Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
May 27, 2023 | Jul. 25, 2023 | Nov. 26, 2022 | |
Document Information [Line Items] | |||
Entity Registrant Name | RICHARDSON ELECTRONICS, LTD. | ||
Entity Central Index Key | 0000355948 | ||
Document Type | 10-K | ||
Trading Symbol | RELL | ||
Document Period End Date | May 27, 2023 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --05-27 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 310.2 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Entity File Number | 0-12906 | ||
Entity Tax Identification Number | 36-2096643 | ||
Entity Address, Address Line One | 40W267 Keslinger Road | ||
Entity Address, Address Line Two | P.O. Box 393 | ||
Entity Address, City or Town | LaFox | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60147-0393 | ||
City Area Code | 630 | ||
Local Phone Number | 208-2200 | ||
Entity Incorporation, State or Country Code | DE | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Document Financial Statement Error Correction [Flag] | false | ||
Title of 12(b) Security | Common stock, $0.05 Par Value | ||
Security Exchange Name | NASDAQ | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Firm ID | 243 | ||
Auditor Name | BDO USA, P.A. | ||
Auditor Location | Chicago, IL, USA | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement for the Annual Meeting of Stockholders scheduled to be held October 10, 2023, which will be filed pursuant to Regulation 14A, are incorporated by reference in Part III of this report. Except as specifically incorporated herein by reference, the above mentioned Proxy Statement is not deemed filed as part of this report. | ||
Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 12,184,674 | ||
Common Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 2,051,488 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 27, 2023 | May 28, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 24,981,000 | $ 35,495,000 |
Accounts receivable, less allowance of $199 and $186, respectively | 30,067,000 | 29,878,000 |
Inventories, net | 110,402,000 | 80,390,000 |
Prepaid expenses and other assets | 2,633,000 | 2,448,000 |
Investments - current | 0 | 5,000,000 |
Total current assets | 168,083,000 | 153,211,000 |
Non-current assets: | ||
Property, plant and equipment, net | 20,823,000 | 16,961,000 |
Intangible assets, net | 1,892,000 | 2,010,000 |
Lease ROU asset | 2,457,000 | 3,239,000 |
Non-current deferred income taxes | 4,526,000 | 4,398,000 |
Other non-current assets | 267,000 | |
Total non-current assets | 29,965,000 | 26,608,000 |
Total assets | 198,048,000 | 179,819,000 |
Current liabilities: | ||
Accounts payable | 23,535,000 | 23,987,000 |
Accrued liabilities | 12,026,000 | 16,110,000 |
Lease liability current | 1,028,000 | 1,109,000 |
Total current liabilities | 36,589,000 | 41,206,000 |
Non-current liabilities: | ||
Non-current deferred income tax liabilities | 98,000 | 85,000 |
Lease liability non-current | 1,429,000 | 1,915,000 |
Other non-current liabilities | 612,000 | 766,000 |
Total non-current liabilities | 2,139,000 | 2,766,000 |
Total liabilities | 38,728,000 | 43,972,000 |
Stockholders’ Equity | ||
Preferred stock, $1.00 par value, no shares issued and outstanding | ||
Additional paid-in-capital | 70,951,000 | 66,331,000 |
Retained earnings | 87,044,000 | 68,031,000 |
Accumulated other comprehensive income | 615,000 | 800,000 |
Total stockholders' equity | 159,320,000 | 135,847,000 |
Total liabilities and stockholders’ equity | 198,048,000 | 179,819,000 |
Common Stock | ||
Stockholders’ Equity | ||
Common stock value | 607,000 | 582,000 |
Common Class B | ||
Stockholders’ Equity | ||
Common stock value | $ 103,000 | $ 103,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | May 27, 2023 | May 28, 2022 |
Allowance for accounts receivable | $ 191 | $ 186 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, issued (in shares) | 0 | 0 |
Preferred Stock, outstanding (in shares) | 0 | 0 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, issued (in shares) | 12,140 | 11,649 |
Common stock, outstanding (in shares) | 12,140 | 11,649 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, issued (in shares) | 2,052 | 2,053 |
Common stock, outstanding (in shares) | 2,052 | 2,053 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Net sales | $ 262,658 | $ 224,620 | $ 176,937 |
Cost of sales | 178,969 | 152,920 | 118,112 |
Gross profit | 83,689 | 71,700 | 58,825 |
Selling, general and administrative expenses | 58,713 | 55,723 | 55,925 |
(Gain) loss on disposal of assets | (7) | 20 | 13 |
Operating income | 24,983 | 15,957 | 2,887 |
Other (income) expense: | |||
Investment/interest income | (295) | (80) | (76) |
Foreign exchange loss | 278 | 273 | 759 |
Other, net | (30) | 5 | (104) |
Total other (income) expense | (47) | 198 | 579 |
Income before income taxes | 25,030 | 15,759 | 2,308 |
Income tax provision (benefit) | 2,697 | (2,168) | 653 |
Net income | 22,333 | 17,927 | 1,655 |
Foreign currency translation (loss) gain, net of tax | (185) | (4,093) | 3,403 |
Comprehensive income | $ 22,148 | $ 13,834 | $ 5,058 |
Weighted average number of shares: | |||
Common shares - Diluted | 12,542 | 11,825 | 11,164 |
Common Stock | |||
Net income per share: | |||
Common shares - Basic | $ 1.62 | $ 1.35 | $ 0.13 |
Common shares - Diluted | $ 1.55 | $ 1.31 | $ 0.13 |
Weighted average number of shares: | |||
Common shares - Basic | 11,943 | 11,395 | 11,105 |
Common shares - Diluted | 12,542 | 11,825 | 11,164 |
Dividends per share: | |||
Dividends per share | $ 0.24 | $ 0.24 | $ 0.24 |
Common Class B | |||
Net income per share: | |||
Common shares - Basic | 1.46 | 1.21 | 0.11 |
Common shares - Diluted | $ 1.40 | $ 1.18 | $ 0.11 |
Weighted average number of shares: | |||
Common shares - Basic | 2,052 | 2,080 | 2,097 |
Common shares - Diluted | 2,052 | 2,080 | 2,097 |
Dividends per share: | |||
Dividends per share | $ 0.22 | $ 0.22 | $ 0.22 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Operating activities: | |||
Net income | $ 22,333 | $ 17,927 | $ 1,655 |
Adjustments to reconcile net income to cash (used in) provided by operating activities: | |||
Depreciation and amortization | 3,671 | 3,423 | 3,424 |
Inventory provisions | 466 | 462 | 1,041 |
(Gain) loss on disposal of assets | (7) | 20 | 13 |
Share-based compensation expense | 936 | 654 | 675 |
Deferred income taxes | (138) | (4,042) | (1) |
Change in assets and liabilities: | |||
Accounts receivable | (363) | (6,183) | (4,198) |
Inventories | (30,452) | (20,571) | (4,861) |
Prepaid expenses and other assets | (519) | (228) | 103 |
Accounts payable | (439) | 7,671 | (565) |
Accrued liabilities | (4,006) | 2,420 | 3,572 |
Other | 319 | 358 | (26) |
Net cash (used in) provided by operating activities | (8,199) | 1,911 | 832 |
Investing activities: | |||
Capital expenditures | (7,378) | (3,120) | (2,632) |
Proceeds from the sale of assets | 194 | 0 | 0 |
Proceeds from maturity of investments | 5,000 | 0 | 25,000 |
Purchases of investments | 0 | (5,000) | (9,000) |
Net cash (used in) provided by investing activities | (2,184) | (8,120) | 13,368 |
Financing activities: | |||
Proceeds from issuance of common stock | 3,778 | 2,992 | 289 |
Cash dividends paid on Common and Class B Common shares | (3,320) | (3,193) | (3,122) |
Other | (69) | (151) | (181) |
Net cash provided by (used in) financing activities | 389 | (352) | (3,014) |
Effect of exchange rate changes on cash and cash equivalents | (520) | (1,260) | 1,595 |
(Decrease) increase in cash and cash equivalents | (10,514) | (7,821) | 12,781 |
Cash and cash equivalents at beginning of period | 35,495 | 43,316 | 30,535 |
Cash and cash equivalents at end of period | 24,981 | 35,495 | 43,316 |
Cash paid during the fiscal year for: | |||
Income taxes | $ 4,807 | $ 1,484 | $ 106 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common | Common Class B | Common Stock | Common Stock Common | Common Stock Common Class B | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Beginning Balance at May. 30, 2020 | $ 118,660 | $ 657 | $ 61,749 | $ 54,764 | $ 1,490 | ||||
Beginning Balance (in shares) at May. 30, 2020 | 11,038 | 2,097 | |||||||
Comprehensive income | |||||||||
Net income | 1,655 | 1,655 | |||||||
Foreign currency translation | 3,403 | 3,403 | |||||||
Share-based compensation: | |||||||||
Restricted stock | 483 | 483 | |||||||
Stock options | 192 | 192 | |||||||
Options exercised | 289 | 2 | 287 | ||||||
Options exercised (in shares) | 49 | ||||||||
Restricted stock issuance | 4 | (4) | |||||||
Restricted stock issuance (in shares) | 73 | ||||||||
Dividends paid to: | |||||||||
Common | (2,669) | (2,669) | |||||||
Class B | (453) | (453) | |||||||
Ending Balance at May. 29, 2021 | 121,560 | 663 | 62,707 | 53,297 | 4,893 | ||||
Ending Balance (in shares) at May. 29, 2021 | 11,160 | 2,097 | |||||||
Comprehensive income | |||||||||
Net income | 17,927 | 17,927 | |||||||
Foreign currency translation | (4,093) | (4,093) | |||||||
Share-based compensation: | |||||||||
Restricted stock | 444 | 444 | |||||||
Stock options | 210 | 210 | |||||||
Options exercised | 2,992 | 18 | 2,974 | ||||||
Options exercised (in shares) | 373 | ||||||||
Restricted stock issuance | 4 | (4) | |||||||
Restricted stock issuance (in shares) | 72 | ||||||||
Class B converted to Common | 44 | (44) | |||||||
Dividends paid to: | |||||||||
Common | (2,745) | (2,745) | |||||||
Class B | (448) | (448) | |||||||
Ending Balance at May. 28, 2022 | 135,847 | 685 | 66,331 | 68,031 | 800 | ||||
Ending Balance (in shares) at May. 28, 2022 | 11,649 | 2,053 | 11,649 | 2,053 | |||||
Comprehensive income | |||||||||
Net income | 22,333 | 22,333 | |||||||
Foreign currency translation | (185) | (185) | |||||||
Share-based compensation: | |||||||||
Restricted stock | 542 | 542 | |||||||
Stock options | 394 | 394 | |||||||
Options exercised | $ 3,778 | 23 | 3,755 | ||||||
Options exercised (in shares) | 440,480 | 441 | |||||||
Restricted stock issuance | $ (69) | 2 | (71) | ||||||
Restricted stock issuance (in shares) | 49 | ||||||||
Class B converted to Common | 1 | (1) | |||||||
Dividends paid to: | |||||||||
Common | (2,877) | (2,877) | |||||||
Class B | (443) | (443) | |||||||
Ending Balance at May. 27, 2023 | $ 159,320 | $ 710 | $ 70,951 | $ 87,044 | $ 615 | ||||
Ending Balance (in shares) at May. 27, 2023 | 12,140 | 2,052 | 12,140 | 2,052 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - Common Stock - $ / shares | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Common | |||
Dividends per common share | $ 0.24 | $ 0.24 | $ 0.24 |
Common Class B | |||
Dividends per common share | $ 0.22 | $ 0.22 | $ 0.22 |
Description of the Company
Description of the Company | 12 Months Ended |
May 27, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Company | 1. DESCRIPTION OF THE COMPANY Richardson Electronics, Ltd. (the "Company", "we", "our") is a leading global manufacturer of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; high-value replacement parts, tubes and service training for diagnostic imaging equipment; and customized display solutions. Nearly 60 % of our products are manufactured in LaFox, Illinois, Marlborough, Massachusetts or Donaueschingen, Germany, or by one of our manufacturing partners throughout the world. All our partners manufacture to our strict specifications and per our supplier code of conduct. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. The Company’s strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair through its global infrastructure. Our products include electron tubes and related components, microwave generators, subsystems used in semiconductor manufacturing and visual technology solutions. These products are used to control, switch or amplify electrical power signals, or are used as display devices in a variety of industrial, commercial, medical and communication applications. The Company began reporting the results for its new Green Energy Solutions ("GES") segment in the first quarter of fiscal 2023 due to its focus on power applications that support the green energy market. The GES segment has been carved out of our existing Power and Microwave Technologies (“PMT”) segment. Accordingly, the Company is reporting its financial performance based on four operating and reportable segments. The results for fiscal 2022 and fiscal 2021 presented herein were adjusted to reflect the presentation of the new GES segment separately from the PMT segment. The Company's four operating and reportable segments for fiscal 2023, fiscal 2022 and fiscal 2021 are defined as follows: Power and Microwave Technologies combines our core engineered solutions capabilities, power grid and microwave tube business with new disruptive RF, Wireless and Power technologies. As a designer, manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair—all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment. Green Energy Solutions combines our key technology partners and engineered solutions capabilities to design and manufacture innovative products for the fast-growing energy storage market and power management applications. As a designer, manufacturer, technology partner and authorized distributor, GES’s strategy is to provide specialized technical expertise and engineered solutions using our core design engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair—all through our existing global infrastructure. GES’s focus is on products for numerous green energy applications such as wind, solar, hydrogen and Electric Vehicles, and other power management applications that support green solutions such as synthetic diamond manufacturing. Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial and medical original equipment manufacturers markets. Our engineers design, manufacture, source and support a full spectrum of solutions to match the needs of our customers. We offer long term availability and proven custom display solutions that include touch screens, protective panels, custom enclosures, All-In-One computers, specialized cabinet finishes and application specific software packages and certification services. We partner with both private label manufacturing companies and leading branded hardware vendors to offer the highest quality display and touch solutions and customized computing platforms. Healthcare manufactures, repairs, refurbishes and distributes high value replacement parts and equipment for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI coils, cold heads and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions currently under development for the diagnostic imaging service market. Through a combination of newly developed products and partnerships, service offerings and training programs, we believe we can help our customers improve efficiency while lowering the cost of healthcare delivery. We currently have operations in the following major geographic regions: North America, Asia/Pacific, Europe and Latin America. Customer Concentration: One customer represented 20 percent of our total accounts receivable balance as of May 27, 2023. No one customer represented more than 10 percent of our total accounts receivable balance as of May 28, 2022. Sales to one customer in our PMT segment totaling $ 31.2 million accounted for 12 percent of the Company’s consolidated net sales in fiscal 2023. No one customer represented more than 10 percent the consolidated net sales in fiscal 2022 and fiscal 2021. Supplier Concentration: One of our suppliers represented 11 percent of our total cost of sales in fiscal 2023, 11 percent in fiscal 2022 and 15 percent in fiscal 2021. The amount owed to this supplier was approximately $ 0.2 million as of May 27, 2023 and $ 1.4 million as of May 28, 2022. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
May 27, 2023 | |
Basis Of Presentation [Abstract] | |
Basis of Presentation | 2. BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP for all fiscal years presented. The consolidated financial statements include our wholly owned subsidiaries. All intercompany transactions and account balances have been eliminated in consolidation. The Company began reporting the results for its new Green Energy Solutions ("GES") segment in the first quarter of fiscal 2023 due to its focus on power applications that support the green energy market. The GES segment has been carved out of our existing Power and Microwave Technologies (“PMT”) segment. Accordingly, the Company is reporting its financial performance based on four operating and reportable segments. The results for fiscal 2022 and fiscal 2021 presented herein were adjusted to reflect the presentation of the new GES segment separately from the PMT segment. Our fiscal year 2023 began on May 29, 2022 and ended on May 27, 2023, our fiscal year 2022 began on May 30, 2021 and ended on May 28, 2022 and our fiscal year 2021 began on May 31, 2020 and ended on May 29, 2021. Unless otherwise noted, all references to a particular year in this document shall mean the fiscal year for such period. |
Revolving Credit Facility
Revolving Credit Facility | 12 Months Ended |
May 27, 2023 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | 4. REVOLVING CREDIT FACILITY The Company entered into a Revolving Credit Facility with PNC Bank N.A. on March 20, 2023. Borrowings under the Company’s Revolving Credit Facility, including the Swingline Loan and Letter of Credit sub-facility extended to the Company thereunder, are secured by (i) a continuing first priority lien on and security interest in and to substantially all of the assets of the Company and its domestic subsidiaries and (ii) a continuing first priority pledge of the Pledged Collateral of the Company and the Guarantors identified in the Security Agreement and the Pledge Agreement executed in connection with the Credit Agreement. The combined maximum borrowings under the Revolving Credit Facility are $ 30,000,000 . Proceeds of borrowings will be used for working capital and general corporate purposes. The Credit Agreement provides that the Company must maintain compliance with a maximum consolidated leverage ratio covenant and a minimum consolidated fixed charge coverage ratio, each as determined in accordance with the Credit Agreement. The Credit Agreement also contains affirmative, negative and financial covenants customary for financings of this type, including, among other things, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales, and transactions with affiliates, as well as customary events of default for financings of this type. The Company was in full compliance with all covenants as May 27, 2023. Borrowings under the Revolving Credit Facility will bear interest at a rate per annum selected by the Company from the following options: (a) Term SOFR Rate (for the applicable Interest Period) plus the SOFR Adjustment (for the applicable Interest Period) plus 1.25 %; (b) Base Rate plus 0.25 % or (c) Daily Simple RFR (for Euros) plus the RFR Adjustment plus 1.25 %. Letters of Credit issued under the Letter of Credit sub-facility will have a letter of credit fee equal to 1.25 % per annum. The fee for the unused portion of the credit line is 0.10 %. There was no amount outstanding under the Revolving Credit Facility as of May 27, 2023 . |
