Note B -- Goodwill and Other Intangible Assets
In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001. SFAS No. 141 requires business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting. Under SFAS No. 142, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment testing in accordance with the statements. Other intangible assets will continue to be amortized over their useful lives.

The Company applied the new rules on accounting for goodwill and other intangible assets beginning in the first quarter of fiscal 2003, and, accordingly discontinued the amortization of goodwill and other intangible assets not subject to amortization.

The following table presents a reconciliation of reported net income (loss) to adjusted net income (loss) excluding amortization of intangible assets not subject to amortization, net of taxes, (in thousands, except per-share amounts):

	For the Periods Ended November 30, 2002 and 2001
	Three Months		Six Months
	FY 2003	FY 2002	FY 2003	FY 2002
Reported net income (loss)	$       1,190	$        902	$     (16,388)	$         548
Add back amortization of goodwill	-	79	-	167
Add back amortization of other intangible    assets not subject to amortization	-	15	-	29
Adjusted net income (loss)	$       1,190	$        996	$     (16,388)	$         744
Basic earnings per share:
Reported earnings (loss) per share	$        0.09	$        0.07	$       (1.19)	$        0.04
Add back amortization of goodwill	-	-	-	0.01
Add back amortization of other intangible    assets not subject to amortization	-	-	-	-
Adjusted basic earnings (loss) per share	$        0.09	$        0.07	$       (1.19)	$        0.05
Diluted earnings per share:
Reported earnings (loss) per share	$        0.09	$        0.07	$       (1.17)	$        0.04
Add back amortization of goodwill	-	-	-	0.01
Add back amortization of other intangible    assets not subject to amortization	-	-	-	-
Adjusted diluted earnings (loss) per share	$        0.09	$        0.07	$       (1.17)	$        0.05

During the second quarter of fiscal 2003, the Company completed both steps of the required impairment tests of goodwill and indefinite lived intangible assets for each of the reporting units as required under the transitional accounting provisions of SFAS 142.

In identifying reporting units, the Company evaluated its reporting structure as of the date of adoption. The Company concluded that the following operating segments and their components qualified as reporting units: RF & Wireless Communications, Broadcast, Display Systems Group, Industrial Power Group, Burtek, and Security Systems Division excluding Burtek. The first step in the process of goodwill impairment testing is a screen for potential impairment of the goodwill and other long lived assets, while the second step measures the amount of the impairment. The Company used a discounted cash flow valuation (income approach) to determine the fair value of each of the reporting units. Sales, operating income, and EBITDA multiples (market approaches) were used as a check against the impairment implications derived under the income approach. The first step indicated that goodwill and other long lived assets of RF & Wireless Communications, Broadcast and Security Systems Division excluding Burtek were impaired. In evaluating the amount of impairment, it was determined that all goodwill and other long lived assets were impaired for the aforementioned reporting units. Consequently, the Company recorded effective at the beginning of the first quarter of fiscal 2003, an impairment loss of $21.6 million of which $21.5 million related to goodwill with the balance attributable to other intangible assets with indefinite useful lives. The impairment loss of $17.9 million, net of tax of $3.7 million, was recorded as a cumulative effect of a change in accounting principle.

The table below provides changes in carrying value of goodwill by reportable segment (in thousands):

	Reportable Segments
	RFWC	IPG	SSD	DSG	Total
Goodwill at May 31,2002	$ 20,342	$   864	$   2,297	$   1,411	$ 24,914
Additions	-	-	-	764	764
Impairment loss	(20,345)	-	(1,131)	-	(21,476)
Foreign currency translation	3	2	(28)	-	(23)
Goodwill at November 30,2002	$        -	$   866	$   1,138	$   2,175	$   4,179

The addition to goodwill recorded in the first quarter of fiscal 2003 represents additional consideration paid for certain business acquisitions made in prior periods due to the acquired businesses achieving certain targeted operating levels.

