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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 28, 2021

OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from To

Commission File Number: 0-12906

RICHARDSON ELECTRONICS, LTD.

(Exact name of registrant as specified in its charter)

Delaware | 36-2096643
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

40W267 Keslinger Road, P.O. Box 393

LaFox, Illinois 60147-0393

(Address of principal executive offices)

Registrant’s telephone number, including area code: (630) 208-2200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common stock, $0.05 Par Value |  | RELL |  | NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer | ☐ |  | Accelerated Filer | ☐
Non-Accelerated Filer | ☒ |  | Smaller Reporting Company | ☒
Emerging Growth Company | ☐ |  |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of October 5, 2021, there were outstanding 11,240,760 shares of Common Stock, $0.05 par value and 2,096,919 shares of Class B Common Stock, $0.05 par value, which are convertible into Common Stock of the registrant on a share for share basis.

TABLE OF CONTENTS

|  |  | Page
Part I. | Financial Information |  |
Item 1. | Financial Statements |  | 2
| Consolidated Balance Sheets |  | 2
| Unaudited Consolidated Statements of Comprehensive Income |  | 3
| Unaudited Consolidated Statements of Cash Flows |  | 4
| Unaudited Consolidated Statement of Stockholders’ Equity |  | 5
| Notes to Unaudited Consolidated Financial Statements |  | 6
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 16
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |  | 21
Item 4. | Controls and Procedures |  | 21
Part II. | Other Information |  |
Item 1. | Legal Proceedings |  | 22
Item 1A. | Risk Factors |  | 22
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |  | 22
Item 5. | Other Information |  | 22
Item 6. | Exhibits |  | 23
Exhibit Index |  | 23
Signatures |  |  | 24

1

PART I. FINANCIAL INFORMATION

ITEM 1. | FINANCIAL STATEMENTS

Richardson Electronics, Ltd.

Consolidated Balance Sheets

(in thousands, except per share amounts)

|  | Unaudited |  |  | Audited |
|  | August 28, 2021 |  |  | May 29, 2021 |
Assets |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 36,418 |  |  | $ | 43,316 |
Accounts receivable, less allowance of $205 and $202, respectively |  |  | 29,724 |  |  |  | 25,096 |
Inventories, net |  |  | 67,649 |  |  |  | 63,508 |
Prepaid expenses and other assets |  |  | 2,429 |  |  |  | 2,385 |
Total current assets |  |  | 136,220 |  |  |  | 134,305 |
Non-current assets: |  |  |  |  |  |  |  |
Property, plant and equipment, net |  |  | 17,132 |  |  |  | 17,067 |
Intangible assets, net |  |  | 2,204 |  |  |  | 2,270 |
Lease ROU asset |  |  | 4,116 |  |  |  | 2,570 |
Non-current deferred income taxes |  |  | 534 |  |  |  | 541 |
Total non-current assets |  |  | 23,986 |  |  |  | 22,448 |
Total assets |  | $ | 160,206 |  |  | $ | 156,753 |
Liabilities |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 17,421 |  |  | $ | 16,979 |
Accrued liabilities |  |  | 14,534 |  |  |  | 14,182 |
Lease liability current |  |  | 1,297 |  |  |  | 1,066 |
Total current liabilities |  |  | 33,252 |  |  |  | 32,227 |
Non-current liabilities: |  |  |  |  |  |  |  |
Non-current deferred income tax liabilities |  |  | 274 |  |  |  | 242 |
Lease liability non-current |  |  | 2,638 |  |  |  | 1,358 |
Other non-current liabilities |  |  | 1,364 |  |  |  | 1,366 |
Total non-current liabilities |  |  | 4,276 |  |  |  | 2,966 |
Total liabilities |  |  | 37,528 |  |  |  | 35,193 |
Stockholders’ equity |  |  |  |  |  |  |  |
Common stock, $0.05 par value; issued and outstanding 11,241 shares on August 28, 2021 and 11,160 shares on May 29, 2021 |  |  | 562 |  |  |  | 558 |
Class B common stock, convertible, $0.05 par value; issued and outstanding 2,097 shares on August 28, 2021 and May 29, 2021 |  |  | 105 |  |  |  | 105 |
Preferred stock, $1.00 par value, no shares issued |  |  | — |  |  |  | — |
Additional paid-in-capital |  |  | 62,974 |  |  |  | 62,707 |
Retained earnings |  |  | 55,146 |  |  |  | 53,297 |
Accumulated other comprehensive income |  |  | 3,891 |  |  |  | 4,893 |
Total stockholders’ equity |  |  | 122,678 |  |  |  | 121,560 |
Total liabilities and stockholders’ equity |  | $ | 160,206 |  |  | $ | 156,753 |

2

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)

|  | Three Months Ended |
|  | August 28, 2021 |  |  | August 29, 2020 |
Net sales |  | $ | 53,704 |  |  | $ | 38,812 |
Cost of sales |  |  | 37,407 |  |  |  | 26,453 |
Gross profit |  |  | 16,297 |  |  |  | 12,359 |
Selling, general and administrative expenses |  |  | 13,469 |  |  |  | 12,976 |
Operating income (loss) |  |  | 2,828 |  |  |  | (617 | )
Other expense (income): |  |  |  |  |  |  |  |
Investment/interest income |  |  | (17 | ) |  |  | (18 | )
Foreign exchange loss |  |  | 27 |  |  |  | 442 |
Other, net |  |  | 16 |  |  |  | (18 | )
Total other expense |  |  | 26 |  |  |  | 406 |
Income (loss) before income taxes |  |  | 2,802 |  |  |  | (1,023 | )
Income tax provision |  |  | 167 |  |  |  | 124 |
Net income (loss) |  |  | 2,635 |  |  |  | (1,147 | )
Foreign currency translation (loss) gain, net of tax |  |  | (1,002 | ) |  |  | 2,136 |
Comprehensive income |  | $ | 1,633 |  |  | $ | 989 |
Net income (loss) per share: |  |  |  |  |  |  |  |
Common shares - Basic |  | $ | 0.20 |  |  | $ | (0.09 | )
Class B common shares - Basic |  |  | 0.18 |  |  |  | (0.08 | )
Common shares - Diluted |  |  | 0.20 |  |  |  | (0.09 | )
Class B common shares - Diluted |  |  | 0.18 |  |  |  | (0.08 | )
Weighted average number of shares: |  |  |  |  |  |  |  |
Common shares – Basic |  |  | 11,194 |  |  |  | 11,070 |
Class B common shares – Basic |  |  | 2,097 |  |  |  | 2,097 |
Common shares – Diluted |  |  | 11,467 |  |  |  | 11,070 |
Class B common shares – Diluted |  |  | 2,097 |  |  |  | 2,097 |
Dividends per share: |  |  |  |  |  |  |  |
Common share |  | $ | 0.060 |  |  | $ | 0.060 |
Class B common share |  |  | 0.054 |  |  |  | 0.054 |