Significant Accounting Policies
Significant Accounting Policies and Disclosures | 12 Months Ended |
May 27, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Disclosures | 3. SIGNIFICANT ACCOUNTING POLICIES AND DISCLOSURES Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management continuously evaluates its critical accounting policies and estimates, including the allowance for doubtful accounts, revenue recognition, inventory obsolescence, intangible assets, loss contingencies and income taxes. Management bases the estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, however, actual results could differ from those estimates. Reclassifications : Certain prior period amounts have been reclassified to conform to the current period reporting classifications. The reclassifications had no effect on previously reported net income or cash flows. Fair Values of Financial Instruments: The fair values of financial instruments are determined based on quoted market prices and market interest rates as of the end of the reporting period. Our financial instruments include investments, accounts receivable, accounts payable and accrued liabilities. The fair values of these financial instruments approximate carrying values at May 27, 2023 and May 28, 2022. Cash and Cash Equivalents: We consider short-term, highly liquid investments that are readily convertible to known amounts of cash, and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates, and that have a maturity of three months or less, when purchased, to be cash equivalents. The carrying amounts reported in the balance sheet for cash and cash equivalents approximate the fair market value of these assets. Allowance for Doubtful Accounts: Our allowance for doubtful accounts includes estimated losses that result from uncollectible receivables. The estimates are influenced by the following: continuing credit evaluation of customers’ financial conditions; aging of receivables, individually and in the aggregate; a large number of customers which are widely dispersed across geographic areas; and collectability and delinquency history by geographic area. Significant changes in one or more of these considerations may require adjustments affecting net income and net carrying value of accounts receivable. The allowance for doubtful accounts was approximately $ 0.2 million as of May 27, 2023 and $ 0.2 million as of May 28, 2022. Loss Contingencies: We accrue a liability for loss contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. If we determine that there is at least a reasonable possibility that a loss may have been incurred, we will include a disclosure describing the contingency. Revenue Recognition: Our customers are generally not resellers, but rather businesses that incorporate our products into their processes from which they generate an economic benefit. The goods are also distinct in that each item sold to the customer is clearly identified on both the purchase order and resulting invoice. Each product we sell benefits the customer independently of the other products. Each item on each purchase order from the customer can be used by the customer unrelated to any other products we provide to the customer. The Company’s revenue includes the following streams: • Manufacturing /assembly • Distribution • Services revenue Manufacturing/assembly typically includes the products that are manufactured or assembled in our manufacturing facility. These products can either be built to the customer’s prints/designs or are products that we stock in our warehouse to sell to any customer that places an order. The manufacturing business does not include a separate service bundled with the product sold or sold in addition to the product. Our contracts for customized products generally include termination provisions if a customer cancels its order. However, we recognize revenue at a point in time because the termination provisions normally do not require, upon cancellation, the customer to pay fees that are commensurate with the work performed. Each purchase order explicitly states the goods or service that we promise to transfer to the customer. The promises to the customer are limited only to those goods or service. The performance obligation is our promise to deliver both goods that were produced by the Company and resale of goods that we purchase from our suppliers. Our shipping and handling activities for destination shipments are performed prior to the customer obtaining control. As such, they are not a separate promised service. The Company elects to account for shipping and handling as activities to fulfill the promise to transfer the goods. The goods we provide to our customers are distinct in that our customers benefit from the goods we sell them through use in their own processes. Distribution typically includes products purchased from our suppliers, stocked in our warehouses and then sold to our customers. The distribution business does not include a separate service bundled with the product sold or sold on top of the product. Revenue is recognized when control of the promised goods is transferred to our customers, which is simultaneous with the title transferring to the customer, in an amount that reflects the transaction price consideration that we expect to receive in exchange for those goods. Control refers to the ability of the customer to direct the use of, and obtain substantially all of, the remaining benefits from the goods. Our transaction price consideration is fixed, unless otherwise disclosed below as variable consideration. Generally, our contracts require our customers to pay for goods after we deliver products to them. Terms are generally on open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe and Latin America subject to customary credit checks. Repair, installation or training activities generate services revenue. The services we provide are relatively short in duration and are typically completed in one or two weeks. Therefore, at each reporting date, the amount of unbilled work is insignificant. The services revenue has consistently accounted for less than 5 % of the Company’s total revenues and is expected to continue at that level. We record discounts taken based on historical experience. The policy varies by business unit. The Company allows returns with prior written authorization. We estimate returns based on historical experience. The Company maintains a reserve for returns based on historical trends that covers all contracts and revenue streams using the expected value method because we have a large number of contracts with similar characteristics, which is considered variable consideration. The reserve for returns creates a refund liability on our balance sheet as a contra trade accounts receivable as well as an asset in inventory. We value the inventory at cost due to there being minimal or no costs to the Company as we generally require the customer to pay freight and we typically do not have costs associated with activities such as relabeling or repackaging. The reserve is considered immaterial at each balance sheet date. Returns for defective product are typically covered by our suppliers’ warranty, thus, returns for defective product are not factored into our reserve. Principal versus agent guidance was considered for customized products that are provided by our suppliers versus manufactured by the Company. The Company acts as the principal as we are responsible for satisfying the performance obligation. We have primary responsibility for fulfilling the contract, we have inventory risk prior to delivery to our customer, we establish prices, our consideration is not in the form of a commission and we bear the credit risk. The Company recognizes revenue in the gross amount of consideration. Contracts with customers A revenue contract exists once a customer purchase order is received, reviewed and accepted. Each accepted purchase order identifies a distinct good or service as the performance obligation. The goods include standard products purchased from a supplier and stocked on our shelves, customized products purchased from a supplier, products that are customized or have value added to them in house prior to shipping to the customer and manufactured products. Prior to accepting a customer purchase order, we review the credit worthiness of the customer. Purchase orders are deemed to meet the collectability criterion once the customer’s credit is approved. The Company receives advance payments or deposits from our customers before revenue is recognized resulting in contract liabilities. Contract liabilities are included in accrued liabilities in the consolidated balance sheets. Contract Liabilities: Contract liabilities and revenue recognized were as follows ( in thousands ): Balance May 29, 2021 $ 3,313 Additions 6,917 Revenue recognized ( 5,264 ) Balance May 28, 2022 $ 4,966 Additions 4,293 Revenue recognized ( 5,976 ) Balance May 27, 2023 $ 3,283 See Note 10, Segment and Geographic Information, for a disaggregation of revenue by reportable segment and geographic region, which represents how our chief operating decision maker reviews information internally to evaluate our financial performance and to make resource allocation and other decisions for the Company. Foreign Currency Translation: The functional currency is the local currency at all foreign locations, with the exception of Hong Kong, where the functional currency is the U.S. dollar. Balance sheet items for our foreign entities, included in our consolidated balance sheets, are translated into U.S. dollars at end-of-period spot rates. Gains and losses resulting from translation of foreign subsidiary financial statements are credited or charged directly to accumulated other comprehensive income, a component of stockholders’ equity. Revenues and expenses are translated at the current rate on the date of the transaction. Gains and losses resulting from foreign currency transactions are included in income. Foreign exchange loss reflected in our Consolidated Statements of Comprehensive Income were $ 0.3 million, $ 0.3 million and $ 0.8 million during fiscal 2023, fiscal 2022 and fiscal 2021, respectively. Shipping and Handling Fees and Costs: Shipping and handling costs billed to customers are reported as revenue and the related costs are reported as a component of cost of sales. Inventories, net: Our consolidated inventories are stated at the lower of cost and net realizable value, generally using a weighted-average cost method. Our net inventories include approximately $ 93.4 million of finished goods, $ 11.8 million of raw materials and $ 5.2 million of work-in-progress as of May 27, 2023 as compared to approximately $ 66.6 million of finished goods, $ 8.0 million of raw materials and $ 5.8 million of work-in-progress as of May 28, 2022. The inventory reserve as of May 27, 2023 was $ 5.9 million compared to $ 6.1 million as of May 28, 2022. Provisions for obsolete or slow-moving inventories are recorded based upon regular analysis of stock rotation privileges, obsolescence, the exiting of certain markets and assumptions about future demand and market conditions. If future demand changes in the industry or market conditions differ from management’s estimates, additional provisions may be necessary. We recorded provisions to our inventory reserves of $ 0.5 million, $ 0.5 million and $ 1.0 million during fiscal 2023, fiscal 2022 and fiscal 2021, respectively, which were included in cost of sales. The provisions were primarily for obsolete and slow-moving parts. The parts were written down to estimated realizable value. Income Taxes: We recognize deferred tax assets and liabilities based on the differences between financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and determine the need for a valuation allowance based on a number of factors, including both positive and negative evidence. These factors include historical taxable income or loss, projected future taxable income or loss, the expected timing of the reversals of existing temporary differences and the implementation of tax planning strategies. In circumstances where we, or any of our affiliates, have incurred three years of cumulative losses which constitute significant negative evidence, positive evidence of equal or greater significance is needed to overcome the negative evidence before a tax benefit is recognized for deductible temporary differences and loss carryforwards. Investments: We liquidated our investments during the third quarter and accordingly had no investments at the end of fiscal 2023. As of May 28, 2022, we had $ 5.0 million invested in a Certificate of Deposit (level 1 classification), which matured in less than twelve months. Intangible Assets: Intangible assets are initially recorded at their fair market values determined by quoted market prices in active markets, if available, or recognized valuation models. Intangible assets that have finite useful lives are amortized over their useful lives either on a straight-line basis or over their projected future cash flows and are tested for impairment when events or changes in circumstances occur that indicate possible impairment. Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements and technology acquired in connection with the acquisitions. Property, Plant and Equipment: Property, plant and equipment are stated at cost, net of accumulated depreciation. Improvements and replacements are capitalized while expenditures for maintenance and repairs are charged to expense as incurred. Provisions for depreciation are computed using the straight-line method over the estimated useful life of the asset. Depreciation expense was approximately $ 3.4 million, $ 3.2 million and $ 3.2 million during fiscal 2023, fiscal 2022 and fiscal 2021, respectively. Property, plant and equipment consist of the following ( in thousands ): May 27, 2023 May 28, 2022 Land and improvements $ 1,532 $ 1,385 Buildings and improvements 24,206 23,002 Computer, communications equipment and software 11,692 11,186 Machinery and other equipment 18,350 16,215 Construction in progress 4,437 1,991 $ 60,217 $ 53,779 Accumulated depreciation ( 39,394 ) ( 36,818 ) Property, plant, and equipment, net $ 20,823 $ 16,961 Construction in progress at May 27, 2023 includes $ 2.2 million for facilities, $ 1.6 million for manufacturing facilities and $ 0.6 million for IT systems. All projects are expected to be completed before the end of fiscal 2024. Supplemental disclosure information of the estimated useful life of the assets: Land improvements 10 years Buildings and improvements 10 - 30 years Computer, communications equipment and software 3 - 10 years Machinery and other equipment 3 - 20 years We review property and equipment, definite-lived intangible assets and other long-lived assets for impairment whenever adverse events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. If adverse events do occur, our impairment review is based on an undiscounted cash flow analysis at the lowest level at which cash flows of the long-lived assets are largely independent of other groups of our assets and liabilities. This analysis requires management judgment with respect to changes in technology, the continued success of product lines and future volume, revenue and expense growth rates. We conduct annual reviews for idle and underutilized equipment and review business plans for possible impairment. Impairment occurs when the carrying value of the assets exceeds the future undiscounted cash flows expected to be earned by the use of the asset or asset group. When impairment is indicated, the estimated future cash flows are then discounted to determine the estimated fair value of the asset or asset group and an impairment charge is recorded for the difference between the carrying value and the estimated fair value. Additionally, we also evaluate the remaining useful life of each reporting period to determine whether events and circumstances warrant a revision to the remaining period of depreciation or amortization. If the estimate of a long-lived asset’s remaining useful life is changed, the remaining carrying amount of the asset is amortized prospectively over that revised remaining useful life. Accrued Liabilities: Accrued liabilities consist of the following ( in thousands ): May 27, 2023 May 28, 2022 Compensation and payroll taxes $ 4,422 $ 5,519 Accrued severance 486 678 Professional fees 661 470 Deferred revenue 3,283 4,966 Other accrued expenses 3,174 4,477 Accrued Liabilities $ 12,026 $ 16,110 Warranties: We offer warranties for the limited number of specific products we manufacture. We estimate the cost to perform under the warranty obligation and recognize this estimated cost at the time of the related product sale. We record expense related to our warranty obligations as cost of sales in our Consolidated Statements of Comprehensive Income. Each quarter, we assess actual warranty costs incurred on a product-by-product basis and compare the warranty costs to our estimated warranty obligation. With respect to new products, estimates are based generally on knowledge of the products and warranty experience. Warranty reserves are established for costs that are expected to be incurred after the sale and delivery of products under warranty. Warranty reserves are included in accrued liabilities on our consolidated balance sheets. The warranty reserves are determined based on known product failures, historical experience and other available evidence. Changes in the warranty reserve during fiscal 2023 and fiscal 2022 were as follows ( in thousands ): Warranty Balance at May 29, 2021 $ 548 Accruals for products sold 160 Utilization ( 32 ) Balance at May 28, 2022 $ 676 Accruals for products sold 91 Utilization ( 42 ) Balance at May 27, 2023 $ 725 Other Non-Current Liabilities: Other non-current liabilities of $ 0.6 million at May 27, 2023 and $ 0.8 million at May 28, 2022, primarily represent employee-benefits obligations in various non-U.S. locations. Share-Based Compensation: We measure and recognize share-based compensation cost at fair value for all share-based payments, including stock options and restricted stock awards. We estimate fair value using the Black-Scholes option-pricing model, which requires assumptions such as expected volatility, risk-free interest rate, expected life and dividends. We account for the forfeitures of stock-based compensation in the period in which they occur. Compensation cost is recognized using a