May 30, 2015 | May 31, 2014 | ||||||
Compensation and payroll taxes | $ | 4,303 | $ | 4,692 | |||
Income taxes | 572 | 68 | |||||
Professional fees | 885 | 560 | |||||
Other accrued expenses | 4,384 | 3,900 | |||||
Accrued Liabilities | $ | 10,144 | $ | 9,220 |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Net Assets | |||||||||||
North America | $ | 76,153 | $ | 88,902 | $ | 103,006 | |||||
Asia/Pacific | 44,602 | 45,334 | 43,604 | ||||||||
Europe | 34,127 | 38,407 | 36,373 | ||||||||
Latin America | 1,770 | 2,202 | 2,256 | ||||||||
Total | $ | 156,652 | $ | 174,845 | $ | 185,239 |
Land improvements | 10 years |
Buildings and improvements | 10 - 30 years |
Computer and communications equipment | 3 - 10 years |
Machinery and other equipment | 3 - 10 years |
May 30, 2015 | May 31, 2014 | ||||||
Inventories | $ | — | $ | 18 | |||
Discontinued operations - Assets | $ | — | $ | 18 | |||
Accrued liabilities - current | $ | — | $ | 7 | |||
Accrued liabilities - non-current | — | 130 | |||||
Discontinued operations - Liabilities | $ | — | $ | 137 |
Fiscal 2015 | Fiscal 2014 | Fiscal 2013 | |||||||||
Net sales | $ | — | $ | 402 | $ | 636 | |||||
Gross loss(1) | — | (330 | ) | (553 | ) | ||||||
Selling, general, and administrative expenses (2) | — | 215 | 714 | ||||||||
Additional (gain)/loss on sale | — | — | 18 | ||||||||
Income tax provision (benefit) (3) | 31 | (375 | ) | (2,051 | ) | ||||||
Income (loss) from discontinued operations, net of tax | (31 | ) | (170 | ) | 766 |
(1) | Gross loss for fiscal years 2014 and 2013 includes unabsorbed manufacturing labor and overhead expenses related to the Manufacturing Agreement with RFPD which ended March 1, 2014. |
(2) | Selling, General and Administrative expenses in fiscal years 2014 and 2013 related primarily to professional fees for tax audits resulting from the Transaction. |
(3) | The income tax provision for fiscal year 2015 was due to an income tax audit as a result of the Transaction. The income tax benefits in fiscal years 2014 and 2013 relates to the reversal of tax reserves. |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
EDG | |||||||||||
Net Sales | $ | 105,748 | $ | 103,274 | $ | 102,593 | |||||
Gross Profit | 33,098 | 31,610 | 31,431 | ||||||||
Canvys | |||||||||||
Net Sales | $ | 24,645 | $ | 27,857 | $ | 32,139 | |||||
Gross Profit | 6,457 | 7,588 | 8,142 | ||||||||
Healthcare | |||||||||||
Net Sales | $ | 6,564 | $ | 6,829 | $ | 6,334 | |||||
Gross Profit | 1,583 | 1,816 | 1,972 |
Description | Balance at beginning of period | Charged to expense | Deductions | Balance at end of period | |||||||||||||
Year ended May 30, 2015 | |||||||||||||||||
Allowance for doubtful accounts | $ | 581 | $ | (221 | ) | (1) | $ | 77 | (2) | $ | 283 | ||||||
Inventory provisions | 3,141 | 228 | (3) | 378 | (4) | 2,991 | |||||||||||
Year ended May 31, 2014 | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,092 | $ | 114 | $ | 625 | (2) | $ | 581 | ||||||||
Inventory provisions | 2,715 | 751 | (3) | 325 | (4) | 3,141 | |||||||||||
Year ended June 1, 2013 | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,058 | $ | 135 | $ | 101 | (2) | $ | 1,092 | ||||||||
Inventory provisions | 2,976 | 412 | (3) | 673 | (4) | 2,715 |
(1) | Charges to bad debt expense, net impact for FY15 was a recovery of $0.2 million primarily due to negotiations and resolutions with a large European customer. |
(2) | Uncollectible amounts written off, net of recoveries and foreign currency translation. |
(3) | Charges to cost of sales. Included in fiscal 2015 are inventory write-downs of $0.1 million for EDG and $0.1 million for Canvys, and less than $0.1 million for Healthcare. Included in fiscal 2014 are inventory write-downs of $0.6 million for EDG and $0.2 million for Canvys. Included in fiscal 2013 are inventory write-downs of $0.2 million for EDG and $0.2 million for Canvys. |
(4) | Inventory disposed of or sold, net of foreign currency translation. |
Fiscal Year Ended | |||||||
May 30, 2015 | May 31, 2014 | ||||||
Continuing operations | $ | 117 | $ | 66 | |||
Discontinuing operations (1) | 1,883 | 95 | |||||
$ | 2,000 | $ | 161 |
7. | LEASE OBLIGATIONS, OTHER COMMITMENTS, AND CONTINGENCIES |
Fiscal Year | Payments | ||
2016 | $ | 1,405 | |
2017 | 609 | ||
2018 | 341 | ||
2019 | 273 | ||
2020 | 224 | ||
Thereafter | 264 |
9. | EMPLOYEE BENEFIT PLANS |
4. | DISCONTINUED OPERATIONS |
Fiscal 2015 | Fiscal 2014 | Fiscal 2013 | |||||||||
Net sales | $ | — | $ | 402 | $ | 636 | |||||
Gross loss(1) | — | (330 | ) | (553 | ) | ||||||
Selling, general, and administrative expenses (2) | — | 215 | 714 | ||||||||
Additional (gain)/loss on sale | — | — | 18 | ||||||||
Income tax provision (benefit) (3) | 31 | (375 | ) | (2,051 | ) | ||||||
Income (loss) from discontinued operations, net of tax | (31 | ) | (170 | ) | 766 |
(1) | Gross loss for fiscal years 2014 and 2013 includes unabsorbed manufacturing labor and overhead expenses related to the Manufacturing Agreement with RFPD which ended March 1, 2014. |
(2) | Selling, General and Administrative expenses in fiscal years 2014 and 2013 related primarily to professional fees for tax audits resulting from the Transaction. |
(3) | The income tax provision for fiscal year 2015 was due to an income tax audit as a result of the Transaction. The income tax benefits in fiscal years 2014 and 2013 relates to the reversal of tax reserves. |
May 30, 2015 | May 31, 2014 | ||||||
Inventories | $ | — | $ | 18 | |||
Discontinued operations - Assets | $ | — | $ | 18 | |||
Accrued liabilities - current | $ | — | $ | 7 | |||
Accrued liabilities - non-current | — | 130 | |||||
Discontinued operations - Liabilities | $ | — | $ | 137 |
For the Fiscal Year Ended | |||||||||||||||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||