3

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

|  | Three Months Ended |
|  | August 28, 2021 |  |  | August 29, 2020 |
Operating activities: |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 2,635 |  |  | $ | (1,147 | )
Adjustments to reconcile net income (loss) to cash used in operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 829 |  |  |  | 873 |
Inventory provisions |  |  | 83 |  |  |  | 237 |
Share-based compensation expense |  |  | 219 |  |  |  | 201 |
Deferred income taxes |  |  | 35 |  |  |  | 2 |
Change in assets and liabilities: |  |  |  |  |  |  |  |
Accounts receivable |  |  | (5,008 | ) |  |  | (854 | )
Inventories |  |  | (4,957 | ) |  |  | (1,621 | )
Prepaid expenses and other assets |  |  | (62 | ) |  |  | 109 |
Accounts payable |  |  | 607 |  |  |  | (2,734 | )
Accrued liabilities |  |  | 480 |  |  |  | 1,779 |
Other |  |  | 266 |  |  |  | (202 | )
Net cash used in operating activities |  |  | (4,873 | ) |  |  | (3,357 | )
Investing activities: |  |  |  |  |  |  |  |
Capital expenditures |  |  | (837 | ) |  |  | (718 | )
Proceeds from maturity of investments |  |  | — |  |  |  | 16,000 |
Purchases of investments |  |  | — |  |  |  | (9,000 | )
Net cash (used in) provided by investing activities |  |  | (837 | ) |  |  | 6,282 |
Financing activities: |  |  |  |  |  |  |  |
Proceeds from issuance of common stock |  |  | 52 |  |  |  | — |
Cash dividends paid |  |  | (786 | ) |  |  | (780 | )
Payment of financing lease principal |  |  | (45 | ) |  |  | (45 | )
Net cash used in financing activities |  |  | (779 | ) |  |  | (825 | )
Effect of exchange rate changes on cash and cash equivalents |  |  | (409 | ) |  |  | 860 |
(Decrease) increase in cash and cash equivalents |  |  | (6,898 | ) |  |  | 2,960 |
Cash and cash equivalents at beginning of period |  |  | 43,316 |  |  |  | 30,535 |
Cash and cash equivalents at end of period |  | $ | 36,418 |  |  | $ | 33,495 |

4

Richardson Electronics, Ltd.

Unaudited Consolidated Statement of Stockholders’ Equity

(in thousands, except per share amounts)

|  | Common |  |  | Class B Common |  |  | Par Value |  |  | Additional Paid In Capital |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Income |  |  | Total |
Balance May 29, 2021: |  |  | 11,160 |  |  |  | 2,097 |  |  | $ | 663 |  |  | $ | 62,707 |  |  | $ | 53,297 |  |  | $ | 4,893 |  |  | $ | 121,560 |
Comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,635 |  |  |  | — |  |  |  | 2,635 |
Foreign currency translation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,002 | ) |  |  | (1,002 | )
Share-based compensation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restricted stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 128 |  |  |  | — |  |  |  | — |  |  |  | 128 |
Stock options |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 91 |  |  |  | — |  |  |  | — |  |  |  | 91 |
Common stock: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options exercised |  |  | 8 |  |  |  | — |  |  |  | — |  |  |  | 52 |  |  |  | — |  |  |  | — |  |  |  | 52 |
Restricted stock issuance |  |  | 73 |  |  |  | — |  |  |  | 4 |  |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | — |
Dividends paid to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common ($0.060 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (673 | ) |  |  | — |  |  |  | (673 | )
Class B ($0.054 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (113 | ) |  |  | — |  |  |  | (113 | )
Balance August 28, 2021 |  |  | 11,241 |  |  |  | 2,097 |  |  | $ | 667 |  |  | $ | 62,974 |  |  | $ | 55,146 |  |  | $ | 3,891 |  |  | $ | 122,678 |
Balance May 30, 2020: |  |  | 11,038 |  |  |  | 2,097 |  |  | $ | 657 |  |  | $ | 61,749 |  |  | $ | 54,764 |  |  | $ | 1,490 |  |  | $ | 118,660 |
Comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,147 | ) |  |  | — |  |  |  | (1,147 | )
Foreign currency translation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,136 |  |  |  | 2,136 |
Share-based compensation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restricted stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 131 |  |  |  | — |  |  |  | — |  |  |  | 131 |
Stock options |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 70 |  |  |  | — |  |  |  | — |  |  |  | 70 |
Common stock: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options exercised |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Restricted stock issuance |  |  | 73 |  |  |  | — |  |  |  | 4 |  |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | — |
Dividends paid to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common ($0.060 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (667 | ) |  |  | — |  |  |  | (667 | )
Class B ($0.054 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (113 | ) |  |  | — |  |  |  | (113 | )
Balance August 29, 2020 |  |  | 11,111 |  |  |  | 2,097 |  |  | $ | 661 |  |  | $ | 61,946 |  |  | $ | 52,837 |  |  | $ | 3,626 |  |  | $ | 119,070 |

5

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

| 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 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, 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 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 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.

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 first quarter of fiscal 2022 and fiscal 2021 both contained 13 weeks.

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

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pursuant to such rules and regulations. The results of our operations for the three months ended August 28, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending May 28, 2022.

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 29, 2021, that we filed on August 2, 2021.

3. CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Inventories, net: Our consolidated inventories were stated at the lower of cost and net realizable value, generally using a weighted-average cost method. Our net inventories include approximately $59.6 million of finished goods, $4.6 million of raw materials and $3.4 million of work-in-progress as of August 28, 2021, as compared to approximately $57.0 million of finished goods, $3.9 million of raw materials and $2.6 million of work-in-progress as of May 29, 2021.