graded vesting schedule over the applicable vesting period. Share-based compensation expense totaled approximately $ 0.9 million during fiscal 2023, $ 0.7 million during fiscal 2022 and $ 0.7 million during fiscal 2021. Stock options granted generally vest over a period of five years and have contractual terms to exercise of 10 years. A summary of stock option activity is as follows ( in thousands, except option prices and years): Number of Weighted Weighted Aggregate Options Outstanding at May 30, 2020 1,427 $ 8.83 Granted 188 4.26 Exercised ( 49 ) 5.93 Forfeited ( 7 ) 5.96 Cancelled ( 104 ) 12.53 Options Outstanding at May 29, 2021 1,455 $ 8.08 Granted 185 7.66 Exercised ( 373 ) 8.01 Forfeited ( 35 ) 6.51 Cancelled ( 84 ) 11.65 Options Outstanding at May 28, 2022 1,148 $ 7.82 Granted 194 15.58 Exercised ( 441 ) 8.58 Forfeited ( 20 ) 8.15 Cancelled ( 25 ) 11.67 Options Outstanding at May 27, 2023 856 $ 9.07 6.4 $ 7,122 Options Vested at May 27, 2023 387 $ 8.24 4.6 $ 3,537 (1) Includes only those options that were in-the-money as of May 27, 2023. Stock options for which the exercise price exceeded the market price have been omitted. Fluctuations in the intrinsic value of both outstanding and exercisable options may result from changes in underlying stock price and timing and volume of option grants, exercises and forfeitures. There were 440,480 stock options exercised during fiscal 2023, with cash received of $ 3.8 million. The total intrinsic value of options exercised was $ 4.7 million during fiscal 2023, $ 1.9 million for fiscal 2022 and $ 0.1 million for fiscal 2021. The weighted average fair value of stock option grants was $ 5.44 during fiscal 2023, $ 1.50 during fiscal 2022 and $ 0.49 during fiscal 2021. As of May 27, 2023, total unrecognized compensation costs related to unvested stock options and restricted stock awards was approximately $ 1.8 million, which is expected to be recognized over the remaining weighted average period of approximately two to four years . The total grant date fair value of stock options vested during fiscal 2023 was $ 0.3 million. The fair value of stock options is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions: Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Expected volatility 39.12 % 29.00 % 27.72 % Risk-free interest rate 3.09 % 0.97 % 0.45 % Expected lives (years) 5.47 6.50 6.50 Annual cash dividend $ 0.24 $ 0.24 $ 0.24 The expected volatility assumptions are based on historical experience commensurate with the expected term. The risk-free interest rate is based on the yield of a treasury note with a remaining term equal to the expected life of the stock option. The expected stock option life assumption is based on the Securities and Exchange Commission’s (“SEC”) guidance in Staff Accounting Bulletin (“SAB”) No. 107 (“SAB No. 107”). For stock options granted during fiscal 2022 and fiscal 2021 the simplified method was used as we believed that our historical stock option experience did not provide a reasonable basis upon which to estimate expected term. The following table summarizes information about stock options outstanding at May 27, 2023 ( in thousands, except option prices and years ): Outstanding Vested Exercise Price Range Shares Weighted Weighted Aggregate Shares Weighted Weighted Aggregate $4.26 to $6.47 280 $ 5.09 6.2 $ 3,446 135 $ 5.41 5.6 $ 1,615 $6.90 to $10.35 347 8.34 5.7 3,138 194 8.65 4.2 1,694 $11.14 to $16.71 229 15.04 7.7 538 58 13.45 3.3 228 Total 856 $ 9.07 6.4 $ 7,122 387 $ 8.24 4.6 $ 3,537 As of May 27, 2023, a summary of restricted stock award transactions was as follows ( in thousands ): Unvested Unvested at May 29, 2021 144 Granted 72 Vested ( 71 ) Unvested at May 28, 2022 145 Granted 53 Vested ( 73 ) Unvested at May 27, 2023 125 Compensation effects arising from issuing stock awards have been charged against income and recorded as additional paid-in-capital in the consolidated statements of stockholders’ equity during fiscal 2023, fiscal 2022 and fiscal 2021. The Employees’ Amended and Restated 2011 Long-Term Incentive Compensation Plan (the “Plan”) authorizes the issuance of up to 3,500,000 shares as incentive stock options, non-qualified stock options or stock awards. Under this plan, 1,028,000 shares are reserved for future issuance. The Plan authorizes the granting of stock options at the fair market value at the date of grant. Generally, these options become exercisable over five years and expire up to 10 years from the date of grant. Restricted stock awards vest on the anniversary of the grant date in three equal installments. Earnings per Share: We have authorized 17,000,000 shares of common stock and 3,000,000 shares of Class B common stock. The Class B common stock has 10 votes per share and has transferability restrictions; however, Class B common stock may be converted into common stock on a share-for-share basis at any time. With respect to dividends and distributions, shares of common stock and Class B common stock rank equally and have the same rights, except that Class B common stock cash dividends are limited to 90 % of the amount of Class A common stock cash dividends. Our Class B common stock is considered a participating security requiring the use of the two-class method for the computation of basic and diluted earnings per share. The two-class computation method for each period reflects the cash dividends paid per share for each class of stock, plus the amount of allocated undistributed earnings per share computed using the participation percentage which reflects the dividend rights of each class of stock. Basic and diluted earnings per share were computed using the two-class method. The shares of Class B common stock are considered to be participating convertible securities since the shares of Class B common stock are convertible on a share-for-share basis into shares of common stock and may participate in dividends with common stock according to a predetermined formula which is 90% of the amount of Class A common stock cash dividends. The earnings per share (“EPS”) presented in our Consolidated Statements of Comprehensive Income are based on the following ( in thousands, except per share amounts ): For the Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Basic Diluted Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net income $ 22,333 $ 22,333 $ 17,927 $ 17,927 $ 1,655 $ 1,655 Less dividends: Common stock 2,877 2,877 2,745 2,745 2,669 2,669 Class B common stock 443 443 448 448 453 453 Undistributed earnings (loss) $ 19,013 $ 19,013 $ 14,734 $ 14,734 $ ( 1,467 ) $ ( 1,467 ) Common stock undistributed earnings (loss) $ 16,467 $ 16,573 $ 12,655 $ 12,720 $ ( 1,254 ) $ ( 1,255 ) Class B common stock undistributed earnings (loss) 2,546 2,440 2,079 2,014 ( 213 ) ( 212 ) Total undistributed earnings (loss) $ 19,013 $ 19,013 $ 14,734 $ 14,734 $ ( 1,467 ) $ ( 1,467 ) Denominator for Basic and Diluted EPS: Common stock weighted average shares 11,943 11,943 11,395 11,395 11,105 11,105 Effect of dilutive securities Dilutive stock options 599 430 59 Denominator for diluted EPS adjusted for 12,542 11,825 11,164 Class B common stock weighted average shares, 2,052 2,052 2,080 2,080 2,097 2,097 Net income per share: Common stock $ 1.62 $ 1.55 $ 1.35 $ 1.31 $ 0.13 $ 0.13 Class B common stock $ 1.46 $ 1.40 $ 1.21 $ 1.18 $ 0.11 $ 0.11 Note: There were no common stock options that were anti-dilutive for fiscal 2023, fiscal 2022 and fiscal 2021. New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 (as amended by ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and 2020-02) introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. The new standard is effective for smaller reporting companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted. The Company will adopt in the first quarter of fiscal 2024 and the expected impact on the consolidated financial statements is not material. |
Related Party Transaction
Related Party Transaction | 12 Months Ended |
May 27, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | 5. RELATED PARTY TRANSACTION On June 15, 2015, the Company entered into a lease agreement for the IMES facility with LDL, LLC. That lease agreement was extended for five years in fiscal 2021. The Company shall be entitled to extend the term of the lease for a period of an additional five years by notifying the landlord in writing of its intention to do so within six months of the expiration of the term. The Executive Vice President of IMES, Lee A. McIntyre III (former owner of IMES), has an ownership interest in LDL, LLC. Mr. McIntyre departed from the Company in fiscal year 2023 , effective as of September 24, 2022 . The lease agreement provides for monthly payments over five years with total future minimum lease payments of $ 0.3 million. Rental expense related to this lease amounted to $ 0.2 million for the fiscal year ended May 27, 2023, $ 0.2 million for fiscal year ended May 28, 2022 and $ 0.1 million for fiscal year ended May 29, 2021. |
Intangible Assets
Intangible Assets | 12 Months Ended |
May 27, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | INTANGIBLE ASSETS Intangible assets are initially recorded at their fair market values determined by quoted market prices in active markets, if available, or recognized valuation models. Intangible assets that have finite useful lives are amortized over their useful lives and are tested for impairment when events or changes in circumstances occur that indicate possible impairment. No impairment was recognized in fiscal 2023, fiscal 2022 or fiscal 2021. Our intangible assets represent the fair value for customer relationships and technology acquired in connection with our acquisitions. Intangible assets subject to amortization were as follows (in thousands) : May 27, 2023 May 28, 2022 Gross Amounts: Customer Relationships (1) $ 3,388 $ 3,393 Technology 380 230 Total Gross Amounts $ 3,768 $ 3,623 Accumulated Amortization: Customer Relationships $ 1,671 $ 1,453 Technology 205 160 Total Accumulated Amortization $ 1,876 $ 1,613 Net Intangible Assets $ 1,892 $ 2,010 (1) Change from prior periods reflect impact of foreign currency translation. Companies must perform the annual test for impairment for indefinite life intangible assets, for which the Company has none, as well as test definite life assets for impairment in the event of a “trigger event” such as adverse changes in the business climate or market which might negatively impact the value of a reporting unit. We determined that the intangible assets were not impaired as of May 27, 2023 on the basis that no adverse events or changes in circumstances were identified that could indicate that the carrying amounts of such assets may not be recoverable. The amortization expense associated with the intangible assets subject to amortization for the next five years is presented in the following table (in thousands) : Fiscal Year Amortization 2024 $ 252 2025 239 2026 206 2027 194 2028 183 Thereafter 818 Total amortization expense $ 1,892 The amortization expense associated with the intangible assets totaled approximately $ 0.3 million during fiscal 2023 and $ 0.2 million during fiscal 2022 and fiscal 2021. The weighted average number of years of amortization expense remaining is 10.6 years. |
Lease Obligations and Other Com
Lease Obligations and Other Commitments | 12 Months Ended |
May 27, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Obligations and Other Commitments | 7. LEASE OBLIGATIONS AND OTHER COMMITMENTS The Company leases real and personal property in the normal course of business under various operating and financing leases. The Company uses operating leases for facility space and automobiles. Most of the leased facility space is for sales and general office use. Automobile leases are used throughout the Company. Financing leases were used for computer servers. Several leases include renewal clauses which vary in length and may not include specific rent renewal amounts. The Company will revise the value of the right of use assets and associated lease liabilities when the Company determines it is reasonably certain of renewal. The gross amounts of assets and liabilities related to both operating and financing leases at May 27, 2023 and May 28, 2022 were as follows (in thousands) : Lease Type May 27, 2023 May 28, 2022 Operating lease ROU asset $ 2,457 $ 3,024 Financing lease ROU asset — 215 Total Lease ROU asset $ 2,457 $ 3,239 Operating lease liability current $ 1,028 $ 1,109 Financing lease liability current — — Total lease liability current $ 1,028 $ 1,109 Operating lease liability non-current $ 1,429 $ 1,915 Financing lease liability non-current — — Total lease liability non-current $ 1,429 $ 1,915 The components of lease costs for fiscal 2023 and fiscal 2022 were as follows (in thousands) : Lease Type Classification Fiscal Year Ended Fiscal Year Ended Consolidated operating lease expense Operating expenses $ 1,721 $ 1,781 Consolidated financing lease amortization Operating expenses — 92 Consolidated financing lease interest Interest expense — 3 Consolidated financing lease expense — 95 Net lease cost $ 1,721 $ 1,876 Rent expense for fiscal 2023, fiscal 2022 and fiscal 2021 was $ 1.5 million, $ 1.6 million, and $ 1.7 million, respectively. Our future lease commitments for minimum rentals, including common area maintenance charges and property taxes during the next five years are as follows (in thousands) : Fiscal Year Operating Leases 2024 $ 1,147 2025 827 2026 453 2027 113 2028 23 Thereafter 12 Total lease payments 2,575 Lease inputted interest 118 Net minimum lease payments $ 2,457 The weighted average remaining lease terms and interest rates of leases held by the Company as of May 27, 2023 were as follows: Lease Type Weighted Average Remaining Weighted Average Operating leases 2.6 4.0 % The cash outflows of the leasing activity of the Company as lessee for fiscal 2023 and fiscal 2022 were as follows (in thousands) : Fiscal Year Ended Cash Flow Source Classification May 27, 2023 May 28, 2022 Operating cash flows from operating leases Operating activities $ 566 $ 747 Operating cash flows from financing leases Operating activities — 148 Finance cash flows from financing leases Financing activities — 151 |
Income Taxes
Income Taxes | 12 Months Ended |
May 27, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES Income before income taxes included the following components ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 United States $ 22,258 $ 12,299 $ 1,077 Foreign 2,772 3,460 1,231 Income before income taxes $ 25,030 $ 15,759 $ 2,308 The provision (benefit) for income taxes for fiscal 2023, fiscal 2022 and fiscal 2021 consisted of the following ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Current: Federal $ 954 $ ( 4,213 ) $ 108 State 1,212 950 — Foreign 547 1,038 665 Total current 2,713 ( 2,225 ) 773 Deferred: Federal — — — Foreign ( 16 ) 57 ( 120 ) Total deferred ( 16 ) 57 ( 120 ) Income tax provision (benefit) $ 2,697 $ ( 2,168 ) $ 653 The differences between income taxes at the U.S. federal statutory income tax rate of 21.0 % for fiscal 2023, fiscal 2022 and fiscal 2021 and the reported income tax provision for fiscal 2023, fiscal 2022 and fiscal 2021, are summarized as follows: Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % Effect of: State income taxes, net of federal tax benefit 3.6 5.5 21.6 Foreign taxes at other rates 0.9 4.5 10.5 Permanent tax differences 0.1 ( 2.0 ) 18.3 Change in valuation allowance for deferred tax assets ( 7.0 ) ( 43.1 ) ( 49.7 ) Return to provision adjustments ( 0.7 ) 0.2 2.2 R&D credit ( 3.7 ) — — Other ( 3.4 ) 0.2 4.4 Effective tax rate 10.8 % ( 13.7 )% 28.3 % Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Our deferred tax assets and liabilities reflect operations as of May 27, 2023 and May 28, 2022. Significant components were as follows ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 Deferred tax assets: NOL carryforwards - foreign and domestic $ 2,324 $ 2,796 Inventory valuations 1,506 1,571 Goodwill 1,056 1,182 Foreign tax credits 26 1,782 Severance reserve 131 183 Foreign capital loss 944 1,224 Section 174 capitalization 1,215 — Lease liability 381 520 Other 1,067 1,480 Subtotal 8,650 10,738 Valuation allowance - foreign and domestic ( 1,375 ) ( 3,474 ) Net deferred tax assets after valuation allowance 7,275 7,264 Deferred tax liabilities: Accelerated depreciation ( 2,441 ) ( 2,406 ) Tax on undistributed earnings ( 24 ) ( 24 ) ROU assets ( 381 ) ( 520 ) Other ( 1 ) ( 1 ) Subtotal ( 2,847 ) ( 2,951 ) Net deferred tax assets $ 4,428 $ 4,313 Supplemental disclosure of net deferred tax assets, Domestic $ 4,517 $ 6,017 Foreign 1,285 1,770 Total $ 5,802 $ 7,787 The Inflation Reduction Act (the "IRA"), signed into law by President Biden on August 16, 2022, has several key corporate tax-related provisions, including a 15 % creditable book minimum tax on adjusted financial statement income (“AFSI”) of applicable corporations, clean energy tax incentives and 1 % excise tax on certain corporate stock buybacks. The Company did not rise to the level of AFSI to be subject to the 15 % creditable book minimal tax. The Company did not have a material impact from the IRA. The Creating Helpful Incentives to Produce Semiconductors Act of 2022 (the "CHIPS Act") was signed into law by President Biden on August 9, 2022, which created a new 25 % investment tax credit for qualified property placed in service for semiconductor manufacturing. This production credit was not applicable to the Company. During the fourth quarter of fiscal 2023, the Company recorded research and development (“R&D”) tax credits of $ 0.9 million. These credits represent the expected U.S. federal and state credits to be claimed for fiscal 2020 through fiscal 2023. The Company has not previously recorded any benefit from an R&D tax credit due to the fact that the Company did not believe it was economically prudent to pursue these credits in prior years. For taxable years beginning after December 31, 2021, taxpayers are required to capitalize certain R&D expenses and amortize them over five or fifteen years under IRC Section 174. This provision increased our taxable income for the year ended May 27, 2023, and resulted in additional cash tax payments for U.S. federal and state income taxes. This provision also generated a deferred tax asset for the year ended May 27, 2023. As of May 27, 2023 and May 28, 2022 we have utilized all net deferred tax assets related to federal net operating loss (“NOL”) carryforwards. Net deferred tax assets related to domestic state NOL carryforwards at May 27, 2023 amounted to approximately $ 2.1 million, compared to $ 2.4 million at May 28, 2022. Net deferred tax assets related to foreign NOL carryforwards was $ 0.2 million as of May 27, 2023 compared to $ 0.4 million as of May 28, 2022, with various or indefinite expiration dates. We released the valuation allowance and have utilized $ 1.8 million of domestic net deferred tax asset related to foreign tax credit carryforwards as of May 27, 2023. We have historically determined that undistributed earnings of our foreign subsidiaries, to the extent of cash available, will be repatriated to the U.S. The deferred tax liability on the outside basis difference is now primarily withholding tax on future dividend distributions. The deferred tax liability related to undistributed earnings of our foreign subsidiaries was less than $ 0.1 million in both fiscal 2023 and fiscal 2022. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to support a more likely than not assertion that its deferred tax assets will be realized. A significant component of objective evidence evaluated was the cumulative income or loss incurred in each jurisdiction over the three-year period ended May 27, 2023. We considered other positive evidence in determining the need for a valuation allowance in the U.S. including the subpart F and GILTI inclusions of our foreign earnings, the changes in our business performance in recent years and the utilization of federal NOLs. The weight of this positive evidence is sufficient to outweigh other negative evidence in evaluating our need for a valuation allowance in the U.S. federal jurisdiction. As a result of the positive evidence outweighing the negative evidence for the year ended May 28, 2022, we released the full valuation allowance on the U.S. federal and state deferred tax items. In addition, in the year ended May 28, 2022, we partially released the valuation allowance on the state NOL deferred tax item, based on the amount of the NOLs that management believed it is more likely than not to realize. As of May 27, 2023, we have released $ 1.8 million of the valuation allowance on the deferred tax asset related to foreign tax credits based on positive evidence that arose during the fourth quarter of fiscal 2023 related to the foreign tax credit limitation calculation. As of May 27, 2023, a valuation allowance of $ 1.4 million was recorded, representing the portion of the deferred tax asset that management does not believe is more likely than not to be realized. The valuation allowance as of May 28, 2022 was $ 3.5 million. The remaining valuation allowance relates to state NOLs ($ 0.2 million) and deferred tax assets in foreign jurisdictions where historical taxable losses have been incurred ($ 1.3 million). The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. Income taxes paid, including foreign estimated tax payments, were $ 4.8 million, $ 1.5 million and $ 0.1 million, during fiscal 2023, fiscal 2022 and fiscal 2021, respectively. In the normal course of business, we are subject to examination by taxing authorities throughout the world. Generally, years prior to fiscal 2017 are closed for examination under the statute of limitation for U.S. federal, U.S. state and local or non-U.S. tax jurisdictions. We were under examination for fiscal 2015 through fiscal 2018 in Germany. The audit was settled in the fourth quarter of fiscal 2022. In the second quarter of fiscal 2023, the Company paid the audit assessment for the fiscal 2015 through fiscal 2018 years. The Company recorded a tax expense of less than $ 0.1 million due to receiving the final assessment for the German audit. The $ 0.1 million of uncertain tax positions recorded in prior quarters has been fully utilized as of May 27, 2023. Our primary foreign tax jurisdictions are Germany and the Netherlands. We have tax years open in Germany beginning in fiscal 2019 and the Netherlands beginning in fiscal 2021. The Company did no t record any uncertain tax positions as of May 27, 2023, as compared to $ 0.1 million as of May 28, 2022. The reserve for the German audits was reversed in fiscal 2023. We record penalties and interest related to uncertain tax positions in the income tax expense line item within the Consolidated Statements of Comprehensive Income. Accrued interest and penalties were included within the related tax liability line in the Consolidated Balance Sheets. We have no t recorded a liability for interest and penalties as of May 27, 2023 or May 28, 2022. The following table summarizes the activity related to the unrecognized tax benefits (in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 Unrecognized tax benefits, beginning of period $ 125 $ 142 Currency translation adjustment ( 4 ) ( 17 ) Release German reserve ( 121 ) — Unrecognized tax benefits, end of period $ — $ 125 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
May 27, 2023 | |
Disclosure Text Block Supplement [Abstract] | |
Employee Benefit Plans | 9. EMPLOYEE BENEFIT PLANS The employee profit sharing plan is a defined contribution profit sharing plan. The profit sharing plan has a 401(k) provision whereby we match 50 % of employee contributions up to 6.0 % of pay for fiscal 2023 and fiscal 2022. The Company matched contributions up to 4.0 % of pay for fiscal 2021. Charges to expense for matching contributions to this plan were $ 1.0 million, $ 0.8 million and $ 0.6 million, during fiscal 2023, fiscal 2022 and fiscal 2021, respectively. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
May 27, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 10. SEGMENT AND GEOGRAPHIC INFORMATION As described in Note 1, Description of the Company and Note 2, Basis of Presentation, the Company began reporting the results for its new Green Energy Solutions ("GES") segment in the first quarter of fiscal 2023 due to its focus on power applications that support the green energy market. The GES segment has been carved out of our existing Power and Microwave Technologies (“PMT”) segment. Accordingly, the Company is reporting its financial performance based on four operating and reportable segments. The results for fiscal 2022 and fiscal 2021 presented herein were adjusted to reflect the presentation of the new GES segment separately from the PMT segment. The Company's four operating and reportable segments for fiscal 2023, fiscal 2022 and fiscal 2021 were defined as follows: Power and Microwave Technologies combines our core engineered solutions capabilities, power grid and microwave tube business with new disruptive RF, Wireless and Power technologies. As a designer, manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair—all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment. Green Energy Solutions combines our key technology partners and engineered solutions capabilities to design and manufacture innovative products for the fast-growing energy storage market and power management applications. As a designer, manufacturer, technology partner and authorized distributor, GES’s strategy is to provide specialized technical expertise and engineered solutions using our core design engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair—all through our existing global infrastructure. GES’s focus is on products for numerous green energy applications such as wind, solar, hydrogen and Electric Vehicles, and other power management applications that support green solutions such as synthetic diamond manufacturing. Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial and medical original equipment manufacturers markets. Our engineers design, manufacture, source and support a full spectrum of solutions to match the needs of our customers. We offer long term availability and proven custom display solutions that include touch screens, protective panels, custom enclosures, All-In-One computers, specialized cabinet finishes and application specific software packages and certification services. We partner with both private label manufacturing companies and leading branded hardware vendors to offer the highest quality display and touch solutions and customized computing platforms. Healthcare manufactures, repairs, refurbishes and distributes high value replacement parts and equipment for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI coils, cold heads and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions currently under development for the diagnostic imaging service market. Through a combination of newly developed products and partnerships, service offerings and training programs, we believe we can help our customers improve efficiency while lowering the cost of healthcare delivery. The CEO, who is the chief operating decision maker, evaluates performance and allocates resources primarily based on the gross profit of each segment. Operating results by segment are summarized in the following table ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 PMT Net Sales $ 164,299 $ 155,445 $ 128,980 Gross Profit 54,089 50,810 43,546 GES Net Sales $ 47,596 $ 22,611 $ 8,300 Gross Profit 13,719 7,231 2,405 Canvys Net Sales $ 39,331 $ 35,187 $ 29,319 Gross Profit 12,375 11,252 10,274 Healthcare Net Sales $ 11,432 $ 11,377 $ 10,338 Gross Profit 3,506 2,407 2,600 A reconciliation of assets to the relevant consolidated amount is as follows ( in thousands ): May 27, 2023 May 28, 2022 Segment assets $ 149,976 $ 120,696 Cash and cash equivalents 24,981 35,495 Investments - current — 5,000 Other current assets (1) 2,771 2,686 Net property, plant and equipment 14,124 9,435 Operating lease ROU asset 1,403 1,894 Financing lease ROU asset — 215 Other non-current assets 267 — Other assets - non-current deferred income taxes 4,526 4,398 Total assets $ 198,048 $ 179,819 (1) Other current assets include miscellaneous receivables and prepaid expenses. Assets are not disclosed by reportable segment as the Company does not track assets by reportable segment and certain assets are not specific to any reportable segment. Capital expenditures for our Healthcare segment during fiscal 2023 and fiscal 2022 were approximately $ 0.6 million and $ 1.0 million, respectively. In addition, we also had capital expenditures during fiscal 2023 and fiscal 2022 related to the Company’s ERP system as well as facilities that were not specific to any particular reportable segment. Geographic net sales information is primarily grouped by customer destination into five areas: North America; Asia/Pacific; Europe; Latin America; and Other. Net sales and gross profit by geographic region are summarized in the following table ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Net Sales North America $ 112,214 $ 98,527 $ 73,625 Asia/Pacific 59,557 49,235 40,839 Europe 62,017 64,435 52,549 Latin America 28,924 12,439 9,651 Other (1) ( 54 ) ( 16 ) 273 Total $ 262,658 $ 224,620 $ 176,937 Gross Profit North America $ 43,580 $ 36,548 $ 28,639 Asia/Pacific 18,775 15,728 13,520 Europe 18,760 19,215 16,958 Latin America 7,735 4,340 3,405 Other (1) ( 5,161 ) ( 4,131 ) ( 3,697 ) Total $ 83,689 $ 71,700 $ 58,825 (1) Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add cost and other unallocated expenses . We sell our products to customers in diversified industries and perform periodic credit evaluations of our customers’ financial condition. Terms are generally on open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe and Latin America. Estimates of credit losses are recorded in the financial statements based on monthly reviews of outstanding accounts. Net assets by geographic region are summarized in the following table ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 Net Assets North America $ 106,528 $ 90,979 Asia/Pacific 12,347 11,514 Europe 37,843 30,873 Latin America 2,602 2,481 Total $ 159,320 $ 135,847 The Company had long-lived assets of $ 22.7 million as of May 27, 2023 and $ 19.0 million as of May 28, 2022. The long-lived assets, which include our fixed assets and intangibles, were primarily in the U.S. There were approximately $ 0.3 million of long-lived assets that belong to our foreign affiliates as of May 27, 2023 and $ 0.4 million as of May 28, 2022. The Company had depreciation and amortization expense of $ 3.7 million, $ 3.4 million and $ 3.4 million for fiscal 2023, fiscal 2022 and fiscal 2021, respectively. The depreciation and amortization, which includes our fixed assets and intangibles, were primarily in the U.S. Depreciation and amortization expense that belongs to our foreign affiliates was approximately $ 0.1 million for fiscal 2023, $ 0.1 million for fiscal 2022 and $ 0.3 million for fiscal 2021, respectively. |
Risks and Uncertainties
Risks and Uncertainties | 12 Months Ended |
May 27, 2023 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | 11. RISKS AND UNCERTAINTIES While the immediate impacts of the COVID-19 pandemic have been assessed, the long-term effects of the disruption, including supply chain disruption, and resulting impact on the global economy and capital markets remain unpredictable, and depend on future developments, such as the possible resurgence of the virus, variant strains of the virus, vaccine availability and effectiveness, and future government actions in response to the crisis. The residual impact of the COVID-19 pandemic and its effects on supply chains and general economic conditions continues to evolve. The COVID-19 pandemic and its residual negative impact on general economic conditions has had and continues to have a negative effect on our business, results of operations, cash flows, gross margins as a percentage of net sales (particularly within our Canvys segment). While the Company did not experience sales declines during fiscal year 2023 as a direct result of the pandemic, the residual economic impact from the pandemic continued to negatively impacted our gross margins as a percentage of net sales in our Canvys segment. It is likely that the pandemic will continue to affect our business for an indeterminable period of time due to the impact on the global economy, including with respect to transportation networks and supply chains, the availability of raw materials, production efforts and customer demand for our products. We have experienced and continue to experience component delays which negatively impact our product development schedule. Management continues to monitor the impact of global economic factors on its financial condition, liquidity, operations, suppliers, industry and workforce. Our ability to predict and respond to future changes resulting from the Covid pandemic is uncertain. Even after the Covid pandemic fully subsides, there may be continued long-term effects on our business practices and customers in economies in which we operate that could severely disrupt our operations and could have a material adverse effect on our business, results of operations, cash flows and financial condition. As we cannot predict the duration, scope or severity of the Covid pandemic, the negative financial impact to our results cannot be reasonably estimated and could be material. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
May 27, 2023 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | 12. VALUATION AND QUALIFYING ACCOUNTS The following table presents the valuation and qualifying account activity for fiscal years ended May 27, 2023, May 28, 2022 and May 29, 2021, ( in thousands ): Description Balance at Charged to Deductions Balance at Year ended May 27, 2023 Allowance for doubtful accounts $ 186 $ 50 (1) $ ( 45 ) (2) $ 191 Inventory provisions 6,060 466 (3) ( 658 ) (4) 5,868 Year ended May 28, 2022 Allowance for doubtful accounts $ 202 $ 103 (1) $ ( 119 ) (2) $ 186 Inventory provisions 5,866 462 (3) ( 268 ) (4) 6,060 Year ended May 29, 2021 Allowance for doubtful accounts $ 334 $ 149 (1) $ ( 281 ) (2) $ 202 Inventory provisions 5,393 1,041 (3) ( 568 ) (4) 5,866 Notes: (1) Charges to bad debt expense. (2) Uncollectible amounts written off, net of recoveries and foreign currency translation. (3) Charges to cost of sales. Included in fiscal 2023 were inventory write-downs of $ 0.3 million for PMT, $ 0.1 million for Canvys and $ 0.1 million for Healthcare. (4) Inventory disposed or sold, net of foreign currency translation. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
May 27, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 13. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) ( in thousands, except per share amounts ): Description First Second Third Fourth Fiscal 2023 Net sales $ 67,557 $ 65,905 $ 70,364 $ 58,832 Gross profit 23,027 21,851 22,405 16,406 Net income 6,324 5,549 6,340 4,120 Net income per share: Common stock - basic $ 0.47 $ 0.40 $ 0.46 $ 0.29 Class B common stock - basic 0.42 0.36 0.41 0.27 Common stock - diluted 0.45 0.39 0.44 0.27 Class B common stock - diluted 0.40 0.35 0.40 0.25 Fiscal 2022 Net sales $ 53,704 $ 53,979 $ 55,308 $ 61,629 Gross profit 16,297 17,657 17,569 20,177 Net income 2,635 4,122 2,887 8,283 Net income per share: Common stock - basic $ 0.20 $ 0.31 $ 0.22 $ 0.62 Class B common stock - basic 0.18 0.28 0.19 0.55 Common stock - diluted 0.20 0.30 0.21 0.59 Class B common stock - diluted 0.18 0.27 0.19 0.54 |
Significant Accounting Polici_2
Significant Accounting Policies and Disclosures (Policies) | 12 Months Ended |
May 27, 2023 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management continuously evaluates its critical accounting policies and estimates, including the allowance for doubtful accounts, revenue recognition, inventory obsolescence, intangible assets, loss contingencies and income taxes. Management bases the estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, however, actual results could differ from those estimates. |
Reclassifications | Reclassifications : Certain prior period amounts have been reclassified to conform to the current period reporting classifications. The reclassifications had no effect on previously reported net income or cash flows. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments: The fair values of financial instruments are determined based on quoted market prices and market interest rates as of the end of the reporting period. Our financial instruments include investments, accounts receivable, accounts payable and accrued liabilities. The fair values of these financial instruments approximate carrying values at May 27, 2023 and May 28, 2022. |
Cash and Cash Equivalents | Cash and Cash Equivalents: We consider short-term, highly liquid investments that are readily convertible to known amounts of cash, and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates, and that have a maturity of three months or less, when purchased, to be cash equivalents. The carrying amounts reported in the balance sheet for cash and cash equivalents approximate the fair market value of these assets. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts: Our allowance for doubtful accounts includes estimated losses that result from uncollectible receivables. The estimates are influenced by the following: continuing credit evaluation of customers’ financial conditions; aging of receivables, individually and in the aggregate; a large number of customers which are widely dispersed across geographic areas; and collectability and delinquency history by geographic area. Significant changes in one or more of these considerations may require adjustments affecting net income and net carrying value of accounts receivable. The allowance for doubtful accounts was approximately $ 0.2 million as of May 27, 2023 and $ 0.2 million as of May 28, 2022. |