Numerator for Basic and Diluted EPS: | |||||||||||||||||||||||
Income (loss) from continuing operations | $ | (5,528 | ) | $ | (5,528 | ) | $ | (345 | ) | $ | (345 | ) | $ | 482 | $ | 482 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (8,788 | ) | $ | (8,788 | ) | $ | (3,686 | ) | $ | (3,686 | ) | $ | (3,089 | ) | $ | (3,089 | ) | |||||
Common stock undistributed earnings (losses) | $ | (7,539 | ) | $ | (7,539 | ) | $ | (3,151 | ) | $ | (3,151 | ) | $ | (2,570 | ) | $ | (2,575 | ) | |||||
Class B common stock undistributed earnings (losses) | (1,249 | ) | (1,249 | ) | (535 | ) | (535 | ) | (519 | ) | (514 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (8,788 | ) | $ | (8,788 | ) | $ | (3,686 | ) | $ | (3,686 | ) | $ | (3,089 | ) | $ | (3,089 | ) | |||||
Income (loss) from discontinued operations | $ | (31 | ) | $ | (31 | ) | $ | (170 | ) | $ | (170 | ) | $ | 766 | $ | 766 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (3,291 | ) | $ | (3,291 | ) | $ | (3,511 | ) | $ | (3,511 | ) | $ | (2,805 | ) | $ | (2,805 | ) | |||||
Common stock undistributed earnings (losses) | $ | (2,823 | ) | $ | (2,823 | ) | $ | (3,001 | ) | $ | (3,001 | ) | $ | (2,334 | ) | $ | (2,338 | ) | |||||
Class B common stock undistributed earnings (losses) | (468 | ) | (468 | ) | (510 | ) | (510 | ) | (471 | ) | (467 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (3,291 | ) | $ | (3,291 | ) | $ | (3,511 | ) | $ | (3,511 | ) | $ | (2,805 | ) | $ | (2,805 | ) | |||||
Net income (loss) | $ | (5,559 | ) | $ | (5,559 | ) | $ | (515 | ) | $ | (515 | ) | $ | 1,248 | $ | 1,248 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (8,819 | ) | $ | (8,819 | ) | $ | (3,856 | ) | $ | (3,856 | ) | $ | (2,323 | ) | $ | (2,323 | ) | |||||
Common stock undistributed earnings (losses) | $ | (7,565 | ) | $ | (7,565 | ) | $ | (3,296 | ) | $ | (3,296 | ) | $ | (1,933 | ) | $ | (1,937 | ) | |||||
Class B common stock undistributed earnings (losses) | (1,254 | ) | (1,254 | ) | (560 | ) | (560 | ) | (390 | ) | (386 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (8,819 | ) | $ | (8,819 | ) | $ | (3,856 | ) | $ | (3,856 | ) | $ | (2,323 | ) | $ | (2,323 | ) | |||||
Denominator for basic and diluted EPS: | |||||||||||||||||||||||
Common stock weighted average shares | 11,682 | 11,682 | 11,915 | 11,915 | 12,448 | 12,448 | |||||||||||||||||
Class B common stock weighted average shares, and shares under if-converted method for diluted EPS | 2,151 | 2,151 | 2,250 | 2,250 | 2,790 | 2,790 | |||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Dilutive stock options | — | — | 134 | ||||||||||||||||||||
Denominator for diluted EPS adjusted for weighted average shares and assumed conversions | 13,833 | 14,165 | 15,372 | ||||||||||||||||||||
Income (loss) from continuing operations per share: | |||||||||||||||||||||||
Common stock | $ | (0.41 | ) | $ | (0.41 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | 0.03 | $ | 0.03 | |||||||
Class B common stock | $ | (0.36 | ) | $ | (0.36 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.03 | $ | 0.03 | |||||||
Income (loss) from discontinued operations per share: | |||||||||||||||||||||||
Common stock | $ | — | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | $ | 0.05 | $ | 0.05 | |||||||||
Class B common stock | $ | — | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | $ | 0.05 | $ | 0.05 | |||||||||
Net income (loss) per share: | |||||||||||||||||||||||
Common stock | $ | (0.41 | ) | $ | (0.41 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.08 | $ | 0.08 | |||||||
Class B common stock | $ | (0.36 | ) | $ | (0.36 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | 0.08 | $ | 0.08 |
Level 1 | Level 2 | Level 3 | |||||||||
May 30, 2015 | |||||||||||
Time deposits/CDs | $ | 34,665 | $ | — | $ | — | |||||
Equity securities | 576 | — | — | ||||||||
Total | $ | 35,241 | $ | — | $ | — | |||||
May 31, 2014 | |||||||||||
Time deposits/CDs | $ | 32,732 | $ | — | $ | — | |||||
Equity securities | 516 | — | — | ||||||||
Total | $ | 33,248 | $ | — | $ | — |
12. | FAIR VALUE MEASUREMENTS |
Level 1 | Level 2 | Level 3 | |||||||||
May 30, 2015 | |||||||||||
Time deposits/CDs | $ | 34,665 | $ | — | $ | — | |||||
Equity securities | 576 | — | — | ||||||||
Total | $ | 35,241 | $ | — | $ | — | |||||
May 31, 2014 | |||||||||||
Time deposits/CDs | $ | 32,732 | $ | — | $ | — | |||||
Equity securities | 516 | — | — | ||||||||
Total | $ | 33,248 | $ | — | $ | — |
6. | GOODWILL AND OTHER INTANGIBLE ASSETS |
TOTAL | ||||
Balance at June 1, 2013 | $ | 1,519 | ||
Premium Paid for WVS Acquisition | 25 | |||
Foreign currency translation | 127 | |||
Impairment on goodwill | (1,671 | ) | ||
Balance at May 31, 2014 | $ | — | ||
Balance at May 30, 2015 | $ | — |
• | Income Approach: To determine the estimated fair value of each reporting unit, we discount the expected cash flows which are developed by management. We estimate our future cash flows after considering current economic conditions and trends, estimated future operating results, our views of growth rates and anticipated future economic and regulatory conditions. To estimate cash flows beyond the final year of our models, we use a terminal value approach and incorporate the present value of the resulting terminal value into our estimate of fair value. |
• | Market-Based Approach: To corroborate the results of the income approach described above, we estimate the fair value of our reporting unit using several market-based approaches, including the guideline company method, which focuses on comparing our risk profile and growth prospects to select reasonably similar publicly traded companies. |
Intangible Assets Subject to Amortization as of | |||||||