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 $5.9 million as of August 28, 2021 and $5.9 million as of May 29, 2021.

Revenue Recognition: The Company has a number of defined revenue streams across our reportable segments. Distribution is the Company’s largest revenue stream. The distribution business does not include a separate service bundled with the product sold or sold on top of the product. Distribution typically includes products purchased from our suppliers, stocked in our warehouses and then sold to our customers. 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.

The Company also sells 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.

The Company recognizes services revenue when the repair, installation or training is performed. The services we provide are relatively short in duration and 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 also record discounts taken and estimate returns based on historical experience. Our products are often manufactured to meet the specific design needs of our customers’ applications. Our engineers work closely with customers to ensure that our products will meet their needs. Our customers are under no obligation to compensate us for designing the products we sell.

Contracts with customers

A revenue contract exists once a customer purchase order is received, reviewed and accepted. 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.

Contract Liabilities: Contract liabilities and revenue recognized were as follows (in thousands):

|  | May 29, 2021 |  |  | Additions |  |  | Revenue Recognized |  |  | August 28, 2021 |
Contract liabilities (deferred revenue) |  | $ | 3,313 |  |  | $ | 1,641 |  |  | $ | (2,066 | ) |  | $ | 2,888 |

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.

Performance obligations and satisfaction of performance obligation in the contract

Each accepted purchase order identifies a distinct good or service as the performance obligation. The goods are generally standard products we purchased from a supplier and stocked on our shelves. They can also be customized products purchased from a supplier or products that are customized or have value added to them in house prior to shipping to the customer. 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 do not require, upon cancelation, 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

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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. For shipping point, the Company is making the election under ASC 606-10-25-18B 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. 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.

Determine the transaction price and variable consideration

The transaction price for each product is the amount invoiced to the customer. Each product on a purchase order is a separate performance obligation with an observable standalone selling price. The transaction price is a fixed price per unit, except for the variable consideration. The Company elects to exclude sales tax from the transaction price.

Recognize revenue when the entity satisfies a performance obligation

We recognize revenue at a point in time when title transfers to the customer, at the shipping point for FOB shipping contracts and at the customer’s delivery location for FOB destination contracts. We believe that the transfer of title best represents when the customer obtains control of the goods. Prior to that date, we do not have right to payment, and the significant risks and rewards remain with us. The significant risks and rewards of ownership of the inventory transfer simultaneously with the transfer of title. The customer’s acceptance of the goods is based on objective measurements, not subjective.

Additional considerations

Sale with right of return:

Our return policy is available to customers in our terms and conditions found on our website www.rell.com. The policy varies by business unit. The Company allows returns with prior written authorization and we allow returns within ten days of shipment for replacement parts.

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 for further consideration. Returns for defective product are typically covered by our suppliers’ warranty, thus, returns for defective product are not factored into our reserve.

Warranties:

We offer warranties for the limited number of specific products we manufacture. For further information regarding the impact of warranties see the Warranties discussion elsewhere in Note 3.

Principal versus agent considerations:

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.

See Note 7, Segment Reporting, 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.

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

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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.

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. Intangible assets subject to amortization were as follows (in thousands):

|  | August 28, 2021 |  |  | May 29, 2021 |
Gross Amounts: |  |  |  |  |  |  |  |
Trade Name |  | $ | 659 |  |  | $ | 659 |
Customer Relationships(1) |  |  | 3,416 |  |  |  | 3,426 |
Non-compete Agreements |  |  | 177 |  |  |  | 177 |
Technology |  |  | 230 |  |  |  | 230 |
Total Gross Amounts |  | $ | 4,482 |  |  | $ | 4,492 |
Accumulated Amortization: |  |  |  |  |  |  |  |
Trade Name |  | $ | 659 |  |  | $ | 659 |
Customer Relationships |  |  | 1,299 |  |  |  | 1,249 |
Non-compete Agreements |  |  | 177 |  |  |  | 177 |
Technology |  |  | 143 |  |  |  | 137 |
Total Accumulated Amortization |  | $ | 2,278 |  |  | $ | 2,222 |
Net Intangible Assets |  | $ | 2,204 |  |  | $ | 2,270 |

| (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 2022 |  | $ | 189 |
2023 |  |  | 246 |
2024 |  |  | 232 |
2025 |  |  | 220 |
2026 |  |  | 185 |
Thereafter |  |  | 1,132 |
Total amortization expense |  | $ | 2,204 |

The weighted average number of years of amortization expense remaining is 12.6 years.

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.

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Accrued Liabilities: Accrued liabilities consisted of the following (in thousands):

|  | August 28, 2021 |  |  | May 29, 2021 |
Compensation and payroll taxes |  | $ | 4,748 |  |  | $ | 4,945 |
Accrued severance |  |  | 694 |  |  |  | 685 |
Professional fees |  |  | 631 |  |  |  | 533 |
Deferred revenue |  |  | 2,888 |  |  |  | 3,313 |
Other accrued expenses |  |  | 5,573 |  |  |  | 4,706 |
Accrued Liabilities |  | $ | 14,534 |  |  | $ | 14,182 |

Warranties: We offer warranties for the limited number of specific products we manufacture. 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. 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, if a sufficient history exists.

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 $0.6 million as of August 28, 2021 and $0.5 million as of May 29, 2021.

4. LEASE OBLIGATIONS AND OTHER COMMITMENTS

The Company leases real and personal property in the normal course of business under various operating leases and financing leases. The Company has two types of operating leases: leases for facility space and leases for automobiles. Most of the leased facility space is for sales and general office use. Automobile leases are used throughout the Company. The financing lease is for our computer servers.

