Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 03, 2018 | Apr. 10, 2018 | |
Entity Registrant Name | RICHARDSON ELECTRONICS LTD/DE | |
Entity Central Index Key | 355,948 | |
Document Type | 10-Q | |
Trading Symbol | RELL | |
Document Period End Date | Mar. 3, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-02 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,796,094 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 | |
Class B Common [Member] | ||
Entity Common Stock, Shares Outstanding | 2,136,919 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 03, 2018 | May 27, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 59,882 | $ 55,327 |
Accounts receivable, less allowance of $362 and $398, respectively | 21,893 | 20,782 |
Inventories, net | 49,129 | 42,749 |
Prepaid expenses and other assets | 3,746 | 3,070 |
Investments - current | 199 | 6,429 |
Total current assets | 134,849 | 128,357 |
Non-current assets: | ||
Property, plant and equipment, net | 17,991 | 15,813 |
Goodwill | 6,332 | 6,332 |
Intangible assets, net | 3,125 | 3,441 |
Non-current deferred income taxes | 1,061 | 1,102 |
Investments - non-current | 2,419 | |
Total non-current assets | 28,509 | 29,107 |
Total assets | 163,358 | 157,464 |
Current liabilities: | ||
Accounts payable | 15,846 | 15,933 |
Accrued liabilities | 9,867 | 8,311 |
Total current liabilities | 25,713 | 24,244 |
Non-current liabilities: | ||
Non-current deferred income tax liabilities | 236 | 158 |
Other non-current liabilities | 947 | 735 |
Total non-current liabilities | 1,183 | 893 |
Total liabilities | 26,896 | 25,137 |
Stockholders' equity | ||
Preferred stock, $1.00 par value, no shares issued | ||
Additional paid-in-capital | 59,900 | 59,436 |
Common stock in treasury, at cost, no shares at March 3, 2018 and May 27, 2017 | ||
Retained earnings | 69,132 | 69,333 |
Accumulated other comprehensive income | 6,783 | 2,916 |
Total stockholders' equity | 136,462 | 132,327 |
Total liabilities and stockholders' equity | 163,358 | 157,464 |
Common Stock [Member] | ||
Stockholders' equity | ||
Common stock, $0.05 par value; issued and outstanding 10,796 shares at March 3, 2018 and 10,712 shares at May 27, 2017 Class B common stock, convertible, $0.05 par value; issued and outstanding 2,137 shares at March 3, 2018 and May 27, 2017 | 540 | 535 |
Class B Common [Member] | ||
Stockholders' equity | ||
Common stock, $0.05 par value; issued and outstanding 10,796 shares at March 3, 2018 and 10,712 shares at May 27, 2017 Class B common stock, convertible, $0.05 par value; issued and outstanding 2,137 shares at March 3, 2018 and May 27, 2017 | $ 107 | $ 107 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 03, 2018 | May 27, 2017 |
Accounts receivable, allowance | $ 362 | $ 398 |
Preferred stock par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock issued | 0 | 0 |
Common Stock [Member] | ||
Common stock par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock issued | 10,796 | 10,712 |
Common stock outstanding | 10,796 | 10,712 |
Class B Common [Member] | ||
Common stock par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock issued | 2,137 | 2,137 |
Common stock outstanding | 2,137 | 2,137 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 03, 2018 | Feb. 25, 2017 | Mar. 03, 2018 | Feb. 25, 2017 | |
Net sales | $ 41,645 | $ 32,313 | $ 117,722 | $ 99,513 |
Cost of sales | 27,578 | 21,621 | 78,133 | 67,617 |
Gross profit | 14,067 | 10,692 | 39,589 | 31,896 |
Selling, general and administrative expenses | 13,097 | 12,002 | 38,023 | 37,697 |
Loss (gain) on disposal of assets | 3 | (188) | ||
Operating income (loss) | 967 | (1,310) | 1,754 | (5,801) |
Other (income) expense: | ||||
Investment/interest income | (208) | (67) | (378) | (129) |
Foreign exchange loss | 159 | 214 | 475 | 311 |
Other, net | 1 | (16) | (14) | |
Total other (income) expense | (48) | 131 | 83 | 182 |
Income (loss) from continuing operations before income taxes | 1,015 | (1,441) | 1,671 | (5,983) |
Income tax provision (benefit) | 488 | (10) | 1,084 | 820 |
Income (loss) from continuing operations | 527 | (1,431) | 587 | (6,803) |
Income from discontinued operations | 1,496 | |||
Net income (loss) | 527 | (1,431) | 2,083 | (6,803) |
Foreign currency translation gain (loss), net of tax | 1,646 | 508 | 3,997 | (1,736) |
Fair value adjustments on investments (loss) gain | (164) | 27 | (130) | 40 |
Comprehensive income (loss) | 2,009 | (896) | $ 5,950 | $ (8,499) |
Common Stock [Member] | ||||
Other (income) expense: | ||||
Net income (loss) | $ 527 | $ (1,431) | ||
Income (loss) from continuing operations | $ 0.04 | $ (0.11) | $ 0.05 | $ (0.54) |
Income from discontinued operations | 0.12 | |||
Total net income (loss) per Common share - Basic | 0.04 | (0.11) | 0.17 | (0.54) |
Net income (loss) per Common share - Diluted: | ||||
Income (loss) from continuing operations | 0.04 | (0.11) | 0.05 | (0.54) |
Income from discontinued operations | 0.12 | |||
Total net income (loss) per share - Diluted | $ 0.04 | $ (0.11) | $ 0.17 | $ (0.54) |
Weighted average number of shares: | ||||
Common shares - Basic | 10,792 | 10,706 | 10,753 | 10,704 |
Common shares - Diluted | 10,872 | 10,706 | 10,793 | 10,704 |
Dividends per share | $ 0.060 | $ 0.060 | $ 0.180 | $ 0.180 |
Class B Common [Member] | ||||
Other (income) expense: | ||||
Net income (loss) | $ 527 | $ (1,431) | ||
Income (loss) from continuing operations | $ 0.04 | $ (0.10) | 0.04 | (0.48) |
Income from discontinued operations | 0.11 | |||
Total net income (loss) per Common share - Basic | 0.04 | (0.10) | 0.15 | (0.48) |
Net income (loss) per Common share - Diluted: | ||||
Income (loss) from continuing operations | 0.04 | (0.10) | 0.04 | (0.48) |
Income from discontinued operations | 0.11 | |||
Total net income (loss) per share - Diluted | $ 0.04 | $ (0.10) | $ 0.15 | $ (0.48) |
Weighted average number of shares: | ||||
Common shares - Basic | 2,137 | 2,141 | 2,137 | 2,141 |
Common shares - Diluted | 2,137 | 2,141 | 2,137 | 2,141 |
Dividends per share | $ 0.054 | $ 0.054 | $ 0.162 | $ 0.162 |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 03, 2018 | Feb. 25, 2017 | Mar. 03, 2018 | Feb. 25, 2017 | |
Operating activities: | ||||
Net income (loss) | $ 527 | $ (1,431) | $ 2,083 | $ (6,803) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 752 | 703 | 2,219 | 2,020 |
Inventory provisions | 183 | 189 | 470 | 298 |
Gain on sale of investments | (159) | (8) | (183) | (2) |
Loss (gain) on disposal of assets | 3 | (188) | ||
Share-based compensation expense | 116 | 75 | 425 | 354 |
Deferred income taxes | 124 | 121 | 186 | (188) |
Change in assets and liabilities: | ||||
Accounts receivable | (551) | (717) | (239) | 3,217 |
Income tax receivable | (5) | |||
Inventories | (598) | 117 | (5,232) | 1,600 |
Prepaid expenses and other assets | 43 | 80 | (572) | (961) |
Accounts payable | 552 | 849 | (446) | (2,372) |
Accrued liabilities | 1,116 | (1,118) | 1,325 | (256) |
Other | (137) | (125) | (140) | (107) |
Net cash provided by (used in) operating activities | 1,971 | (1,265) | (292) | (3,205) |
Investing activities: | ||||
Capital expenditures | (1,461) | (764) | (4,196) | (4,063) |
Proceeds from sale of assets | 276 | |||
Proceeds from maturity of investments | 3,943 | 12,120 | 3,582 | |
Purchases of investments | (3,943) | (2,136) | ||
Proceeds from sales of available-for-sale securities | 648 | 78 | 913 | 225 |
Purchases of available-for-sale securities | (78) | (265) | (225) | |
Other | (2) | (3) | (7) | (9) |
Net cash provided by (used in) investing activities | 3,128 | (767) | 4,898 | (2,626) |
Financing activities: | ||||
Proceeds from issuance of common stock | 44 | 30 | 44 | 30 |
Cash dividends paid | (763) | (758) | (2,284) | (2,273) |
Net cash used in financing activities | (719) | (728) | (2,240) | (2,243) |