May 30, 2015 | May 31, 2014 | ||||||
Gross Amounts: | |||||||
Trade Name | $ | 29 | $ | 29 | |||
Customer Relationship | 948 | 977 | |||||
Non-compete Agreements | 47 | 47 | |||||
Total Gross Amounts | $ | 1,024 | $ | 1,053 | |||
Accumulated Amortization: | |||||||
Trade Name | $ | 29 | $ | 18 | |||
Customer Relationship | 221 | 178 | |||||
Non-compete Agreements | 31 | 14 | |||||
Total Accumulated Amortization | $ | 281 | $ | 210 | |||
Net Intangibles | $ | 743 | $ | 843 |
Amortization Expense | |||
Fiscal Year | |||
2016 | $ | 66 | |
2017 | 57 | ||
2018 | 55 | ||
2019 | 46 | ||
2020 | 44 | ||
Thereafter | 475 |
8. | INCOME TAXES |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
United States | $ | (9,287 | ) | $ | (1,399 | ) | $ | (2,716 | ) | ||
Foreign | 2,293 | 747 | 3,358 | ||||||||
Income (loss) before income taxes | $ | (6,994 | ) | $ | (652 | ) | $ | 642 |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Current: | |||||||||||
Federal | $ | (326 | ) | $ | 214 | $ | (974 | ) | |||
State | 14 | 1 | 56 | ||||||||
Foreign | 191 | 601 | 970 | ||||||||
Total current | $ | (121 | ) | $ | 816 | $ | 52 | ||||
Deferred: | |||||||||||
Federal | $ | (1,964 | ) | $ | (585 | ) | $ | (213 | ) | ||
State | 530 | (169 | ) | 151 | |||||||
Foreign | 89 | (369 | ) | 170 | |||||||
Total deferred | $ | (1,345 | ) | $ | (1,123 | ) | $ | 108 | |||
Income tax provision (benefit) | $ | (1,466 | ) | $ | (307 | ) | $ | 160 |
Fiscal Year Ended | ||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | ||||||
Federal statutory rate | 34.0 | % | 34.0 | % | 34.0 | % | ||
Effect of: | ||||||||
State income taxes, net of federal tax benefit | 5.3 | 14.1 | (14.5 | ) | ||||
Foreign income inclusion | (1.6 | ) | (10.2 | ) | 24.7 | |||
Foreign taxes at other rates | 4.4 | (4.4 | ) | (44.6 | ) | |||
Permanent tax differences | (0.5 | ) | (3.9 | ) | 3.2 | |||
Intercompany items | 2.2 | (11.0 | ) | — | ||||
Compensation items | — | (12.7 | ) | — | ||||
Tax reserves | 0.8 | (7.2 | ) | (23.5 | ) | |||
Additional U.S. tax on undistributed foreign earnings | (0.5 | ) | 37.6 | 33.8 | ||||
Net increase in valuation allowance for deferred tax assets | (27.3 | ) | (3.4 | ) | 18.1 | |||
Additional benefit for carryback of current year federal loss | — | — | (6.1 | ) | ||||
Return to provision adjustments | 4.0 | 15.3 | — | |||||
Other | 0.1 | (1.2 | ) | (0.2 | ) | |||
Effective tax rate | 20.9 | % | 47.0 | % | 24.9 | % |
Fiscal Year Ended | |||||||
May 30, 2015 | May 31, 2014 | ||||||
Deferred tax assets: | |||||||
NOL carryforwards - foreign and domestic | $ | 5,960 | $ | 3,405 | |||
Inventory valuations | 1,060 | 1,130 | |||||
Goodwill | 1,031 | 989 | |||||
Foreign tax credits | 322 | — | |||||
Severance reserve | — | 367 | |||||
Foreign capital loss | 1,073 | 1,093 | |||||
Other | 1,983 | 2,753 | |||||
Subtotal | $ | 11,429 | $ | 9,737 | |||
Valuation allowance - foreign and domestic | (5,158 | ) | (4,070 | ) | |||
Net deferred tax assets after valuation allowance | $ | 6,271 | $ | 5,667 | |||
Deferred tax liabilities: | |||||||
Accelerated depreciation | $ | (218 | ) | $ | (317 | ) | |
Tax on undistributed earnings | (4,813 | ) | (7,031 | ) | |||
Other | (202 | ) | (659 | ) | |||
Subtotal | $ | (5,233 | ) | $ | (8,007 | ) | |
Net Deferred tax assets (liabilities) | $ | 1,038 | $ | (2,340 | ) | ||
Supplemental disclosure of deferred tax assets (liabilities) information: | |||||||
Domestic | $ | 3,477 | $ | (1,797 | ) | ||
Foreign | $ | 2,710 | $ | 3,527 | |||
Total | $ | 6,187 | $ | 1,730 |
Fiscal Year Ended | |||||||
May 30, 2015 | May 31, 2014 | ||||||
Unrecognized tax benefits, beginning of period | $ | 161 | $ | 32 | |||
Increase due to currency translation | — | 7 | |||||
Increase in positions taken in prior period | 2,000 | 163 | |||||
Increase in positions taken in current period | — | — | |||||
Decrease in positions due to settlements | (161 | ) | — | ||||
Decrease related to the expiration of statute of limitations | — | (41 | ) | ||||
Unrecognized tax benefits, end of period | $ | 2,000 | $ | 161 |
Fiscal Year Ended | |||||||
May 30, 2015 | May 31, 2014 | ||||||
Continuing operations | $ | 117 | $ | 66 | |||
Discontinuing operations (1) | 1,883 | 95 | |||||
$ | 2,000 | $ | 161 |
11. | LITIGATION |
1. | DESCRIPTION OF THE COMPANY |
Fiscal Year | Payments | ||
2016 | $ | 1,405 | |
2017 | 609 | ||
2018 | 341 | ||
2019 | 273 | ||
2020 | 224 | ||
Thereafter | 264 |
2. | BASIS OF PRESENTATION |
May 30, 2015 | May 31, 2014 | ||||||
Land and improvements | $ | 1,594 | $ | 1,598 | |||
Buildings and improvements | 18,883 | 18,456 | |||||
Computer and communications equipment | 6,774 | 3,792 | |||||
Construction in progress | 1,218 | 1,377 | |||||
Machinery and other equipment | 6,562 | 5,795 | |||||
$ | 35,031 | $ | 31,018 | ||||
Accumulated depreciation | (24,950 | ) | (23,795 | ) | |||
Property, plant, and equipment, net | $ | 10,081 | $ | 7,223 |
Land improvements | 10 years |
Buildings and improvements | 10 - 30 years |
Computer and communications equipment | 3 - 10 years |
Machinery and other equipment | 3 - 10 years |
May 30, 2015 | May 31, 2014 | ||||||
Land and improvements | $ | 1,594 | $ | 1,598 | |||
Buildings and improvements | 18,883 | 18,456 | |||||
Computer and communications equipment | 6,774 | 3,792 | |||||
Construction in progress | 1,218 | 1,377 | |||||
Machinery and other equipment | 6,562 | 5,795 | |||||
$ | 35,031 | $ | 31,018 | ||||
Accumulated depreciation | (24,950 | ) | (23,795 | ) | |||
Property, plant, and equipment, net | $ | 10,081 | $ | 7,223 |
14. | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) |
Description | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Fiscal 2015 | |||||||||||||||
