to our success in
relationships with our vendors is the visibility we give them to worldwide
demand for their current products and products in development. Richardson's
global information system includes programs that our sales force use to
forecast product demand by potential design opportunity based on dialog with
our customers. This information is shared with our product suppliers to
assist them in predicting near and long-term demand and product life cycles.
Richardson has global distribution agreements with such leading semiconductor
suppliers as Anadigics, Ericsson, M/A-COM, Motorola and Stanford
Microdevices. In addition, Richardson has partnerships with many niche RF and
wireless suppliers to form the most comprehensive RF and wireless resource in
the industry.
(5)
The following is a description of Wireless's major product groups:
RF and Microwave Devices - a wide variety of components, such as mixers,
switches, amplifiers, oscillators and RF diodes, which are used in
telecommunications and other related markets, such as broadcast, cable TV,
cellular and PCS, satellite, wireless LANs and various other wireless
applications.
Interconnect Devices - passive components used to connect all types of
electronic equipment including those employing RF technology.
Broadcast Equipment - video products, camera tubes, klystrons, transmitters
and accessories used for radio and television broadcasting.
Richardson participates in RF and wireless applications and markets
throughout the world. In the past year, we increased our market share in RF
and wireless applications used in industrial, broadcast, avionics and
cellular markets. In particular, in cellular applications, the infrastructure
has lagged the 35 percent growth rate of the subscriber market. We expect to
benefit as the infrastructure is built out to meet subscriber demand. We are
also expanding in the broadband and fiber optic markets as they continue to
gain popularity. The rollout of new third generation networks will also
require significant investment over the next three years. Richardson's RF and
Wireless Communication Group is in an excellent position to participate in
each of these growing markets.
Industrial Power Group
Richardson serves a broad range of customers including the steel, automotive,
textile, plastics, semiconductor, marine and avionics industries. Our
engineering skill and products are used in countless applications, such as
motor speed controls, industrial heating, laser technology, semiconductor
manufacturing equipment, radar and welding.
Historically, two separate sales teams focused on different product lines:
vacuum tubes or solid state. The recent reorganization to a market focus
combined the two sales teams into one. The realignment has been extremely
well received; not only by our industrial customers, but also our vendors who
value the dedication we are placing on the industrial market.
We are committed to a specialized strategy of providing engineered solutions
for our customers. With our technical expertise and value-added capabilities,
we offer the customer design services, lower-cost product alternatives,
complementary products, system integration, component modification and
assembly. This broad array of services supports both OEM's and end-users.
In the past several years, we have expanded our offerings in power conversion
technology to include designing new systems. Today, Richardson is a leading
systems integrator and supplier of components and assemblies for microwave
equipment used to make semiconductors. Designing our products into new OEM
applications also increases the probability of our participation in after-
market sales.
(6)
In fiscal 2000, we succeeded in expanding existing franchise agreements as
well as attracting new vendors. APT, CPI, Jennings and Westcode expanded our
territories and Altec, Bussmann, Ferraz, Illinois Capacitor, Nissei-
Arcotronics, and Ohmite were added to our line card. We also represent Burle,
Hitachi, Powerex, Toshiba, Triton and Varian. Collectively, this group
represents the key manufacturers of industrial electronic components in the
world.
The following is a description of Industrial's major product groups:
Power Semiconductors - solid-state, high-frequency power amplifiers used in
broadcast, cellular, aircraft and satellite communications and in many types
of electronic instrumentation. In many circumstances, the customer prefers to
acquire the complete assembly as opposed to the discrete transistor.
Accordingly, the Company expanded its product offering to include design and
prototype assembly of amplifiers and pallets incorporating RF power
transistors.
Silicon Controlled Rectifiers ("SCRs"), Heat Sink Assemblies and Power
Semiconductor Modules - components used in many industrial control
applications because of their ability to switch large amounts of power at
high speeds. These silicon power devices are capable of operating at up to
4,000 volts at 2,000 amperes.
High Voltage and Power Capacitors - devices used in industrial, avionics,
medical and broadcast applications for filtering, high-current by-pass, feed-
through capacitance for harmonic attenuation, pulse shaping, grid and plate
blocking, tuning of tank circuits, antenna coupling and energy discharge.
Power Amplifier / Oscillator Tubes - vacuum or gas-filled tubes used in
applications where current or voltage amplification and/or oscillation is
required. Applications include induction heating, diathermy equipment,
communications and radar systems and power supplies for voltage regulation or
amplification.
Microwave Generators - devices that incorporate magnetrons, which are high
vacuum oscillator tubes used to generate energy at microwave frequencies. The
pulsed magnetron is predominantly used to generate high-energy microwave
signals for radar applications. Magnetrons are also used in vulcanizing
rubber, food processing, packaging, wood / glue drying, in the manufacture of
wafers for the semiconductor industry and other industrial heating
applications such as microwave ovens and by the medical industry for
sterilization and cancer therapy.