Effect of exchange rate changes on cash and cash equivalents | 1,049 | 35 | 2,189 | (994) |
Increase (decrease) in cash and cash equivalents | 5,429 | (2,725) | 4,555 | (9,068) |
Cash and cash equivalents at beginning of period | 54,453 | 54,111 | 55,327 | 60,454 |
Cash and cash equivalents at end of period | $ 59,882 | $ 51,386 | $ 59,882 | $ 51,386 |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statement of Stockholders' Equity - 9 months ended Mar. 03, 2018 - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Class B Common [Member] | Par value [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Beginning Balance at May. 27, 2017 | $ 642 | $ 59,436 | $ 69,333 | $ 2,916 | $ 132,327 | ||
Beginning Balance (in shares) at May. 27, 2017 | 10,712 | 2,137 | |||||
Comprehensive income | |||||||
Net income | 2,083 | 2,083 | |||||
Foreign currency translation | 3,997 | 3,997 | |||||
Fair value adjustments on investments | (130) | (130) | |||||
Share-based compensation: | |||||||
Restricted stock | 57 | 57 | |||||
Restricted stock - shares | 78 | ||||||
Stock options | 368 | 368 | |||||
Common stock: | |||||||
Options exercised | 5 | 39 | 44 | ||||
Options exercised (in shares) | 6 | ||||||
Dividends paid to: | |||||||
Common | (1,938) | (1,938) | |||||
Class B | (346) | (346) | |||||
Ending Balance at Mar. 03, 2018 | $ 647 | $ 59,900 | $ 69,132 | $ 6,783 | $ 136,462 | ||
Ending Balance (in shares) at Mar. 03, 2018 | 10,796 | 2,137 |
Unaudited Consolidated Stateme7
Unaudited Consolidated Statement of Stockholders' Equity (Parenthetical) | 9 Months Ended |
Mar. 03, 2018$ / shares | |
Common Stock [Member] | |
Dividends paid (per share) | $ 0.18 |
Class B Common [Member] | |
Dividends paid (per share) | $ 0.162 |
DESCRIPTION OF THE COMPANY
DESCRIPTION OF THE COMPANY | 9 Months Ended |
Mar. 03, 2018 | |
Description Of Company | |
DESCRIPTION OF THE COMPANY | 1. DESCRIPTION OF THE COMPANY Richardson Electronics, Ltd. is a leading global provider of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; high value flat panel detector solutions, replacement parts, tubes and service training for diagnostic imaging equipment; and customized display solutions. 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. We have three operating and reportable segments, which we define as follows: Power and Microwave Technologies Group (“PMT”) combines our core engineered solutions, power grid and microwave tube business with new RF and power technologies. As a manufacturer and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities. 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 alternative energy, 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. Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial, and medical original equipment manufacturers (“OEM”) markets. Healthcare manufactures, refurbishes and distributes high value replacement parts 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; 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 and deliver better clinical outcomes 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. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Mar. 03, 2018 | |
Basis Of Presentation | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements. Our fiscal quarter ends on the Saturday nearest the end of the quarter-ending month. The third quarter of fiscal 2018 and fiscal 2017 both contained 13 weeks. The first nine months of fiscal 2018 and fiscal 2017 contained 40 and 39 weeks, respectively. In the opinion of management, all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results of interim periods have been made. All inter-company transactions and balances have been eliminated. The unaudited consolidated financial statements presented herein include the accounts of our wholly owned subsidiaries. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The results of our operations for the three and nine months ended March 3, 2018, are not necessarily indicative of the results that may be expected for the fiscal year ending June 2, 2018. The financial information contained in this report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 27, 2017, that we filed on July 31, 2017. |
CRITICAL ACCOUNTING POLICIES AN
CRITICAL ACCOUNTING POLICIES AND ESTIMATES | 9 Months Ended |
Mar. 03, 2018 | |
Accounting Policies [Abstract] | |
CRITICAL ACCOUNTING POLICIES AND ESTIMATES | 3. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Inventories, net: At this time, we do not anticipate any material risks or uncertainties related to possible future inventory write-downs. 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. Inventory reserves were approximately $3.7 million as of March 3, 2018 and $3.5 million as of May 27, 2017. Revenue Recognition: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers, which amends guidance for revenue recognition. ASU 2014-09 is principles based guidance that can be applied to all contracts with customers, enhancing comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the guidance is that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance details the steps entities should apply to achieve the core principle. In August 2015, the FASB issued an amendment to defer the effective date for all entities by one year. For public entities, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. Companies have the option of using either a full or modified retrospective approach in applying this standard. During fiscal 2016 and 2017, the FASB issued four additional updates which further clarify the guidance provided in ASU 2014-09. We are evaluating the impact of the new standard on our financial statements using a three-phase approach (assessment, conversion and implementation). We continue to work through our assessment phase and further evaluation is needed in order to determine whether or not the new revenue recognition standard will have a material impact on our financial statements and related disclosures upon adoption. We have undertaken a detailed analysis of our various contracts with customers and revenue streams. The Company has engaged a third party to assist in evaluating the impact of this new standard on its consolidated financial statements and related disclosures. We will complete the conversion and implementation phases by the end of fiscal year 2018 in conjunction with future interpretative guidance. Loss Contingencies: Goodwill and Intangible Assets: During the fourth quarter of each fiscal year, our goodwill balances are reviewed for impairment using the first day of our fourth quarter as the measurement date. If after reviewing the totality of events or circumstances, we determine that it is not likely that the fair value of a reporting unit exceeds its carrying amount, then we test for impairment through the application of a fair value based test. We estimate the fair value of each of our reporting units based on projected future operating results, market approach, and discounted cash flows. Intangible assets are initially recorded at their fair market values determined on 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. Income Taxes: In March 2016, the FASB issued ASU No. 2016-09, “ Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, Accrued Liabilities: in thousands March 3, 2018 May 27, 2017 Compensation and payroll taxes $ 3,328 $ 3,250 Accrued severance (1) 410 706 Professional fees 642 535 Deferred revenue 2,051 1,460 Other accrued expenses 3,436 2,360 Accrued Liabilities $ 9,867 $ 8,311 (1) In the second quarter of fiscal year 2017, the Company executed a reduction in headcount to streamline operations and reduce costs and recorded $1.3 million of expense included in selling, general and administrative expenses for employee termination costs payable to terminated employees with employment and/or separation agreements with the Company. The changes in the severance accrual for the first nine months of fiscal year 2018 included payments of $0.3 million. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Mar. 03, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 4. GOODWILL AND INTANGIBLE ASSETS The carrying value of goodwill was $6.3 million as of March 3, 2018 and May 27, 2017. Goodwill is initially recorded based on the premium paid for acquisitions and is subsequently tested for impairment, using the first day of our fourth quarter as the measurement date. We test goodwill for impairment annually and whenever events or circumstances indicates an impairment may have occurred, such as a significant adverse change in the business climate, loss of key personnel or a decision to sell or dispose of a reporting unit. The goodwill balance in its entirety relates to our IMES reporting unit which is included in our Healthcare segment. Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements and technology acquired in connection with our acquisitions. Intangible assets subject to amortization are as follows (in thousands) March 3, May 27, Gross Amounts: Trade Name $ 659 $ 659 Customer Relationships (1) 3,417 3,397 Non-compete Agreements 177 177 Technology 230 230 Total Gross Amounts $ 4,483 $ 4,463 Accumulated Amortization: Trade Name $ 598 $ 441 Customer Relationships 582 446 Non-compete Agreements 107 84 Technology 71 51 Total Accumulated Amortization $ 1,358 $ 1,022 Net Intangibles $ 3,125 $ 3,441 (1) Change from prior periods reflect impact of foreign currency translation. 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 Expense Remaining 2018 $ 108 2019 245 2020 258 2021 246 2022 253 Thereafter 2,015 Total amortization expense $ 3,125 The weighted average number of years of amortization expense remaining is 15.9 years. |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Mar. 03, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | 5. INVESTMENTS As of March 3, 2018, we had approximately $0.2 million invested in time deposits and certificates of deposit (“CD”) which mature in less than twelve months. The fair value of these investments is equal to the face value of each time deposit and CD. As of May 27, 2017, we had invested in time deposits and certificates of deposit in the amount of $8.2 million. Of this, $6.4 million mature in less than twelve months and $1.8 million mature in greater than twelve months. The fair value of these investments is the face value of each time deposit and CD. We liquidated our investments in equity securities in the third quarter of fiscal 2018. Proceeds from the liquidation were $0.9 million with gross realized gains of $0.2 million for the nine months ended March 3, 2018. Prior to the liquidation of our investment in equity securities, our investments in equity securities were classified as available-for-sale and were carried at their fair value based on quoted market prices. Our investments, which were included in non-current assets, had a carrying amount of $0.6 million as of May 27, 2017. Proceeds from the sale of securities were $0.1 million during the third quarter of fiscal 2017. Prior to liquidating the equity securities, we reinvested proceeds from the sale of securities, and the cost of the equity securities sold was based on a specific identification method. Gross realized gains on those sales were less than $0.1 million during the third quarter of fiscal 2017. Net unrealized holding gains of less than $0.1 million during the third quarter of fiscal 2017 were included in accumulated other comprehensive income (loss). |
WARRANTIES
WARRANTIES | 9 Months Ended |
Mar. 03, 2018 | |
Guarantees [Abstract] | |
WARRANTIES | 6. WARRANTIES We offer warranties for the limited number of specific products we manufacture. We also provide extended warranties for some products we sell that lengthen the period of coverage specified in the manufacturer’s original warranty. Our warranty terms generally range from one to three years. 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 (loss). 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, the extended warranty period 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. Warranty reserves were approximately $0.1 million as of March 3, 2018 and May 27, 2017. |
LEASE OBLIGATIONS, OTHER COMMIT
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES | 9 Months Ended |
Mar. 03, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES | 7. LEASE OBLIGATIONS, OTHER COMMITMENTS AND CONTINGENCIES We lease certain warehouse and office facilities and office equipment under non-cancelable operating leases. Rent expense was $1.3 million during the first nine months of fiscal 2018 and $1.5 million during the first nine months of fiscal 2017. 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 Payments Remaining 2018 $ 454 2019 1,622 2020 1,143 2021 802 2022 144 Thereafter 97 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 03, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES We recorded an income tax provision from continuing operations of $1.1 million and $0.8 million for the first nine months of fiscal 2018 and the first nine months of fiscal 2017, respectively. The effective income tax rate from continuing operations during the first nine months of fiscal 2018 was a tax provision of 65.0%, as compared to a tax provision of (13.7%) during the first nine months of fiscal 2017. The difference in rate during the first nine months of fiscal 2018, as compared to the first nine months of fiscal 2017, reflects the change in the overall loss realized through the third quarter in each respective period, changes in our geographical distribution of income (loss), the recording of provision to return true-ups of various foreign jurisdictions, the accrual of an uncertain tax position with respect to a German audit and our positions with respect to permanent reinvestment of foreign earnings under ASC 740-30, Income Taxes - Other Considerations or Special Areas (“ASC 740-30”). The 65.0% effective income tax rate differs from the federal statutory rate of 29.2% as a result of our geographical distribution of income (loss), the recording of a valuation allowance against the increase in our U.S. state and federal net deferred tax assets, recognition of an uncertain tax position and preliminary tax assessments with respect to the income tax audit in Germany. On December 22, 2017, the U.S. government enacted new tax legislation, Tax Cuts and Jobs Act (the “Act”). The primary provisions of the Act expected to impact the Company in fiscal 2018 are a reduction to the U.S. corporate income tax rate from 35% to 21% and a transition from a worldwide corporate tax system to a territorial tax system. The reduction in the corporate income tax rate requires the Company to remeasure its net deferred tax assets to the new corporate tax rate and the transition to a territorial tax system requires payment of a one-time tax on deemed repatriation of undistributed and previously untaxed non-U.S. earnings. Primarily as a result of those provisions of the Act, the Company recorded a deferred remeasurement impact of approximately $1.6 million, which was fully offset by the valuation allowance movement. Additionally, the estimated deemed earnings repatriation tax, net of available foreign tax credits brought back as part of the deemed repatriation, was $3.5 million. The Company does not anticipate any cash tax payments due to the foreign tax credit carryforwards available to fully offset the provisional deemed repatriation tax. The 21% corporate income tax rate was effective January 1, 2018. Based on the Company’s June 2, 2018 fiscal year end, the