Net sales | $ | 34,699 | $ | 33,841 | $ | 33,471 | $ | 34,946 | |||||||
Gross profit | 10,658 | 10,462 | 9,800 | 10,218 | |||||||||||
Loss from continuing operations | (83 | ) | (1,144 | ) | (2,198 | ) | (2,103 | ) | |||||||
Income (loss) from discontinued operations | — | 87 | — | (118 | ) | ||||||||||
Net loss | (83 | ) | (1,057 | ) | (2,198 | ) | (2,221 | ) | |||||||
Loss from continuing operations | |||||||||||||||
Common stock - basic | $ | (0.01 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.16 | ) | |||
Class B common stock - basic | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.15 | ) | $ | (0.13 | ) | |||
Common stock - diluted | $ | (0.01 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.16 | ) | |||
Class B common stock - diluted | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.15 | ) | $ | (0.13 | ) | |||
Income (loss) from discontinued operations | |||||||||||||||
Common stock - basic | $ | — | $ | 0.01 | $ | — | $ | (0.01 | ) | ||||||
Class B common stock - basic | $ | — | $ | 0.01 | $ | — | $ | (0.01 | ) | ||||||
Common stock - diluted | $ | — | $ | 0.01 | $ | — | $ | (0.01 | ) | ||||||
Class B common stock - diluted | $ | — | $ | 0.01 | $ | — | $ | (0.01 | ) | ||||||
Net Loss | |||||||||||||||
Common stock - basic | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.16 | ) | $ | (0.17 | ) | |||
Class B common stock - basic | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.14 | ) | |||
Common stock - diluted | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.16 | ) | $ | (0.17 | ) | |||
Class B common stock - diluted | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.14 | ) | |||
Fiscal 2014 | |||||||||||||||
Net sales | $ | 34,257 | $ | 35,436 | $ | 32,884 | $ | 35,383 | |||||||
Gross profit | 10,192 | 11,007 | 9,651 | 10,164 | |||||||||||
Income (loss) from continuing operations | 1,979 | 631 | (112 | ) | (2,843 | ) | |||||||||
Income (loss) from discontinued operations | (11 | ) | (107 | ) | (420 | ) | 368 | ||||||||
Net income (loss) | 1,968 | 524 | (532 | ) | (2,475 | ) | |||||||||
Income (loss) from continuing operations | |||||||||||||||
Common stock - basic | $ | 0.14 | $ | 0.05 | $ | (0.01 | ) | $ | (0.21 | ) | |||||
Class B common stock - basic | $ | 0.13 | $ | 0.04 | $ | (0.01 | ) | $ | (0.19 | ) | |||||
Common stock - diluted | $ | 0.14 | $ | 0.04 | $ | (0.01 | ) | $ | (0.21 | ) | |||||
Class B common stock - diluted | $ | 0.13 | $ | 0.04 | $ | (0.01 | ) | $ | (0.19 | ) | |||||
Income (loss) from discontinued operations | |||||||||||||||
Common stock - basic | $ | — | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.03 | |||||
Class B common stock - basic | $ | — | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.02 | |||||
Common stock - diluted | $ | — | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.03 | |||||
Class B common stock - diluted | $ | — | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.02 | |||||
Net income (loss) | |||||||||||||||
Common stock - basic | $ | 0.14 | $ | 0.04 | $ | (0.04 | ) | $ | (0.18 | ) | |||||
Class B common stock - basic | $ | 0.13 | $ | 0.03 | $ | (0.04 | ) | $ | (0.17 | ) | |||||
Common stock - diluted | $ | 0.14 | $ | 0.03 | $ | (0.04 | ) | $ | (0.18 | ) | |||||
Class B common stock - diluted | $ | 0.13 | $ | 0.03 | $ | (0.04 | ) | $ | (0.17 | ) |
May 30, 2015 | May 31, 2014 | ||||||
Segment assets | $ | 60,200 | $ | 52,790 | |||
Cash and cash equivalents | 74,535 | 102,752 | |||||
Investments - current | 23,692 | 31,732 | |||||
Other current assets (1) | 3,494 | 5,790 | |||||
Net property | 10,081 | 7,223 | |||||
Investments - non-current | 11,549 | 1,516 | |||||
Other assets - non-current deferred income taxes | 1,443 | 1,724 | |||||
Assets of discontinued operations (2) | — | 18 | |||||
Total assets | $ | 184,994 | $ | 203,545 |
(1) | Other current assets include miscellaneous receivables, prepaid expenses, and current deferred income taxes. |
(2) | See Note 4 “Discontinued Operations”. |
5. | RELATED PARTY TRANSACTION |
May 30, 2015 | May 31, 2014 | ||||||
Compensation and payroll taxes | $ | 4,303 | $ | 4,692 | |||
Income taxes | 572 | 68 | |||||
Professional fees | 885 | 560 | |||||
Other accrued expenses | 4,384 | 3,900 | |||||
Accrued Liabilities | $ | 10,144 | $ | 9,220 |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Current: | |||||||||||
Federal | $ | (326 | ) | $ | 214 | $ | (974 | ) | |||
State | 14 | 1 | 56 | ||||||||
Foreign | 191 | 601 | 970 | ||||||||
Total current | $ | (121 | ) | $ | 816 | $ | 52 | ||||
Deferred: | |||||||||||
Federal | $ | (1,964 | ) | $ | (585 | ) | $ | (213 | ) | ||
State | 530 | (169 | ) | 151 | |||||||
Foreign | 89 | (369 | ) | 170 | |||||||
Total deferred | $ | (1,345 | ) | $ | (1,123 | ) | $ | 108 | |||
Income tax provision (benefit) | $ | (1,466 | ) | $ | (307 | ) | $ | 160 |
Fiscal Year Ended | |||||||
May 30, 2015 | May 31, 2014 | ||||||
Deferred tax assets: | |||||||
NOL carryforwards - foreign and domestic | $ | 5,960 | $ | 3,405 | |||
Inventory valuations | 1,060 | 1,130 | |||||
Goodwill | 1,031 | 989 | |||||
Foreign tax credits | 322 | — | |||||
Severance reserve | — | 367 | |||||
Foreign capital loss | 1,073 | 1,093 | |||||
Other | 1,983 | 2,753 | |||||
Subtotal | $ | 11,429 | $ | 9,737 | |||
Valuation allowance - foreign and domestic | (5,158 | ) | (4,070 | ) | |||
Net deferred tax assets after valuation allowance | $ | 6,271 | $ | 5,667 | |||
Deferred tax liabilities: | |||||||
Accelerated depreciation | $ | (218 | ) | $ | (317 | ) | |
Tax on undistributed earnings | (4,813 | ) | (7,031 | ) | |||
Other | (202 | ) | (659 | ) | |||
Subtotal | $ | (5,233 | ) | $ | (8,007 | ) | |
Net Deferred tax assets (liabilities) | $ | 1,038 | $ | (2,340 | ) | ||
Supplemental disclosure of deferred tax assets (liabilities) information: | |||||||
