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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
For the fiscal year ended May 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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) (I.R.S. Employer Identification No.)
40W267 Keslinger Road, LaFox, Illinois 60147
(Address of principal executive offices and zip code)
(Registrant's telephone number including area code): (708) 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, $.05 par value
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of August 24, 1994, there were outstanding 8,190,249 shares of
Common Stock,$.05 par value, and 3,247,296 shares of Class B
Common Stock, $.05 par value, which are convertible into Common
Stock on a share for share basis, of the registrant and the
aggregate market value of such shares, held by non-affiliates of
the registrant was approximately $27,500,000.
(Cover page continued)
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K Document
Part I
Item 1 - Business Page 11, Note B on pages 18 and 19,
and Note J on page 22 of regis
trant's Annual Report to Stock
holders for the fiscal year ended
May 31, 1994
Part II
Item 5 - Market for the Pages 15 (for dividends), 20 (for
Registrant's Common dividend restriction) and 24 (for
Stock and Related stock prices) of registrant's
Security Holder Matters Annual Report to Stockholders for
the fiscal year ended May 31, 1994
Item 6 - Selected Page 10 of registrant's Annual
Financial Data Report to Stockholders for the
fiscal year ended May 31, 1994
Item 7 - Management's Pages 11 to 13 of registrant's
Discussion and Analysis Annual Report to Stockholders for
of Results of Operations the fiscal year ended May 31, 1994
and Financial Condition
Item 8 - Financial Pages 14 to 23 of the registrant's
Statements and Annual Report to Stockholders for
Supplementary Data the fiscal year ended May 31, 1994
Part III
Item 10 - Directors and Registrant's Proxy Statement to be
Executive Officers of used in connection with its Annual
Registrant Meeting of Stockholders scheduled
to be held October 11, 1994,
captions ELECTION OF DIRECTORS -
Information Relating to Directors,
Nominees and Executive Officers,
ELECTION OF DIRECTORS - Af
filiations, and SECTION 16 FILINGS
Item 11 - Executive Registrant's Proxy Statement to be
Compensation used in connection with its Annual
Meeting of Stockholders scheduled
to be held October 11, 1994,
captions ELECTION OF DIRECTORS -
Directors Compensation, and
EXECUTIVE COMPENSATION, except
captions REPORT ON EXECUTIVE COM
PENSATION and PERFORMANCE GRAPH
Item 12 - Security Registrant's Proxy Statement to be
Ownership of Certain used in connection with its Annual
Beneficial Owners and Meeting of Stockholders scheduled
Management to be held October 11, 1994,
captions ELECTION OF DIRECTORS -
Information Relating to Directors,
Nominees and Executive Officers,
and PRINCIPAL STOCKHOLDERS
Item 13 - Certain Registrant's Proxy Statement to be
Relationships and used in connection with its Annual
Related Transactions Meeting of Stockholders scheduled
to be held October 11, 1994, c
aption EXECUTIVE COMPENSATION -
Compensation / Stock Option Commit
tee Interlocks and Insider
Participation
Part IV
Item 14 - Exhibits, Exhibits and Financial Statement
Financial Statements and Schedules as specified in Item 14
Schedules, and Reports
on Form 8-K
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.
PART I
Item 1. Business
The registrant (herein with its subsidiaries referred to as
the "Company" or "Richardson") operates in one industry as a
distributor of electronic components, including vacuum tubes,
semiconductors and related products. These devices are used
primarily to control electrical power, amplify signals, or as
display devices in a variety of industrial, communication and
scientific applications. Historically, the Company manufactured
certain of the electron tubes it distributed. See Note B of the
"Notes to Consolidated Financial Statements" of the Annual Report
to Stockholders for the Year Ended May 31, 1994 discussing the
phase-down of its involvement in manufacturing operations. In
addition, the Company distributes a variety of closed circuit
television ("CCTV") equipment and other security systems related
products.
Consolidated sales in 1994 set a new record at $172.1
million, up 8.1 percent over the prior year. The Company
believes that much of its growth is attributable to its
concentration on specialized areas of the electronics market.
Historically, the Company's primary business was the distribution
of electron tubes and it continues to be a major distributor of
these products. In recent years, the Company has followed the
migration of its customers to newer technologies, capitalizing on
its expertise as a value-added distributor. In 1994, due to the
significant increase in new product offerings including solid
state components and cathode ray tubes, such products represented
47% of consolidated sales compared to 23% five years ago. The
addition of new product lines is primarily based upon
compatibility with the Company's existing customer base. The
Company also seeks new applications and customers (including,
without limitation, through new and expanded distribution
franchises) for its existing product lines.