Loss Contingencies | Loss Contingencies: We accrue a liability for loss contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. If we determine that there is at least a reasonable possibility that a loss may have been incurred, we will include a disclosure describing the contingency. |
Revenue Recognition | Revenue Recognition: Our customers are generally not resellers, but rather businesses that incorporate our products into their processes from which they generate an economic benefit. The goods are also distinct in that each item sold to the customer is clearly identified on both the purchase order and resulting invoice. Each product we sell benefits the customer independently of the other products. Each item on each purchase order from the customer can be used by the customer unrelated to any other products we provide to the customer. The Company’s revenue includes the following streams: • Manufacturing /assembly • Distribution • Services revenue Manufacturing/assembly typically includes the products that are manufactured or assembled in our manufacturing facility. These products can either be built to the customer’s prints/designs or are products that we stock in our warehouse to sell to any customer that places an order. The manufacturing business does not include a separate service bundled with the product sold or sold in addition to the product. Our contracts for customized products generally include termination provisions if a customer cancels its order. However, we recognize revenue at a point in time because the termination provisions normally do not require, upon cancellation, the customer to pay fees that are commensurate with the work performed. Each purchase order explicitly states the goods or service that we promise to transfer to the customer. The promises to the customer are limited only to those goods or service. The performance obligation is our promise to deliver both goods that were produced by the Company and resale of goods that we purchase from our suppliers. Our shipping and handling activities for destination shipments are performed prior to the customer obtaining control. As such, they are not a separate promised service. The Company elects to account for shipping and handling as activities to fulfill the promise to transfer the goods. The goods we provide to our customers are distinct in that our customers benefit from the goods we sell them through use in their own processes. Distribution typically includes products purchased from our suppliers, stocked in our warehouses and then sold to our customers. The distribution business does not include a separate service bundled with the product sold or sold on top of the product. Revenue is recognized when control of the promised goods is transferred to our customers, which is simultaneous with the title transferring to the customer, in an amount that reflects the transaction price consideration that we expect to receive in exchange for those goods. Control refers to the ability of the customer to direct the use of, and obtain substantially all of, the remaining benefits from the goods. Our transaction price consideration is fixed, unless otherwise disclosed below as variable consideration. Generally, our contracts require our customers to pay for goods after we deliver products to them. Terms are generally on open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe and Latin America subject to customary credit checks. Repair, installation or training activities generate services revenue. The services we provide are relatively short in duration and are typically completed in one or two weeks. Therefore, at each reporting date, the amount of unbilled work is insignificant. The services revenue has consistently accounted for less than 5 % of the Company’s total revenues and is expected to continue at that level. We record discounts taken based on historical experience. The policy varies by business unit. The Company allows returns with prior written authorization. We estimate returns based on historical experience. The Company maintains a reserve for returns based on historical trends that covers all contracts and revenue streams using the expected value method because we have a large number of contracts with similar characteristics, which is considered variable consideration. The reserve for returns creates a refund liability on our balance sheet as a contra trade accounts receivable as well as an asset in inventory. We value the inventory at cost due to there being minimal or no costs to the Company as we generally require the customer to pay freight and we typically do not have costs associated with activities such as relabeling or repackaging. The reserve is considered immaterial at each balance sheet date. Returns for defective product are typically covered by our suppliers’ warranty, thus, returns for defective product are not factored into our reserve. Principal versus agent guidance was considered for customized products that are provided by our suppliers versus manufactured by the Company. The Company acts as the principal as we are responsible for satisfying the performance obligation. We have primary responsibility for fulfilling the contract, we have inventory risk prior to delivery to our customer, we establish prices, our consideration is not in the form of a commission and we bear the credit risk. The Company recognizes revenue in the gross amount of consideration. Contracts with customers A revenue contract exists once a customer purchase order is received, reviewed and accepted. Each accepted purchase order identifies a distinct good or service as the performance obligation. The goods include standard products purchased from a supplier and stocked on our shelves, customized products purchased from a supplier, products that are customized or have value added to them in house prior to shipping to the customer and manufactured products. Prior to accepting a customer purchase order, we review the credit worthiness of the customer. Purchase orders are deemed to meet the collectability criterion once the customer’s credit is approved. The Company receives advance payments or deposits from our customers before revenue is recognized resulting in contract liabilities. Contract liabilities are included in accrued liabilities in the consolidated balance sheets. Contract Liabilities: Contract liabilities and revenue recognized were as follows ( in thousands ): Balance May 29, 2021 $ 3,313 Additions 6,917 Revenue recognized ( 5,264 ) Balance May 28, 2022 $ 4,966 Additions 4,293 Revenue recognized ( 5,976 ) Balance May 27, 2023 $ 3,283 See Note 10, Segment and Geographic Information, for a disaggregation of revenue by reportable segment and geographic region, which represents how our chief operating decision maker reviews information internally to evaluate our financial performance and to make resource allocation and other decisions for the Company. |
Foreign Currency Translation | Foreign Currency Translation: The functional currency is the local currency at all foreign locations, with the exception of Hong Kong, where the functional currency is the U.S. dollar. Balance sheet items for our foreign entities, included in our consolidated balance sheets, are translated into U.S. dollars at end-of-period spot rates. Gains and losses resulting from translation of foreign subsidiary financial statements are credited or charged directly to accumulated other comprehensive income, a component of stockholders’ equity. Revenues and expenses are translated at the current rate on the date of the transaction. Gains and losses resulting from foreign currency transactions are included in income. Foreign exchange loss reflected in our Consolidated Statements of Comprehensive Income were $ 0.3 million, $ 0.3 million and $ 0.8 million during fiscal 2023, fiscal 2022 and fiscal 2021, respectively. |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs: Shipping and handling costs billed to customers are reported as revenue and the related costs are reported as a component of cost of sales. |
Inventories, net | Inventories, net: Our consolidated inventories are stated at the lower of cost and net realizable value, generally using a weighted-average cost method. Our net inventories include approximately $ 93.4 million of finished goods, $ 11.8 million of raw materials and $ 5.2 million of work-in-progress as of May 27, 2023 as compared to approximately $ 66.6 million of finished goods, $ 8.0 million of raw materials and $ 5.8 million of work-in-progress as of May 28, 2022. The inventory reserve as of May 27, 2023 was $ 5.9 million compared to $ 6.1 million as of May 28, 2022. Provisions for obsolete or slow-moving inventories are recorded based upon regular analysis of stock rotation privileges, obsolescence, the exiting of certain markets and assumptions about future demand and market conditions. If future demand changes in the industry or market conditions differ from management’s estimates, additional provisions may be necessary. We recorded provisions to our inventory reserves of $ 0.5 million, $ 0.5 million and $ 1.0 million during fiscal 2023, fiscal 2022 and fiscal 2021, respectively, which were included in cost of sales. The provisions were primarily for obsolete and slow-moving parts. The parts were written down to estimated realizable value. |
Income Taxes | Income Taxes: We recognize deferred tax assets and liabilities based on the differences between financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and determine the need for a valuation allowance based on a number of factors, including both positive and negative evidence. These factors include historical taxable income or loss, projected future taxable income or loss, the expected timing of the reversals of existing temporary differences and the implementation of tax planning strategies. In circumstances where we, or any of our affiliates, have incurred three years of cumulative losses which constitute significant negative evidence, positive evidence of equal or greater significance is needed to overcome the negative evidence before a tax benefit is recognized for deductible temporary differences and loss carryforwards. |
Investments | Investments: We liquidated our investments during the third quarter and accordingly had no investments at the end of fiscal 2023. As of May 28, 2022, we had $ 5.0 million invested in a Certificate of Deposit (level 1 classification), which matured in less than twelve months. |
Intangible Assets | Intangible Assets: Intangible assets are initially recorded at their fair market values determined by quoted market prices in active markets, if available, or recognized valuation models. Intangible assets that have finite useful lives are amortized over their useful lives either on a straight-line basis or over their projected future cash flows and are tested for impairment when events or changes in circumstances occur that indicate possible impairment. Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements and technology acquired in connection with the acquisitions. |
Property, Plant and Equipment | Property, Plant and Equipment: Property, plant and equipment are stated at cost, net of accumulated depreciation. Improvements and replacements are capitalized while expenditures for maintenance and repairs are charged to expense as incurred. Provisions for depreciation are computed using the straight-line method over the estimated useful life of the asset. Depreciation expense was approximately $ 3.4 million, $ 3.2 million and $ 3.2 million during fiscal 2023, fiscal 2022 and fiscal 2021, respectively. Property, plant and equipment consist of the following ( in thousands ): May 27, 2023 May 28, 2022 Land and improvements $ 1,532 $ 1,385 Buildings and improvements 24,206 23,002 Computer, communications equipment and software 11,692 11,186 Machinery and other equipment 18,350 16,215 Construction in progress 4,437 1,991 $ 60,217 $ 53,779 Accumulated depreciation ( 39,394 ) ( 36,818 ) Property, plant, and equipment, net $ 20,823 $ 16,961 Construction in progress at May 27, 2023 includes $ 2.2 million for facilities, $ 1.6 million for manufacturing facilities and $ 0.6 million for IT systems. All projects are expected to be completed before the end of fiscal 2024. Supplemental disclosure information of the estimated useful life of the assets: Land improvements 10 years Buildings and improvements 10 - 30 years Computer, communications equipment and software 3 - 10 years Machinery and other equipment 3 - 20 years We review property and equipment, definite-lived intangible assets and other long-lived assets for impairment whenever adverse events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. If adverse events do occur, our impairment review is based on an undiscounted cash flow analysis at the lowest level at which cash flows of the long-lived assets are largely independent of other groups of our assets and liabilities. This analysis requires management judgment with respect to changes in technology, the continued success of product lines and future volume, revenue and expense growth rates. We conduct annual reviews for idle and underutilized equipment and review business plans for possible impairment. Impairment occurs when the carrying value of the assets exceeds the future undiscounted cash flows expected to be earned by the use of the asset or asset group. When impairment is indicated, the estimated future cash flows are then discounted to determine the estimated fair value of the asset or asset group and an impairment charge is recorded for the difference between the carrying value and the estimated fair value. Additionally, we also evaluate the remaining useful life of each reporting period to determine whether events and circumstances warrant a revision to the remaining period of depreciation or amortization. If the estimate of a long-lived asset’s remaining useful life is changed, the remaining carrying amount of the asset is amortized prospectively over that revised remaining useful life. |
Accrued Liabilities | Accrued Liabilities: Accrued liabilities consist of the following ( in thousands ): May 27, 2023 May 28, 2022 Compensation and payroll taxes $ 4,422 $ 5,519 Accrued severance 486 678 Professional fees 661 470 Deferred revenue 3,283 4,966 Other accrued expenses 3,174 4,477 Accrued Liabilities $ 12,026 $ 16,110 |
Warranties | Warranties: We offer warranties for the limited number of specific products we manufacture. We estimate the cost to perform under the warranty obligation and recognize this estimated cost at the time of the related product sale. We record expense related to our warranty obligations as cost of sales in our Consolidated Statements of Comprehensive Income. Each quarter, we assess actual warranty costs incurred on a product-by-product basis and compare the warranty costs to our estimated warranty obligation. With respect to new products, estimates are based generally on knowledge of the products and warranty experience. Warranty reserves are established for costs that are expected to be incurred after the sale and delivery of products under warranty. Warranty reserves are included in accrued liabilities on our consolidated balance sheets. The warranty reserves are determined based on known product failures, historical experience and other available evidence. Changes in the warranty reserve during fiscal 2023 and fiscal 2022 were as follows ( in thousands ): Warranty Balance at May 29, 2021 $ 548 Accruals for products sold 160 Utilization ( 32 ) Balance at May 28, 2022 $ 676 Accruals for products sold 91 Utilization ( 42 ) Balance at May 27, 2023 $ 725 |
Other Non-Current Liabilities | Other Non-Current Liabilities: Other non-current liabilities of $ 0.6 million at May 27, 2023 and $ 0.8 million at May 28, 2022, primarily represent employee-benefits obligations in various non-U.S. locations. |
Share-Based Compensation | Share-Based Compensation: We measure and recognize share-based compensation cost at fair value for all share-based payments, including stock options and restricted stock awards. We estimate fair value using the Black-Scholes option-pricing model, which requires assumptions such as expected volatility, risk-free interest rate, expected life and dividends. We account for the forfeitures of stock-based compensation in the period in which they occur. Compensation cost is recognized using a graded vesting schedule over the applicable vesting period. Share-based compensation expense totaled approximately $ 0.9 million during fiscal 2023, $ 0.7 million during fiscal 2022 and $ 0.7 million during fiscal 2021. Stock options granted generally vest over a period of five years and have contractual terms to exercise of 10 years. A summary of stock option activity is as follows ( in thousands, except option prices and years): Number of Weighted Weighted Aggregate Options Outstanding at May 30, 2020 1,427 $ 8.83 Granted 188 4.26 Exercised ( 49 ) 5.93 Forfeited ( 7 ) 5.96 Cancelled ( 104 ) 12.53 Options Outstanding at May 29, 2021 1,455 $ 8.08 Granted 185 7.66 Exercised ( 373 ) 8.01 Forfeited ( 35 ) 6.51 Cancelled ( 84 ) 11.65 Options Outstanding at May 28, 2022 1,148 $ 7.82 Granted 194 15.58 Exercised ( 441 ) 8.58 Forfeited ( 20 ) 8.15 Cancelled ( 25 ) 11.67 Options Outstanding at May 27, 2023 856 $ 9.07 6.4 $ 7,122 Options Vested at May 27, 2023 387 $ 8.24 4.6 $ 3,537 (1) Includes only those options that were in-the-money as of May 27, 2023. Stock options for which the exercise price exceeded the market price have been omitted. Fluctuations in the intrinsic value of both outstanding and exercisable options may result from changes in underlying stock price and timing and volume of option grants, exercises and forfeitures. There were 440,480 stock options exercised during fiscal 2023, with cash received of $ 3.8 million. The total intrinsic value of options exercised was $ 4.7 million during fiscal 2023, $ 1.9 million for fiscal 2022 and $ 0.1 million for fiscal 2021. The weighted average fair value of stock option grants was $ 5.44 during fiscal 2023, $ 1.50 during fiscal 2022 and $ 0.49 during fiscal 2021. As of May 27, 2023, total unrecognized compensation costs related to unvested stock options and restricted stock awards was approximately $ 1.8 million, which is expected to be recognized over the remaining weighted average period of approximately two to four years . The total grant date fair value of stock options vested during fiscal 2023 was $ 0.3 million. The fair value of stock options is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions: Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Expected volatility 39.12 % 29.00 % 27.72 % Risk-free interest rate 3.09 % 0.97 % 0.45 % Expected lives (years) 5.47 6.50 6.50 Annual cash dividend $ 0.24 $ 0.24 $ 0.24 The expected volatility assumptions are based on historical experience commensurate with the expected term. The risk-free interest rate is based on the yield of a treasury note with a remaining term equal to the expected life of the stock option. The expected stock option life assumption is based on the Securities and Exchange Commission’s (“SEC”) guidance in Staff Accounting Bulletin (“SAB”) No. 107 (“SAB No. 107”). For stock options granted during fiscal 2022 and fiscal 2021 the simplified method was used as we believed that our historical stock option experience did not provide a reasonable basis upon which to estimate expected term. The following table summarizes information about stock options outstanding at May 27, 2023 ( in thousands, except option prices and years ): Outstanding Vested Exercise Price Range Shares Weighted Weighted Aggregate Shares Weighted Weighted Aggregate $4.26 to $6.47 280 $ 5.09 6.2 $ 3,446 135 $ 5.41 5.6 $ 1,615 $6.90 to $10.35 347 8.34 5.7 3,138 194 8.65 4.2 1,694 $11.14 to $16.71 229 15.04 7.7 538 58 13.45 3.3 228 Total 856 $ 9.07 6.4 $ 7,122 387 $ 8.24 4.6 $ 3,537 As of May 27, 2023, a summary of restricted stock award transactions was as follows ( in thousands ): Unvested Unvested at May 29, 2021 144 Granted 72 Vested ( 71 ) Unvested at May 28, 2022 145 Granted 53 Vested ( 73 ) Unvested at May 27, 2023 125 Compensation effects arising from issuing stock awards have been charged against income and recorded as additional paid-in-capital in the consolidated statements of stockholders’ equity during fiscal 2023, fiscal 2022 and fiscal 2021. The Employees’ Amended and Restated 2011 Long-Term Incentive Compensation Plan (the “Plan”) authorizes the issuance of up to 3,500,000 shares as incentive stock options, non-qualified stock options or stock awards. Under this plan, 1,028,000 shares are reserved for future issuance. The Plan authorizes the granting of stock options at the fair market value at the date of grant. Generally, these options become exercisable over five years and expire up to 10 years from the date of grant. Restricted stock awards vest on the anniversary of the grant date in three equal installments. |