Domestic | $ | 3,477 | $ | (1,797 | ) | ||
Foreign | $ | 2,710 | $ | 3,527 | |||
Total | $ | 6,187 | $ | 1,730 |
For the Fiscal Year Ended | |||||||||||||||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||
Numerator for Basic and Diluted EPS: | |||||||||||||||||||||||
Income (loss) from continuing operations | $ | (5,528 | ) | $ | (5,528 | ) | $ | (345 | ) | $ | (345 | ) | $ | 482 | $ | 482 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (8,788 | ) | $ | (8,788 | ) | $ | (3,686 | ) | $ | (3,686 | ) | $ | (3,089 | ) | $ | (3,089 | ) | |||||
Common stock undistributed earnings (losses) | $ | (7,539 | ) | $ | (7,539 | ) | $ | (3,151 | ) | $ | (3,151 | ) | $ | (2,570 | ) | $ | (2,575 | ) | |||||
Class B common stock undistributed earnings (losses) | (1,249 | ) | (1,249 | ) | (535 | ) | (535 | ) | (519 | ) | (514 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (8,788 | ) | $ | (8,788 | ) | $ | (3,686 | ) | $ | (3,686 | ) | $ | (3,089 | ) | $ | (3,089 | ) | |||||
Income (loss) from discontinued operations | $ | (31 | ) | $ | (31 | ) | $ | (170 | ) | $ | (170 | ) | $ | 766 | $ | 766 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (3,291 | ) | $ | (3,291 | ) | $ | (3,511 | ) | $ | (3,511 | ) | $ | (2,805 | ) | $ | (2,805 | ) | |||||
Common stock undistributed earnings (losses) | $ | (2,823 | ) | $ | (2,823 | ) | $ | (3,001 | ) | $ | (3,001 | ) | $ | (2,334 | ) | $ | (2,338 | ) | |||||
Class B common stock undistributed earnings (losses) | (468 | ) | (468 | ) | (510 | ) | (510 | ) | (471 | ) | (467 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (3,291 | ) | $ | (3,291 | ) | $ | (3,511 | ) | $ | (3,511 | ) | $ | (2,805 | ) | $ | (2,805 | ) | |||||
Net income (loss) | $ | (5,559 | ) | $ | (5,559 | ) | $ | (515 | ) | $ | (515 | ) | $ | 1,248 | $ | 1,248 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (8,819 | ) | $ | (8,819 | ) | $ | (3,856 | ) | $ | (3,856 | ) | $ | (2,323 | ) | $ | (2,323 | ) | |||||
Common stock undistributed earnings (losses) | $ | (7,565 | ) | $ | (7,565 | ) | $ | (3,296 | ) | $ | (3,296 | ) | $ | (1,933 | ) | $ | (1,937 | ) | |||||
Class B common stock undistributed earnings (losses) | (1,254 | ) | (1,254 | ) | (560 | ) | (560 | ) | (390 | ) | (386 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (8,819 | ) | $ | (8,819 | ) | $ | (3,856 | ) | $ | (3,856 | ) | $ | (2,323 | ) | $ | (2,323 | ) | |||||
Denominator for basic and diluted EPS: | |||||||||||||||||||||||
Common stock weighted average shares | 11,682 | 11,682 | 11,915 | 11,915 | 12,448 | 12,448 | |||||||||||||||||
Class B common stock weighted average shares, and shares under if-converted method for diluted EPS | 2,151 | 2,151 | 2,250 | 2,250 | 2,790 | 2,790 | |||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Dilutive stock options | — | — | 134 | ||||||||||||||||||||
Denominator for diluted EPS adjusted for weighted average shares and assumed conversions | 13,833 | 14,165 | 15,372 | ||||||||||||||||||||
Income (loss) from continuing operations per share: | |||||||||||||||||||||||
Common stock | $ | (0.41 | ) | $ | (0.41 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | 0.03 | $ | 0.03 | |||||||
Class B common stock | $ | (0.36 | ) | $ | (0.36 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.03 | $ | 0.03 | |||||||
Income (loss) from discontinued operations per share: | |||||||||||||||||||||||
Common stock | $ | — | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | $ | 0.05 | $ | 0.05 | |||||||||
Class B common stock | $ | — | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | $ | 0.05 | $ | 0.05 | |||||||||
Net income (loss) per share: | |||||||||||||||||||||||
Common stock | $ | (0.41 | ) | $ | (0.41 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.08 | $ | 0.08 | |||||||
Class B common stock | $ | (0.36 | ) | $ | (0.36 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | 0.08 | $ | 0.08 |
Fiscal Year Ended | ||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | ||||||
Federal statutory rate | 34.0 | % | 34.0 | % | 34.0 | % | ||
Effect of: | ||||||||
State income taxes, net of federal tax benefit | 5.3 | 14.1 | (14.5 | ) | ||||
Foreign income inclusion | (1.6 | ) | (10.2 | ) | 24.7 | |||
Foreign taxes at other rates | 4.4 | (4.4 | ) | (44.6 | ) | |||
Permanent tax differences | (0.5 | ) | (3.9 | ) | 3.2 | |||
Intercompany items | 2.2 | (11.0 | ) | — | ||||
Compensation items | — | (12.7 | ) | — | ||||
Tax reserves | 0.8 | (7.2 | ) | (23.5 | ) | |||
Additional U.S. tax on undistributed foreign earnings | (0.5 | ) | 37.6 | 33.8 | ||||
Net increase in valuation allowance for deferred tax assets | (27.3 | ) | (3.4 | ) | 18.1 | |||
Additional benefit for carryback of current year federal loss | — | — | (6.1 | ) | ||||
Return to provision adjustments | 4.0 | 15.3 | — | |||||
Other | 0.1 | (1.2 | ) | (0.2 | ) | |||
Effective tax rate | 20.9 | % | 47.0 | % | 24.9 | % |
Intangible Assets Subject to Amortization as of | |||||||
May 30, 2015 | May 31, 2014 | ||||||
Gross Amounts: | |||||||
Trade Name | $ | 29 | $ | 29 | |||
Customer Relationship | 948 | 977 | |||||
Non-compete Agreements | 47 | 47 | |||||
Total Gross Amounts | $ | 1,024 | $ | 1,053 | |||
Accumulated Amortization: | |||||||
Trade Name | $ | 29 | $ | 18 | |||
Customer Relationship | 221 | 178 | |||||
Non-compete Agreements | 31 | 14 | |||||
Total Accumulated Amortization | $ | 281 | $ | 210 | |||
Net Intangibles | $ | 743 | $ | 843 |
TOTAL | ||||
Balance at June 1, 2013 | $ | 1,519 | ||
Premium Paid for WVS Acquisition | 25 | |||
Foreign currency translation | 127 | |||
Impairment on goodwill | (1,671 | ) | ||
Balance at May 31, 2014 | $ | — | ||
Balance at May 30, 2015 | $ | — |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