The following table provides changes in carrying value of other intangible assets not subject to amortization which represent incorporation and acquisition costs (in thousands):

	Reportable Segments
	RFWC	IPG	SSD	Total
Other intangible assets not subject to amortization at May 31,2002	$   111	$      9	$   373	$   493
Impairment loss	(111)	-	-	(111)
Foreign currency translation	-	-	(9)	(9)
Other intangible assets not subject to amortization balance at November 30, 2002	$        -	$      9	$   364	$   373

Intangible assets subject to amortization as well as amortization expense are as follows (in thousands):

	November 30, 2002		May 31, 2002
	Gross Amount	Accumulated Amortization	Gross Amount	Accumulated Amortization
Intangible assets subject to amortization:
Deferred financing costs	$   3,178	$   2,470	$   2,852	$   2,335
Other intangible assets	478	442	478	436
Total intangible assets subject to amortization:	$   3,656	$   2,912	$   3,330	$   2,771

	Second Quarter		Six Months
	FY 2003	FY 2002	FY 2003	FY 2002
Amortization of intangible assets subject to amortization	$      91	$      33	$     141	$      66

The amortization expense associated with the intangible assets subject to amortization is expected to be $284,000, $313,000, $194,000, $71,000 and $23,000 in fiscal 2003, 2004, 2005, 2006, and 2007, respectively. The weighted average number of years of amortization expense remaining is 3.25.

Note C -- Income Taxes
The income tax provisions for the three and six-month periods ended November 30, 2002 and November 30, 2001 are based on the estimated annual effective tax rate of 36%, representing the U.S. statutory rate of 35% and the net of state and foreign subsidiary tax rates. The higher effective tax rates in foreign jurisdictions are offset by the tax benefits under the extra-territorial income tax regime.

Note D -- Calculation of Earnings per Share
Basic earnings per share is calculated by dividing net income by the weighted average number of Common and Class B Common shares outstanding. Diluted earnings per share is calculated by dividing net income (adjusted for interest savings, net of tax, on assumed bond conversions) by the actual shares outstanding and share equivalents that would arise from the exercise of stock options and the assumed conversion of convertible bonds when such assumptions have a dilutive effect on the calculation. The Company's 8 1/4 % and 7 1/4 % convertible debentures are excluded from the calculation in both fiscal 2002 and 2003 as assumed conversion would be anti-dilutive. The per share amounts presented in the Consolidated Condensed Statement of Operations are based on the following amounts (in thousands):

Note E -- Industry and Market Information
The marketing and sales structure of the Company consists of four strategic business units (SBU's): RF & Wireless Communications Group (RFWC), Industrial Power Group (IPG), Security Systems Division (SSD), and Display Systems Group (DSG).

RFWC serves the voice and data telecommunications market and the radio and television broadcast industry predominately for wireless infrastructure applications.

IPG serves a broad range of markets including power supplies, automotive, industrial, semiconductor, alternative energy, medical, industrial maintenance and repair organizations, and audio/amplifier.

SSD provides security systems and related design services into the financial, building security, utilities, government, loss prevention, and transportation markets.

DSG provides system integration and custom product solutions for the medical imaging, custom display, public information, and government markets. The medical monitor business was integrated into DSG in fiscal 2002 and serves the medical imaging market.

In February 2002, the Company sold its Medical Glassware business including the reloading and distribution of X-ray, CT, and image intensifier tubes.

SBUs are managed by Vice Presidents and General Managers who report to the President and Chief Operating Officer. The President evaluates performance and allocates resources, in part, based on the direct operating contribution of each SBU. Direct operating contribution is defined as gross margin less product management and direct selling expenses. In each geographic area, certain sales force expenses are directly charged to SBUs. Other expenses, such as general sales force, regional sales management, and administrative and support expenses are shared and, accordingly, are not included in direct SBU expenses. Administrative expenses including finance, legal, information technology, human resources, logistics, and facility costs are not allocated to SBU results. Intersegment sales are not significant.

Accounts receivable, inventory, goodwill and certain notes receivable are identified by SBU. Cash, net property, plant and equipment, and other assets are not identifiable by SBU. Accordingly, depreciation and amortization of financing costs and certain intangible assets are not identifiable by SBU. Operating results for the three- and six-month periods ended November 30, 2002 and November 30, 2001 and identifiable assets as of the end of the respective periods by SBU are summarized in the table below (in thousands). Fiscal 2002 DSG data has been reclassified to include medical monitors. Fiscal 2002 MSG data was reclassified to include only Medical Glassware, which was sold in February 2002. The reclassifications have been made to conform to the 2003 presentations.