The gross amounts of assets and liabilities related to both operating and financing leases were as follows (in thousands):

Lease Type |  | August 28, 2021 |  |  | May 29, 2021 |
Operating lease ROU asset |  | $ | 3,831 |  |  | $ | 2,262 |
Financing lease ROU asset |  |  | 285 |  |  |  | 308 |
Total Lease ROU asset |  | $ | 4,116 |  |  | $ | 2,570 |
Operating lease liability current |  | $ | 1,193 |  |  | $ | 918 |
Financing lease liability current |  |  | 104 |  |  |  | 148 |
Total lease liability current |  | $ | 1,297 |  |  | $ | 1,066 |
Operating lease liability non-current |  | $ | 2,638 |  |  | $ | 1,358 |
Total lease liability non-current |  | $ | 2,638 |  |  | $ | 1,358 |

The components of lease costs were as follows (in thousands):

|  |  |  | Three Months Ended |
|  |  |  | August 28, 2021 |  |  | August 29, 2020 |
Consolidated operating lease expense |  | Operating expenses |  | $ | 455 |  |  | $ | 488 |
Consolidated financing lease amortization |  | Operating expenses |  |  | 23 |  |  |  | 23 |
Consolidated financing lease interest |  | Interest expense |  |  | 2 |  |  |  | 4 |
Consolidated financing lease expense |  |  |  |  | 25 |  |  |  | 27 |
Net lease cost |  |  |  | $ | 480 |  |  | $ | 515 |

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The approximate future minimum lease payments under operating and financing leases at August 28, 2021 were as follows (in thousands):

Fiscal Year |  | Operating Leases |  |  | Financing Leases |  |  | Total |
Remaining 2022 |  | $ | 1,033 |  |  | $ | 106 |  |  | $ | 1,139 |
2023 |  |  | 1,192 |  |  |  | — |  |  |  | 1,192 |
2024 |  |  | 816 |  |  |  | — |  |  |  | 816 |
2025 |  |  | 575 |  |  |  | — |  |  |  | 575 |
2026 |  |  | 403 |  |  |  | — |  |  |  | 403 |
Thereafter |  |  | 95 |  |  |  | — |  |  |  | 95 |
Total lease payments |  |  | 4,114 |  |  |  | 106 |  |  |  | 4,220 |
Less imputed interest |  |  | 283 |  |  |  | 2 |  |  |  | 285 |
Net minimum lease payments |  | $ | 3,831 |  |  | $ | 104 |  |  | $ | 3,935 |

The weighted average remaining lease terms and interest rates of leases held by the Company as of August 28, 2021 were as follows:

Lease Type |  | Weighted Average Remaining Lease Term in Years |  | Weighted Average Interest Rate |
Operating leases |  | 3.7 |  | 4.5% |
Financing leases |  | 0.6 |  | 4.6% |

The cash outflows of the leasing activity of the Company as lessee for three months ending August 28, 2021 and August 29, 2020 were as follows (in thousands):

|  |  |  | Three Months Ended |
Cash Flow Source |  | Classification |  | August 28, 2021 |  |  | August 29, 2020 |
Operating cash flows from operating leases |  | Operating activities |  | $ | 1,554 |  |  | $ | 261 |
Operating cash flows from financing leases |  | Operating activities |  |  | 44 |  |  |  | 42 |
Finance cash flows from financing leases |  | Financing activities |  |  | 45 |  |  |  | 45 |

5. INCOME TAXES

We recorded an income tax provision of $0.2 million and $0.1 million for the first three months of fiscal 2022 and the first three months of fiscal 2021, respectively. The effective income tax rate during the first three months of fiscal 2022 was a tax provision of 5.9% as compared to a tax provision of (12.1%) during the first three months of fiscal 2021. The difference in rate during the first three months of fiscal 2022 as compared to the first three months of fiscal 2021 reflects changes in our geographical distribution of income (loss). The 5.9% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income (loss) and the movement of the valuation allowance against our U.S. state and federal net deferred tax assets.

In the normal course of business, we are subject to examination by taxing authorities throughout the world. Generally, years prior to fiscal 2015 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) and Germany (fiscal 2015 through 2018). 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 2018.

We have historically determined that certain 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. We have provided a deferred tax liability of less than $0.1 million as of both August 28, 2021 and as of May 29, 2021.

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As of August 28, 2021 and as of May 29, 2021, our worldwide liability for uncertain tax positions related to continuing operations was $0.1 million, excluding interest and penalties. We record penalties and interest related to uncertain tax positions in the income tax expense line item within the consolidated statements of comprehensive income.

The valuation allowance against the net deferred tax assets that will more likely than not be realized was $11.5 million as of August 28, 2021. The valuation allowance against the net deferred tax assets was $12.2 million as of May 29, 2021 as no material additional domestic federal and state net deferred tax assets were generated during the first quarter of fiscal 2021 from losses in the U.S. jurisdiction. 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.

6. 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 common stock cash dividends.

In accordance with ASC 260-10, Earnings Per Share (“ASC 260”), 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 as prescribed in ASC 260. 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 common stock cash dividends.

The earnings per share (“EPS”) presented in our unaudited consolidated statements of comprehensive income were based on the following amounts (in thousands, except per share amounts):

|  | Three Months Ended |
|  | August 28, 2021 |  |  | August 29, 2020 |
|  | Basic |  |  | Diluted |  |  | Basic |  |  | Diluted |
Numerator for Basic and Diluted EPS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 2,635 |  |  | $ | 2,635 |  |  | $ | (1,147 | ) |  | $ | (1,147 | )
Less dividends: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  |  | 673 |  |  |  | 673 |  |  |  | 667 |  |  |  | 667 |
Class B common stock |  |  | 113 |  |  |  | 113 |  |  |  | 113 |  |  |  | 113 |
Undistributed earnings (loss) |  | $ | 1,849 |  |  | $ | 1,849 |  |  | $ | (1,927 | ) |  | $ | (1,927 | )
Common stock undistributed earnings (loss) |  | $ | 1,582 |  |  | $ | 1,588 |  |  | $ | (1,646 | ) |  | $ | (1,646 | )
Class B common stock undistributed earnings (loss) |  |  | 267 |  |  |  | 261 |  |  |  | (281 | ) |  |  | (281 | )
Total undistributed earnings (loss) |  | $ | 1,849 |  |  | $ | 1,849 |  |  | $ | (1,927 | ) |  | $ | (1,927 | )
Denominator for Basic and Diluted EPS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock weighted average shares |  |  | 11,194 |  |  |  | 11,194 |  |  |  | 11,070 |  |  |  | 11,070 |
Effect of dilutive securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dilutive stock options |  |  |  |  |  |  | 273 |  |  |  |  |  |  |  | — |
Denominator for diluted EPS adjusted for weighted average shares and assumed conversion |  |  |  |  |  |  | 11,467 |  |  |  |  |  |  |  | 11,070 |
Class B commons stock weighted average shares, and shares under if-converted method for diluted EPS |  |  | 2,097 |  |  |  | 2,097 |  |  |  | 2,097 |  |  |  | 2,097 |
Net income (loss) per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  | $ | 0.20 |  |  | $ | 0.20 |  |  | $ | (0.09 | ) |  | $ | (0.09 | )
Class B common stock |  | $ | 0.18 |  |  | $ | 0.18 |  |  | $ | (0.08 | ) |  | $ | (0.08 | )

Note: The were no common stock options that were antidilutive in the first quarter of fiscal 2022. Common stock options that were anti-dilutive and not included in diluted earnings per common share for the first quarter of fiscal 2021 were 1,593.