U.S. statutory income tax rate for fiscal 2018 will be approximately 29.2%. The tax impact recorded for the Act during the third quarter of fiscal 2018 was provisional as outlined below and may change. The Company completed a preliminary assessment of earnings that could be repatriated based on reinvestment needs of non-U.S. operations and earnings available for repatriation. The estimated withholding tax that would be incurred from the repatriation of those earnings is included in the third quarter of fiscal 2018 provisional income tax expense. The Company continues to analyze the provisions of the Act addressing the net deferred tax asset remeasurement and its calculations, the deemed earnings repatriation, including the determination of undistributed non-U.S. earnings, and evaluate potential Company actions, including repatriating additional non-U.S. earnings and actions that could affect the Company’s fiscal year ended 2018 U.S. taxable income. In addition, the Company continues to monitor potential legislative action and regulatory interpretations of the Act. Based on the effective date of certain provisions, the Company will be subject to additional requirements of the Act beginning in fiscal 2019. Those provisions include a tax on global intangible low-taxed income (GILTI), a tax determined by base erosion tax benefits (BEAT) from certain payments between a U.S. corporation and foreign subsidiaries, a limitation of certain executive compensation, a deduction for foreign derived intangible income (FDII) and interest expense limitations. The Company has not completed its analysis of those provisions and the estimated impact. The Company also has not determined its accounting policy to treat the taxes due on GILTI as a period cost or include in the determination of deferred taxes. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 that allows for a measurement period up to one year after the enactment date of the Act to complete the accounting requirements. The Company will complete the adjustments related to the Act within the allowed period. We have historically determined that undistributed earnings of our foreign subsidiaries, to the extent of cash available, will be repatriated to the U.S. Due to the deemed earnings repatriation tax, the outside basis difference for which the historic balance has primarily related has been reduced. The deferred tax liability on the outside basis difference is now primarily withholding tax. Accordingly, we have reduced the deferred tax liability from $5.7 million as of the second quarter of fiscal 2018 to $0.2 million as of the third quarter of fiscal 2018 on foreign earnings of $47.2 million. In the normal course of business, we are subject to examination by taxing authorities throughout the world. Generally, years prior to fiscal 2007 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 are currently under examination in Thailand (fiscal 2008 through 2011). We are also under examination in the state of Illinois for fiscal years 2014 and 2015. Our primary foreign tax jurisdictions are Germany and the Netherlands. We have tax years open in Germany beginning in fiscal 2015 and the Netherlands beginning in fiscal 2011. On September 12, 2017, the Company received an income tax refund from the State of Illinois of approximately $2.0 million, which was inclusive of interest earned. The refund was a result of the conclusion of the Illinois amended return related to the sale of the RF, Wireless and Power Division in 2011. A net benefit of $1.5 million, which includes $0.5 million of professional fee costs incurred to pursue the refund, was recognized in the second quarter of fiscal 2018 in discontinued operations. As of March 3, 2018, our worldwide liability for uncertain tax positions related to continuing operations was $0.1 million, excluding interest and penalties, as compared to no liability as of May 27, 2017. The change to the uncertain tax positions for the third quarter of fiscal 2018 was as a result of the preliminary German audit assessments and the related exposure for the open years, which was reserved in the second quarter of fiscal 2018. We record penalties and interest relating to uncertain tax positions in the income tax expense line item within the unaudited consolidated statements of income (loss). It is not expected that there will be a change to unrecognized tax provision within the next 12 months. The valuation allowance against the net deferred tax assets increased to $10.0 million as of March 3, 2018. Changes during the first nine months relating to the Act include the impact from the deferred remeasurement, deemed earnings repatriation tax and changes to the permanent reinvestment assertion outside basis difference as a result of the Act. Additional impacts to the valuation allowance include an Illinois income tax rate increase and additional domestic federal and state net deferred tax assets generated during the first three quarters of fiscal year 2018 due to additional losses in the U.S. jurisdiction. The valuation allowance against the net deferred tax assets was $8.5 million as of May 27, 2017. A full valuation allowance on the U.S. and state deferred tax assets will be maintained until sufficient positive evidence related to sources of future taxable income exists to support a reversal of the valuation allowance. 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. |
CALCULATION OF EARNINGS PER SHA
CALCULATION OF EARNINGS PER SHARE | 9 Months Ended |
Mar. 03, 2018 | |
Earnings Per Share [Abstract] | |
CALCULATION OF EARNINGS PER SHARE | 9. CALCULATION OF 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. In accordance with ASC 260-10, Earnings Per Share The earnings per share (“EPS”) presented in our unaudited consolidated statements of comprehensive income (loss) are based on the following amounts ( in thousands, except per share amounts Three Months Ended March 3, 2018 February 25, 2017 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Income (loss) from continuing operations $ 527 $ 527 $ (1,431 ) $ (1,431 ) Less dividends: Common stock 648 648 642 642 Class B common stock 115 115 116 116 Undistributed losses $ (236 ) $ (236 ) $ (2,189 ) $ (2,189 ) Common stock undistributed losses $ (200 ) $ (200 ) $ (1,855 ) $ (1,855 ) Class B common stock undistributed losses (36 ) (36 ) (334 ) (334 ) Total undistributed losses $ (236 ) $ (236 ) $ (2,189 ) $ (2,189 ) Income from discontinued operations $ — $ — $ — $ — Less dividends: Common stock — — — — Class B common stock — — — — Undistributed losses $ — $ — $ — $ — Common stock undistributed losses $ — $ — $ — $ — Class B common stock undistributed losses — — — — Total undistributed losses $ — $ — $ — $ — Net income (loss) $ 527 $ 527 $ (1,431 ) $ (1,431 ) Less dividends: Common stock 648 648 642 642 Class B common stock 115 115 116 116 Undistributed losses $ (236 ) $ (236 ) $ (2,189 ) $ (2,189 ) Common stock undistributed losses $ (200 ) $ (200 ) $ (1,855 ) $ (1,855 ) Class B common stock undistributed losses (36 ) (36 ) (334 ) (334 ) Total undistributed losses $ (236 ) $ (236 ) $ (2,189 ) $ (2,189 ) Denominator for basic and diluted EPS: Common stock weighted average shares 10,792 10,792 10,706 10,706 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,137 2,137 2,141 2,141 Effect of dilutive securities Dilutive stock options 80 — Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 13,009 12,847 Income (loss) from continuing operations per share: Common stock $ 0.04 $ 0.04 $ (0.11 ) $ (0.11 ) Class B common stock $ 0.04 $ 0.04 $ (0.10 ) $ (0.10 ) Income from discontinued operations per share: Common stock $ — $ — $ — $ — Class B common stock $ — $ — $ — $ — Net income (loss) per share: Common stock $ 0.04 $ 0.04 $ (0.11 ) $ (0.11 ) Class B