A significant portion of the Company's sales are of
replacement parts. Specialized areas of the original equipment
industry and research and development applications are also
served by the Company. The marketing and sales organization of
the Company is divided into four strategic business units (SBUs):
Electron Device Group (EDG), Solid State and Components Group
(SSC), Display Products Group (DPG), and Security Systems
Division (SSD). EDG distributes power grid tubes and continuous
wave magnetrons for industrial heating applications and also
thyratrons, ignitrons, receiving tubes and special purpose tubes
which are sold to many industries, including automotive, steel,
plastics and textiles companies. EDG also distributes high
voltage switch tubes and x-ray tubes used in x-ray imaging
equipment and specialty tubes for analytical equipment, as well
as camera tubes, photomultipliers, switch tubes, magnetrons,
hydrogen thyratrons and imaging equipment to the medical
industry. Power grid tube and camera tube product lines are sold
by EDG to the radio and television broadcast industry. In
addition, EDG assists other SBU's to market cathode ray tubes
(CRTs), semiconductors and other products to the broadcast
industry. EDG also serves the avionics, marine, microwave and
communications markets with product lines including traveling
wave tubes, klystrons, planar triodes, hydrogen thyratrons,
magnetrons and display storage tubes.
SSC distributes RF transistors and amplifiers, communi
cations modules, passive components, silicon controlled
rectifiers, integrated circuits, semiconductors, high voltage
capacitors, resistors, broadcast amplifiers, and other RF and
microwave semiconductors for avionics, broadcast, communications,
data display and industrial applications. DPG markets data
display and instrumentation CRTs that are used in data display,
marine, medical, radar, and avionic applications. It also
distributes flyback transformers and various components for
monitor and terminal repair. SSD distributes closed-circuit
television (CCTV) equipment, as well as fiber optic, microwave,
intercommunication, access control and other security related
products, equipment and accessories, for both initial
installation and replacement. In addition, SSD is an approved
repair service organization. Sales trends for each SBU are
summarized and analyzed in Management's Discussion and Analysis
on page 11 of the Annual Report to Stockholders for the Year
Ended May 31, 1994.
Sales in the global market for electron tubes in which the
Company participates, principally through EDG, is estimated by
the Company to have been approximately $2.2 billion in 1993. The
Company participates through SSC in specialized segments of the
semiconductor portion of the market by distributing power semicon
ductors and RF and microwave semiconductors. According to
industry estimates, European, United States and Japan-based
factory sales for power semiconductors were approximately $4.5
billion in 1993. Richardson estimates the portion of this market
it serves at $650 million. DPG estimates factory sales of CRTs in
the global market were approximately $5 billion in 1993.
Richardson estimates the available market it serves for
replacement CRTs is approximately $150 million. The Company esti
mates that annual wholesale sales for CCTV and related security
equipment in which the Company participates as a distributor,
principally through SSD, were approximately $220 million in 1993.
Sales of solid state components, primarily RF semiconduc
tors, have grown rapidly in recent years. Semiconductors have
been replacing electron tubes in a number of applications, such
as low power television and radio transmitters. However, in many
applications, including higher power broadcasting and industrial
equipment, electron tubes are more suitable than semiconductors
due to the higher power capabilities of tubes and their ability
to withstand severe environmental and other conditions which
often damage semiconductors. Semiconductors, however, continue to
expand the range of their applications. Consequently, many parts
of the market for electron tubes in which the Company
participates, have been declining. EDG sales, which serve the
Company's traditional electron tube market, have declined 6% in
1994, 5% in 1993 and 11% in 1992. Last year the decrease was
principally attributable to general market trends, poor economic
conditions in Europe and Latin America, and foreign exchange rate
fluctuations (see "Management's Discussion and Analysis of
Results of Operations and Financial Condition - Sales Analysis,
EDG" in the accompanying financial statements). In response to
this trend, EDG is seeking to add additional products and expand
existing marketing agreements.
The Company has found that a replacement market for power
semiconductors exists and that many of its tube customers have
semiconductor requirements as well. In addition SSC's sales to
original equipment manufacturers has grown and accounted for
approximately 59% of the SBU's 1994 sales. SSC's sales have
increased 34% in 1994, 15% in 1993 and 15% in 1992 (see
"Management's Discussion and Analysis of Results of Operations
and Financial Condition - Sales Analysis, SSC" in the Annual
Report to Stockholders for the Year Ended May 31, 1994.)