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7. SEGMENT REPORTING

We have identified three reportable segments as follows:

PMT 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, 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 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 and deliver better clinical outcomes 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)

|  | Three Months Ended |
|  | August 28, 2021 |  |  | August 29, 2020 |
PMT |  |  |  |  |  |  |  |
Net Sales |  | $ | 43,009 |  |  | $ | 30,252 |
Gross Profit |  |  | 12,931 |  |  |  | 9,971 |
Canvys |  |  |  |  |  |  |  |
Net Sales |  | $ | 8,441 |  |  | $ | 6,712 |
Gross Profit |  |  | 2,818 |  |  |  | 2,284 |
Healthcare |  |  |  |  |  |  |  |
Net Sales |  | $ | 2,254 |  |  | $ | 1,848 |
Gross Profit |  |  | 548 |  |  |  | 104 |

Geographic net sales information is primarily grouped by customer destination into five areas: North America; Asia/Pacific; Europe; Latin America; and Other.

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Net sales and gross profit by geographic region are summarized in the following table (in thousands):

|  | Three Months Ended |
|  | August 28, 2021 |  |  | August 29, 2020 |
Net Sales |  |  |  |  |  |  |  |
North America |  | $ | 20,528 |  |  | $ | 16,129 |
Asia/Pacific |  |  | 13,246 |  |  |  | 10,035 |
Europe |  |  | 17,050 |  |  |  | 10,687 |
Latin America |  |  | 2,875 |  |  |  | 1,927 |
Other (1) |  |  | 5 |  |  |  | 34 |
Total |  | $ | 53,704 |  |  | $ | 38,812 |
Gross Profit |  |  |  |  |  |  |  |
North America |  | $ | 7,380 |  |  | $ | 6,017 |
Asia/Pacific |  |  | 4,146 |  |  |  | 3,078 |
Europe |  |  | 4,789 |  |  |  | 3,356 |
Latin America |  |  | 1,081 |  |  |  | 662 |
Other (1) |  |  | (1,099 | ) |  |  | (754 | )
Total |  | $ | 16,297 |  |  | $ | 12,359 |

(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.

8. RISKS AND UNCERTAINTIES

Company Response to COVID-19

In March 2020, the World Health Organization classified the outbreak of COVID-19 as a pandemic. Thereafter, most U.S. states imposed “shelter in place” directives on their populations to stem the spread of COVID-19 and similar restrictive measures were taken by governments across the world.

The shelter in place directives generally required the closure of businesses that did not provide essential functions. The Company was considered a critical supplier of products to healthcare and critical infrastructure businesses. Further, several of our largest customers mandated that we continue to supply parts so as not to disrupt the supply chain and their ability to serve critical industries. As such, the Company qualified as an “Essential Business” and the Company continued our manufacturing and distribution operations throughout 2021. Our top priority was ensuring the health and safety of our employees and, accordingly, we undertook measures such as limiting the number of people in any one of our facilities by requiring only employees who could not perform their work remotely to physically work in a Company US-based facility. The Company advised all other employees that could perform their job functions remotely to do so. As such, the Company’s operations remained operational.

The impact of the COVID-19 outbreak and its effects continue to evolve. As such, the full magnitude that the pandemic, and the steps taken to prevent and/or mitigate its spread, will have on the Company’s financial condition, liquidity and future results of operations is uncertain. The extent of the impact of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the duration and spread of the pandemic, the extent, speed and effectiveness of worldwide containment and vaccination efforts and the impact of these and other factors on our employees, customers and suppliers. Our ability to meet customer demands for products may be impaired or, similarly, our customers may experience adverse business consequences due to COVID-19 and its effects. Reduced demand for products or impaired ability to meet customer demand (including disruptions at our transportation service providers or vendors) could have a material adverse effect on our business, operations and financial performance. While we had some COVID-19 related component delays impacting new product development schedules, we did not experience a major interruption in our supply chain. Management continues to monitor the global situation on its financial condition, liquidity, operations, suppliers, industry and workforce. Given the ever-evolving nature of the pandemic and the continued global responses to curb its spread, the Company is not presently able to fully estimate the effects of COVID-19 on its results of operations, financial condition or liquidity for fiscal year 2022.

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Company Response to CARES Act

On March 27, 2020, Congress enacted the Coronavirus Aid, Relief and Economic Security (“CARES”) Act to provide certain relief as a result of the COVID-19 outbreak. The CARES Act included provisions relating to refundable payroll tax credits, deferral of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, increased limitations on qualified charitable contributions and technical corrections to tax depreciation methods for qualified, improvement property. As of August 28, 2021, the Company deferred $0.9 million of employer-side social security tax payments. The Company has estimated and recorded the overall effects of the CARES Act and does not anticipate a material change.

9. FAIR VALUE MEASUREMENTS

Investments are measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820. The Company had no investments as of August 28, 2021 and May 29, 2021.

10. 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. The lease agreement provides for monthly payments over five years with total future minimum lease payments of $0.6 million. Rental expense related to this lease amounted to less than $0.1 million for the three months ended August 28, 2021 and August 29, 2020.

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ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements in this report may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. The terms “may,” “should,” “could,” “anticipate,” “believe,” “continues,” “estimate,” “expect,” “intend,” “objective,” “plan,” “potential,” “project” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These statements are based on management’s current expectations, intentions or beliefs and are subject to a number of factors, assumptions and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impact the business include the risk factors set forth in Item 1A of this quarterly report on Form 10-Q for the quarter ended August 28, 2021, as well as our Annual Report on Form 10-K filed on August 2, 2021. We undertake no obligation to update any such factor or to publicly announce the results of any revisions to any forward-looking statements contained herein whether as a result of new information, future events or otherwise.