common stock $ 0.04 $ 0.04 $ (0.10 ) $ (0.10 ) Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the third quarter of fiscal 2017 was 853. Nine Months Ended March 3, 2018 February 25, 2017 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Income (loss) from continuing operations $ 587 $ 587 $ (6,803 ) $ (6,803 ) Less dividends: Common stock 1,938 1,938 1,925 1,925 Class B common stock 346 346 348 348 Undistributed losses $ (1,697 ) $ (1,697 ) $ (9,076 ) $ (9,076 ) Common stock undistributed losses $ (1,440 ) $ (1,440 ) $ (7,691 ) $ (7,691 ) Class B common stock undistributed losses (257 ) (257 ) (1,385 ) (1,385 ) Total undistributed losses $ (1,697 ) $ (1,697 ) $ (9,076 ) $ (9,076 ) Income from discontinued operations $ 1,496 $ 1,496 $ — $ — Less dividends: Common stock 1,938 1,938 — — Class B common stock 346 346 — — Undistributed losses $ (788 ) $ (788 ) $ — $ — Common stock undistributed losses $ (668 ) $ (668 ) $ — $ — Class B common stock undistributed losses (120 ) (120 ) — — Total undistributed losses $ (788 ) $ (788 ) $ — $ — Net income (loss) $ 2,083 $ 2,083 $ (6,803 ) $ (6,803 ) Less dividends: Common stock 1,938 1,938 1,925 1,925 Class B common stock 346 346 348 348 Undistributed losses $ (201 ) $ (201 ) $ (9,076 ) $ (9,076 ) Common stock undistributed losses $ (171 ) $ (171 ) $ (7,691 ) $ (7,691 ) Class B common stock undistributed losses (30 ) (30 ) (1,385 ) (1,385 ) Total undistributed losses $ (201 ) $ (201 ) $ (9,076 ) $ (9,076 ) Denominator for basic and diluted EPS: Common stock weighted average shares 10,753 10,753 10,704 10,704 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,137 2,137 2,141 2,141 Effect of dilutive securities Dilutive stock options 40 — Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 12,930 12,845 Income (loss) from continuing operations per share: Common stock $ 0.05 $ 0.05 $ (0.54 ) $ (0.54 ) Class B common stock $ 0.04 $ 0.04 $ (0.48 ) $ (0.48 ) Income from discontinued operations per share: Common stock $ 0.12 $ 0.12 $ — $ — Class B common stock $ 0.11 $ 0.11 $ — $ — Net income (loss) per share: Common stock $ 0.17 $ 0.17 $ (0.54 ) $ (0.54 ) Class B common stock $ 0.15 $ 0.15 $ (0.48 ) $ (0.48 ) Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the first nine months of fiscal 2017 was 853. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Mar. 03, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 10. SEGMENT REPORTING In accordance with ASC 280-10, Segment Reporting, we have identified three operating and reportable segments as follows: Power and Microwave Technologies Group (“PMT”) combines our core engineered solutions, power grid and microwave tube business with new RF and power technologies. As a manufacturer and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities. 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 alternative energy, 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. Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial, and medical original equipment manufacturers (“OEM”) markets. Healthcare manufactures, refurbishes and distributes high value replacement parts 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; 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 and deliver better clinical outcomes while lowering the cost of healthcare delivery. The CEO 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 Three Months Ended Nine Months Ended March 3, February 25, March 3, February 25, 2018 2017 2018 2017 PMT Net Sales $ 31,869 $ 24,763 $ 91,056 $ 75,373 Gross Profit 10,656 8,075 30,492 23,803 Canvys Net Sales $ 7,585 $ 4,824 $ 20,057 $ 14,883 Gross Profit 2,571 1,331 6,245 4,222 Healthcare Net Sales $ 2,191 $ 2,726 $ 6,609 $ 9,257 Gross Profit 840 1,286 2,852 3,871 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 Three Months Ended Nine Months Ended March 3, February 25, March 3, February 25, 2018 2017 2018 2017 Net Sales North America $ 18,748 $ 13,607 $ 49,657 $ 40,715 Asia/Pacific 6,635 5,916 21,102 20,192 Europe 14,197 10,950 40,312 32,418 Latin America 2,086 1,792 6,646 6,138 Other (1) (21 ) 48 5 50 Total $ 41,645 $ 32,313 $ 117,722 $ 99,513 Gross Profit North America $ 6,955 $ 5,258 $ 18,747 $ 15,090 Asia/Pacific 2,331 2,085 7,256 7,012 Europe 4,904 3,764 13,493 10,540 Latin America 820 643 2,638 2,337 Other (1) (943 ) (1,058 ) (2,545 ) (3,083 ) Total $ 14,067 $ 10,692 $ 39,589 $ 31,896 (1) Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs 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. |
LITIGATION
LITIGATION | 9 Months Ended |
Mar. 03, 2018 | |
Litigation | |
LITIGATION | 11. LITIGATION On December 5, 2017, Steven H. Busch filed a Verified Stockholder Derivative Complaint against Edward J. Richardson, Paul Plante, Jacques Belin, James Benham, Kenneth Halverson, and the Company in the Delaware Court of Chancery, captioned Steven H. Busch v. Edward J. Richardson, et al. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Mar. 03, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 12. FAIR VALUE MEASUREMENTS ASC 820, Fair Value Measurements and Disclosures ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists; therefore requiring an entity to develop its own assumptions. As of March 3, 2018 and May 27, 2017, we held investments that are required to be measured at fair value on a recurring basis. Our investments currently consist of time deposits and CDs, where face value is equal to fair value, and as of May 27, 2017, equity securities of publicly traded companies for which market prices are readily available. Investments measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of March 3, 2018 and May 27, 2017, were as follows ( in thousands Level 1 March 3, 2018 Time deposits/CDs $ 199 Equity securities — Total $ 199 May 27, 2017 Time deposits/CDs $ 8,226 Equity securities 622 Total $ 8,848 |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 9 Months Ended |
Mar. 03, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | 13. Related Party Transaction On June 15, 2015, the Company entered into a lease agreement for the IMES facility with LDL, LLC. The Executive Vice President of IMES, Lee A. McIntyre III (former owner of IMES), has an ownership interest in LDL, LLC. 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 $0.1 million for the nine months ended March 3, 2018 and for the nine months ended February 25, 2017. 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 nine months of the expiration of the initial term. |
CRITICAL ACCOUNTING POLICIES 21
CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Policies) | 9 Months Ended |
Mar. 03, 2018 | |
Accounting Policies [Abstract] | |
Inventories, net | Inventories, net: At this time, we do not anticipate any material risks or uncertainties related to possible future inventory write-downs. 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. Inventory reserves were approximately $3.7 million as of March 3, 2018 and $3.5 million as of May 27, 2017. |
Revenue Recognition | Revenue Recognition: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers, which amends guidance for revenue recognition. ASU 2014-09 is principles based guidance that can be applied to all contracts with customers, enhancing comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the guidance is that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance details the steps entities should apply to achieve the core principle. In August 2015, the FASB issued an amendment to defer the effective date for all entities by one year. For public entities, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. Companies have the option of using either a full or modified retrospective approach in applying this standard. During fiscal 2016 and 2017, the FASB issued four additional updates which further clarify the guidance provided in ASU 2014-09. We are evaluating the impact of the new standard on our financial statements using a three-phase approach (assessment, conversion and implementation). We continue to work through our assessment phase and further evaluation is needed in order to determine whether or not the new revenue recognition standard will have a material impact on our financial statements and related disclosures upon adoption. We have undertaken a detailed analysis of our various contracts with customers and revenue streams. The Company has engaged a third party to assist in evaluating the impact of this new standard on its consolidated financial statements and related disclosures. We will complete the conversion and implementation phases by the end of fiscal year 2018 in conjunction with future interpretative guidance. |