The Company's sales of CRT's and other display products have
increased 42% in 1994, 17% in 1993 and 50% in 1992 (see
"Management's Discussion and Analysis of Results of Operations
and Financial Condition - Sales Analysis, DPG" in the Annual
Report to Stockholders for the Year Ended May 31, 1994.)
SSD's sales increased 2% in 1994, declined 13% in 1993 and
increased 17% in 1992. (see "Management's Discussion and Analysis
of Results of Operations and Financial Condition - Sales
Analysis, SSD" in the Annual Report to Stockholders for the Year
Ended May 31, 1994.)
Developments in the Past Fiscal Year
In 1993, the Company developed a plan to reorganize its
sales staff on a specialty basis by SBU wherever possible. This
plan was implemented throughout North America in fiscal 1994. In
addition to Corporate Account Managers, who continue to sell the
Company's full line of products to large national and
international accounts, the Company utilizes a specialty sales
staff for selling products for specific SBUs. In addition,
several sales engineers were added to the sales staff in the
United States and Europe to improve technical service to
customers who purchase SSC products. The specialty sales staff is
deployed based upon their sales and technical experience to
service the products and achieve the growth objectives of the SBU
they represent.
As part of the Department of Justice (DOJ) settlement
reached in October 1991, the Company agreed not to make further
acquisitions of power grid tube product lines without the
approval of the government. This affected the Company's ability
to acquire product lines to fully utilize the capacity of its
manufacturing facilities in LaFox, Illinois and Brive, France.
The LaFox facility, which has been phasing down its operations,
experienced underutilization and manufacturing inefficiencies of
$.5 million, $.1 million and $1.4 million in 1994, 1993 and 1992,
respectively. The Brive facility has sustained similar
inefficiencies of $3.7 million, $3.1 million and $2.2 million in
1994, 1993 and 1992. In addition, the company incurred warranty
costs on manufactured products of $.8 million, $.4 million and
$.3 million in 1994, 1993 and 1992.
In response to the persistent underutilization and
production inefficiencies which were not resolved by other
actions taken, the Board of Directors approved management's plan
to phase down the Company's involvement in the manufacture of
electron tubes. In developing this plan, the Company solicited
offers for the sale of the Brive operation from strategic buyers,
including local management who has expressed preliminary interest
in a management buy-out. The Board has authorized the Company to
pursue the buy-out proposal as well as other alternatives.
The plan includes a $26.5 million charge against 1994
earnings for the estimated cost of the phase-down. Of this
charge, $21.4 million consists of asset write-downs and costs
related to the sale or disposition of the Brive facility. The
balance, $5.1 million, represents an increase in the provision
for the phase-down of domestic manufacturing and settlement of
certain litigation, originally established at $20.0 million in
1991. See details of management's plan, the related costs and
employees affected in Note B of the "Notes to Consolidated
Financial Statements" of the Annual Report to Stockholders for
the Year Ended May 31,1994. The plan will be completed in fiscal
1995.
Products
The following is a description of some of the Company's
products:
Power Amplifier / Oscillator Tubes are vacuum or gas filled
tubes used in applications where current or voltage amplification
and/or oscillation is required. Some areas of use are: induction
heating, diathermy equipment, sonic generators, communications
and radar systems and power supplies for voltage regulation or
amplification.
Thyratrons and Rectifiers are vacuum or gas filled tubes
used to control the flow of electrical current. Thyratrons are
used to control ignitrons, electric motor speed controls, theatri
cal 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.
RF Power Transistors are "solid state" high-frequency power
amplifiers used in land mobile, aircraft and satellite
communications and in many types of electronic instrumentation.
Closed-circuit Television ("CCTV") products include cameras,
lenses, monitors, scanners, time lapse recorders and associated
accessories. CCTV products are used in surveillance applications
and monitoring hazardous environments in the work-place.
Magnetrons are high vacuum oscillator tubes which are 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 heating
applications such as microwave ovens and devices used by the
medical industry.
Receiving/Industrial Receiving Tubes are vacuum tubes used
to regulate or amplify small amounts of power in a wide variety
of electrical and electronic equipment. Communications, medical
instrumentation, consumer electronics, and industrial controls
are typical applications for this product.
Planar Triodes are high frequency triodes manufactured using
a special process to enable them to operate at several thousand
megahertz (MHZ). Aircraft instrumentation and television
translators use planar triodes.
Klystrons are vacuum tubes used to amplify or generate power
at microwave frequencies by means of velocity modulation.