Hydrogen Thyratrons - electron tubes capable of high speed and high voltage
switching. They are used to control the power in laser and radar equipment
and in linear accelerators for cancer treatment.
Thyratrons and Rectifiers - vacuum or gas-filled tubes used to control the
flow of electrical current. Thyratrons are used to control ignitrons,
electric motor speed controls, theatrical lighting and machinery such as
printing presses and various types of medical equipment. Rectifiers are used
to restrict electric current flow to one direction in power supply
applications.
(7)
Ignitrons - mercury pool tubes used to control the flow of large amounts of
electrical current. Their primary applications are in welding equipment,
power conversion, fusion research and power rectification equipment.
Geographically, our vacuum tube revenue base is spread broadly over the
world, while solid state sales are concentrated in North America. This
imbalance represents a significant opportunity. With the reorganization, a
major initiative is to capitalize on our existing worldwide customer
relationships and grow the solid state segment of the business outside North
America.
Medical Systems Group
Richardson's serves the medical imaging market, providing system upgrades and
integration services in addition to a wide range of diagnostic imaging
components. Our team of medical imaging specialists and display product
professionals support medical service dealers and hospital maintenance
professionals throughout the world.
The Company's broad range of products cover applications for conventional,
angiographic, cardiac catherizations and computed tomography X-ray systems,
as well as magnetic resonance imaging and ultrasound systems. Glassware
products include X-ray tubes, medical imaging intensifiers and camera tubes.
Other products include high-resolution color and monochrome displays, X-ray
generators, cable assemblies and test equipment. We support the customers'
requirements for imaging products from such well-known sources as Comet,
Dunlee, InfiMed, Thomson and Toshiba and, for display products, Barco,
Clinton, Dome Imaging, Image Systems, NEC, and Philips-FIMI and Siemens.
The following is a description of Medical's major product groups:
CT and X-Ray Tubes - glass and glass/metal vacuum tubes which generate high-
frequency radiation for use in medical diagnostic imaging including
fluoroscopy and computer-aided tomography ("CAT-scan").
Image Intensifiers - glass/metal vacuum tube that converts x-ray level
radiation into light-level energy used in fluoroscopy, angio, and digital
imaging applications.
High Resolution Displays - an integral component of Picture and Archiving
Communications Systems (PACS), displays are used in diagnostic and non-
diagnostic imaging to display the digital image generated from CT, MRI,
radiography and other digital modalities.
The Medical Systems Group reloads X-ray tubes and image intensifiers in
Dallas, Texas, Richmond, Virginia and Amsterdam, Holland. Our Richmond
facility also provides engineering expertise to customize medical imaging
upgrades and to integrate various imaging components into packaged "sub-
systems." Our reloaded X-ray tubes include Dunlee, GE, Philips, Shimatzu,
Siemens and Toshiba. Remanufactured or upgraded image intensifier systems
include GE, Philips, Picker and Siemens equipment. All reloaded or
remanufactured products meet or exceed manufacturers' specifications at a
substantial cost savings to the customer.
(8)
Among Richardson's newest offerings is RELLmed, an integrated imaging
solution that facilitates 100 percent compatibility between imaging hardware.
RELLmed bundles fully configured computers, video controller cards and high-
resolution display monitors into a single operating system that can be
custom-designed to meet specific requirements.
Display Systems Group
Richardson provides system integration and custom product solutions for the
public information display, financial, point-of-sale and general data display
markets. The customer base includes organizations from virtually all areas of
business, including, stock exchanges, airlines, and fast food franchises, in
addition to all types of industrial users of data display devices.
The Display Systems Group's historical growth and success can be attributed
to addressing a niche market as the unique source for Cathode Ray Tube
("CRT") replacement products. The Company has developed an extensive cross
reference capability, enabling Richardson to identify replacement tubes for
more than 200,000 original manufacturers' model or part numbers and to source
and inventory replacement tubes.
While CRT's are still an important part of the business, future growth will
be in the custom design and integration of flat panel displays and monitors.
Our technical sales team assists customers in developing solutions for data
display issues such as, space limitations, special mounting, glare,
ruggedness, touch screen requirements and many others. This business grew by
more than 100 percent in fiscal 2000.
Richardson has long-standing relationships with key manufacturers including
Clinton, Fujitsu, NEC/Mitsubishi, Panasonic, Philips-FIMI, Siemens and Sony,
among others. The Company has design and assembly operations in Chicago,
Illinois and Boston, Massachusetts and stocking locations in Chicago and
Lincoln, England.
The following is a description of Display's major product groups:
Cathode Ray Tubes - vacuum tubes that convert an electrical signal into a
visual image to display information on computer terminals or televisions.
CRTs are used in various environments, including hospitals, financial
institutions, airports and numerous other applications wherever large user
groups share electronic data visually. The product line includes both
monochrome and color tubes.