In addition, while we do, from time to time, communicate with securities analysts, it is against our policy to disclose to them any material non-public information or other confidential commercial information. Accordingly, stockholders should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.

INTRODUCTION

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to assist the reader in better understanding our business, results of operations, financial condition, changes in financial condition, critical accounting policies and estimates and significant developments. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes appearing elsewhere in this filing. This section is organized as follows:

| • | Business Overview

| • | Results of Operations – an analysis and comparison of our consolidated results of operations for the three month periods ended August 28, 2021 and August 29, 2020, as reflected in our consolidated statements of comprehensive income.

| • | Liquidity, Financial Position and Capital Resources – a discussion of our primary sources and uses of cash for the three month periods ended August 28, 2021 and August 29, 2020, and a discussion of changes in our financial position.

Business Overview

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.

Some of the Company's products are manufactured in China and are imported into the United States. The Office of the United States Trade Representative ("USTR") instituted additional 10% to 25% tariffs on the importation of a number of products into the United States from China effective July 6, 2018, with additional products added August 23, 2018 and September 24, 2018. These additional tariffs are a response to what the USTR considers to be certain unfair trade practices by China. A number of the Company's products manufactured in China are now subject to these additional duties of 25% when imported into the United States.

Management continues to work with its suppliers as well as its customers to mitigate the impact of the tariffs on our customers’ markets. However, if the Company is unable to successfully pass through the additional cost of these tariffs, or if the higher prices reduce demand for the Company's products, it will have a negative effect on the Company's sales and gross margins.

We have three operating and reportable segments, which we define as follows:

Power and Microwave Technologies Group (“PMT”) 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

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existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, 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 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. Our volume commitments are lower than the large display manufacturers, making us the ideal choice for companies with very specific design requirements. 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 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.

RESULTS OF OPERATIONS

Financial Summary – Three Months Ended August 28, 2021

| • | The first quarter of fiscal 2022 and fiscal 2021 each contained 13 weeks.

| • | Net sales during the first quarter of fiscal 2022 were $53.7 million, an increase of 38.4%, compared to net sales of $38.8 million during the first quarter of fiscal 2021.

| • | Gross margin decreased to 30.3% during the first quarter of fiscal 2022 compared to 31.8% during the first quarter of fiscal 2021.

| • | Selling, general and administrative expenses were $13.5 million or 25.1% of net sales, during the first quarter of fiscal 2022 compared to $13.0 million, or 33.4% of net sales, during the first quarter of fiscal 2021.

| • | Operating income during the first quarter of fiscal 2022 was $2.8 million compared to an operating loss of $0.6 million during the first quarter of fiscal 2021.

| • | Net income during the first quarter of fiscal 2022 was $2.6 million compared to a net loss of $1.1 million during the first quarter of fiscal 2021.

Net Sales and Gross Profit Analysis

Net sales by segment and percent change during the first quarter of fiscal 2022 and fiscal 2021 were as follows (in thousands):

Net Sales |  | Three Months Ended |  |  | FY22 vs. FY21 |
|  | August 28, 2021 |  |  | August 29, 2020 |  |  | % Change |
PMT |  | $ | 43,009 |  |  | $ | 30,252 |  |  |  | 42.2 | %
Canvys |  |  | 8,441 |  |  |  | 6,712 |  |  |  | 25.8 | %
Healthcare |  |  | 2,254 |  |  |  | 1,848 |  |  |  | 22.0 | %
Total |  | $ | 53,704 |  |  | $ | 38,812 |  |  |  | 38.4 | %

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During the first quarter of fiscal 2022, consolidated net sales increased 38.4% compared to the first quarter of fiscal 2021. Sales for PMT increased 42.2%, sales for Canvys increased 25.8% and sales for Healthcare increased 22.0%. The increase in PMT was mainly due to strong growth from our Power and Microwave new technology partners in various applications including Power Management and 5G infrastructure and increased revenue from our Semiconductor Wafer Fabrication customers buying engineered solutions. We also had growth in various Electron Device product lines. The increase in Canvys was primarily due to strong sales in the European market. The increase in Healthcare was primarily due to a significant increase in demand for the ALTA 750DTM tubes.

Gross profit by segment and percent of net sales for the first quarter of fiscal 2022 and fiscal 2021 were as follows (in thousands):

Gross Profit |  | Three Months Ended |
|  | August 28, 2021 |  |  | % of Net Sales |  |  | August 29, 2020 |  |  | % of Net Sales |
PMT |  | $ | 12,931 |  |  |  | 30.1 | % |  | $ | 9,971 |  |  |  | 33.0 | %
Canvys |  |  | 2,818 |  |  |  | 33.4 | % |  |  | 2,284 |  |  |  | 34.0 | %
Healthcare |  |  | 548 |  |  |  | 24.3 | % |  |  | 104 |  |  |  | 5.6 | %
Total |  | $ | 16,297 |  |  |  | 30.3 | % |  | $ | 12,359 |  |  |  | 31.8 | %

Gross profit reflects the distribution and manufacturing product margin less manufacturing variances, inventory obsolescence charges, customer returns, scrap and cycle count adjustments, engineering costs and other provisions.

Consolidated gross profit increased to $16.3 million during the first quarter of fiscal 2022 compared to $12.4 million during the first quarter of fiscal 2021. Consolidated gross margin as a percentage of net sales decreased to 30.3% during the first quarter of fiscal 2022 from 31.8% during the first quarter of fiscal 2021, primarily due to product mix and lower product margin in PMT.

Power and Microwave Technologies Group

PMT net sales increased 42.2% to $43.0 million during the first quarter of fiscal 2022 from $30.3 million during the first quarter of fiscal 2021. The increase was mainly due to strong growth from our Power and Microwave new technology partners in various applications including Power Management and 5G infrastructure and increased revenue from our Semiconductor Wafer Fabrication customers buying engineered solutions. We also had growth in various Electron Device product lines. Gross margin as a percentage of net sales decreased to 30.1% during the first quarter of fiscal 2022 as compared to 33.0% during the first quarter of fiscal 2021 due to product mix and lower product margin.