Applications include radar and telecommunications systems.
Silicon Controlled Rectifiers (SCR's) and Power Semicon
ductor Modules are used in many industrial control applications,
and have spawned new 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.
Ignitrons are mercury pool tubes used to control the flow of
large amounts of electrical current. They are used most often in
welding equipment, power conversion and power rectification
equipment.
Electronic Display Tubes are small gas filled tubes which
contain multiple elements which can display either numerical or
alphabetical characters on command. These display tubes are used
in scientific and medical equipment and in various commercial
applications.
Camera Tubes are vacuum tubes used to change a visible light
image to electronic signals which are then transmitted to a
monitor for conversion back to a visible image. Camera tubes are
used in broadcast, security and medical applications.
Traveling Wave Tubes are high vacuum microwave amplifiers
whose electrical signal can be adjusted by means of electrostatic
or magnetic fields. Applications include satellite as well as
ground telecommunications and electronic countermeasure devices.
Cathode Ray Tubes ("CRTs") are vacuum tubes which convert an
electrical signal into a visual image to display information on
computer terminals or televisions used in the medical, scientific
and publishing industries as well as in general business
applications.
High Voltage and Power Capacitors are 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.
Microwave Diodes are specialized diodes intended for use at
microwave and RF frequencies for oscillator, mixer, switching,
and power control, and amplifier applications in broadcast,
avionic, telecommunication, medical and industrial equipment.
Distribution and Marketing
The Company buys, warehouses and distributes more than
55,000 types of tubes and semiconductors ranging in price from $1
to $21,000 for tubes and $.10 to $2,500 for semiconductors and
related components. The Company processes approximately 550
orders per day averaging more than $1,250 each (for an average
total of $687,000 per day). The Company distributes electron
tubes it manufactures as well as electron tubes, power, RF and
microwave semiconductors and related products purchased from
other sources, including Varian Associates, Inc., Motorola, Inc.,
Clinton Electronics Corp., Burle Industries, Inc., Panasonic
Industrial Company, Philips, SGS Thomson, ITT Electron
Technology Division, RF Products, Microwave Associates, Powerex,
M/A-COM, Joslyn Jennings, Semtech Corp. and Dale Electronics. No
single outside supplier currently accounts for more than 10% of
the Company's purchases in any year, other than Varian which
accounted for approximately 17%, 22% and 21% of purchases in
fiscal 1994, 1993 and 1992, respectively. The Company believes
that the loss of any one supplier, other than Varian, would not
cause a material adverse impact on its earnings and revenues. The
Company believes that relationships with Varian are satisfactory.
The Company has entered into marketing distribution
agreements with various manufacturers in the tube, semiconductor,
and CCTV industries. The most significant is a distributor
agreement with the Electron Device Group of Varian Associates,
Inc. ("Varian") under which the Company is Varian's exclusive
distributor of power grid tubes throughout the world with the
exception of the United States and certain former Eastern Bloc
countries where the Company is one of Varian's stocking
distributors. This distributor agreement replaces the joint
venture between the Company and Varian named Varian Supply
Company ("VASCO") which was dissolved in fiscal 1992 as part of
the Company's settlement of the DOJ's investigation of the
Company. Such settlement also included an agreement by the
Company to obtain DOJ approval, except under limited
circumstances, for the acquisition of any company (or its power
grid tube assets) engaged in the rebuilding, manufacture, or
distribution of power grid tubes. (See Note K of the "Notes to
Consolidated Financial Statements" of the Annual Report to
Stockholders for the Year Ended May 31,1994.) Varian product
accounted for 18%, 20% and 25% of net sales of the Company in
fiscal 1994, 1993 and 1992, respectively.
Customer orders are taken by the regional sales offices and
directed to the Company's headquarters and distribution facility
in LaFox, Illinois or to one of its international distribution
centers. The Company utilizes a sophisticated data processing
network which provides on-line, real-time interconnection of all
sales offices, manufacturing facilities and central distribution
operations. Information on stock availability, customers, and
competitive market analyses are instantly obtainable by
management and the entire distribution network. Most of the
products distributed by Richardson are critical to the function
of the equipment in which they are used, therefore, Richardson
utilizes this system to facilitate same day shipment of over 90%
of its customer orders received.
In 1994 the Company reorganized its sales staff on a
specialty basis wherever possible (see Part I, Item 1., Business
- - - Developments in the Past Fiscal Year".)