Data Display Monitors - peripheral components incorporating a color or
monochrome CRT capable of displaying an analog or digitally generated video
signal.
Flat Panel Displays - display monitors incorporating a liquid crystal display
or plasma panel, rather than a CRT, typically a few inches in depth and
ranging from 10" to 42" measured diagonally.
Security Systems Division
Richardson is a full-line distributor of closed circuit television ("CCTV"),
fire, burglary, access control, sound and communication products and
accessories. We specialize in CCTV design-in support and have particular
(9)
expertise in the industry's fastest growth area - applications employing
digital technology. Security Systems has 24 stocking locations in the world
with 17 in North America, 4 in Europe and 3 in Latin America.
Richardson supports its worldwide customer base with products from more than
100 manufacturers including such well-known names as Aiphone, Mitsubishi,
Panasonic, Paradox, Pelco, Sanyo, and Sony. In addition, the Company carries
its own private label brand, National Electronics.
The Company serves its customers through a 100 person direct sales force
averaging more than eight years of experience, a 150 page catalog and a web
site, www.cctvnet.com.
The following is a description of SSD's major product groups:
CCTV Products - including cameras, lenses, monitors, scanners, time lapse
recorders and associated accessories, are used in surveillance applications
and for monitoring hazardous environments in the workplace.
Burglar and Fire Detection Systems - devices used to detect unauthorized
access to an area or the presence of smoke or fire.
Commercial Sound Systems - sound reproduction components used in background
music, paging and telephonic interconnect systems.
The security systems industry is moving to wireless technology and digital
imaging. Richardson is at the forefront of this transition, developing new
products under the National brand, including state-of-the-art equipment such
as hard disk recording, Internet based transmission, covert applications,
speed dome applications and telephone-control-based CCTV systems.
Distribution and Marketing
The Company purchases RF and power semiconductors, vacuum tubes, monitors and
flat panel displays, and electronic security products and systems from
various sources, including Advanced Power Technology, Ad-Tech Industries,
ANADIGICS, Clinton Electronics, Communication and Power Industries ("CPI"),
Covimag, Dunlee, Ericsson, FIMI, Fujitsu, Gasser & Sons, General Electric, Hi
Sharp, Huber & Suhner, Jennings, KDI Electronics, Litton, M/A-COM, Marconi,
Motorola, MPD, New Japan Radio, Orion/Daewoo, NEC Tecnologies, Panasonic,
Paradox, Pelco, Philips, Powerex, QMI, RF Prime, Samsung, Samtell, Sanyo, SCT
Societe des Ceramiques, Semtech, Sensormatic, Sony, Stanford Microdevices,
Stellex Microwave Systems, Teletube, THOMSON, Toshiba, Triton Services,
United Monolithic Semiconductor, Varian Associates and Watkins Johnson.
In 1991, the Company settled an antitrust suit with the U.S. Department of
Justice related to its participation in the electron tube manufacturing
industry. As a consequence, certain of its manufacturing activities became
uneconomic and were divested or discontinued, including the sale of the
Company's former Brive, France manufacturing operation to local management.
Formal transfer of ownership occurred in January 1995. Under an evergreen
agreement, the Company and Covimag negotiate a purchase commitment on an
annual basis. Covimag is managed by the same individuals previously employed
by the Company at this facility. Covimag is highly dependent on Richardson,
which is its primary customer. Settlement of purchases under the contract is
at standard terms. Except for the supply contract, Richardson has no other
financial commitment to or from Covimag. Relationships under the supply
contract are believed by the Company to be satisfactory.
(10)
In addition to the agreement with Covimag, the Company has marketing
distribution agreements with various manufacturers in the electron tube,
semiconductor and CCTV industries. The most significant distributor agreement
is with CPI under which the Company is the exclusive distributor of power
grid tubes throughout the world, with the exception of the United States and
certain Eastern European countries. In these areas, however, the Company
remains the only CPI stocking distributor.
Customer orders are taken by the regional sales offices and generally
directed to one of Richardson's principal distribution facilities in LaFox,
Illinois; Houston, Texas; Vancouver, British Columbia; or Lincoln, England.
There are 33 additional stocking locations throughout the world. The Company
utilizes a sophisticated data processing network that provides on-line, real-
time interconnection of all sales offices and central distribution
operations, 24 hours per day, seven days per week. Information on stock
availability, cross-reference information, customers and market analyses are
instantly obtainable throughout the entire distribution network.
Manufacturing
The Company distributes its proprietary products principally under the trade
names "National," "Cetron," "RF Gain", 'Amperex." and "MONORAY".
Approximately 23% of the Company's sales are from products it manufactures or
modifies through value-added services. The Company also sells products under
these brand names made by independent manufacturers to the Company's
specifications.