Loss Contingencies | Loss Contingencies: |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: During the fourth quarter of each fiscal year, our goodwill balances are reviewed for impairment using the first day of our fourth quarter as the measurement date. If after reviewing the totality of events or circumstances, we determine that it is not likely that the fair value of a reporting unit exceeds its carrying amount, then we test for impairment through the application of a fair value based test. We estimate the fair value of each of our reporting units based on projected future operating results, market approach, and discounted cash flows. Intangible assets are initially recorded at their fair market values determined on 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. |
Income Taxes | Income Taxes: In March 2016, the FASB issued ASU No. 2016-09, “ Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, |
Accrued Liabilities | Accrued Liabilities: in thousands March 3, 2018 May 27, 2017 Compensation and payroll taxes $ 3,328 $ 3,250 Accrued severance (1) 410 706 Professional fees 642 535 Deferred revenue 2,051 1,460 Other accrued expenses 3,436 2,360 Accrued Liabilities $ 9,867 $ 8,311 (1) In the second quarter of fiscal year 2017, the Company executed a reduction in headcount to streamline operations and reduce costs and recorded $1.3 million of expense included in selling, general and administrative expenses for employee termination costs payable to terminated employees with employment and/or separation agreements with the Company. The changes in the severance accrual for the first nine months of fiscal year 2018 included payments of $0.3 million. |
CRITICAL ACCOUNTING POLICIES 22
CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Tables) | 9 Months Ended |
Mar. 03, 2018 | |
Accounting Policies [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following ( in thousands March 3, 2018 May 27, 2017 Compensation and payroll taxes $ 3,328 $ 3,250 Accrued severance (1) 410 706 Professional fees 642 535 Deferred revenue 2,051 1,460 Other accrued expenses 3,436 2,360 Accrued Liabilities $ 9,867 $ 8,311 (1) In the second quarter of fiscal year 2017, the Company executed a reduction in headcount to streamline operations and reduce costs and recorded $1.3 million of expense included in selling, general and administrative expenses for employee termination costs payable to terminated employees with employment and/or separation agreements with the Company. The changes in the severance accrual for the first nine months of fiscal year 2018 included payments of $0.3 million. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Mar. 03, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets subject to amortization | Intangible assets subject to amortization are as follows (in thousands) March 3, May 27, Gross Amounts: Trade Name $ 659 $ 659 Customer Relationships (1) 3,417 3,397 Non-compete Agreements 177 177 Technology 230 230 Total Gross Amounts $ 4,483 $ 4,463 Accumulated Amortization: Trade Name $ 598 $ 441 Customer Relationships 582 446 Non-compete Agreements 107 84 Technology 71 51 Total Accumulated Amortization $ 1,358 $ 1,022 Net Intangibles $ 3,125 $ 3,441 (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 Expense Remaining 2018 $ 108 2019 245 2020 258 2021 246 2022 253 Thereafter 2,015 Total amortization expense $ 3,125 |
LEASE OBLIGATIONS, OTHER COMM24
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES (Tables) | 9 Months Ended |
Mar. 03, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of the future lease commitments for minimum rentals | 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 Payments Remaining 2018 $ 454 2019 1,622 2020 1,143 2021 802 2022 144 Thereafter 97 |
CALCULATION OF EARNINGS PER S25
CALCULATION OF EARNINGS PER SHARE (Tables) | 9 Months Ended |
Mar. 03, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The earnings per share (“EPS”) presented in our unaudited consolidated statements of comprehensive income (loss) are based on the following amounts ( in thousands, except per share amounts Three Months Ended March 3, 2018 February 25, 2017 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Income (loss) from continuing operations $ 527 $ 527 $ (1,431 ) $ (1,431 ) Less dividends: Common stock 648 648 642 642 Class B common stock 115 115 116 116 Undistributed losses $ (236 ) $ (236 ) $ (2,189 ) $ (2,189 ) Common stock undistributed losses $ (200 ) $ (200 ) $ (1,855 ) $ (1,855 ) Class B common stock undistributed losses (36 ) (36 ) (334 ) (334 ) Total undistributed losses $ (236 ) $ (236 ) $ (2,189 ) $ (2,189 ) Income from discontinued operations $ — $ — $ — $ — Less dividends: Common stock — — — — Class B common stock — — — — Undistributed losses $ — $ — $ — $ — Common stock undistributed losses $ — $ — $ — $ — Class B common stock undistributed losses — — — — Total undistributed losses $ — $ — $ — $ — Net income (loss) $ 527 $ 527 $ (1,431 ) $ (1,431 ) Less dividends: Common stock 648 648 642 642 Class B common stock 115 115 116 116 Undistributed losses $ (236 ) $ (236 ) $ (2,189 ) $ (2,189 ) Common stock undistributed losses $ (200 ) $ (200 ) $ (1,855 ) $ (1,855 ) Class B common stock undistributed losses (36 ) (36 ) (334 ) (334 ) Total undistributed losses $ (236 ) $ (236 ) $ (2,189 ) $ (2,189 ) Denominator for basic and diluted EPS: Common stock weighted average shares 10,792 10,792 10,706 10,706 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,137 2,137 2,141 2,141 Effect of dilutive securities Dilutive stock options 80 — Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 13,009 12,847 Income (loss) from continuing operations per share: Common stock $ 0.04 $ 0.04 $ (0.11 ) $ (0.11 ) Class B common stock $ 0.04 $ 0.04 $ (0.10 ) $ (0.10 ) Income from discontinued operations per share: Common stock $ — $ — $ — $ — Class B common stock $ — $ — $ — $ — Net income (loss) per share: Common stock $ 0.04 $ 0.04 $ (0.11 ) $ (0.11 ) Class B common stock $ 0.04 $ 0.04 $ (0.10 ) $ (0.10 ) Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the third quarter of fiscal 2017 was 853. Nine Months Ended March 3, 2018 February 25, 2017 Basic Diluted Basic Diluted Numerator for Basic and Diluted EPS: Income (loss) from continuing operations $ 587 $ 587 $ (6,803 ) $ (6,803 ) Less dividends: Common stock 1,938 1,938 1,925 1,925 Class B common stock 346 346 348 348 Undistributed losses $ (1,697 ) $ (1,697 ) $ (9,076 ) $ (9,076 ) Common stock undistributed losses $ (1,440 ) $ (1,440 ) $ (7,691 ) $ (7,691 ) Class B common stock undistributed losses (257 ) (257 ) (1,385 ) (1,385 ) Total undistributed losses $ (1,697 ) $ (1,697 ) $ (9,076 ) $ (9,076 ) Income from discontinued operations $ 1,496 $ 1,496 $ — $ — Less dividends: Common stock 1,938 1,938 — — Class B common stock 346 346 — — Undistributed losses $ (788 ) $ (788 ) $ — $ — Common stock undistributed losses $ (668 ) $ (668 ) $ — $ — Class B common stock