Canvys

Canvys net sales increased 25.8% to $8.4 million during the first quarter of fiscal 2022 from $6.7 million during the first quarter of fiscal 2021 primarily due to strong sales in the European market. Gross margin as a percentage of net sales decreased to 33.4% during the first quarter of fiscal 2022 from 34.0% during the first quarter of fiscal 2021 due to the increasing freight costs resulting from the COVID-19 pandemic.

Healthcare

Healthcare net sales increased 22.0% to $2.3 million during the first quarter of fiscal 2022 from $1.8 million during the first quarter of fiscal 2021. The increase in sales was primarily due to a significant increase in demand for the ALTA 750DTM tubes. Gross margin as a percentage of net sales increased to 24.3% during the first quarter of fiscal 2022 as compared to 5.6% during the first quarter of fiscal 2021 primarily due to favorable product mix and increased ALTA 750DTM tube production.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $13.5 million during the first quarter of fiscal 2022 from $13.0 million in the first quarter of fiscal 2021. The increase resulted from higher employee compensation expense and higher travel costs partially offset by lower legal fees.

Other Income/Expense

Other expense was less than $0.1 million during the first quarter of fiscal 2022, compared to other expense of $0.4 million for the first quarter of fiscal 2021. Other expense during the first quarter of fiscal 2022 was mainly a foreign exchange loss, as investment income was offset by other expenses. Our foreign exchange gains and losses are primarily due to the translation of U.S. dollars held in non-U.S. entities. We currently do not utilize derivative instruments to manage our exposure to foreign currency.

Income Tax Provision

We recorded an income tax provision of $0.2 million and $0.1 million for the first three months of fiscal 2022 and the first three months of fiscal 2021, respectively. The effective income tax rate during the first three months of fiscal 2022 was a tax provision of 5.9% as compared to a tax provision of (12.1%) during the first three months of fiscal 2021. The difference in rate during the first three months of fiscal 2022 as compared to the first three months of fiscal 2021 reflects changes in our geographical distribution of

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income (loss). The 5.9% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income and the movement of the valuation allowance against our U.S. state and federal net deferred tax assets.

In the normal course of business, we are subject to examination by taxing authorities throughout the world. Generally, years prior to fiscal 2015 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) and Germany (fiscal 2015 through 2018). 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 2018.

Net Income (Loss) and Per Share Data

Net income during the first quarter of fiscal 2022 was $2.6 million, or $0.20 per diluted common share and $0.18 per Class B diluted common share as compared to net loss of $1.1 million during the first quarter of fiscal 2021 or ($0.09) per diluted common share and ($0.08) per Class B diluted common share.

LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES

Our operations and cash needs have been primarily financed through income from operations and cash on hand.

Cash and cash equivalents were $36.4 million at August 28, 2021. Cash and cash equivalents at August 28, 2021 consisted of $18.4 million in North America, $9.7 million in Europe, $1.3 million in Latin America and $7.0 million in Asia/Pacific. We repatriated $0.7 million to the United States in the first quarter of fiscal 2022, from our entity in China. Although the Tax Cuts and Jobs Act generally eliminated federal income tax on future cash repatriation to the United States, cash repatriation may be subject to state and local taxes, withholding or similar taxes. See Note, 7 Income Taxes of the notes to our consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended May 29, 2021, filed August 2, 2021 for further information.

Cash and cash equivalents were $43.3 million at May 29, 2021. Cash and cash equivalents at May 29, 2021, consisted of $26.1 million in North America, $8.8 million in Europe, $1.2 million in Latin America and $7.2 million in Asia/Pacific. We repatriated a total of $0.9 million to the United States in fiscal 2021 from several of our foreign entities. This amount includes $0.7 million from our entities in Italy and South Korea in the third quarter of fiscal 2021 and $0.2 million from our entity in France in the fourth quarter of fiscal 2021.

The Company continues to monitor the impact of COVID-19, including the extent, duration and effectiveness of containment actions taken, the speed and extent of vaccination programs, the impact of the pandemic on its supply chain, manufacturing and distribution operations, customers and employees, as well as the U.S. economy in general. However, due to the uncertain and constantly evolving impacts of the COVID-19 pandemic across the globe, the Company cannot currently predict the long-term impact on its operations and financial results. The uncertainties associated with the COVID-19 pandemic and its effects include potential adverse effects on the overall economy, the Company’s supply chain, transportation services, employees and customers. The COVID-19 pandemic and its effects could adversely affect the Company’s revenues, earnings, liquidity and cash flows and may require significant actions in response, including expense reductions. Conditions surrounding COVID-19 change rapidly and additional impacts of which the Company is not currently aware may arise. Based on past performance and current expectations, we believe that the existing sources of liquidity, including current cash, will provide sufficient resources to meet known capital requirements and working capital needs through the next twelve months.

Cash Flows from Operating Activities

Cash flows from operating activities primarily resulted from our net income (loss) adjusted for non-cash items and changes in our operating assets and liabilities.

Operating activities used $4.9 million of cash during the first three months of fiscal 2022. We had a net income of $2.6 million during the first three months of fiscal 2022, which included non-cash stock-based compensation expense of $0.2 million associated with the issuance of stock option and restricted stock awards, $0.1 million for inventory reserve provisions and depreciation and amortization expense of $0.8 million associated with our property and equipment as well as amortization of our intangible assets. Changes in our operating assets and liabilities used $8.7 million in cash during the first three months of fiscal 2022, net of foreign currency exchange gains and losses, included an increase in accounts receivable of $5.0 million and an increase in inventory of $5.0 million. Partially offsetting the cash utilization for accounts receivable and inventory was an increase in accounts payable and accrued liabilities of $1.1 million. The increase in accounts receivable was primarily due to increased sales revenue. The majority of the inventory increase was to support the growth in the RF and microwave components business. The increase in accounts payable was related to the inventory increase and the increase in accrued liabilities was timing related.

Operating activities used $3.4 million of cash during the first three months of fiscal 2021. We had a net loss of $1.1 million during the first three months of fiscal 2021, which included non-cash stock-based compensation expense of $0.2 million associated with the issuance of stock option and restricted stock awards, $0.2 million for inventory reserve provisions and depreciation and amortization expense of $0.9 million associated with our property and equipment as well as amortization of our intangible assets.