United States | $ | (9,287 | ) | $ | (1,399 | ) | $ | (2,716 | ) | ||
Foreign | 2,293 | 747 | 3,358 | ||||||||
Income (loss) before income taxes | $ | (6,994 | ) | $ | (652 | ) | $ | 642 |
Warranty Reserve | |||
Balance at June 1, 2013 | $ | 188 | |
Accruals for products sold | 202 | ||
Utilization | (215 | ) | |
Balance at May 31, 2014 | $ | 175 | |
Accruals for products sold | 116 | ||
Utilization | (103 | ) | |
Balance at May 30, 2015 | $ | 188 |
Description | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Fiscal 2015 | |||||||||||||||
Net sales | $ | 34,699 | $ | 33,841 | $ | 33,471 | $ | 34,946 | |||||||
Gross profit | 10,658 | 10,462 | 9,800 | 10,218 | |||||||||||
Loss from continuing operations | (83 | ) | (1,144 | ) | (2,198 | ) | (2,103 | ) | |||||||
Income (loss) from discontinued operations | — | 87 | — | (118 | ) | ||||||||||
Net loss | (83 | ) | (1,057 | ) | (2,198 | ) | (2,221 | ) | |||||||
Loss from continuing operations | |||||||||||||||
Common stock - basic | $ | (0.01 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.16 | ) | |||
Class B common stock - basic | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.15 | ) | $ | (0.13 | ) | |||
Common stock - diluted | $ | (0.01 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.16 | ) | |||
Class B common stock - diluted | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.15 | ) | $ | (0.13 | ) | |||
Income (loss) from discontinued operations | |||||||||||||||
Common stock - basic | $ | — | $ | 0.01 | $ | — | $ | (0.01 | ) | ||||||
Class B common stock - basic | $ | — | $ | 0.01 | $ | — | $ | (0.01 | ) | ||||||
Common stock - diluted | $ | — | $ | 0.01 | $ | — | $ | (0.01 | ) | ||||||
Class B common stock - diluted | $ | — | $ | 0.01 | $ | — | $ | (0.01 | ) | ||||||
Net Loss | |||||||||||||||
Common stock - basic | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.16 | ) | $ | (0.17 | ) | |||
Class B common stock - basic | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.14 | ) | |||
Common stock - diluted | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.16 | ) | $ | (0.17 | ) | |||
Class B common stock - diluted | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.14 | ) | |||
Fiscal 2014 | |||||||||||||||
Net sales | $ | 34,257 | $ | 35,436 | $ | 32,884 | $ | 35,383 | |||||||
Gross profit | 10,192 | 11,007 | 9,651 | 10,164 | |||||||||||
Income (loss) from continuing operations | 1,979 | 631 | (112 | ) | (2,843 | ) | |||||||||
Income (loss) from discontinued operations | (11 | ) | (107 | ) | (420 | ) | 368 | ||||||||
Net income (loss) | 1,968 | 524 | (532 | ) | (2,475 | ) | |||||||||
Income (loss) from continuing operations | |||||||||||||||
Common stock - basic | $ | 0.14 | $ | 0.05 | $ | (0.01 | ) | $ | (0.21 | ) | |||||
Class B common stock - basic | $ | 0.13 | $ | 0.04 | $ | (0.01 | ) | $ | (0.19 | ) | |||||
Common stock - diluted | $ | 0.14 | $ | 0.04 | $ | (0.01 | ) | $ | (0.21 | ) | |||||
Class B common stock - diluted | $ | 0.13 | $ | 0.04 | $ | (0.01 | ) | $ | (0.19 | ) | |||||
Income (loss) from discontinued operations | |||||||||||||||
Common stock - basic | $ | — | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.03 | |||||
Class B common stock - basic | $ | — | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.02 | |||||
Common stock - diluted | $ | — | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.03 | |||||
Class B common stock - diluted | $ | — | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.02 | |||||
Net income (loss) | |||||||||||||||
Common stock - basic | $ | 0.14 | $ | 0.04 | $ | (0.04 | ) | $ | (0.18 | ) | |||||
Class B common stock - basic | $ | 0.13 | $ | 0.03 | $ | (0.04 | ) | $ | (0.17 | ) | |||||
Common stock - diluted | $ | 0.14 | $ | 0.03 | $ | (0.04 | ) | $ | (0.18 | ) | |||||
Class B common stock - diluted | $ | 0.13 | $ | 0.03 | $ | (0.04 | ) | $ | (0.17 | ) |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Net Sales | |||||||||||
North America | $ | 59,742 | $ | 57,137 | $ | 62,269 | |||||
Asia/Pacific | 24,605 | 24,069 | 22,732 | ||||||||
Europe | 44,425 | 47,610 | 45,663 | ||||||||
Latin America | 8,275 | 8,936 | 9,447 | ||||||||
Other (1) | (90 | ) | 208 | 955 | |||||||
Total | $ | 136,957 | $ | 137,960 | $ | 141,066 | |||||
Gross Profit | |||||||||||
North America | $ | 20,352 | $ | 18,905 | $ | 20,963 | |||||
Asia/Pacific | 7,967 | 7,849 | 7,805 | ||||||||
Europe | 14,051 | 15,506 | 14,248 | ||||||||
Latin America | 3,082 | 3,231 | 3,296 | ||||||||
Other (1) | (4,314 | ) | (4,477 | ) | (4,767 | ) | |||||
Total | $ | 41,138 | $ | 41,014 | $ | 41,545 |
Outstanding | Vested | ||||||||||||||||||||||||
Exercise Price Range | Shares | Price | Life | Aggregate Intrinsic Value | Shares | Price | Life | Aggregate Intrinsic Value | |||||||||||||||||
$4.26 to $7.24 | 185 | $ | 5.70 | 3.8 | $ | 547 | 185 | $ | 5.75 | 3.8 | $ | 547 | |||||||||||||
$7.32 to $11.14 | 507 | $ | 10.16 | 7.7 | $ | 47 | 131 | $ | 8.96 | 4.4 | $ | 47 | |||||||||||||
$11.50 to $13.76 | 445 | $ | 12.51 | 6.3 | $ | — | 292 | $ | 12.66 | 6.0 | $ | — | |||||||||||||
Total | 1,137 | $ | 10.35 | 6.5 | $ | 594 | 608 | $ | 9.83 | 4.9 | $ | 594 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
Options Outstanding at June 2, 2012 | 766 | $ | 9.52 | |||||||||
Granted | 225 | 11.70 | ||||||||||
Exercised | (31 | ) | 6.37 | |||||||||
Forfeited | (14 | ) | 10.40 | |||||||||
Cancelled | (2 | ) | 12.43 | |||||||||
Options Outstanding at June 1, 2013 | 944 | $ | 10.13 | |||||||||
Granted | 224 | 11.15 | ||||||||||
Exercised | (32 | ) | 5.84 | |||||||||
Forfeited | (54 | ) | 11.73 | |||||||||
Cancelled | (17 | ) | 11.52 | |||||||||
Options Outstanding at May 31, 2014 | 1,065 | $ | 10.37 | |||||||||