undistributed losses (120 ) (120 ) — — Total undistributed losses $ (788 ) $ (788 ) $ — $ — Net income (loss) $ 2,083 $ 2,083 $ (6,803 ) $ (6,803 ) Less dividends: Common stock 1,938 1,938 1,925 1,925 Class B common stock 346 346 348 348 Undistributed losses $ (201 ) $ (201 ) $ (9,076 ) $ (9,076 ) Common stock undistributed losses $ (171 ) $ (171 ) $ (7,691 ) $ (7,691 ) Class B common stock undistributed losses (30 ) (30 ) (1,385 ) (1,385 ) Total undistributed losses $ (201 ) $ (201 ) $ (9,076 ) $ (9,076 ) Denominator for basic and diluted EPS: Common stock weighted average shares 10,753 10,753 10,704 10,704 Class B common stock weighted average shares, and shares under if-converted method for diluted EPS 2,137 2,137 2,141 2,141 Effect of dilutive securities Dilutive stock options 40 — Denominator for diluted EPS adjusted for weighted average shares and assumed conversions 12,930 12,845 Income (loss) from continuing operations per share: Common stock $ 0.05 $ 0.05 $ (0.54 ) $ (0.54 ) Class B common stock $ 0.04 $ 0.04 $ (0.48 ) $ (0.48 ) Income from discontinued operations per share: Common stock $ 0.12 $ 0.12 $ — $ — Class B common stock $ 0.11 $ 0.11 $ — $ — Net income (loss) per share: Common stock $ 0.17 $ 0.17 $ (0.54 ) $ (0.54 ) Class B common stock $ 0.15 $ 0.15 $ (0.48 ) $ (0.48 ) Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the first nine months of fiscal 2017 was 853. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Mar. 03, 2018 | |
Segment Reporting [Abstract] | |
Schedule of operating results by segment | Operating results by segment are summarized in the following table ( in thousands Three Months Ended Nine Months Ended March 3, February 25, March 3, February 25, 2018 2017 2018 2017 PMT Net Sales $ 31,869 $ 24,763 $ 91,056 $ 75,373 Gross Profit 10,656 8,075 30,492 23,803 Canvys Net Sales $ 7,585 $ 4,824 $ 20,057 $ 14,883 Gross Profit 2,571 1,331 6,245 4,222 Healthcare Net Sales $ 2,191 $ 2,726 $ 6,609 $ 9,257 Gross Profit 840 1,286 2,852 3,871 |
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 Three Months Ended Nine Months Ended March 3, February 25, March 3, February 25, 2018 2017 2018 2017 Net Sales North America $ 18,748 $ 13,607 $ 49,657 $ 40,715 Asia/Pacific 6,635 5,916 21,102 20,192 Europe 14,197 10,950 40,312 32,418 Latin America 2,086 1,792 6,646 6,138 Other (1) (21 ) 48 5 50 Total $ 41,645 $ 32,313 $ 117,722 $ 99,513 Gross Profit North America $ 6,955 $ 5,258 $ 18,747 $ 15,090 Asia/Pacific 2,331 2,085 7,256 7,012 Europe 4,904 3,764 13,493 10,540 Latin America 820 643 2,638 2,337 Other (1) (943 ) (1,058 ) (2,545 ) (3,083 ) Total $ 14,067 $ 10,692 $ 39,589 $ 31,896 (1) Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs and other unallocated expenses. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Mar. 03, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of investments measured at fair value on a recurring basis | Investments measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of March 3, 2018 and May 27, 2017, were as follows ( in thousands Level 1 March 3, 2018 Time deposits/CDs $ 199 Equity securities — Total $ 199 May 27, 2017 Time deposits/CDs $ 8,226 Equity securities 622 Total $ 8,848 |
DESCRIPTION OF THE COMPANY (Det
DESCRIPTION OF THE COMPANY (Details Narrative) | 9 Months Ended |
Mar. 03, 2018Segment | |
Description Of Company Details Narrative | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
CRITICAL ACCOUNTING POLICIES 29
CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Details) - USD ($) $ in Thousands | Mar. 03, 2018 | May 27, 2017 | |
Accrued Liabilities: | |||
Compensation and payroll taxes | $ 3,328 | $ 3,250 | |
Accrued severance | [1] | 410 | 706 |
Professional fees | 642 | 535 | |
Deferred revenue | 2,051 | 1,460 | |
Other accrued expenses | 3,436 | 2,360 | |
Accrued Liabilities | $ 9,867 | $ 8,311 | |
[1] | In the second quarter of fiscal year 2017, the Company executed a reduction in headcount to streamline operations and reduce costs and recorded $1.3 million of expense included in selling, general and administrative expenses for employee termination costs payable to terminated employees with employment and/or separation agreements with the Company. The changes in the severance accrual for the first nine months of fiscal year 2018 included payments of $0.3 million. |
CRITICAL ACCOUNTING POLICIES 30
CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Nov. 26, 2016 | Mar. 03, 2018 | May 27, 2017 | |
Accounting Policies [Abstract] | |||
Finished goods | $ 40,900 | $ 36,000 | |
Raw material | 5,700 | 5,300 | |
Work in progress | 2,500 | 1,400 | |
Inventory valuation reserves | 3,700 | $ 3,500 | |
Severance expense | $ 1,300 | ||
Payment of severance benefits | $ 300 |
GOODWILL AND INTANGIBLE ASSET31
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Mar. 03, 2018 | May 27, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | $ 4,483 | $ 4,463 | |
Finite Lived Intangible Assets Accumulated Amortization | 1,358 | 1,022 | |
Intangibles, net | 3,125 | 3,441 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | 659 | 659 | |
Finite Lived Intangible Assets Accumulated Amortization | 598 | 441 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | [1] | 3,417 | 3,397 |
Finite Lived Intangible Assets Accumulated Amortization | 582 | 446 | |
Non-compete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | 177 | 177 | |
Finite Lived Intangible Assets Accumulated Amortization | 107 | 84 | |
Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite Lived Intangible Assets Gross | 230 | 230 | |
Finite Lived Intangible Assets Accumulated Amortization | $ 71 | $ 51 | |
[1] | Change from prior periods reflect impact of foreign currency translation. |
GOODWILL AND INTANGIBLE ASSET32
GOODWILL AND INTANGIBLE ASSETS (Details 1) $ in Thousands | Mar. 03, 2018USD ($) |
Fiscal Year | |
Remaing 2,018 | $ 108 |
2,019 | 245 |
2,020 | 258 |
2,021 | 246 |
2,022 | 253 |
Thereafter | 2,015 |
Total amortization expense | $ 3,125 |
GOODWILL AND INTANGIBLE ASSET33
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 03, 2018 | May 27, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 6,332 | $ 6,332 |
Weighted average number of years of amortization expense | 15 years 10 months 24 days |
INVESTMENTS (Details Narrative)
INVESTMENTS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 03, 2018 | Feb. 25, 2017 | Mar. 03, 2018 | Feb. 25, 2017 | May 27, 2017 | |
Investment [Line Items] | |||||
Available for sale - equity securities | $ 600 | ||||
Available for sale securities - gross realized gains | $ 200 | $ 100 | |||
Net unrealized holding gains included in AOCI | 100 | ||||
Proceeds from sales of available-for-sale securities | $ 648 | $ 78 | 913 | $ 225 | |
Proceeds from sale of assets | 276 | ||||
Time Deposits and Cetificate of Deposits[Member] | |||||
Investment [Line Items] | |||||
Investments, carrying value | 8,200 | ||||
Investment, less than twelve months | $ 200 | $ 200 | 6,400 | ||
Investment, greater than twelve months | $ 1,800 |
WARRANTIES (Details Narrative)
WARRANTIES (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 03, 2018 | May 27, 2017 | |
Warranty reserves | $ 100 | $ 100 |
Minimum [Member] | ||
Warranty term | 1 year | |
Maximum [Member] | ||
Warranty term | 3 years |
LEASE OBLIGATIONS, OTHER COMM36
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES (Details) $ in Thousands | Mar. 03, 2018USD ($) |
Fiscal Year | |
Remaining 2,018 | $ 454 |
2,019 | 1,622 |
2,020 | 1,143 |
2,021 | 802 |
2,022 | 144 |
Thereafter | $ 97 |
LEASE OBLIGATIONS, OTHER COMM37
LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 03, 2018 | Feb. 25, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense under operating leases | $ 1,300 | $ 1,500 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 03, 2018 | Dec. 02, 2017 | Feb. 25, 2017 | Mar. 03, 2018 | Feb. 25, 2017 | May 27, 2017 | |