The products currently manufactured by the Company, or subcontracted on a
proprietary basis for the Company, include RF amplifiers, transmitters and
pallet assemblies thyratrons and rectifiers, power tubes, ignitrons,
microwave generators, electronic display tubes, phototubes, SCR assemblies
and spark gap tubes. Richardson reloads and remanufactures medical x-ray
tubes. The materials used in the manufacturing process consist of glass bulbs
and tubing, nickel, stainless steel and other metals, plastic and metal
bases, ceramics and a wide variety of fabricated metal components. These
materials generally are readily available, but some components may require
long lead times for production and some materials are subject to shortages or
price fluctuations based on supply and demand.
Employees
As of May 31, 2000, the Company employed 990 individuals on a full-time
basis. Of these, 583 are located in the United States, including 73 employed
in administrative and clerical positions, 411 in sales and distribution and
99 in
(11)
value-added and product manufacturing. The Company's international
subsidiaries employ 407 individuals engaged in administration, sales,
distribution, manufacturing and value-added operations. All of Richardson's
employees are non-union. The Company's relationship with its employees is
considered to be good.
Competition
Richardson believes that, on a global basis, it is a significant distributor
of RF and power semiconductors and subassemblies, electron tubes, CRTs and
security systems. For many of its product offerings, the Company competes
against the OEM for sales of replacement parts and system upgrades to service
existing installed equipment. In addition, the Company competes worldwide
with other general line distributors and other distributors of electronic
components.
Patents and Trademarks
The Company holds or licenses certain manufacturing patents and trademark
rights, including the trademarks "National," "Cetron" and "Amperex." The
Company believes that although its patents and trademarks have value, they
will not determine the Company's success, which depends principally upon its
core engineering capability, marketing technical support, product delivery
and the quality and economic value of its products.
Item 2. Properties
The Company's corporate facility and largest distribution center is owned by
the Company and is located on approximately 300 acres in LaFox, Illinois,
consisting of approximately 255,000 square feet of manufacturing, warehouse
and office space. Richardson also owns a building containing approximately
45,000 square feet of warehouse space on 1.5 acres in Geneva, Illinois. Owned
facilities outside of the United States are located in England, Spain and
Italy.
The Company also maintains leased branch sales offices in or near major
cities throughout the world, including 41 locations in North America, 14 in
Europe, 11 in the Far East / Pacific Rim and 4 in Latin America. The Company
leases production facilities in Texas, Virginia and the Netherlands for its
medical tube reloading operations.
Item 3. Legal Proceedings
The Company is a defendant in Panache Broadcasting of Pennsylvania v.
Richardson Electronics, Ltd., et. al., in United States District Court,
Northern District of Illinois, filed in 1990. The complaint is a class action
for purposes of liability determination on behalf of all persons and
businesses in the United States who purchased electron power tubes
encompassed by the VASCO joint venture of the defendants from one or more of
the defendant corporations at any time between February 26, 1986 and May 13,
1999. The complaint alleges antitrust violations and seeks treble damages,
injunctive relief and attorneys fees. The Company has denied the material
allegations. The case remains primarily in the preliminary discovery stage.
From time to time the Company is involved in other litigation arising in the
normal course of its business which is not expected to have a material
adverse effect on the Company.
(12)
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of stockholders, through the solicitation
of proxies or otherwise, during the fourth quarter of the fiscal year ended
May 31, 2000.
(13)
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
Incorporated herein by reference to pages 18 (for dividend payments) and 30
(for market data) of the Company's 2000 Annual Report for the fiscal year
ended May 31, 2000 (Annual Report).
Item 6. Selected Financial Data
Incorporated herein by reference to page 12 of the Annual Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Incorporated herein by reference to pages 13 to 16 of the Annual Report.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Investors should consider carefully the following risk factors, in addition
to the other information included and incorporated by reference in this
annual report on Form 10-K. All statements other than statements of
historical facts included in this report are statements that constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934. The
words "expect," "estimate," "anticipate," "predict," "believe" and similar
expressions and variations thereof are intended to identify forward-looking
statements. Such statements appear in a number of places in this report and
include statements regarding the intent, belief or current expectations of
the Company, its directors or its officers with respect to, among other
things: (i) trends affecting the Company's financial condition or results of
operations; (ii) the Company's financing plans; (iii) the Company's business
and growth strategies, including potential acquisitions; and (iv) other plans
and objectives for future operations. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and
involve risks and uncertainties and that actual results may differ materially
from those predicted in the forward-looking statements or which may be
anticipated from historical results or trends. In addition to the information
contained in the Company's other filings with the Securities and Exchange
Commission, factors which could affect future performance include, among
others, the following:
* Competitive pressures may increase or change through industry
consolidation, entry of new competitors, marketing changes or otherwise.
There can be no assurance that the Company will be able to continue to
compete effectively with existing or potential competitors.
(14)
* Technological changes may affect the marketability of inventory on hand.
* General economic or business conditions, domestic and foreign, may be less
favorable than expected, resulting in lower sales or lower profit margins
than expected.