The Company markets its products to manufacturers and users
of equipment in, among others, the areas of communications,
industrial heating, marine, medical care and avionics. The
Company also sells to customers who purchase for resale,
including electronics distributors and service companies. The
Company has established supply contracts, generally for a one-
year term, with certain customers, and is committed pursuant to
these contracts to maintain minimum inventories so as to provide
product without significant delay. Management believes that for
the past two fiscal years approximately 20% of the Company's
sales were made under such supply contracts. During the past five
years no single customer has represented more than 10% of the
Company's sales.
The Company emphasizes sales to replacement markets. Some of
these markets may expand as new equipment utilizing electron
tubes continues to be sold. For example: equipment such as video
monitors and computer display terminals which use cathode ray
tubes also present expanding market opportunities for replacement
purposes; new communications equipment using microwave devices
such as traveling wave tubes and klystrons and RF transistors
continues to be developed for applications with high power or
high-frequency requirements that tube technology alone can
provide. Richardson sales include products for use in
applications in the following industries: automotive, avionics,
broadcasting, closed-circuit television, communications, food
processing, marine, medical, steel, and telecommunications, as
well as federal, state and local governments.
The Company's backlog of firm orders scheduled for future
delivery within 12 months was $29,700,000, $22,400,000 and
$21,400,000 as of May 31, 1994, 1993 and 1992, respectively. The
Company's backlog consists primarily of commercial contracts that
require future shipping dates. The level of the Company's backlog
is not indicative of future sales.
International
International sales represented approximately 46% of the
Company's fiscal 1994 sales. These sales were $79,123,000,
$75,101,000, and $77,916,000 in fiscal years 1994, 1993 and 1992,
respectively. Export sales shipped directly from the United
States, principally to European and Latin American customers,
were $29,667,000, $28,396,000 and $29,839,000 in 1994,1993 and
1992. The Company has 33 locations throughout the world. See Note
J of the "Notes to Consolidated Financial Statements" of the
Annual Report to Stockholders for the Year Ended May 31,1994 for
details of the Company's international operations, including
sales, operating income and identifiable assets.
Manufacturing
The Company distributes its manufactured products
principally under the trade names "National", "Cetron" and
"Amperex". Located in LaFox, Illinois and Brive, France, the
Company's manufacturing operations, including value-added,
accounted for approximately 18% of its product distribution
requirements in fiscal 1994. Such manufacturing operations
contributed sales of approximately $30 million in fiscal 1994,
$33 million in fiscal 1992 and $35 million in fiscal 1992.
The products currently manufactured by the Company include
thyratrons and rectifiers, power tubes, ignitrons, electronic
display tubes, phototubes, SCR Assemblies, CW and pulsed
magnetrons and spark gap tubes. The materials used in the
manufacturing process are readily available and 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.
See above, Part I, Item 1. Business, Developments in the
Past Fiscal Year for information on the Company's planned phase-
down of manufacturing operations. These plans include the sale or
disposition of the Company's Brive operations. As part of any
sale, the Company intends to enter into purchase commitments with
the buyer in order to assure an uninterrupted source of supply
for its customers. It is anticipated that the higher earnings
levels and stability which will result from the elimination of
manufacturing inefficiencies will be partially offset by reduced
profit margins on distributed product.
Research and Development
The objective of the Company's research and development is
to increase the number of applications for its products and to
develop existing technology with respect to advanced products.
The Company emphasizes product development rather than basic
research. The ability of the Company to compete is, in part,
dependent upon its ability to anticipate changing market needs
and to provide the required products.
At present, a staff of 11 persons are involved, on a full-
or part-time basis, in various phases of product development. The
Company's expenditures in this area were $358,000, $584,000 and
$548,000 in fiscal 1994, 1993 and 1992.
Employees
As of May 31, 1994, the Company employed 392 individuals on
a full time basis at U.S. locations. Of these, 53 are employed in
administrative and clerical positions, 219 are employed in sales
and distribution, and 120 are employed in value-added and product
manufacturing. The Company's foreign subsidiaries employ an
additional 262 individuals of which 119 individuals are engaged
in administrative, sales and distribution and 143 in
manufacturing. All of the Company's U.S. employees are non-union.
A portion of the Company's employees in Brive, France are
represented by unions. The Company's relations with such unions
have been satisfactory.
Competition
Although the Company believes it is an important distributor
of electron tubes and semiconductors in the United States, it
competes worldwide with other general line distributors and
manufacturers and other distributors of electronic components
(including original equipment manufacturers), many of which are
substantially larger and have greater resources than the Company.