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Changes in our operating assets and liabilities resulted in a use of cash of $3.5 million during the first three months of fiscal 2021, net of foreign currency exchange gains and losses, included a decrease of $2.7 million in accounts payable, an increase in inventory of $1.6 million and an increase in accounts receivable of $0.9 million, partially offset by an increase in accrued liabilities of $1.8 million. The decrease in our accounts payable was due to timing of payments for some of our larger vendors for both inventory and services. The majority of the inventory increase was to support the electron tube and semi-conductor wafer fab equipment business. The increase in accounts receivable was primarily due to the sales increase compared to the fourth quarter of fiscal 2020. The increase in accrued liabilities is mainly due to timing of employee compensation and payroll tax payments.

Cash Flows from Investing Activities

Cash flows from investing activities consisted primarily of capital expenditures and purchases and maturities of investments. Our purchases and proceeds from investments consist of time deposits and CDs. The purchasing of future investments varies from period to period due to interest and foreign currency exchange rates.

Cash used in investing activities of $0.8 million during the first three months of fiscal 2022 was due to capital expenditures. Capital expenditures related primarily to capital used for our Healthcare business and our IT system. The Company did not have any investment purchases or maturities in the first quarter of fiscal 2022.

Cash provided by investing activities of $6.3 million during the first three months of fiscal 2021 included proceeds from the maturities of investments of $16.0 million, partially offset by purchases of investments of $9.0 million and $0.7 million in capital expenditures. Capital expenditures related primarily to capital used for our Healthcare business and our IT system.

Cash Flows from Financing Activities

Cash flows used in financing activities consisted primarily of cash dividends paid.

Cash used in financing activities of $0.8 million during the first three months of fiscal 2022 primarily resulted from cash used to pay dividends.

Cash used in financing activities of $0.8 million during the first three months of fiscal 2021 primarily resulted from cash used to pay dividends.

All future payments of dividends are at the discretion of the Board of Directors. Dividend payments will depend on earnings, capital requirements, operating conditions and such other factors that the Board may deem relevant.

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ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Risk Management and Market Sensitive Financial Instruments

We are exposed to many different market risks with the various industries we serve. The primary financial risk we are exposed to is foreign currency exchange, as certain operations, assets and liabilities of ours are denominated in foreign currencies. We manage these risks through normal operating and financing activities.

The interpretation and analysis of these disclosures should not be considered in isolation since such variances in exchange rates would likely influence other economic factors. Such factors, which are not readily quantifiable, would likely also affect our operations. Additional disclosure regarding various market risks are set forth in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended May 29, 2021, filed August 2, 2021.

ITEM 4.CONTROLS AND PROCEDURES

(a) | Evaluation of Disclosure Controls and Procedures

Management of the Company, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of August 28, 2021.

Disclosure controls and procedures are intended to provide reasonable assurance that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) | Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the first quarter of fiscal 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. | LEGAL PROCEEDINGS

ITEM 1A. | RISK FACTORS

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended May 29, 2021, filed August 2, 2021.

ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 5. | OTHER INFORMATION

Item 5.07. Submission of Matters to a Vote of Security Holders

We held our annual meeting of stockholders on October 5, 2021. At the annual meeting, our stockholders (i) elected each of the nominees listed below to the Company's Board of Directors to serve for a term expiring at the 2022 Annual Meeting; (ii) ratified the selection of BDO USA, LLP as our independent registered public accounting firm for fiscal year 2022; and (iii) approved, on an advisory basis, the compensation of the Company's named executive officers.

The final results for the votes regarding each proposal are set forth below.

| 1. | The voting results with respect to the election of each director were as follows:

Nominee |  | For |  |  | Abstain/Withhold |  |  | Broker Non-Votes |
Edward J. Richardson |  |  | 26,997,731 |  |  |  | 1,184,797 |  |  |  | 1,573,851 |
Wendy S. Diddell |  |  | 26,929,578 |  |  |  | 1,252,950 |  |  |  | 1,573,851 |
Jacques Belin |  |  | 26,069,814 |  |  |  | 2,112,714 |  |  |  | 1,573,851 |
James Benham |  |  | 26,165,945 |  |  |  | 2,016,583 |  |  |  | 1,573,851 |
Kenneth Halverson |  |  | 26,068,354 |  |  |  | 2,114,174 |  |  |  | 1,573,851 |
Robert H. Kluge |  |  | 26,901,845 |  |  |  | 1,280,683 |  |  |  | 1,573,851 |
Paul J. Plante |  |  | 25,747,344 |  |  |  | 2,435,184 |  |  |  | 1,573,851 |

| 2. | The voting results with respect to the ratification of the selection of BDO USA, LLP as our independent registered public accounting firm for fiscal year 2022 was approved with 29,681,655 votes “FOR”, 25,386 votes “AGAINST” and 49,338

votes “ABSTAIN/WITHHOLD”.

| 3. | The voting results with respect to the approval, on an advisory basis, the compensation of our Named Executive Officers was approved with 26,649,366 votes “FOR”, 1,454,265 votes “AGAINST”, 78,897 votes “ABSTAIN/WITHHOLD” and 1,573,851 broker non-votes.

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ITEM 6. | EXHIBITS

Exhibit Index

Exhibit Number |  | Description
3.1 |  | Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Annex III of the Proxy Statement dated August 22, 2014).
3.2 |  | Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 15, 2017).
31.1 |  | Certification of Edward J. Richardson pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 |  | Certification of Robert J. Ben pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 |  | The following financial information from our Quarterly Report on Form 10-Q for the first quarter of fiscal 2022, filed with the SEC on October 7, 2021, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Comprehensive Income, (iii) the Unaudited Consolidated Statements of Cash Flows, (iv) the Unaudited Consolidated Statement of Stockholders’ Equity and (v) Notes to Unaudited Consolidated Financial Statements.
104 |  | Cover Page Interactive Data File (embedded within the Inline XBRL document).

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| RICHARDSON ELECTRONICS, LTD.
Date: October 7, 2021 | By: | /s/ Robert J. Ben
|  | Robert J. Ben Chief Financial Officer and Chief Accounting Officer (on behalf of the Registrant and as Principal Financial Officer)

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