Granted | 225 | 9.92 | ||||||||||
Exercised | (47 | ) | 6.53 | |||||||||
Forfeited | (34 | ) | 11.42 | |||||||||
Cancelled | (72 | ) | 11.19 | |||||||||
Options Outstanding at May 30, 2015 | 1,137 | $ | 10.35 | 6.5 | $ | 594 | ||||||
Options Vested at May 30, 2015 | 608 | $ | 9.83 | 4.9 | $ | 594 |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Expected volatility | 46.12 | % | 49.31 | % | 50.79 | % | |||||
Risk-free interest rate | 2.12 | % | 2.03 | % | 1.12 | % | |||||
Expected lives (years) | 6.47 | 6.47 | 6.37 | ||||||||
Annual cash dividend | $ | 0.24 | $ | 0.24 | $ | 0.24 |
Fiscal Year Ended | |||||||
May 30, 2015 | May 31, 2014 | ||||||
Unrecognized tax benefits, beginning of period | $ | 161 | $ | 32 | |||
Increase due to currency translation | — | 7 | |||||
Increase in positions taken in prior period | 2,000 | 163 | |||||
Increase in positions taken in current period | — | — | |||||
Decrease in positions due to settlements | (161 | ) | — | ||||
Decrease related to the expiration of statute of limitations | — | (41 | ) | ||||
Unrecognized tax benefits, end of period | $ | 2,000 | $ | 161 |
13. | VALUATION AND QUALIFYING ACCOUNTS |
Description | Balance at beginning of period | Charged to expense | Deductions | Balance at end of period | |||||||||||||
Year ended May 30, 2015 | |||||||||||||||||
Allowance for doubtful accounts | $ | 581 | $ | (221 | ) | (1) | $ | 77 | (2) | $ | 283 | ||||||
Inventory provisions | 3,141 | 228 | (3) | 378 | (4) | 2,991 | |||||||||||
Year ended May 31, 2014 | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,092 | $ | 114 | $ | 625 | (2) | $ | 581 | ||||||||
Inventory provisions | 2,715 | 751 | (3) | 325 | (4) | 3,141 | |||||||||||
Year ended June 1, 2013 | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,058 | $ | 135 | $ | 101 | (2) | $ | 1,092 | ||||||||
Inventory provisions | 2,976 | 412 | (3) | 673 | (4) | 2,715 |
(1) | Charges to bad debt expense, net impact for FY15 was a recovery of $0.2 million primarily due to negotiations and resolutions with a large European customer. |
(2) | Uncollectible amounts written off, net of recoveries and foreign currency translation. |
(3) | Charges to cost of sales. Included in fiscal 2015 are inventory write-downs of $0.1 million for EDG and $0.1 million for Canvys, and less than $0.1 million for Healthcare. Included in fiscal 2014 are inventory write-downs of $0.6 million for EDG and $0.2 million for Canvys. Included in fiscal 2013 are inventory write-downs of $0.2 million for EDG and $0.2 million for Canvys. |
(4) | Inventory disposed of or sold, net of foreign currency translation. |
Amortization Expense | |||
Fiscal Year | |||
2016 | $ | 66 | |
2017 | 57 | ||
2018 | 55 | ||
2019 | 46 | ||
2020 | 44 | ||
Thereafter | 475 |
10. | SEGMENT AND GEOGRAPHIC INFORMATION |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
EDG | |||||||||||
Net Sales | $ | 105,748 | $ | 103,274 | $ | 102,593 | |||||
Gross Profit | 33,098 | 31,610 | 31,431 | ||||||||
Canvys | |||||||||||
Net Sales | $ | 24,645 | $ | 27,857 | $ | 32,139 | |||||
Gross Profit | 6,457 | 7,588 | 8,142 | ||||||||
Healthcare | |||||||||||
Net Sales | $ | 6,564 | $ | 6,829 | $ | 6,334 | |||||
Gross Profit | 1,583 | 1,816 | 1,972 |
May 30, 2015 | May 31, 2014 | ||||||
Segment assets | $ | 60,200 | $ | 52,790 | |||
Cash and cash equivalents | 74,535 | 102,752 | |||||
Investments - current | 23,692 | 31,732 | |||||
Other current assets (1) | 3,494 | 5,790 | |||||
Net property | 10,081 | 7,223 | |||||
Investments - non-current | 11,549 | 1,516 | |||||
Other assets - non-current deferred income taxes | 1,443 | 1,724 | |||||
Assets of discontinued operations (2) | — | 18 | |||||
Total assets | $ | 184,994 | $ | 203,545 |
(1) | Other current assets include miscellaneous receivables, prepaid expenses, and current deferred income taxes. |
(2) | See Note 4 “Discontinued Operations”. |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Net Sales | |||||||||||
North America | $ | 59,742 | $ | 57,137 | $ | 62,269 | |||||
Asia/Pacific | 24,605 | 24,069 | 22,732 | ||||||||
Europe | 44,425 | 47,610 | 45,663 | ||||||||
Latin America | 8,275 | 8,936 | 9,447 | ||||||||
Other (1) | (90 | ) | 208 | 955 | |||||||
Total | $ | 136,957 | $ | 137,960 | $ | 141,066 | |||||
Gross Profit | |||||||||||
North America | $ | 20,352 | $ | 18,905 | $ | 20,963 | |||||
Asia/Pacific | 7,967 | 7,849 | 7,805 | ||||||||
Europe | 14,051 | 15,506 | 14,248 | ||||||||
Latin America | 3,082 | 3,231 | 3,296 | ||||||||
Other (1) | (4,314 | ) | (4,477 | ) | (4,767 | ) | |||||
Total | $ | 41,138 | $ | 41,014 | $ | 41,545 |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Net Assets | |||||||||||
North America | $ | 76,153 | $ | 88,902 | $ | 103,006 | |||||
Asia/Pacific | 44,602 | 45,334 | 43,604 | ||||||||
Europe | 34,127 | 38,407 | 36,373 | ||||||||
Latin America | 1,770 | 2,202 | 2,256 | ||||||||
Total | $ | 156,652 | $ | 174,845 | $ | 185,239 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
Options Outstanding at June 2, 2012 | 766 | $ | 9.52 | |||||||||
Granted | 225 | 11.70 | ||||||||||
Exercised | (31 | ) | 6.37 | |||||||||
Forfeited | (14 | ) | 10.40 | |||||||||
Cancelled | (2 | ) | 12.43 | |||||||||
Options Outstanding at June 1, 2013 | 944 | $ | 10.13 | |||||||||
Granted | 224 | 11.15 | ||||||||||
Exercised | (32 | ) | 5.84 | |||||||||
Forfeited | (54 | ) | 11.73 | |||||||||
Cancelled | (17 | ) | 11.52 | |||||||||
Options Outstanding at May 31, 2014 | 1,065 | $ | 10.37 | |||||||||
Granted | 225 | 9.92 | ||||||||||
Exercised | (47 | ) | 6.53 | |||||||||
Forfeited | (34 | ) | 11.42 | |||||||||
Cancelled | (72 | ) | 11.19 | |||||||||
Options Outstanding at May 30, 2015 | 1,137 | $ | 10.35 | 6.5 | $ | 594 | ||||||