The Company also competes against manufacturers of
semiconductors, which have replaced electron tubes in many
applications. Also see above Part I, Item 1, Business, Develop
ments in the Past Fiscal Year.
Patents and Trademarks
The Company acquired certain manufacturing patents and
trademarks in connection with acquisitions, including the
trademarks "National", "Cetron," and "Amperex." The Company
believes that although the patents and trademarks it has obtained
have value, they will not be determinative of the Company's
success, which depends principally upon its marketing technical
support, product dlivery and upon the quality and economic value
of its products.
Item 2. Properties
The Company owns facilities on approximately 300 acres in
LaFox, Illinois, consisting of a modern, single and two-story
concrete, brick and steel constructed building containing
approximately 255,000 square feet of manufacturing, warehouse and
office space. The Company also owns a four-story building
containing approximately 45,000 square feet of warehouse space on
1.5 acres in Geneva, Illinois. The Company's United Kingdom
subsidiary owns a 12,000 square foot single story brick building
in Lincoln, England which it utilizes as a sales office and
warehouse hub for European sales distribution. The Company's
Spanish subsidiary owns a 3,510 square foot office and warehouse
space in a 55,000 square foot industrial concrete building
constructed in 1988 in Madrid, Spain. The Company's Italian
subsidiary owns an office and warehouse facility located in
Florence, Italy which consists of approximately 6,400 square feet
of a brick and concrete industrial building. A French subsidiary
of the Company owns a single and two-story concrete, brick and
steel constructed building of approximately 130,000 square feet
in Brive, France, which it uses for manufacturing, warehouse and
office.
The Company also rents branch sales offices on a short-term
basis in or near Boston, New York, Orlando, Dallas, San
Francisco, Los Angeles, Seattle and Miami; and in Montreal,
Canada; and Munich, Germany. Additional sales offices, which
include warehouse space, leased on a short-term basis, are
located in or near Toronto, Canada; Paris, France; Tokyo, Japan
and Singapore. Additional warehouse space in Geneva, Illinois is
also rented on a short-term basis. The Company also leases a
facility from a trust, of which Edward J. Richardson, Chairman of
the Board of the Company, is the principal beneficiary. Such
facility is used by SSD as its sales office and warehouse. Under
the terms of this lease, the Company is obligated to make rental
payments of $68,705 per year, expiring in 1996. In the opinion of
management, the lease is on terms no less favorable to the
Company than similar leases which would be available from unre
lated third parties.
Item 3. Legal Proceedings
No material developments have occurred in the matter of
Panache Broadcasting of Pennsylvania, Inc. v. Richardson Electron
ics, Ltd., Varian Associates, Inc., and Varian Supply Company,
pending in the United States District Court for the Northern
District of Illinois, Eastern Division, docket no. 90 C 6400. The
complaint alleges violations of Sections 1 and 2 of the Sherman
Act and Section 7 of the Clayton Act As previously reported the
matter remains primarily in the discovery stage and the Court has
not determined whether the matter may be maintained as a class
action.
The United States Government advised the Company in March
1994 that the Government may assert a claim for damages and
penalties against the Company under the False Claims Act and the
Lanham Act for conduct in connection with a $3.1 million contract
completed in 1989 to supply certain tubes. The False Claims Act
permits the Government to seek a civil penalty for each violation
of not less than $5,000 nor more than $10,000, plus three times
its damages. The Company believes it has not violated these
statutes and is discussing the resolution of the matter with the
Government. If such discussions are not satisfactorily concluded,
the Company plans to vigorously defend itself against any
litigation the Government may initiate.
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, 1994.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Security Holder Matters
Incorporated herein by reference to pages 15 (for dividend
payments), 20 (for dividend restriction) and 24 (for market data)
of the Annual Report to Stockholders for the Year Ended May 31,
1994.
Item 6. Selected Financial Data
Incorporated herein by reference to page 10 of the Annual
Report to Stockholders for the Year Ended May 31, 1994.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Incorporated herein by reference to pages 11 to 13 of the
Annual Report to Stockholders for the Year Ended May 31, 1994.
Item 8. Financial Statements and Supplementary Data
Incorporated herein by reference to pages 14 through 23 of
the Annual Report to Stockholders for the Year Ended May 31,
1994.
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 Company's most recent financial statements, which
would require disclosure under Item 9 of this Report.
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 11, 1994, 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 is contained in the Company's Proxy
Statement to be used in connection with its Annual Meeting of
Stockholders scheduled to be held October 11, 1994, 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 11, 1994, 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 11, 1994, under the caption
"EXECUTIVE COMPENSATION - Compensation Committee Interlocks and
Insider Participation," which information is incorporated herein
by reference.