* Changes in relationships with customers or vendors, the ability to develop
new relationships or the business failure of several customers or vendors may
affect sales or profitability.
* Political, legislative or regulatory changes may adversely affect the
businesses in which the Company operates.
* Changes in securities markets, interest rates or foreign exchange rates may
adversely affect the Company's performance or stock price.
* The failure to obtain or retain key executive or technical personnel could
affect future performance.
* The Company's growth strategy includes expansion through acquisitions.
There can be no assurance that the Company will be able to successfully
complete further acquisitions or that past or future acquisitions will not
have an adverse impact on the Company's operations.
* The potential future sale of Common Stock shares, possible anti-takeover
measures available to the Company, dividend policies, as well as voting
control of the Company by Edward J. Richardson, Chairman of the Board and
Chief Executive Officer may affect the stock price.
* The continued availability of financing on favorable terms can not be
assured.
Item 8. Financial Statements and Supplementary Data
Incorporated herein by reference to pages 17 through 28 of the Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
No event has occurred within the 24 month period prior to the date of the
Company's most recent financial statements, which would require disclosure
under Item 9 of this Report.
(15)
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning Directors and Executive Officers of the Company is
contained in the Company's Proxy Statement to be used in connection with its
Annual Meeting of Stockholders scheduled to be held October 3, 2000, under
the captions "ELECTION OF DIRECTORS - Information Relating to Directors,
Nominees and Executive Officers", "ELECTION OF DIRECTORS - Affiliations" and
"SECTION 16 FILINGS", which information is incorporated herein by reference.
Item 11. Executive Compensation
Incorporated herein by reference is information concerning executive
compensation contained in the Company's Proxy Statement to be used in
connection with its Annual Meeting of Stockholders scheduled to be held
October 3, 2000, under the captions "ELECTION OF DIRECTORS - Directors
Compensation" and "EXECUTIVE COMPENSATION", except for captions "REPORT ON
EXECUTIVE COMPENSATION" and "PERFORMANCE GRAPH".
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information concerning security ownership of certain beneficial owners and
management is contained in the Company's Proxy Statement to be used in
connection with its Annual Meeting of Stockholders scheduled to be held
October 3, 2000, under the caption "ELECTION OF DIRECTORS - Information
Relating to Directors, Nominees and Executive Officers" and "PRINCIPAL
STOCKHOLDERS", which information is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related transactions is
contained in the Company's Proxy Statement to be used in connection with its
Annual Meeting of Stockholders scheduled to be held October 3, 2000, under
the caption "EXECUTIVE COMPENSATION - Compensation Committee Interlocks and
Insider Participation", which information is incorporated herein by
reference.
(16)
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following consolidated financial statements of the registrant and
its subsidiaries included on pages 17 through 28 of the Annual Report are
incorporated herein by reference:
Filing Method
Report of Independent Accountants E
1. FINANCIAL STATEMENTS:
Consolidated Balance Sheets - May 31, 2000 and 1999 E
Consolidated Statements of Operations - Years ended
May 31, 2000, 1999 and 1998 E
Consolidated Statements of Cash Flows - Years ended
May 31, 2000, 1999 and 1998 E
Consolidated Statements of Stockholders' Equity -
Years ended May 31, 2000, 1999 and 1998 E
Notes to Consolidated Financial Statements E
The following consolidated financial information for the fiscal years
2000, 1999 and 1998 is submitted herewith:
2. FINANCIAL STATEMENT SCHEDULE:
II. Valuation and Qualifying Accounts E
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore,
have been omitted.
(b) REPORTS ON FORM 8-K.
None.