Earnings per Share | Earnings per Share: We have authorized 17,000,000 shares of common stock and 3,000,000 shares of Class B common stock. The Class B common stock has 10 votes per share and has transferability restrictions; however, Class B common stock may be converted into common stock on a share-for-share basis at any time. With respect to dividends and distributions, shares of common stock and Class B common stock rank equally and have the same rights, except that Class B common stock cash dividends are limited to 90 % of the amount of Class A common stock cash dividends. Our Class B common stock is considered a participating security requiring the use of the two-class method for the computation of basic and diluted earnings per share. The two-class computation method for each period reflects the cash dividends paid per share for each class of stock, plus the amount of allocated undistributed earnings per share computed using the participation percentage which reflects the dividend rights of each class of stock. Basic and diluted earnings per share were computed using the two-class method. The shares of Class B common stock are considered to be participating convertible securities since the shares of Class B common stock are convertible on a share-for-share basis into shares of common stock and may participate in dividends with common stock according to a predetermined formula which is 90% of the amount of Class A common stock cash dividends. The earnings per share (“EPS”) presented in our Consolidated Statements of Comprehensive Income are based on the following ( in thousands, except per share amounts ): For the Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Basic Diluted Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net income $ 22,333 $ 22,333 $ 17,927 $ 17,927 $ 1,655 $ 1,655 Less dividends: Common stock 2,877 2,877 2,745 2,745 2,669 2,669 Class B common stock 443 443 448 448 453 453 Undistributed earnings (loss) $ 19,013 $ 19,013 $ 14,734 $ 14,734 $ ( 1,467 ) $ ( 1,467 ) Common stock undistributed earnings (loss) $ 16,467 $ 16,573 $ 12,655 $ 12,720 $ ( 1,254 ) $ ( 1,255 ) Class B common stock undistributed earnings (loss) 2,546 2,440 2,079 2,014 ( 213 ) ( 212 ) Total undistributed earnings (loss) $ 19,013 $ 19,013 $ 14,734 $ 14,734 $ ( 1,467 ) $ ( 1,467 ) Denominator for Basic and Diluted EPS: Common stock weighted average shares 11,943 11,943 11,395 11,395 11,105 11,105 Effect of dilutive securities Dilutive stock options 599 430 59 Denominator for diluted EPS adjusted for 12,542 11,825 11,164 Class B common stock weighted average shares, 2,052 2,052 2,080 2,080 2,097 2,097 Net income per share: Common stock $ 1.62 $ 1.55 $ 1.35 $ 1.31 $ 0.13 $ 0.13 Class B common stock $ 1.46 $ 1.40 $ 1.21 $ 1.18 $ 0.11 $ 0.11 Note: There were no common stock options that were anti-dilutive for fiscal 2023, fiscal 2022 and fiscal 2021. |
New Accounting Pronouncements | New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 (as amended by ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and 2020-02) introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. The new standard is effective for smaller reporting companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted. The Company will adopt in the first quarter of fiscal 2024 and the expected impact on the consolidated financial statements is not material. |
Significant Accounting Polici_3
Significant Accounting Policies and Disclosures (Tables) | 12 Months Ended |
May 27, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Contract Liabilities and Revenue Recognized | Contract Liabilities: Contract liabilities and revenue recognized were as follows ( in thousands ): Balance May 29, 2021 $ 3,313 Additions 6,917 Revenue recognized ( 5,264 ) Balance May 28, 2022 $ 4,966 Additions 4,293 Revenue recognized ( 5,976 ) Balance May 27, 2023 $ 3,283 |
Schedule of Property, Plant and Equipment | Property, plant and equipment consist of the following ( in thousands ): May 27, 2023 May 28, 2022 Land and improvements $ 1,532 $ 1,385 Buildings and improvements 24,206 23,002 Computer, communications equipment and software 11,692 11,186 Machinery and other equipment 18,350 16,215 Construction in progress 4,437 1,991 $ 60,217 $ 53,779 Accumulated depreciation ( 39,394 ) ( 36,818 ) Property, plant, and equipment, net $ 20,823 $ 16,961 |
Schedule of Property Plant and Equipment Estimated Useful Lives | Supplemental disclosure information of the estimated useful life of the assets: Land improvements 10 years Buildings and improvements 10 - 30 years Computer, communications equipment and software 3 - 10 years Machinery and other equipment 3 - 20 years |
Schedule of Accrued Liabilities | Accrued Liabilities: Accrued liabilities consist of the following ( in thousands ): May 27, 2023 May 28, 2022 Compensation and payroll taxes $ 4,422 $ 5,519 Accrued severance 486 678 Professional fees 661 470 Deferred revenue 3,283 4,966 Other accrued expenses 3,174 4,477 Accrued Liabilities $ 12,026 $ 16,110 |
Schedule of Warranty Reserve | Changes in the warranty reserve during fiscal 2023 and fiscal 2022 were as follows ( in thousands ): Warranty Balance at May 29, 2021 $ 548 Accruals for products sold 160 Utilization ( 32 ) Balance at May 28, 2022 $ 676 Accruals for products sold 91 Utilization ( 42 ) Balance at May 27, 2023 $ 725 |
Schedule of Share-Based Compensation, Stock Options, Activity | A summary of stock option activity is as follows ( in thousands, except option prices and years): Number of Weighted Weighted Aggregate Options Outstanding at May 30, 2020 1,427 $ 8.83 Granted 188 4.26 Exercised ( 49 ) 5.93 Forfeited ( 7 ) 5.96 Cancelled ( 104 ) 12.53 Options Outstanding at May 29, 2021 1,455 $ 8.08 Granted 185 7.66 Exercised ( 373 ) 8.01 Forfeited ( 35 ) 6.51 Cancelled ( 84 ) 11.65 Options Outstanding at May 28, 2022 1,148 $ 7.82 Granted 194 15.58 Exercised ( 441 ) 8.58 Forfeited ( 20 ) 8.15 Cancelled ( 25 ) 11.67 Options Outstanding at May 27, 2023 856 $ 9.07 6.4 $ 7,122 Options Vested at May 27, 2023 387 $ 8.24 4.6 $ 3,537 (1) Includes only those options that were in-the-money as of May 27, 2023. Stock options for which the exercise price exceeded the market price have been omitted. Fluctuations in the intrinsic value of both outstanding and exercisable options may result from changes in underlying stock price and timing and volume of option grants, exercises and forfeitures. |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | The fair value of stock options is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions: Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Expected volatility 39.12 % 29.00 % 27.72 % Risk-free interest rate 3.09 % 0.97 % 0.45 % Expected lives (years) 5.47 6.50 6.50 Annual cash dividend $ 0.24 $ 0.24 $ 0.24 |
Schedule of Share-Based Compensation, Shares Outstanding Under Stock Option Plans, by Exercise Price Range | The following table summarizes information about stock options outstanding at May 27, 2023 ( in thousands, except option prices and years ): Outstanding Vested Exercise Price Range Shares Weighted Weighted Aggregate Shares Weighted Weighted Aggregate $4.26 to $6.47 280 $ 5.09 6.2 $ 3,446 135 $ 5.41 5.6 $ 1,615 $6.90 to $10.35 347 8.34 5.7 3,138 194 8.65 4.2 1,694 $11.14 to $16.71 229 15.04 7.7 538 58 13.45 3.3 228 Total 856 $ 9.07 6.4 $ 7,122 387 $ 8.24 4.6 $ 3,537 |
Schedule of Restricted Stock Award Transactions | As of May 27, 2023, a summary of restricted stock award transactions was as follows ( in thousands ): Unvested Unvested at May 29, 2021 144 Granted 72 Vested ( 71 ) Unvested at May 28, 2022 145 Granted 53 Vested ( 73 ) Unvested at May 27, 2023 125 |
Schedule of Earnings Per Share, Basic and Diluted | The earnings per share (“EPS”) presented in our Consolidated Statements of Comprehensive Income are based on the following ( in thousands, except per share amounts ): For the Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Basic Diluted Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Net income $ 22,333 $ 22,333 $ 17,927 $ 17,927 $ 1,655 $ 1,655 Less dividends: Common stock 2,877 2,877 2,745 2,745 2,669 2,669 Class B common stock 443 443 448 448 453 453 Undistributed earnings (loss) $ 19,013 $ 19,013 $ 14,734 $ 14,734 $ ( 1,467 ) $ ( 1,467 ) Common stock undistributed earnings (loss) $ 16,467 $ 16,573 $ 12,655 $ 12,720 $ ( 1,254 ) $ ( 1,255 ) Class B common stock undistributed earnings (loss) 2,546 2,440 2,079 2,014 ( 213 ) ( 212 ) Total undistributed earnings (loss) $ 19,013 $ 19,013 $ 14,734 $ 14,734 $ ( 1,467 ) $ ( 1,467 ) Denominator for Basic and Diluted EPS: Common stock weighted average shares 11,943 11,943 11,395 11,395 11,105 11,105 Effect of dilutive securities Dilutive stock options 599 430 59 Denominator for diluted EPS adjusted for 12,542 11,825 11,164 Class B common stock weighted average shares, 2,052 2,052 2,080 2,080 2,097 2,097 Net income per share: Common stock $ 1.62 $ 1.55 $ 1.35 $ 1.31 $ 0.13 $ 0.13 Class B common stock $ 1.46 $ 1.40 $ 1.21 $ 1.18 $ 0.11 $ 0.11 Note: There were no common stock options that were anti-dilutive for fiscal 2023, fiscal 2022 and fiscal 2021. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
May 27, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Subject to Amortization | Intangible assets subject to amortization were as follows (in thousands) : May 27, 2023 May 28, 2022 Gross Amounts: Customer Relationships (1) $ 3,388 $ 3,393 Technology 380 230 Total Gross Amounts $ 3,768 $ 3,623 Accumulated Amortization: Customer Relationships $ 1,671 $ 1,453 Technology 205 160 Total Accumulated Amortization $ 1,876 $ 1,613 Net Intangible Assets $ 1,892 $ 2,010 (1) Change from prior periods reflect impact of foreign currency translation. |
Schedule of the Amortization Expense for the Next Five Years | The amortization expense associated with the intangible assets subject to amortization for the next five years is presented in the following table (in thousands) : Fiscal Year Amortization 2024 $ 252 2025 239 2026 206 2027 194 2028 183 Thereafter 818 Total amortization expense $ 1,892 |
Lease Obligations and Other C_2
Lease Obligations and Other Commitments (Tables) | 12 Months Ended |
May 27, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Gross Amount Assets and Liabilities Related to Operating and Financing Leases | The gross amounts of assets and liabilities related to both operating and financing leases at May 27, 2023 and May 28, 2022 were as follows (in thousands) : Lease Type May 27, 2023 May 28, 2022 Operating lease ROU asset $ 2,457 $ 3,024 Financing lease ROU asset — 215 Total Lease ROU asset $ 2,457 $ 3,239 Operating lease liability current $ 1,028 $ 1,109 Financing lease liability current — — Total lease liability current $ 1,028 $ 1,109 Operating lease liability non-current $ 1,429 $ 1,915 Financing lease liability non-current — — Total lease liability non-current $ 1,429 $ 1,915 |
Components of Lease Costs | The components of lease costs for fiscal 2023 and fiscal 2022 were as follows (in thousands) : Lease Type Classification Fiscal Year Ended Fiscal Year Ended Consolidated operating lease expense Operating expenses $ 1,721 $ 1,781 Consolidated financing lease amortization Operating expenses — 92 Consolidated financing lease interest Interest expense — 3 Consolidated financing lease expense — 95 Net lease cost $ 1,721 $ 1,876 |
Schedule of Future Minimum Lease Payments under Operating Leases | Our future lease commitments for minimum rentals, including common area maintenance charges and property taxes during the next five years are as follows (in thousands) : Fiscal Year Operating Leases 2024 $ 1,147 2025 827 2026 453 2027 113 2028 23 Thereafter 12 Total lease payments 2,575 Lease inputted interest 118 Net minimum lease payments $ 2,457 |
Schedule of Weighted Average Remaining Lease Terms and Interest Rates of Leases | The weighted average remaining lease terms and interest rates of leases held by the Company as of May 27, 2023 were as follows: Lease Type Weighted Average Remaining Weighted Average Operating leases 2.6 4.0 % |
Schedule of Cash Outflows of Leasing Activity | The cash outflows of the leasing activity of the Company as lessee for fiscal 2023 and fiscal 2022 were as follows (in thousands) : Fiscal Year Ended Cash Flow Source Classification May 27, 2023 May 28, 2022 Operating cash flows from operating leases Operating activities $ 566 $ 747 Operating cash flows from financing leases Operating activities — 148 Finance cash flows from financing leases Financing activities — 151 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 27, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Tax, Domestic and Foreign | Income before income taxes included the following components ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 United States $ 22,258 $ 12,299 $ 1,077 Foreign 2,772 3,460 1,231 Income before income taxes $ 25,030 $ 15,759 $ 2,308 |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes for fiscal 2023, fiscal 2022 and fiscal 2021 consisted of the following ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Current: Federal $ 954 $ ( 4,213 ) $ 108 State 1,212 950 — Foreign 547 1,038 665 Total current 2,713 ( 2,225 ) 773 Deferred: Federal — — — Foreign ( 16 ) 57 ( 120 ) Total deferred ( 16 ) 57 ( 120 ) Income tax provision (benefit) $ 2,697 $ ( 2,168 ) $ 653 |
Schedule of Effective Income Tax Rate Reconciliation | The differences between income taxes at the U.S. federal statutory income tax rate of 21.0 % for fiscal 2023, fiscal 2022 and fiscal 2021 and the reported income tax provision for fiscal 2023, fiscal 2022 and fiscal 2021, are summarized as follows: Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % Effect of: State income taxes, net of federal tax benefit 3.6 5.5 21.6 Foreign taxes at other rates 0.9 4.5 10.5 Permanent tax differences 0.1 ( 2.0 ) 18.3 Change in valuation allowance for deferred tax assets ( 7.0 ) ( 43.1 ) ( 49.7 ) Return to provision adjustments ( 0.7 ) 0.2 2.2 R&D credit ( 3.7 ) — — Other ( 3.4 ) 0.2 4.4 Effective tax rate 10.8 % ( 13.7 )% 28.3 % |
Schedule of Deferred Tax Assets and Liabilities | Fiscal Year Ended May 27, 2023 May 28, 2022 Deferred tax assets: NOL carryforwards - foreign and domestic $ 2,324 $ 2,796 Inventory valuations 1,506 1,571 Goodwill 1,056 1,182 Foreign tax credits 26 1,782 Severance reserve 131 183 Foreign capital loss 944 1,224 Section 174 capitalization 1,215 — Lease liability 381 520 Other 1,067 1,480 Subtotal 8,650 10,738 Valuation allowance - foreign and domestic ( 1,375 ) ( 3,474 ) Net deferred tax assets after valuation allowance 7,275 7,264 Deferred tax liabilities: Accelerated depreciation ( 2,441 ) ( 2,406 ) Tax on undistributed earnings ( 24 ) ( 24 ) ROU assets ( 381 ) ( 520 ) Other ( 1 ) ( 1 ) Subtotal ( 2,847 ) ( 2,951 ) Net deferred tax assets $ 4,428 $ 4,313 Supplemental disclosure of net deferred tax assets, Domestic $ 4,517 $ 6,017 Foreign 1,285 1,770 Total $ 5,802 $ 7,787 |
Schedule of Unrecognized Tax Benefits | The following table summarizes the activity related to the unrecognized tax benefits (in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 Unrecognized tax benefits, beginning of period $ 125 $ 142 Currency translation adjustment ( 4 ) ( 17 ) Release German reserve ( 121 ) — Unrecognized tax benefits, end of period $ — $ 125 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
May 27, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results by Segment | Operating results by segment are summarized in the following table ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 PMT Net Sales $ 164,299 $ 155,445 $ 128,980 Gross Profit 54,089 50,810 43,546 GES Net Sales $ 47,596 $ 22,611 $ 8,300 Gross Profit 13,719 7,231 2,405 Canvys Net Sales $ 39,331 $ 35,187 $ 29,319 Gross Profit 12,375 11,252 10,274 Healthcare Net Sales $ 11,432 $ 11,377 $ 10,338 Gross Profit 3,506 2,407 2,600 |
Schedule of Reconciliation of Assets from Segment to Consolidated | A reconciliation of assets to the relevant consolidated amount is as follows ( in thousands ): May 27, 2023 May 28, 2022 Segment assets $ 149,976 $ 120,696 Cash and cash equivalents 24,981 35,495 Investments - current — 5,000 Other current assets (1) 2,771 2,686 Net property, plant and equipment 14,124 9,435 Operating lease ROU asset 1,403 1,894 Financing lease ROU asset — 215 Other non-current assets 267 — Other assets - non-current deferred income taxes 4,526 4,398 Total assets $ 198,048 $ 179,819 (1) Other current assets include miscellaneous receivables and prepaid expenses. |