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 14 through 23
of its Annual Report to Stockholders for the fiscal year ended
May 31, 1994 are incorporated herein by reference:
Filing
Method
Report of Independent Accountants E - Exhibit 13
1. FINANCIAL STATEMENTS E - Exhibit 13
Consolidated Balance Sheets - May 31, 1994 and E
1993
Consolidated Statements of Operations - Years E
ended May 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows -Years E
ended May 31, 1994, 1993 and 1992
Consolidated Statements of Stockholders' Equity - E
Years ended May 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements E
The following consolidated financial information for the
fiscal years 1994, 1993 and 1992 is submitted herewith:
2. FINANCIAL STATEMENT SCHEDULES:
VIII Valuation and Qualifying Accounts E - Exhibit 99.1
IX Short-Term Borrowings E - Exhibit 99.2
XIII Other Investments E - Exhibit 99.3
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.
There were no reports on Form 8-K during the last quarter of
the period covered by this report.
(c) EXHIBITS Filing
Method
3(a) Restated Certificate of Incorporation of the NA
Company, incorporated by reference to
Appendix B to the Proxy Statement/ Pro
spectus dated November 13, 1986, included in
the Company's Registration Statement on Form
S-4 Commission File No. 33-8696.
3(b) By-laws of the Company, as amended. E
4(a) Specimen forms of Common Stock and Class B NA
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.
4(b) Indenture between the Company and Conti NA
nental Illinois National Bank and Trust
Company of Chicago (including form of 7-1/4%
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, 1990.
10(a) $13,000,000 Senior Term Note dated March 28, NA
1994 delivered to American National Bank,
incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the fiscal
quarter ended February 28, 1994.
10(b) Industrial Building Lease, dated April 14, NA
1993 between the Company and the American
National Bank & Trust, as trustee under
Trust No. 56120 dated 2-23-83, incorporated
by reference to Exhibit 10(b) to the
Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1994.
10(c) The Company's Employees Profit Sharing Plan E
and Trust Agreement, (as amended and
restated effective June 1, 1989) dated July
14, 1994.
10(d) The Company's Amended and Restated Incentive NA
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.
10(d)(1) First Amendment to the Company's Amended and NA
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.
10(d)(2) Second Amendment to the Company's Amended NA
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.
10(e) The Company's Amended and Restated Employees NA
Stock Purchase Plan, incorporated by
reference to the Company's Proxy Statement
used in connection with its Annual Meeting
of Stockholders held October 2, 1985.
10(e)(1) First Amendment to Amended and Restated NA
Employees Stock Purchase Plan, incorporated
by reference to Appendix D to the Company's
Proxy Statement/Prospectus dated November
13, 1986 included in its Registration
Statement on Form S-4, Commission File No.
33-8696.
10(e)(2) Second Amendment to Amended and Restated NA
Employees Stock Purchase Plan, incorporated
by reference to Appendix E to the Company's
Proxy Statement/Prospectus dated November
13, 1986 included in its Registration
Statement on Form S-4, Commission File No.
33-8696.
10(e)(3) Third Amendment to Amended and Restated NA
Employees Stock Purchase Plan incorporated
by reference to Exhibit 10(m)(3) to the
Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1990.
10(e)(4) Fourth Amendment to Amended and Restated NA
Employees Stock Purchase Plan incorporated
by reference to Exhibit 10(m)(4) to the
Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1991.
10(e)(5) Fifth Amendment to Amended and Restated NA
Employees Stock Purchase Plan incorporated
by reference to Exhibit 10(m)(5) to the
Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1991.
10(f) Employees Stock Ownership Plan and Trust E
Agreement, effective as of June 1, 1987,
dated July 14, 1994.
10(g) Stock Option Plan for Non-Employee directors NA
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.
10(h) The Company's Employees' Incentive Compen NA
sation 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.
10(h)(1) First Amendment to Employees Incentive NA
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.
10(i) Richardson Electronics, Ltd. Employees' 1994 NA
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.
10(j) Correspondence outlining Agreement between NA
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.
10(j)(1) Letter dated February 3, 1992 between the NA
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.
10(j)(2) Letter dated April 1, 1993 between the NA
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.
10(k) Letter dated January 14, 1992 between the NA
Company and Jacques Bouyer setting forth the
terms of Mr. Bouyer's engagement as a
management consultant by the Company 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.
10(k)(1) Letter dated January 15, 1992 between the NA
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.