Deferred tax liability, undistributed foreign earnings | $ 200 | $ 5,700 | $ 200 | |||
Foreign earnings | 47,200 | |||||
Deferred tax valuation allowance | 10,000 | 10,000 | $ 8,500 | |||
Income tax provision | 488 | $ (10) | $ 1,084 | $ 820 | ||
Effective income tax rate | 65.00% | (13.70%) | ||||
U.S. statutory tax rate | 29.20% | |||||
U.S. Corporate income tax rate | 35.00% | |||||
Liability for uncertain tax provisions | $ 100 | $ 100 | ||||
Deferred remeasurement impact | 160000.00% | |||||
Estimated deemed earnings repatriation tax, net of available foreign tax credits | $ 3,500 | |||||
Tax Year 2018 [Member] | ||||||
U.S. statutory tax rate | 21.00% | |||||
State of Illinois [Member] | ||||||
Proceeds income tax refund | 2,000 | |||||
Discontinued operations - income tax benefit, net | 1,500 | |||||
Professional fees | $ 500 |
CALCULATION OF EARNINGS PER S39
CALCULATION OF EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 03, 2018 | Feb. 25, 2017 | Mar. 03, 2018 | Feb. 25, 2017 | |
Numerator for Basic and Diluted Earnings Per Share: | ||||
Income (loss) from continuing operations | $ 527 | $ (1,431) | $ 587 | $ (6,803) |
Undistributed earnings (losses) - continuing operations | (236) | (2,189) | (1,697) | (9,076) |
Undistributed earnings (losses) - continuing operations, Diluted | (236) | (2,189) | (1,697) | (9,076) |
Income from discontinued operations | 1,496 | |||
Undistributed earnings (losses) - discontinued operations | (788) | |||
Undistributed earnings (losses) - discontinued operations, Diluted | (788) | |||
Net income (loss) | 527 | (1,431) | 2,083 | (6,803) |
Undistributed earnings (losses) | (236) | (2,189) | (201) | (9,076) |
Undistributed earnings (losses), Diluted | $ (236) | $ (2,189) | $ (201) | $ (9,076) |
Denominator for Basic and Diluted Earnings Per Share: | ||||
Weighted Average Number of Shares | 13,009 | 12,847 | 12,930 | 12,845 |
Common Stock [Member] | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Less dividends: | $ 648 | $ 642 | $ 1,938 | $ 1,925 |
Undistributed earnings (losses) - continuing operations | (200) | (1,855) | (1,440) | (7,691) |
Undistributed earnings (losses) - continuing operations, Diluted | (200) | (1,855) | (1,440) | (7,691) |
Undistributed earnings (losses) - discontinued operations | (668) | |||
Undistributed earnings (losses) - discontinued operations, Diluted | (668) | |||
Net income (loss) | 527 | (1,431) | ||
Undistributed earnings (losses) | (200) | (1,855) | (171) | (7,691) |
Undistributed earnings (losses), Diluted | $ (200) | $ (1,855) | $ (171) | $ (7,691) |
Denominator for Basic and Diluted Earnings Per Share: | ||||
Weighted Average Number of Shares Outstanding, Basic | 10,792 | 10,706 | 10,753 | 10,704 |
Weighted Average Number of Shares Outstanding, Diluted | 10,872 | 10,706 | 10,793 | 10,704 |
Dilutive stock options | 80 | 40 | ||
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Income (loss) from continuing operations - basic | $ 0.04 | $ (0.11) | $ 0.05 | $ (0.54) |
Income (loss) from continuing operations - diluted | 0.04 | (0.11) | 0.05 | (0.54) |
Income from discontinued operations - basic | 0.12 | |||
Income from discontinued operations - diluted | 0.12 | |||
Earnings Per Share, Basic | 0.04 | (0.11) | 0.17 | (0.54) |
Earnings Per Share, Diluted | $ 0.04 | $ (0.11) | $ 0.17 | $ (0.54) |
Class B Common [Member] | ||||
Numerator for Basic and Diluted Earnings Per Share: | ||||
Less dividends: | $ 115 | $ 116 | $ 346 | $ 348 |
Undistributed earnings (losses) - continuing operations | (36) | (334) | (257) | (1,385) |
Undistributed earnings (losses) - continuing operations, Diluted | (36) | (334) | (257) | (1,385) |
Undistributed earnings (losses) - discontinued operations | (120) | |||
Undistributed earnings (losses) - discontinued operations, Diluted | (120) | |||
Net income (loss) | 527 | (1,431) | ||
Undistributed earnings (losses) | (36) | (334) | (30) | (1,385) |
Undistributed earnings (losses), Diluted | $ (36) | $ (334) | $ (30) | $ (1,385) |
Denominator for Basic and Diluted Earnings Per Share: | ||||
Weighted Average Number of Shares Outstanding, Basic | 2,137 | 2,141 | 2,137 | 2,141 |
Weighted Average Number of Shares Outstanding, Diluted | 2,137 | 2,141 | 2,137 | 2,141 |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Income (loss) from continuing operations - basic | $ 0.04 | $ (0.10) | $ 0.04 | $ (0.48) |
Income (loss) from continuing operations - diluted | 0.04 | (0.10) | 0.04 | (0.48) |
Income from discontinued operations - basic | 0.11 | |||
Income from discontinued operations - diluted | 0.11 | |||
Earnings Per Share, Basic | 0.04 | (0.10) | 0.15 | (0.48) |
Earnings Per Share, Diluted | $ 0.04 | $ (0.10) | $ 0.15 | $ (0.48) |
CALCULATION OF EARNINGS PER S40
CALCULATION OF EARNINGS PER SHARE (Details Narrative) shares in Thousands | 3 Months Ended | 9 Months Ended | |
Feb. 25, 2017shares | Mar. 03, 2018shares | Feb. 25, 2017shares | |
Common stock options anti-dilutive, shares | 853 | 853 | |
Common Stock [Member] | |||
Common stock authorized, shares | 17,000 | ||
Class B Common [Member] | |||
Common stock authorized, shares | 3,000 | ||
Limit of cash dividends to Class A cash dividends (percent) | 90.00% | ||
Number of votes (per share) | 10 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 03, 2018 | Feb. 25, 2017 | Mar. 03, 2018 | Feb. 25, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net Sales | $ 41,645 | $ 32,313 | $ 117,722 | $ 99,513 |
Gross Profit | 14,067 | 10,692 | 39,589 | 31,896 |
PMT [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 31,869 | 24,763 | 91,056 | 75,373 |
Gross Profit | 10,656 | 8,075 | 30,492 | 23,803 |
Canvys [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 7,585 | 4,824 | 20,057 | 14,883 |
Gross Profit | 2,571 | 1,331 | 6,245 | 4,222 |
Healthcare [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 2,191 | 2,726 | 6,609 | 9,257 |
Gross Profit | $ 840 | $ 1,286 | $ 2,852 | $ 3,871 |
SEGMENT REPORTING (Details 1)
SEGMENT REPORTING (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 03, 2018 | Feb. 25, 2017 | Mar. 03, 2018 | Feb. 25, 2017 | ||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 41,645 | $ 32,313 | $ 117,722 | $ 99,513 | |
Gross Profit | 14,067 | 10,692 | 39,589 | 31,896 | |
North America [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 18,748 | 13,607 | 49,657 | 40,715 | |
Gross Profit | 6,955 | 5,258 | 18,747 | 15,090 | |
Asia/Pacific [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 6,635 | 5,916 | 21,102 | 20,192 | |
Gross Profit | 2,331 | 2,085 | 7,256 | 7,012 | |
Europe [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 14,197 | 10,950 | 40,312 | 32,418 | |
Gross Profit | 4,904 | 3,764 | 13,493 | 10,540 | |
Latin America [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 2,086 | 1,792 | 6,646 | 6,138 | |
Gross Profit | 820 | 643 | 2,638 | 2,337 | |
Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [1] | (21) | 48 | 5 | 50 |
Gross Profit | [1] | $ (943) | $ (1,058) | $ (2,545) | $ (3,083) |
[1] | Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs and other unallocated expenses. |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Inputs, Level 1 [Member] - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 03, 2018 | May 27, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Time deposits/CDs | $ 199 | $ 8,226 |
Equity securities | 622 | |
Total | $ 199 | $ 8,848 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 03, 2018 | Feb. 25, 2017 | |
Rental expense | $ 1,300 | $ 1,500 |
Lessor - LDL, LLC [Member] | Lee A. McIntyre III [Member] | ||
Total future minimum lease payments | $ 300 | |
Lease term | 5 years | |
Renewal term | 5 years | |
Rental expense | $ 100 | $ 100 |