A reconciliation of sales, gross margin, direct operating contribution and assets to the relevant consolidated amounts follows. (Other assets include miscellaneous receivables, manufacturing inventories and sundry assets.) (in thousands):

The Company sells its products to customers in a wide range of industries and performs periodic credit evaluations of their financial condition. Terms are generally on open account, payable net 30 days in North America and Latin America, and vary throughout Europe and the Far East. Estimates of credit losses are recorded in the financial statements based on periodic reviews of outstanding accounts.

RFWC's second quarter sales increased 10.0% from fiscal 2002 levels, primarily driven by a 47% growth in the United States. Sales for the six-month period increased 13% from the prior year primarily from growth in Asia and the Unites States. Gross margins as a percent of sales decreased from 23.6% in the prior year's second quarter to 22.4% in fiscal 2003 primarily due to several large U.S. customer sales at low margins.

IPG sales increased by 5.1% in the second quarter as sales in the U.S. increased by 9.3% offset partially by declines in Asia and Latin America. Sales for IPG for the six-month period increased 2.5% compared to the prior year.

SSD sales continued their upward trend increasing 11.6% compared to the second quarter of fiscal 2002 and 10.8% in the six month period compared to the prior year due to heightened concerns over security and acceleration in the conversion from analogue to digital technology. Gross margins increased to 25.1% in the second quarter from 23.7% in the prior year's second quarter due to an increase in sales and gross margins in the Canada region. Gross margin trends were similar year-to-date compared to the prior year.

Second quarter sales for DSG fell 6.4% in fiscal 2003 from 2002 levels, reflecting the weakness in transportation and financial services sectors as well as the timing of project scheduling. Gross margins increased to 26.9% in the second quarter from 25.3% in the same period in the prior year primarily due to an increase in margins from CRT and medical monitor displays. Year-to-date sales and gross margin trends were similar to the second quarter.

MSG sales decline of 93.8% in the second quarter from fiscal 2002 was the result of the Medical Glassware business sale completed in February of 2002. Fiscal 2002 sales and gross margins for MSG have been reclassified to include only Medical Glassware products to conform with the fiscal 2003 presentation. All other sales and gross margins previously reported as MSG have been reclassified to Corporate.

Sales, percentage change from the prior year, gross margins and gross margin percent of sales by geographic area are summarized in the following table. The caption, "other", includes sales to export distributors and to countries where the Company does not have offices. Warranty provisions, LIFO provisions, freight costs, obsolescence provisions, and gross margins from miscellaneous sales are included under the caption "Corporate" (in thousands).

North America sales increased 10.7% in the second quarter from the prior year primarily due to sales growth in RFWC in the United States and strong SSD sales in Canada. In the second quarter, gross margins declined from 25.7% in fiscal 2002 to 25.2% in fiscal 2003 in North America from lower markups on an expanded customer base. Asia Pacific sales increased by 2.6% in the second quarter while gross margins remained essentially flat. Sales in Asia Pacific increased 15.1% in the six-month period compared to the prior year due to an increase in sales in RFWC. Latin America sales declined 34.2% from the prior year's second quarter. Sales for the six-month period for Latin America were down 29.6% compared to the prior year. The quarter and six-month sales declines are a direct result of the economic downturn in the Latin America economies.

Selling, General and Administrative Expenses
Selling, general and administrative expenses in the second quarter of fiscal 2003 of $24.5 million increased 4.9% from the prior year's second quarter. Investment in engineering staff, higher performance incentives and additional professional services accounted for the increase. SG&A as a percent of revenues in the second quarter of fiscal 2003 decreased to 20.6% from 22.3% in the first quarter of fiscal 2003 but increased from 20.2% from the prior year's second quarter.