(17)
(c)EXHIBITS
Filing Method
3(b) By-laws of the Company, as amended, incorporated
by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1997. NA
4(a) Restated Certificate of Incorporation of the Company,
incorporated by reference to Appendix B to the
Proxy Statement / Prospectus dated
November 13, 1986, incorporated by reference to the
Company's Registration Statement on Form S-4,
Commission File No. 33-8696. NA
4(b) Specimen forms of Common Stock and Class B Common
Stock certificates of the Company incorporated by
reference to Exhibit 4(a) to the Company's
Registration Statement on Form S-1, Commission File
No. 33-10834. NA
4(c) Indenture between the Company and Continental
Illinois National Bank and Trust Company of Chicago
(including form of 71/4% Convertible Subordinated
Debentures due December 15, 2006) incorporated by
reference to Exhibit 4(b) to the Company's Annual
Report on Form 10-K for the fiscal year ended
May 31, 1987. NA
4(c)(1)First Amendment to the Indenture between the
Company and First Trust of Illinois, a National
Association, as successor to Continental Illinois
National Bank and Trust Company of Chicago, dated
February 18, 1997, incorporated by reference to
Exhibit 4(a) to the Company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1997. NA
4(d) Indenture between the Company and American National
Bank and Trust Company, as Trustee, for 8 1/4%
Convertible Senior Subordinated Debentures due
June 15, 2006 (including form of 8 1/4% Convertible
Senior Subordinated Debentures due June 15, 2006)
incorporated by reference to Exhibit 10 of the
Company's Schedule 13E-4, filed February 18, 1997. NA
10(a) Loan Agreement dated as of March 1, 1998 among
Richardson Electronics, Ltd., various lending
institutions and American National Bank and Trust
Company of Chicago as Agent, establishing a
$50,000,000 Credit Facility, incorporated by reference
to Exhibit 10(a) to the Company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1998. NA
(18)
10(a)(1)Amendment dated February 4, 2000 to the loan
agreement referred to in 10(a) above. E
10(b) Amended and Restated Credit Agreement made as of
March 1, 1998 between Burtek Systems, Inc. as
Borrower and First Chicago NBD Bank, Canada as
Lender Richardson Electronics, Ltd. as Guarantor,
incorporated by reference to Exhibit 10(b) to the
Company's Quarterly Report on Form 10-Q for the
quarter ended February 28, 1998. NA
10(c) The Corporate Plan for Retirement The Profit Sharing /
401(k) Plan Fidelity Basic Plan Document No. 07 dated
June 1, 1996, incorporated by reference to Exhibit 10(d)
to the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996. NA
10(d) The Company's Amended and Restated Incentive Stock
Option Plan effective April 8, 1987 incorporated by
reference to Exhibit 10(m) to the Company's Annual
Report on Form 10-K for the fiscal year ended
May 31, 1987. NA
10(d)(1)First Amendment to the Company's Amended and Restated
Incentive Stock Option Plan effective April 11, 1989
incorporated by reference to Exhibit 10(l)(1) to the
Company's Annual Report on Form 10-K for the fiscal
year ended May 31, 1989. NA
10(d)(2)Second Amendment to the Company's Amended and Restated
Incentive Stock Option Plan effective April 11, 1989
incorporated by reference to Exhibit 10(l)(2) to the
Company's Annual Report on Form 10-K for the fiscal
year ended May 31, 1991. NA
10(d)(3)Third Amendment to the Company's Amended and Restated
Incentive Stock Option Plan effective April 11, 1989
dated August 15, 1996, incorporated by reference to
the Company's Proxy Statement used in connection with
its Annual Meeting of Stockholders held October 1, 1996. NA
10(e) Richardson Electronics, Ltd. Employees 1996 Stock
Purchase Plan incorporated by reference to Appendix A
of the Company's Proxy Statement dated September 3, 1996
for its Annual Meeting of Stockholders held on
October 1, 1996. NA
10(f) Employees Stock Ownership Plan and Trust Agreement,
(19)
effective as of June 1, 1987, dated July 14, 1994,
incorporated by reference to Exhibit 10(f) to the
Company's Annual Report on Form 10-K for the fiscal
year ended May 31, 1994. NA
10(f)(1)First Amendment to Employees Stock Ownership Plan
and Trust Agreement, dated July 12, 1995,
incorporated by reference to Exhibit 10(g)(1) to the
Company's Annual Report on Form 10-K for the fiscal
year ended May 31, 1995. NA
10(f)(2)Second Amendment to Employees Stock Ownership Plan
and Trust Agreement, dated July 12, 1995, dated
April 10, 1996, incorporated by reference to the
Company's Proxy Statement used in connection with its
Annual Meeting of Stockholders held October 1, 1996. NA
10(f)(3)Third Amendment to Employees Stock Ownership Plan and
Trust Agreement, dated July 12, 1995, dated
April 9,1997 incorporated by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended
May 31, 1998. NA
10(g) Richardson Electronics, Ltd. Employees 1999 Stock
Purchase Plan, incorporated by reference to the
Company's Annual Report on Form 10-K for the fiscal
year ended May 31, 1999. NA
10(h) Stock Option Plan for Non-Employee Directors
incorporated by reference to Appendix A to the
Company's Proxy Statement dated August 30, 1989 for
its Annual Meeting of Stockholders held on
October 18, 1989. NA
10(i) Richardson Electronics, Ltd. 1996 Stock Option Plan
for Non-Employee Directors, incorporated by reference
to Appendix C of the Company's Proxy Statement dated
September 3, 1996 for its Annual Meeting of
Stockholders held on October 1, 1996. NA
10(j) The Company's Employees' Incentive Compensation Plan
incorporated by reference to Appendix A to the
Company's Proxy Statement dated August 31, 1990 for
its Annual Meeting of Stockholders held on
October 9, 1990. NA
10(j)(1)First Amendment to Employees Incentive Compensation
Plan incorporated by reference to Exhibit 10(p)(1)
to the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1991. NA
10(j)(2)Second Amendment to Employees Incentive Compensation
(20)
Plan dated August 15, 1996, incorporated by reference
to the Company's Proxy Statement used in connection
with its Annual Meeting of Stockholders held
October 1, 1996. NA
10(k) Richardson Electronics, Ltd. Employees' 1994
Incentive Compensation Plan incorporated by reference
to Exhibit A to the Company's Proxy Statement dated
August 31, 1994 for its Annual Meeting of Stockholders
held on October 11, 1994. NA
10(k)(1)First Amendment to the Richardson Electronics, Ltd.