Schedule of Net Sales and Gross Profit by Geographic Region | Net sales and gross profit by geographic region are summarized in the following table ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 May 29, 2021 Net Sales North America $ 112,214 $ 98,527 $ 73,625 Asia/Pacific 59,557 49,235 40,839 Europe 62,017 64,435 52,549 Latin America 28,924 12,439 9,651 Other (1) ( 54 ) ( 16 ) 273 Total $ 262,658 $ 224,620 $ 176,937 Gross Profit North America $ 43,580 $ 36,548 $ 28,639 Asia/Pacific 18,775 15,728 13,520 Europe 18,760 19,215 16,958 Latin America 7,735 4,340 3,405 Other (1) ( 5,161 ) ( 4,131 ) ( 3,697 ) Total $ 83,689 $ 71,700 $ 58,825 (1) Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add cost and other unallocated expenses . |
Schedule of Net Assets by Geographic Region | Net assets by geographic region are summarized in the following table ( in thousands ): Fiscal Year Ended May 27, 2023 May 28, 2022 Net Assets North America $ 106,528 $ 90,979 Asia/Pacific 12,347 11,514 Europe 37,843 30,873 Latin America 2,602 2,481 Total $ 159,320 $ 135,847 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
May 27, 2023 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | The following table presents the valuation and qualifying account activity for fiscal years ended May 27, 2023, May 28, 2022 and May 29, 2021, ( in thousands ): Description Balance at Charged to Deductions Balance at Year ended May 27, 2023 Allowance for doubtful accounts $ 186 $ 50 (1) $ ( 45 ) (2) $ 191 Inventory provisions 6,060 466 (3) ( 658 ) (4) 5,868 Year ended May 28, 2022 Allowance for doubtful accounts $ 202 $ 103 (1) $ ( 119 ) (2) $ 186 Inventory provisions 5,866 462 (3) ( 268 ) (4) 6,060 Year ended May 29, 2021 Allowance for doubtful accounts $ 334 $ 149 (1) $ ( 281 ) (2) $ 202 Inventory provisions 5,393 1,041 (3) ( 568 ) (4) 5,866 Notes: (1) Charges to bad debt expense. (2) Uncollectible amounts written off, net of recoveries and foreign currency translation. (3) Charges to cost of sales. Included in fiscal 2023 were inventory write-downs of $ 0.3 million for PMT, $ 0.1 million for Canvys and $ 0.1 million for Healthcare. (4) Inventory disposed or sold, net of foreign currency translation. |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
May 27, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Description First Second Third Fourth Fiscal 2023 Net sales $ 67,557 $ 65,905 $ 70,364 $ 58,832 Gross profit 23,027 21,851 22,405 16,406 Net income 6,324 5,549 6,340 4,120 Net income per share: Common stock - basic $ 0.47 $ 0.40 $ 0.46 $ 0.29 Class B common stock - basic 0.42 0.36 0.41 0.27 Common stock - diluted 0.45 0.39 0.44 0.27 Class B common stock - diluted 0.40 0.35 0.40 0.25 Fiscal 2022 Net sales $ 53,704 $ 53,979 $ 55,308 $ 61,629 Gross profit 16,297 17,657 17,569 20,177 Net income 2,635 4,122 2,887 8,283 Net income per share: Common stock - basic $ 0.20 $ 0.31 $ 0.22 $ 0.62 Class B common stock - basic 0.18 0.28 0.19 0.55 Common stock - diluted 0.20 0.30 0.21 0.59 Class B common stock - diluted 0.18 0.27 0.19 0.54 |
Description of the Company - Ad
Description of the Company - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May 27, 2023 USD ($) | Feb. 25, 2023 USD ($) | Nov. 26, 2022 USD ($) | Aug. 27, 2022 USD ($) | May 28, 2022 USD ($) | Feb. 26, 2022 USD ($) | Nov. 27, 2021 USD ($) | Aug. 28, 2021 USD ($) | May 27, 2023 USD ($) Segment | May 28, 2022 USD ($) Segment | May 29, 2021 USD ($) Segment | |
Concentration Risk [Line Items] | |||||||||||
Number of reportable segments | Segment | 4 | 4 | 4 | ||||||||
Supplier concentration accounts payable | $ 23,535 | $ 23,987 | $ 23,535 | $ 23,987 | |||||||
Net Sales | 58,832 | $ 70,364 | $ 65,905 | $ 67,557 | 61,629 | $ 55,308 | $ 53,979 | $ 53,704 | 262,658 | 224,620 | $ 176,937 |
PMT | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net Sales | 164,299 | $ 155,445 | $ 128,980 | ||||||||
Customer | PMT | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net Sales | $ 31,200 | ||||||||||
Product Concentration | Maximum | Sales | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Percentage of products manufactured | 60% | ||||||||||
Customer Concentration | Sales | Customer | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Percentage of products manufactured | 12% | ||||||||||
Customer Concentration | Accounts Receivable | Customer | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Percentage of products manufactured | 20% | ||||||||||
Customer Concentration | Maximum | Sales | Customer | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Percentage of products manufactured | 10% | 10% | |||||||||
Customer Concentration | Maximum | Accounts Receivable | Customer | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Percentage of products manufactured | 10% | ||||||||||
Supplier Concentration | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Supplier concentration accounts payable | $ 200 | $ 1,400 | $ 200 | $ 1,400 | |||||||
Supplier Concentration | Cost of Sales | Customer | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Percentage of products manufactured | 11% | 11% | 15% |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - Segment | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Basis Of Presentation [Abstract] | |||
Number of operating segments | 4 | 4 | 4 |
Number of reportable segments | 4 | 4 | 4 |
Significant Accounting Polici_4
Significant Accounting Policies and Disclosures - Additional Information (Details) | 12 Months Ended | ||
May 27, 2023 USD ($) Number $ / shares shares | May 28, 2022 USD ($) $ / shares shares | May 29, 2021 USD ($) $ / shares shares | |
Significant Accounting Policies and Disclosures [Line Items] | |||
Allowance for doubtful accounts | $ 191,000 | $ 186,000 | |
Foreign exchange (gain) loss | 278,000 | 273,000 | $ 759,000 |
Finished goods | 93,400,000 | 66,600,000 | |
Raw material | 11,800,000 | 8,000,000 | |
Work in progress | 5,200,000 | 5,800,000 | |
Inventory valuation reserves | 5,900,000 | 6,100,000 | |
Inventory provisions | 466,000 | 462,000 | 1,041,000 |
Investments - current | 0 | 5,000,000 | |
Depreciation | 3,400,000 | 3,200,000 | 3,200,000 |
Construction in progress | 4,437,000 | 1,991,000 | |
Other non-current liabilities | 612,000 | 766,000 | |
Share-based compensation expense | $ 936,000 | $ 654,000 | $ 675,000 |
Stock option vesting period | 5 years | ||
Option terms to exercise | 10 years | ||
Exercised | shares | 440,480,000 | ||
Proceeds from share exercised | $ 3,800,000 | ||
Weighted average fair value of stock option grants | $ / shares | $ 5.44 | $ 1.5 | $ 0.49 |
Total unrecognized compensation costs | $ 1,800,000 | ||
Total grant date fair value stock options vested | $ 300,000 | ||
Limit of cash dividends Class B common stock (percent) | 90% | ||
Common stock options anti-dilutive | shares | 0 | 0 | 0 |
Common Stock | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Common stock shares, authorized | shares | 17,000,000 | ||
Common Class B | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Common stock shares, authorized | shares | 3,000,000 | ||
Number of votes per share | Number | 10 | ||
Employees' 2011 Long-Term Incentive Compensation Plan | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Number of shares authorized | shares | 3,500,000 | ||
Number of shares for future issuance | shares | 1,028,000 | ||
Option exercisable period | 5 years | ||
Facilities | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Construction in progress | $ 2,200,000 | ||
Manufacturing Facilities | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Construction in progress | 1,600,000 | ||
IT systems | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Construction in progress | $ 600,000 | ||
Maximum | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Services revenue recognized as percentage of aggregate revenue | 5% | ||
Intrinsic value | $ 4,700,000 | $ 1,900,000 | $ 100,000 |
Period of recognition | 4 years | ||
Maximum | Employees' 2011 Long-Term Incentive Compensation Plan | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Option terms to exercise | 10 years | ||
Minimum | |||
Significant Accounting Policies and Disclosures [Line Items] | |||
Period of recognition | 2 years |
Significant Accounting Polici_5
Significant Accounting Policies and Disclosures - Schedule of Contract Liabilities and Revenue Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 27, 2023 | May 28, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Contract Liabilities, Beginning Balance | $ 4,966 | $ 3,313 |
Contract Liabilities, Additions | 4,293 | 6,917 |
Contract Liabilities, Revenue Recognized | (5,976) | (5,264) |
Contract Liabilities, Ending Balance | $ 3,283 | $ 4,966 |
Significant Accounting Polici_6
Significant Accounting Policies and Disclosures - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | May 27, 2023 | May 28, 2022 |
Accounting Policies [Abstract] | ||
Land and improvements | $ 1,532 | $ 1,385 |
Buildings and improvements | 24,206 | 23,002 |
Computer, communications equipment and software | 11,692 | 11,186 |
Machinery and other equipment | 18,350 | 16,215 |
Construction in progress | 4,437 | 1,991 |
Property, plant and equipment, gross | 60,217 | 53,779 |
Accumulated depreciation | (39,394) | (36,818) |
Property, plant, and equipment, net | $ 20,823 | $ 16,961 |
Significant Accounting Polici_7
Significant Accounting Policies and Disclosures - Schedule of Property Plant and Equipment Estimated Useful Lives (Details) | May 27, 2023 |
Land Improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of the assets | 10 years |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of the assets | 10 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of the assets | 30 years |
Computer, Communications Equipment and Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of the assets | 3 years |
Computer, Communications Equipment and Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of the assets | 10 years |
Machinery and Other Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of the assets | 3 years |
Machinery and Other Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of the assets | 20 years |
Significant Accounting Polici_8
Significant Accounting Policies and Disclosures - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | May 27, 2023 | May 28, 2022 |
Accrued Liabilities: | ||
Compensation and payroll taxes | $ 4,422 | $ 5,519 |
Accrued severance | 486 | 678 |
Professional fees | 661 | 470 |
Deferred revenue | 3,283 | 4,966 |
Other accrued expenses | 3,174 | 4,477 |
Accrued Liabilities | $ 12,026 | $ 16,110 |
Significant Accounting Polici_9
Significant Accounting Policies and Disclosures - Schedule of Warranty Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 27, 2023 | May 28, 2022 | |
Accounting Policies [Abstract] | ||
Warranty reserve, beginning | $ 676 | $ 548 |
Accruals for products sold | 91 | 160 |
Utilization | (42) | (32) |
Warranty reserve, ending | $ 725 | $ 676 |
Significant Accounting Polic_10
Significant Accounting Policies and Disclosures - Schedule of Share-Based Compensation, Stock Options, Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
May 27, 2023 | May 28, 2022 | May 29, 2021 | ||
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Roll Forward | ||||
Exercised | (440,480) | |||
Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Roll Forward | ||||
Options outstanding at beginning | 1,148 | 1,455 | 1,427 | |
Granted | 194 | 185 | 188 | |
Exercised | (441) | (373) | (49) | |
Forfeited | (20) | (35) | (7) | |
Cancelled | (25) | (84) | (104) | |
Options outstanding at ending | 856 | 1,148 | 1,455 | |
Options vested at ending | 387 | |||
Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Options Outstanding at beginning | $ 7.82 | $ 8.08 | $ 8.83 | |
Granted | 15.58 | 7.66 | 4.26 | |
Exercised | 8.58 | 8.01 | 5.93 | |
Forfeited | 8.15 | 6.51 | 5.96 | |
Cancelled | 11.67 | 11.65 | 12.53 | |
Options outstanding at ending | 9.07 | $ 7.82 | $ 8.08 | |
Options vested at ending | $ 8.24 | |||
Options, Weighted Average Remaining Contractual Term [Roll Forward] | ||||
Options outstanding at ending | 6 years 4 months 24 days | |||
Options vested | 4 years 7 months 6 days | |||
Options, Aggregate Intrinsic Value [Roll Forward] | ||||
Options outstanding at ending | [1] | $ 7,122 | ||
Options vested at ending | [1] | $ 3,537 | ||
[1] Includes only those options that were in-the-money as of May 27, 2023. Stock options for which the exercise price exceeded the market price have been omitted. Fluctuations in the intrinsic value of both outstanding and exercisable options may result from changes in underlying stock price and timing and volume of option grants, exercises and forfeitures. |
Significant Accounting Polic_11
Significant Accounting Policies and Disclosures - Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Accounting Policies [Abstract] | |||
Expected volatility | 39.12% | 29% | 27.72% |
Risk-free interest rate | 3.09% | 0.97% | 0.45% |
Expected lives (years) | 5 years 5 months 19 days | 6 years 6 months | 6 years 6 months |
Annual cash dividend | $ 0.24 | $ 0.24 | $ 0.24 |
Significant Accounting Polic_12
Significant Accounting Policies and Disclosures - Schedule of Share-Based Compensation, Shares Outstanding Under Stock Option Plans, by Exercise Price Range (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||||
May 27, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | ||
Stock Options | |||||
Options, Outstanding, Number | 856 | 1,148 | 1,455 | 1,427 | |
Options, Outstanding, Weighted Average Exercise Price | $ 9.07 | $ 7.82 | $ 8.08 | $ 8.83 | |
Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 4 months 24 days | ||||
Options, Outstanding, Intrinsic Value | [1] | $ 7,122 | |||
Options, Vested, Number of Shares | 387 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 8.24 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 4 years 7 months 6 days | ||||
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | [1] | $ 3,537 | |||
$4.26 to $6.47 | |||||
Options, Outstanding, Number | 280 | ||||
Options, Outstanding, Weighted Average Exercise Price | $ 5.09 | ||||
Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 2 months 12 days | ||||
Options, Outstanding, Intrinsic Value | $ 3,446 | ||||
Options, Vested, Number of Shares | 135 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 5.41 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 5 years 7 months 6 days | ||||
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 1,615 | ||||
$6.90 to $10.35 | |||||
Options, Outstanding, Number | 347 | ||||
Options, Outstanding, Weighted Average Exercise Price | $ 8.34 | ||||
Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years 8 months 12 days | ||||
Options, Outstanding, Intrinsic Value | $ 3,138 | ||||
Options, Vested, Number of Shares | 194 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 8.65 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 4 years 2 months 12 days | ||||
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 1,694 | ||||
$11.14 to $16.71 | |||||
Options, Outstanding, Number | 229 | ||||
Options, Outstanding, Weighted Average Exercise Price | $ 15.04 | ||||
Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years 8 months 12 days | ||||
Options, Outstanding, Intrinsic Value | $ 538 | ||||
Options, Vested, Number of Shares | 58 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 13.45 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 3 years 3 months 18 days | ||||
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 228 | ||||
[1] Includes only those options that were in-the-money as of May 27, 2023. Stock options for which the exercise price exceeded the market price have been omitted. Fluctuations in the intrinsic value of both outstanding and exercisable options may result from changes in underlying stock price and timing and volume of option grants, exercises and forfeitures. |
Significant Accounting Polic_13
Significant Accounting Policies and Disclosures - Schedule of Restricted Stock Award Transactions (Details) - shares shares in Thousands | 12 Months Ended | |
May 27, 2023 | May 28, 2022 | |
Accounting Policies [Abstract] | ||
Unvested Restricted Shares, Beginning balance | 145 | 144 |
Granted | 53 | 72 |
Vested | (73) | (71) |
Unvested Restricted Shares, Ending balance | 125 | 145 |
Significant Accounting Polic_14
Significant Accounting Policies and Disclosures - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May 27, 2023 | Feb. 25, 2023 | Nov. 26, 2022 | Aug. 27, 2022 | May 28, 2022 | Feb. 26, 2022 | Nov. 27, 2021 | Aug. 28, 2021 | May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Net income | $ 4,120 | $ 6,340 | $ 5,549 | $ 6,324 | $ 8,283 | $ 2,887 | $ 4,122 | $ 2,635 | $ 22,333 | $ 17,927 | $ 1,655 |
Undistributed earnings (loss) | 19,013 | 14,734 | (1,467) | ||||||||
Undistributed earnings (loss) | $ 19,013 | $ 14,734 | $ (1,467) | ||||||||
Denominator for basic and diluted Earnings Per Share: | |||||||||||
Effect of dilutive securities dilutive stock options | 599 | 430 | 59 | ||||||||
Weighted Average Number of Shares Outstanding, Diluted | 12,542 | 11,825 | 11,164 | ||||||||
Basic | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Net income | $ 22,333 | $ 17,927 | $ 1,655 | ||||||||
Diluted | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Net income | 22,333 | 17,927 | 1,655 | ||||||||
Common Stock | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Undistributed earnings (loss) | 16,467 | 12,655 | (1,254) | ||||||||
Undistributed earnings (loss) | $ 16,573 | $ 12,720 | $ (1,255) | ||||||||
Denominator for basic and diluted Earnings Per Share: | |||||||||||
Weighted Average Number of Shares Outstanding, Basic | 11,943 | 11,395 | 11,105 | ||||||||
Weighted Average Number of Shares Outstanding, Diluted | 12,542 | 11,825 | 11,164 | ||||||||
Net income per share: | |||||||||||
Earnings Per Share, Basic | $ 0.29 | $ 0.46 | $ 0.40 | $ 0.47 | $ 0.62 | $ 0.22 | $ 0.31 | $ 0.20 | $ 1.62 | $ 1.35 | $ 0.13 |
Net income per share: | |||||||||||
Earnings Per Share, Diluted | 0.27 | 0.44 | 0.39 | 0.45 | 0.59 | 0.21 | 0.30 | 0.20 | $ 1.55 | $ 1.31 | $ 0.13 |
Common Stock | Basic | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Less dividends | $ 2,877 | $ 2,745 | $ 2,669 | ||||||||
Common Stock | Diluted | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Less dividends | 2,877 | 2,745 | 2,669 | ||||||||
Common Class B | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Undistributed earnings (loss) | 2,546 | 2,079 | (213) | ||||||||
Undistributed earnings (loss) | $ 2,440 | $ 2,014 | $ (212) | ||||||||
Denominator for basic and diluted Earnings Per Share: | |||||||||||