Interest and Other Expenses
Lower interest expense in fiscal 2003 compared to fiscal 2002 is partially due to the adoption of SFAS 133, Accounting for Derivative Instruments and Hedging Activities, in the beginning of fiscal 2002, for certain interest rate exchange agreements. The Company recorded the change in the fair value of these agreements of $507,000 in the first quarter and $ 522,000 in the second quarter of fiscal 2002 in interest expense. In fiscal 2003, the Company designated such agreements as hedges and has subsequently recorded any change in the fair value of such agreements to other accumulated comprehensive income.
The remainder of the interest expense difference is attributed to lower borrowing levels at more favorable interest rates in fiscal 2003.

Net Results
Net income for the second quarter of fiscal 2003 was $1,190,000 compared to $902,000 net income in the second quarter of the prior year. For the six-month periods, the Company recorded net income before cumulative effect of accounting change of $1,474,000 and $548,000, in 2003 and 2002, respectively. For the six-month periods, the Company recorded a net loss of $16,388,000 and a net income of $548,000 in fiscal 2003 and 2002, respectively. Included in the 2003 results is a goodwill and other intangible assets impairment charge in the amount of $17.9 million, net of taxes of $3.7 million. The impairment was recorded as a change in accounting principle in the first quarter of fiscal 2003. Accordingly, the first quarter results were modified to include this charge as required under the transitional provisions of SFAS 142. (See Note B to the Consolidated Financial Statements).

Liquidity and Capital Resources
Working capital requirements increased $8.8 million in the six months of fiscal 2003 due to reductions in accounts payable of $9.8 million compared to the prior year where working capital requirements decreased $14.9 million primarily due to a decrease in accounts receivable of $13.2 million. Despite an increase of 9.5% in sales in the second quarter, net changes in working capital decreased in the quarter by $1.9 million.
The Company entered into a new $102 million secured revolving credit facility with its current lending group. The new credit facility replaces existing credit lines and is principally secured by the Company trade receivables and inventory. The new agreement provides significantly relaxed leverage and coverage ratios from the prior agreement while extending the maturity date to September 2005 with similar pricing.
The loan and debenture agreements contain financial covenants, of which the most restrictive set benchmark levels for tangible net worth, senior funded debt to cash flow, cash flow to interest coverage, and senior funded debt relative to accounts receivable and inventory levels. The Company was in compliance with the covenants for the period ended November 30, 2002.
Cash reserves, investments, funds from operations and credit lines are expected to be adequate to meet the operational needs and future dividends of the Company. The policy regarding payment of dividends is reviewed periodically by the Board of Directors in light of the Company's operating needs and capital structure.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Investors should consider carefully the following risk factors, in addition to the other information included in this quarterly report on Form 10-Q. 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.
• 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 1. LEGAL PROCEEDINGS

From time to time, the Company is engaged in legal proceedings arising in the normal course of business. These legal proceedings are not expected to have a material adverse effect on the Company.

ITEM 2. CHANGES IN SECURITIES

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the Annual Meeting of Stockholders held October 15, 2002, the management slate of directors ran unopposed and was elected.

Name	Number of Affirmative Votes	Withheld Authority
Edward J. Richardson	40,737,516	260,610
Scott Hodes	40,901,873	96,253
Samuel Rubinovitz	40,900,973	97,153
Arnold Allen	40,900,523	97,603
Jacques Bouyer	40,882,099	116,027
Dario Sacomani	40,737,154	260,972
Harold L.Purkey	40,902,123	96,003
Ad Ketelaars	40,902,373	95,753
Bruce W. Johnson	40,735,964	262,162
John R. Peterson	40,902,373	95,753

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits -

99       Statements of Edward J. Richardson, Chairman of the Board and Chief Executive Officer of Richardson Electronics, Ltd and
          Dario Sacomani, Senior Vice President and Chief Financial Officer of Richardson Electronics, Ltd,
          as required by Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

Form 8-K dated October 15, 2002 announcing Richardson's fiscal 2003 second quarter dividend.

Form 8-K dated December 5, 2002 announcing Richardson's second quarter fiscal 2003 conference call.

Form 8-K dated December 9, 2002 announcing Richardson's new credit facility agreement.

Form 8-K dated December 17, 2002 reporting Richardson's second quarter fiscal 2003 Earnings.

Form 8-K dated December 18, 2002 containing Richardson's new credit facility agreement.

SIGNATURE

Pursuant to the requirements 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.