Employees' 1994 Incentive Compensation Plan dated
August 15, 1996, incorporated by reference to the
Company's Proxy Statement used in connection with
its Annual Meeting of Stockholders held October 1, 1996. NA
10(l) Richardson Electronics, Ltd. 1996 Incentive
Compensation Plan incorporated by reference to
Appendix B of the Company's Proxy Statement dated
September 3, 1996 for its Annual Meeting of Stockholders
held on October 1, 1996. NA
10(m) Richardson Electronics, Ltd. 1998 Incentive Compensation
Plan incorporated by reference to Appendix A of the
Company's Proxy Statement dated September 3, 1998 for
its Annual Meeting of Stockholders held on
October 6, 1998. NA
10(n) Correspondence outlining Agreement between the Company
and Arnold R. Allen with respect to Mr. Allen's
employment by the Company, incorporated by reference
to Exhibit 10(v) to the Company's Annual Report on Form
10-K, for the fiscal year ended May 31, 1985. NA
10(n)(1)Letter dated February 3, 1992 between the Company and
Arnold R. Allen outlining Mr. Allen's engagement as a
consultant by the Company, incorporated by reference to
Exhibit 10 (r)(1) to the Company's Annual Report on
Form 10-K, for the fiscal year ended May 31, 1992. NA
10(n)(2)Letter dated April 1, 1993 between the Company and
Arnold R. Allen regarding Mr. Allen's engagement as
consultant by the Company, incorporated by reference
to Exhibit 10(i)(2) to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1994. NA
10(o) Letter dated January 14, 1992 between the Company and
Jacques Bouyer setting forth the terms of Mr. Bouyer's
engagement as a management consultant by the Company
(21)
for Europe, incorporated by reference to Exhibit
10(t)(1) to the Company's Annual Report on Form 10-K
for the fiscal year ended on May 31, 1992. NA
10(o)(1)Letter dated January 15, 1992 between the Company and
Jacques Bouyer setting forth the terms of Mr. Bouyer's
engagement as a management consultant by the Company
for the United States, incorporated by reference to
Exhibit 10(t)(1) to the Company's Annual Report on Form
10-K for the fiscal year ended on May 31, 1992. NA
10(p) Letter dated January 13, 1994 between the Company
and Samuel Rubinovitz setting forth the terms of
Mr. Rubinovitz' engagement as management consultant by
the Company incorporated by reference to Exhibit 10(m)
to the Company's Annual Report on Form 10-K for the
fiscal year ended on May 31, 1994. NA
10(q) Letter dated May 20, 1994 between the Company and
William J. Garry setting forth the terms of Mr. Garry's
employment by the Company, incorporated by reference to
Exhibit 10(p) to the Company's Annual Report on Form
10-K for the fiscal year ended on May 31, 1994. NA
10(r) Employment, Nondisclosure and Non-Compete Agreement
dated June 1, 1998 between the Company and Flint Cooper
setting forth the terms of Mr. Cooper's employment by
the Company, incorporated by reference to Exhibit 10(p)
to the Company's Annual Report on Form 10-K for the
fiscal year ended on May 31, 1998. NA
10(s) Agreement dated January 16, 1997 between the Company
and Dennis Gandy setting forth the terms of
Mr. Gandy's employment by the Company, incorporated
by reference to Exhibit 10(b) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
February 28, 1997. NA
10(t) Agreement dated March 21, 1997 between the Company
and David Gilden setting forth the terms of
Mr. Gilden's employment by the Company, incorporated
by reference to Exhibit 10(c) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
February 28, 1997. NA
10(u) Employment agreement dated as of November 7, 1996
between the Company and Bruce W. Johnson
incorporated by reference to Exhibit (c)(4) of the
Company's Schedule 13 E-4, filed December 18, 1996. NA
(22)
10(v) Employment agreement dated as of May 10, 1993 as
amended March 23, 1998 between the Company and
Pierluigi Calderone incorporated by reference to
Exhibit 10(d) of the Company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1998. NA
10(w) Employment agreement dated as of September 26, 1999
between the Company and Murray Kennedy. E
10(x) Employment agreement dated as of November 22, 1999
between the Company and Gregory Peloquin. E
10(y) Employment agreement dated as of December 7, 1999
between the Company and Kevin Oakley. E
10(z) Employment agreement dated as of May 30, 2000
between the Company and Robert Heise. E
10(aa) The Company's Directors and Officers Liability
Insurance Policy issued by Chubb Group of Insurance
Companies Policy Number 8125-64-60A, incorporated by