10(l) Letter dated November 27, 1992 between the NA
Company and Ad Ketelaars setting forth the
terms of Mr. Ketelaars' employment by the
Company, incorporated by reference to
Exhibit 10(k) to the Company's Annual Report
on Form 10-K for the fiscal year ended on
May 31, 1994.
10(m) Letter dated January 13, 1994 between the E
Company and Samuel Rubinovitz setting forth
the terms of Mr. Rubinovitz' engagement as
management consultant by the Company.
10(n) Letter dated April 1, 1994 between the E
Company and Leonard R. Prange setting forth
the terms of Mr. Prange's employment by the
Company.
10(o) Letter dated April 4, 1994 between the E
Company and Bart F. Petrini setting forth
the terms of Mr. Petrini's employment by the
Company.
10(p) Letter dated May 20, 1994 between the E
Company and William J. Garry setting forth
the terms of Mr. Garry's employment by the
Company.
10(q) The Company's Directors and Officers Lia NA
bility Insurance Policy issued by Chubb
Group of Insurance Companies Policy Number
8125-64-60A incorporated by reference to
Exhibit 10(u) to the Company's Annual Report
on Form 10-K for the fiscal year ended May
31, 1991.
10(q)(1) The Company's Directors and Officers Lia E
bility Insurance Policy renewal issued by
Chubb Group of Insurance Companies Policy
Number 8125-64-60B.
10(q)(2) The Company's Directors and Officers Lia E
bility Insurance Policy issued by National
Union Fire Insurance Policy Number 4392020.
10(q)(3) The Company's Directors and Officers Lia E
bility Insurance Policy issued by CNA In
surance Companies Policy Number
DOX600028634.
10(r) Plea Agreement, dated September 30, 1991, NA
executed by Registrant 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 CR 0791, with Information
attached, incorporated by reference to
Exhibit 10(a) of the Company's Current
Report on Form 8-K for September 30, 1991.
10(r)(1) Stipulation, dated September 30, 1991, NA
executed by Registrant 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, with proposed Final
Judgment attached, incorporated by reference
to Exhibit 10(b) of the Company's Current
Report on Form 8-K for September 30, 1991.
10(r)(2) Settlement Agreement, dated September 30, NA
1991, between Registrant and the United
States of America, incorporated by reference
to Exhibit 10(c) of the Company's Current
Report on Form 8-K for September 30, 1991.
10(r)(3) Distributor Agreement, executed August 8, NA
1991, between Registrant and Varian Asso
ciates, Inc., incorporated by reference to
Exhibit 10(d) of the Company's Current
Report on Form 8-K for September 30, 1991.
10(r)(4) First Amendment to Distributor Agreement NA
(which is Exhibit 10(v)(4) hereto) 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.
10(r)(5) Amendment, dated as of September 30, 1991, NA
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.
10(r)(6) Final Judgment, dated April 1, 1992, in the NA
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 incorpo
rated 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.
10(s) Trade Mark License Agreement dated as of May NA
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.
10(t) Amended and Restated Administrative NA
Agreement between the Company and the
Company's National Electronics Division and
the Defense Logistics Agency dated February
3, 1992, incorporated by reference to
Exhibit 10(x)(2) to the Company's Annual
Report on Form 10-K for the fiscal year
ended May 31, 1992.
11 Statement re computation of net income per E
share.
13 Annual Report to Stockholders for fiscal E
year ending May 31, 1994 (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).
21 Subsidiaries of the Company. E
23 Consent of Independent Accountants. E
99.1 Schedule VIII E
99.2 Schedule IX E
99.3 Schedule XIII E
99.4 Appendix E
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.
RlCHARDSON ELECTRONICS, LTD.
By: /S/ Edward J. Richardson,
Chairman of the Board and
President
By: /S/ William J. Garry,
Vice President and
Chief Financial Officer
Date: August 26, 1994
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/Edward J. Richardson, /s/ Dennis R Gandy,
Chairman of the Board Director
(principal executive August 26, 1994
officer), President
and Director
August 26, 1994
/s/ Arnold R Allen, /s/ David Gilden,
Director Director
August 26, 1994 August 26, 1994
/s/ Joel Levine, /s/ Scott Hodes,
Director Director
August 26, 1994 August 26, 1994
/s/Leonard R. Prange, /s/ Samuel Rubinovitz,
Director Director
August 26, 1994 August 26, 1994
/s/ Jacques Bouyer, /s/ Kenneth J. Douglas,
Director Director
August 26, 1994 August 26, 1994