Weighted Average Number of Shares Outstanding, Basic | 2,052 | 2,080 | 2,097 | ||||||||
Weighted Average Number of Shares Outstanding, Diluted | 2,052 | 2,080 | 2,097 | ||||||||
Net income per share: | |||||||||||
Earnings Per Share, Basic | 0.27 | 0.41 | 0.36 | 0.42 | 0.55 | 0.19 | 0.28 | 0.18 | $ 1.46 | $ 1.21 | $ 0.11 |
Net income per share: | |||||||||||
Earnings Per Share, Diluted | $ 0.25 | $ 0.40 | $ 0.35 | $ 0.40 | $ 0.54 | $ 0.19 | $ 0.27 | $ 0.18 | $ 1.40 | $ 1.18 | $ 0.11 |
Common Class B | Basic | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Less dividends | $ 443 | $ 448 | $ 453 | ||||||||
Common Class B | Diluted | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Less dividends | $ 443 | $ 448 | $ 453 |
Revolving Credit Facility - Add
Revolving Credit Facility - Additional Information (Details) - Revolving Credit Facility - USD ($) | 12 Months Ended | |
May 27, 2023 | Mar. 23, 2023 | |
Debt Instrument [Line Items] | ||
Aggregate principal amount | $ 30,000,000 | |
Letter of credit issue fee percentage | 1.25% | |
Percentage of unused line fee | 0.10% | |
Outstanding under the Revolving Credit Facility | $ 0 | |
Base rate | ||
Debt Instrument [Line Items] | ||
Interest rate of credit facility | 0.25% | |
Euro RFR | ||
Debt Instrument [Line Items] | ||
Interest rate of credit facility | 1.25% | |
SOFR Rate | ||
Debt Instrument [Line Items] | ||
Interest rate of credit facility | 1.25% |
Related Party Transaction - Add
Related Party Transaction - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Related Party Transaction [Line Items] | |||
Total future minimum lease payments | $ 2,575 | ||
Rental expense | 566 | $ 747 | |
Lee A. McIntyre III | Lessor - LDL, LLC | |||
Related Party Transaction [Line Items] | |||
Total future minimum lease payments | $ 300 | ||
Lease term | 5 years | ||
Renewal term | 5 years | ||
Extended term | 5 years | ||
Executive vice president departing year | 2023 | ||
Executive vice president departing effective date | Sep. 24, 2022 | ||
Lee A. McIntyre III | Maximum | Lessor - LDL, LLC | |||
Related Party Transaction [Line Items] | |||
Rental expense | $ 200 | $ 200 | $ 100 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of intangible assets | $ 0 | $ 0 | $ 0 |
Amortization expense | $ 300,000 | $ 200,000 | $ 200,000 |
Weighted average number of years of amortization expense | 10 years 7 months 6 days |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | May 27, 2023 | May 28, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total Gross Amounts | $ 3,768 | $ 3,623 | |
Total Accumulated Amortization | 1,876 | 1,613 | |
Net Intangible Assets | 1,892 | 2,010 | |
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total Gross Amounts | 3,388 | 3,393 | [1] |
Total Accumulated Amortization | 1,671 | 1,453 | |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total Gross Amounts | 380 | 230 | |
Total Accumulated Amortization | $ 205 | $ 160 | |
[1] Change from prior periods reflect impact of foreign currency translation. |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of the Amortization Expense for the Next Five Years (Details) - USD ($) $ in Thousands | May 27, 2023 | May 28, 2022 |
Fiscal Year | ||
2024 | $ 252 | |
2025 | 239 | |
2026 | 206 | |
2027 | 194 | |
2028 | 183 | |
Thereafter | 818 | |
Net Intangible Assets | $ 1,892 | $ 2,010 |
Lease Obligations and Other C_3
Lease Obligations and Other Commitments - Schedule of Gross Amount Assets and Liabilities Related to Operating and Financing Leases (Details) - USD ($) $ in Thousands | May 27, 2023 | May 28, 2022 |
Lease Type | ||
Operating lease ROU asset | $ 2,457 | $ 3,024 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Assets, Noncurrent | Assets, Noncurrent |
Financing lease ROU asset | $ 215 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Assets, Noncurrent | Assets, Noncurrent |
Total Lease ROU asset | $ 2,457 | $ 3,239 |
Operating lease liability current | $ 1,028 | $ 1,109 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current | Liabilities, Current |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current | Liabilities, Current |
Total lease liability current | $ 1,028 | $ 1,109 |
Operating lease liability non-current | $ 1,429 | $ 1,915 |
Operating Lease Liability Noncurrent Statement Of Financial Position [Extensible List] | Liabilities, Noncurrent | Liabilities, Noncurrent |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Liabilities, Noncurrent | Liabilities, Noncurrent |
Total lease liability non-current | $ 1,429 | $ 1,915 |
Lease Obligations and Other C_4
Lease Obligations and Other Commitments - Components of Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 27, 2023 | May 28, 2022 | |
Lease Type | ||
Consolidated operating lease expense | $ 1,721 | $ 1,781 |
Consolidated financing lease amortization | 92 | |
Consolidated financing lease interest | 3 | |
Consolidated financing lease expense | 95 | |
Net lease cost | $ 1,721 | $ 1,876 |
Lease Obligations and Other C_5
Lease Obligations and Other Commitments - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 1.5 | $ 1.6 | $ 1.7 |
Lease Obligations and Other C_6
Lease Obligations and Other Commitments - Schedule of Future Minimum Lease Payments Under Operating and Financing Leases (Details) $ in Thousands | May 27, 2023 USD ($) |
Operating Leases | |
2024 | $ 1,147 |
2025 | 827 |
2026 | 453 |
2027 | 113 |
2028 | 23 |
Thereafter | 12 |
Total lease payments | 2,575 |
Less inputted interest | 118 |
Net minimum lease payments | $ 2,457 |
Lease Obligations and Other C_7
Lease Obligations and Other Commitments - Schedule of Weighted Average Lease Terms and Interest Rates of Leases (Details) | May 27, 2023 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted average remaining lease term in years, operating leases | 2 years 7 months 6 days |
Weighted average interest rate, operating leases | 4% |
Lease Obligations and Other C_8
Lease Obligations and Other Commitments - Schedule of Cash Outflows of Leasing Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 27, 2023 | May 28, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 566 | $ 747 |
Operating cash flows from financing leases | 148 | |
Finance cash flows from financing leases | $ 151 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (Loss) Before Income Tax, Domestic and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Components Of Income Loss Before Income Taxes [Abstract] | |||
Income before income taxes, United States | $ 22,258 | $ 12,299 | $ 1,077 |
Income before income taxes, Foreign | 2,772 | 3,460 | 1,231 |
Income before income taxes | $ 25,030 | $ 15,759 | $ 2,308 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Current: | |||
Federal | $ 954 | $ (4,213) | $ 108 |
State | 1,212 | 950 | |
Foreign | 547 | 1,038 | 665 |
Total current | 2,713 | (2,225) | 773 |
Deferred: | |||
Foreign | (16) | 57 | (120) |
Total deferred | (16) | 57 | (120) |
Income tax provision (benefit) | $ 2,697 | $ (2,168) | $ 653 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
May 27, 2023 | May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Operating Loss Carryforwards [Line Items] | ||||
U.S. federal statutory income tax rate | 21% | 21% | 21% | |
Creditable minimum tax credit percentage on adjusted financial statement income | 15% | 15% | ||
Excise tax percentage on corporate stock buybacks | 1% | 1% | ||
Investment tax credit percentage for qualified property | 25% | 25% | ||
Research and development (R&D) tax credits | $ 900,000 | |||
Deferred tax liability, undistributed earnings of foreign subsidiaries | 24,000 | $ 24,000 | $ 24,000 | |
Deferred tax valuation allowance | 1,375,000 | 1,375,000 | 3,474,000 | |
Foreign tax credits | 26,000 | 26,000 | 1,782,000 | |
Income taxes paid, net | 4,800,000 | 1,500,000 | $ 100,000 | |
Income tax provision | 2,697,000 | (2,168,000) | $ 653,000 | |
Liability for uncertain tax positions related to continuing operations, excluding interest and penalties | 0 | 0 | 100,000 | |
Liability for uncertain tax positions fully utilized | 100,000 | 100,000 | ||
Liability for interest and penalties | 0 | $ 0 | 0 | |
Maximum | ||||
Operating Loss Carryforwards [Line Items] | ||||
Amortize period of tax credits research and development | 15 years | |||
Deferred tax liability, undistributed earnings of foreign subsidiaries | 100,000 | $ 100,000 | 100,000 | |
Maximum | German Audit | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax provision | $ 100,000 | |||
Minimum | ||||
Operating Loss Carryforwards [Line Items] | ||||
Amortize period of tax credits research and development | 5 years | |||
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating Loss Carryforwards | 2,100,000 | $ 2,100,000 | 2,400,000 | |
Valuation allowance pertaining to deferred tax assets | 200,000 | |||
Foreign Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating Loss Carryforwards | 200,000 | 200,000 | 400,000 | |
Foreign tax credits | 1,800,000 | 1,800,000 | ||
Foreign tax credits | $ 1,800,000 | $ 1,800,000 | ||
Valuation allowance pertaining to deferred tax assets | $ 1,300,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 21% | 21% | 21% |
Effect of: | |||
State income taxes, net of federal tax benefit | 3.60% | 5.50% | 21.60% |
Foreign taxes at other rates | 0.90% | 4.50% | 10.50% |
Permanent tax differences | 0.10% | (2.00%) | 18.30% |
Change in valuation allowance for deferred tax assets | (7.00%) | (43.10%) | (49.70%) |
Return to provision adjustments | (0.70%) | 0.20% | 2.20% |
R&D credit | (3.70%) | ||
Other | (3.40%) | 0.20% | 4.40% |
Effective tax rate | 10.80% | (13.70%) | 28.30% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | May 27, 2023 | May 28, 2022 |
Deferred tax assets: | ||
NOL carryforwards - foreign and domestic | $ 2,324 | $ 2,796 |
Inventory valuations | 1,506 | 1,571 |
Goodwill | 1,056 | 1,182 |
Foreign tax credits | 26 | 1,782 |
Severance reserve | 131 | 183 |
Foreign capital loss | 944 | 1,224 |
Section 174 capitalization | 1,215 | |
Lease liability | 381 | 520 |
Other | 1,067 | 1,480 |
Subtotal | 8,650 | 10,738 |
Valuation allowance - foreign and domestic | (1,375) | (3,474) |
Net deferred tax assets after valuation allowance | 7,275 | 7,264 |
Deferred tax liabilities: | ||
Accelerated depreciation | (2,441) | (2,406) |
Tax on undistributed earnings | (24) | (24) |
ROU assets | (381) | (520) |
Other | (1) | (1) |
Subtotal | (2,847) | (2,951) |
Net deferred tax assets | 4,428 | 4,313 |
Supplemental disclosure of net deferred tax assets, excluding valuation allowance: | ||
Deferred tax assets - domestic | 4,517 | 6,017 |
Deferred tax assets - Foreign | 1,285 | 1,770 |
Total | $ 5,802 | $ 7,787 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 27, 2023 | May 28, 2022 | |
Disclosure Income Taxes Schedule Of Unrecognized Tax Benefits Details [Abstract] | ||
Unrecognized tax benefits, beginning of period | $ 125 | $ 142 |
Currency translation adjustment | (4) | (17) |
Release German reserve | $ (121) | |
Unrecognized tax benefits, end of period | $ 125 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - Employee Profit Sharing Plan - USD ($) $ in Millions | 12 Months Ended | ||
May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of employees matched | 50% | ||
Percent of pay matched | 6% | 6% | 4% |
Matching contributions expense | $ 1 | $ 0.8 | $ 0.6 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
May 27, 2023 USD ($) Segment | May 28, 2022 USD ($) Segment | May 29, 2021 USD ($) Segment | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | Segment | 4 | 4 | 4 |
Number of reportable segments | Segment | 4 | 4 | 4 |
Capital expenditures | $ 7,378 | $ 3,120 | $ 2,632 |
Long-lived assets | 22,700 | 19,000 | |
Depreciation and amortization | 3,671 | 3,423 | 3,424 |
Foreign | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 300 | 400 | |
Depreciation and amortization | 100 | 100 | $ 300 |
Healthcare | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | $ 600 | $ 1,000 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Operating Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May 27, 2023 | Feb. 25, 2023 | Nov. 26, 2022 | Aug. 27, 2022 | May 28, 2022 | Feb. 26, 2022 | Nov. 27, 2021 | Aug. 28, 2021 | May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 58,832 | $ 70,364 | $ 65,905 | $ 67,557 | $ 61,629 | $ 55,308 | $ 53,979 | $ 53,704 | $ 262,658 | $ 224,620 | $ 176,937 |
Gross Profit | $ 16,406 | $ 22,405 | $ 21,851 | $ 23,027 | $ 20,177 | $ 17,569 | $ 17,657 | $ 16,297 | 83,689 | 71,700 | 58,825 |
PMT | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 164,299 | 155,445 | 128,980 | ||||||||
Gross Profit | 54,089 | 50,810 | 43,546 | ||||||||
GES | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 47,596 | 22,611 | 8,300 | ||||||||
Gross Profit | 13,719 | 7,231 | 2,405 | ||||||||
Canvys | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 39,331 | 35,187 | 29,319 | ||||||||
Gross Profit | 12,375 | 11,252 | 10,274 | ||||||||
Healthcare | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 11,432 | 11,377 | 10,338 | ||||||||
Gross Profit | $ 3,506 | $ 2,407 | $ 2,600 |
Segment and Geographic Inform_5
Segment and Geographic Information - Schedule of Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) | May 27, 2023 | Aug. 27, 2022 | May 28, 2022 | |
Segment Reporting [Abstract] | ||||
Segment assets | $ 149,976,000 | $ 120,696,000 | ||
Cash and cash equivalents | 24,981,000 | 35,495,000 | ||
Investments - current | 0 | 5,000,000 | ||
Other current assets | [1] | 2,771,000 | 2,686,000 | |
Net property, plant and equipment | 14,124,000 | 9,435,000 | ||
Operating lease ROU asset | 1,403,000 | 1,894,000 | ||
Financing lease ROU asset | 215,000 | |||
Other non-current assets | 267,000 | $ 0 | ||
Other assets - non-current deferred income taxes | 4,526,000 | 4,398,000 | ||
Total assets | $ 198,048,000 | $ 179,819,000 | ||
[1] Other current assets include miscellaneous receivables and prepaid expenses. |
Segment and Geographic Inform_6
Segment and Geographic Information - Schedule of Net Sales and Gross Profit by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
May 27, 2023 | Feb. 25, 2023 | Nov. 26, 2022 | Aug. 27, 2022 | May 28, 2022 | Feb. 26, 2022 | Nov. 27, 2021 | Aug. 28, 2021 | May 27, 2023 | May 28, 2022 | May 29, 2021 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Net Sales | $ 58,832 | $ 70,364 | $ 65,905 | $ 67,557 | $ 61,629 | $ 55,308 | $ 53,979 | $ 53,704 | $ 262,658 | $ 224,620 | $ 176,937 | |
Gross Profit | $ 16,406 | $ 22,405 | $ 21,851 | $ 23,027 | $ 20,177 | $ 17,569 | $ 17,657 | $ 16,297 | 83,689 | 71,700 | 58,825 | |
North America | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Sales | 112,214 | 98,527 | 73,625 | |||||||||
Gross Profit | 43,580 | 36,548 | 28,639 | |||||||||
Asia/Pacific | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Sales | 59,557 | 49,235 | 40,839 | |||||||||
Gross Profit | 18,775 | 15,728 | 13,520 | |||||||||
Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Sales | 62,017 | 64,435 | 52,549 | |||||||||
Gross Profit | 18,760 | 19,215 | 16,958 | |||||||||
Latin America | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Sales | 28,924 | 12,439 | 9,651 | |||||||||
Gross Profit | 7,735 | 4,340 | 3,405 | |||||||||
Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Sales | [1] | (54) | (16) | 273 | ||||||||
Gross Profit | [1] | $ (5,161) | $ (4,131) | $ (3,697) | ||||||||
[1] Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add cost and other unallocated expenses . |
Segment and Geographic Inform_7
Segment and Geographic Information - Schedule of Net Assets by Geographic Region (Details) - USD ($) $ in Thousands | May 27, 2023 | May 28, 2022 |
Segment Reporting Information [Line Items] | ||
Net Assets | $ 159,320 | $ 135,847 |
North America | ||
Segment Reporting Information [Line Items] | ||
Net Assets | 106,528 | 90,979 |
Asia/Pacific | ||
Segment Reporting Information [Line Items] | ||
Net Assets | 12,347 | 11,514 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Net Assets | 37,843 | 30,873 |
Latin America | ||
Segment Reporting Information [Line Items] | ||
Net Assets | $ 2,602 | $ 2,481 |
Valuation and Qualifying Acco_3
Valuation and Qualifying Accounts - Schedule of Valuation and Qualifying Accounts Disclosure (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
May 27, 2023 | May 28, 2022 | May 29, 2021 | ||
Allowance for Doubtful Accounts | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at beginning of period | $ 186 | $ 202 | $ 334 | |
Charged to expense | [1] | 50 | 103 | 149 |
Deductions | [2] | (45) | (119) | (281) |
Balance at end of period | 191 | 186 | 202 | |
Inventory Provisions | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at beginning of period | 6,060 | 5,866 | 5,393 | |
Charged to expense | [3] | 466 | 462 | 1,041 |
Deductions | [4] | (658) | (268) | (568) |
Balance at end of period | $ 5,868 | $ 6,060 | $ 5,866 | |
[1] Charges to bad debt expense. Uncollectible amounts written off, net of recoveries and foreign currency translation. Charges to cost of sales. Included in fiscal 2023 were inventory write-downs of $ 0.3 million for PMT, $ 0.1 million for Canvys and $ 0.1 million for Healthcare. Inventory disposed or sold, net of foreign currency translation. |
Valuation and Qualifying Acco_4
Valuation and Qualifying Accounts - Schedule of Valuation and Qualifying Accounts Disclosure (Parenthetical) (Details) $ in Millions | 12 Months Ended |
May 27, 2023 USD ($) | |
PMT | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Inventory write-down | $ 0.3 |
Canvys | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Inventory write-down | 0.1 |
Healthcare | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Inventory write-down | $ 0.1 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May 27, 2023 | Feb. 25, 2023 | Nov. 26, 2022 | Aug. 27, 2022 | May 28, 2022 | Feb. 26, 2022 | Nov. 27, 2021 | Aug. 28, 2021 | May 27, 2023 | May 28, 2022 | May 29, 2021 | |
Net sales | $ 58,832 | $ 70,364 | $ 65,905 | $ 67,557 | $ 61,629 | $ 55,308 | $ 53,979 | $ 53,704 | $ 262,658 | $ 224,620 | $ 176,937 |
Gross profit | 16,406 | 22,405 | 21,851 | 23,027 | 20,177 | 17,569 | 17,657 | 16,297 | 83,689 | 71,700 | 58,825 |
Net income | $ 4,120 | $ 6,340 | $ 5,549 | $ 6,324 | $ 8,283 | $ 2,887 | $ 4,122 | $ 2,635 | $ 22,333 | $ 17,927 | $ 1,655 |
Common Stock | |||||||||||
Net income per share: | |||||||||||
Earnings Per Share, Basic | $ 0.29 | $ 0.46 | $ 0.40 | $ 0.47 | $ 0.62 | $ 0.22 | $ 0.31 | $ 0.20 | $ 1.62 | $ 1.35 | $ 0.13 |
Earnings Per Share, Diluted | 0.27 | 0.44 | 0.39 | 0.45 | 0.59 | 0.21 | 0.30 | 0.20 | 1.55 | 1.31 | 0.13 |
Common Class B | |||||||||||
Net income per share: | |||||||||||
Earnings Per Share, Basic | 0.27 | 0.41 | 0.36 | 0.42 | 0.55 | 0.19 | 0.28 | 0.18 | 1.46 | 1.21 | 0.11 |
Earnings Per Share, Diluted | $ 0.25 | $ 0.40 | $ 0.35 | $ 0.40 | $ 0.54 | $ 0.19 | $ 0.27 | $ 0.18 | $ 1.40 | $ 1.18 | $ 0.11 |