reference to Exhibit 10(t) to the Company's Annual
Report on Form 10-K for the fiscal year ended
May 31, 1991. NA
10(bb)(1)The Company's Directors and Officers Executive
Liability and Indemnification Insurance Policy
renewal issued by Chubb Group of Insurance
Companies - Policy Number 8125-64-60F,
incorporated by reference to Exhibit 10(z)(1) of
the Company's Annual Report on Form 10-K for the
year ended May 31, 1999. NA
10(bb)(2)The Company's Excess Directors and Officers
Liability and Corporate Indemnification Policy
issued by St. Paul Mercury Insurance Company -
Policy Number 900DX0414, incorporated by reference
to Exhibit 10(z)(2) of the Company's Annual Report
on Form 10-K for the year ended May 31, 1999. NA
10(bb)(3)The Company's Directors and Officers Liability
Insurance Policy issued by CNA Insurance
Companies - Policy Number DOX600028634, incorporated
by reference to Exhibit 10(z)(3) of the Company's
Annual Report on Form 10-K for the year ended
May 31, 1999. NA
10(cc) Distributor Agreement, executed August 8, 1991,
between Registrant and Varian Associates, Inc.,
incorporated by reference to Exhibit 10(d) of the
Company's Current Report on Form 8-K for
September 30, 1991. NA
(23)
10(cc)(1)Amendment, dated as of September 30, 1991, between
Registrant and Varian Associates, Inc.,
incorporated by reference to Exhibit 10(e) of the
Company's Current Report on Form 8-K for
September 30, 1991. NA
10(cc)(2)First Amendment to Distributor Agreement between
Varian Associates, Inc. and the Company as of
April 10, 1992, incorporated by reference to
Exhibit 10(v)(5) of the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1992. NA
10(cc)(3)Consent to Assignment and Assignment dated
August 4, 1995 between Registrant and Varian
Associates Inc., incorporated by reference to
Exhibit 10(s)(4) of the Company's Annual Report
on Form 10-K for the fiscal year ended May 31, 1995. NA
10(cc)(4)Final Judgment, dated April 1, 1992, in the matter
of United States of America v. Richardson
Electronics, Ltd., filed in the United States District
Court for the Northern District of Illinois, Eastern
Division, as Docket No. 91 C 6211 incorporated by
reference to Exhibit 10(v)(7) to the Company's Annual
Report on Form 10-K for the fiscal year ended
May 31, 1992. NA
10(dd) Trade Mark License Agreement dated as of May 1, 1991
between North American Philips Corporation and the
Company incorporated by reference to Exhibit 10(w)(3)
of the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1991. NA
10(ee) Agreement among Richardson Electronics, Ltd.,
Richardson Electronique S.A., Covelec S.A. (now known
as Covimag S.A.), and Messrs. Denis Dumont and Patrick
Pertzborn, delivered February 23, 1995, translated
from French, incorporated by reference to Exhibit
10(b) to the Company's Report on Form 8-K dated
February 23, 1995. NA
10(ff) Settlement Agreement by and between the United States
of America and Richardson Electronics, Ltd. Dated
May 31, 1995 incorporated by reference to Exhibit
10(a) to the Company's Report on Form 8-K dated
May 31, 1995. NA
13 Annual Report to Stockholders for fiscal year ending
May 31, 2000 (except for the pages and information
thereof expressly incorporated by reference in this
Form 10-K, the Annual Report to Stockholders is
provided solely for the information of the Securities
and Exchange Commission and is not deemed "filed" as
part of this Form 10-K). E
(24)
21 Subsidiaries of the Company. E
23 Consent of Independent Auditors. E
27 Financial Data Schedule. E
(25)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
RICHARDSON ELECTRONICS, LTD.
By:/s/ By:/s/
Edward J. Richardson, Bruce W. Johnson,
Chairman of the Board and President and Chief Operating
Chief Executive Officer Officer
By:/s/
William J. Garry
Senior Vice President and
Date: August 28, 2000 Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ /s/
Edward J. Richardson, Chairman Bruce W. Johnson, President,
of the Board, Chief Executive Chief Operating Officer, and
Director
Officer (principal executive officer) August 28, 2000
and Director
August 28, 2000
/s/ /s/
William J. Garry, Senior Vice Arnold R. Allen, Director
President and Chief Financial August 28, 2000
Officer (principal financial and
accounting officer) and Director
August 28, 2000
/s/ /s/
Jacques Bouyer, Director Scott Hodes, Director
August 28, 2000 August 28, 2000
/s/ /s/
Ad Ketelaars, Director John Peterson, Director
August 28, 2000 August 28, 2000
/s/ /s/
Harold L. Purkey, Director Samuel Rubinovitz, Director
August 28, 2000 August 28, 2000
(26)