Richardson Electronics, Ltd. (NASDAQ: RELL) today reported sales and earnings for its third quarter ended February 26, 2011. The Company also announced that its Board of Directors declared a $.05 quarterly cash dividend and authorized an initial share repurchase of $25 million to repurchase shares of the Company’s common stock. As previously announced, the Company completed the sale of its RF, Wireless and Power Division (RFPD) to Arrow Electronics, Inc. on March 1, 2011. The cash proceeds and gain on sale will be reflected in the Company’s fourth quarter fiscal 2011 financial statements.
Net sales for the third quarter of Fiscal 2011 were $39.7 million, up 18.7% from net sales of $33.4 million during the third quarter of last year. Operating income was $0.8 million, or 2.1% of net sales, during the third quarter of fiscal 2011, compared to an operating loss of $0.3 million during last year’s third quarter. Income from continuing operations during the third quarter of fiscal 2011 was $0.2 million, or $.01 per diluted common share, compared to a loss from continuing operations of $0.7 million during the third quarter of last year.
The Company’s third quarter results reflect RFPD as a discontinued operation. Income from discontinued operations, net of tax, was $8.0 million, or $0.43 per diluted common share, during the third quarter of fiscal 2011 compared to $5.2 million, or $0.30 per diluted common share, during the third quarter of fiscal 2010.
Net income during the third quarter of fiscal 2011 was $8.2 million, or $0.44 per diluted common share, compared to net income of $4.5 million, or $0.26 per diluted common share, for the prior year’s third quarter.Operating income of $0.8 million for the third quarter includes $0.4 million of incremental costs associated with a strategic distribution agreement for EDG. These costs are expected to continue through June 2011. Operating income of $2.3 million for the first nine months of fiscal 2011 includes $1.1 million of incremental costs.