Options Vested at May 30, 2015 | 608 | $ | 9.83 | 4.9 | $ | 594 |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Expected volatility | 46.12 | % | 49.31 | % | 50.79 | % | |||||
Risk-free interest rate | 2.12 | % | 2.03 | % | 1.12 | % | |||||
Expected lives (years) | 6.47 | 6.47 | 6.37 | ||||||||
Annual cash dividend | $ | 0.24 | $ | 0.24 | $ | 0.24 |
Outstanding | Vested | ||||||||||||||||||||||||
Exercise Price Range | Shares | Price | Life | Aggregate Intrinsic Value | Shares | Price | Life | Aggregate Intrinsic Value | |||||||||||||||||
$4.26 to $7.24 | 185 | $ | 5.70 | 3.8 | $ | 547 | 185 | $ | 5.75 | 3.8 | $ | 547 | |||||||||||||
$7.32 to $11.14 | 507 | $ | 10.16 | 7.7 | $ | 47 | 131 | $ | 8.96 | 4.4 | $ | 47 | |||||||||||||
$11.50 to $13.76 | 445 | $ | 12.51 | 6.3 | $ | — | 292 | $ | 12.66 | 6.0 | $ | — | |||||||||||||
Total | 1,137 | $ | 10.35 | 6.5 | $ | 594 | 608 | $ | 9.83 | 4.9 | $ | 594 |
3. | SIGNIFICANT ACCOUNTING POLICIES AND DISCLOSURES |
May 30, 2015 | May 31, 2014 | ||||||
Land and improvements | $ | 1,594 | $ | 1,598 | |||
Buildings and improvements | 18,883 | 18,456 | |||||
Computer and communications equipment | 6,774 | 3,792 | |||||
Construction in progress | 1,218 | 1,377 | |||||
Machinery and other equipment | 6,562 | 5,795 | |||||
$ | 35,031 | $ | 31,018 | ||||
Accumulated depreciation | (24,950 | ) | (23,795 | ) | |||
Property, plant, and equipment, net | $ | 10,081 | $ | 7,223 |
Land improvements | 10 years |
Buildings and improvements | 10 - 30 years |
Computer and communications equipment | 3 - 10 years |
Machinery and other equipment | 3 - 10 years |
May 30, 2015 | May 31, 2014 | ||||||
Compensation and payroll taxes | $ | 4,303 | $ | 4,692 | |||
Income taxes | 572 | 68 | |||||
Professional fees | 885 | 560 | |||||
Other accrued expenses | 4,384 | 3,900 | |||||
Accrued Liabilities | $ | 10,144 | $ | 9,220 |
Warranty Reserve | |||
Balance at June 1, 2013 | $ | 188 | |
Accruals for products sold | 202 | ||
Utilization | (215 | ) | |
Balance at May 31, 2014 | $ | 175 | |
Accruals for products sold | 116 | ||
Utilization | (103 | ) | |
Balance at May 30, 2015 | $ | 188 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
Options Outstanding at June 2, 2012 | 766 | $ | 9.52 | |||||||||
Granted | 225 | 11.70 | ||||||||||
Exercised | (31 | ) | 6.37 | |||||||||
Forfeited | (14 | ) | 10.40 | |||||||||
Cancelled | (2 | ) | 12.43 | |||||||||
Options Outstanding at June 1, 2013 | 944 | $ | 10.13 | |||||||||
Granted | 224 | 11.15 | ||||||||||
Exercised | (32 | ) | 5.84 | |||||||||
Forfeited | (54 | ) | 11.73 | |||||||||
Cancelled | (17 | ) | 11.52 | |||||||||
Options Outstanding at May 31, 2014 | 1,065 | $ | 10.37 | |||||||||
Granted | 225 | 9.92 | ||||||||||
Exercised | (47 | ) | 6.53 | |||||||||
Forfeited | (34 | ) | 11.42 | |||||||||
Cancelled | (72 | ) | 11.19 | |||||||||
Options Outstanding at May 30, 2015 | 1,137 | $ | 10.35 | 6.5 | $ | 594 | ||||||
Options Vested at May 30, 2015 | 608 | $ | 9.83 | 4.9 | $ | 594 |
Fiscal Year Ended | |||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Expected volatility | 46.12 | % | 49.31 | % | 50.79 | % | |||||
Risk-free interest rate | 2.12 | % | 2.03 | % | 1.12 | % | |||||
Expected lives (years) | 6.47 | 6.47 | 6.37 | ||||||||
Annual cash dividend | $ | 0.24 | $ | 0.24 | $ | 0.24 |
Outstanding | Vested | ||||||||||||||||||||||||
Exercise Price Range | Shares | Price | Life | Aggregate Intrinsic Value | Shares | Price | Life | Aggregate Intrinsic Value | |||||||||||||||||
$4.26 to $7.24 | 185 | $ | 5.70 | 3.8 | $ | 547 | 185 | $ | 5.75 | 3.8 | $ | 547 | |||||||||||||
$7.32 to $11.14 | 507 | $ | 10.16 | 7.7 | $ | 47 | 131 | $ | 8.96 | 4.4 | $ | 47 | |||||||||||||
$11.50 to $13.76 | 445 | $ | 12.51 | 6.3 | $ | — | 292 | $ | 12.66 | 6.0 | $ | — | |||||||||||||
Total | 1,137 | $ | 10.35 | 6.5 | $ | 594 | 608 | $ | 9.83 | 4.9 | $ | 594 |
For the Fiscal Year Ended | |||||||||||||||||||||||
May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||
Numerator for Basic and Diluted EPS: | |||||||||||||||||||||||
Income (loss) from continuing operations | $ | (5,528 | ) | $ | (5,528 | ) | $ | (345 | ) | $ | (345 | ) | $ | 482 | $ | 482 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (8,788 | ) | $ | (8,788 | ) | $ | (3,686 | ) | $ | (3,686 | ) | $ | (3,089 | ) | $ | (3,089 | ) | |||||
Common stock undistributed earnings (losses) | $ | (7,539 | ) | $ | (7,539 | ) | $ | (3,151 | ) | $ | (3,151 | ) | $ | (2,570 | ) | $ | (2,575 | ) | |||||
Class B common stock undistributed earnings (losses) | (1,249 | ) | (1,249 | ) | (535 | ) | (535 | ) | (519 | ) | (514 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (8,788 | ) | $ | (8,788 | ) | $ | (3,686 | ) | $ | (3,686 | ) | $ | (3,089 | ) | $ | (3,089 | ) | |||||
Income (loss) from discontinued operations | $ | (31 | ) | $ | (31 | ) | $ | (170 | ) | $ | (170 | ) | $ | 766 | $ | 766 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (3,291 | ) | $ | (3,291 | ) | $ | (3,511 | ) | $ | (3,511 | ) | $ | (2,805 | ) | $ | (2,805 | ) | |||||
Common stock undistributed earnings (losses) | $ | (2,823 | ) | $ | (2,823 | ) | $ | (3,001 | ) | $ | (3,001 | ) | $ | (2,334 | ) | $ | (2,338 | ) | |||||
Class B common stock undistributed earnings (losses) | (468 | ) | (468 | ) | (510 | ) | (510 | ) | (471 | ) | (467 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (3,291 | ) | $ | (3,291 | ) | $ | (3,511 | ) | $ | (3,511 | ) | $ | (2,805 | ) | $ | (2,805 | ) | |||||
Net income (loss) | $ | (5,559 | ) | $ | (5,559 | ) | $ | (515 | ) | $ | (515 | ) | $ | 1,248 | $ | 1,248 | |||||||
Less dividends: | |||||||||||||||||||||||
Common stock | 2,794 | 2,794 | 2,853 | 2,853 | 2,971 | 2,971 | |||||||||||||||||
Class B common stock | 466 | 466 | 488 | 488 | 600 | 600 | |||||||||||||||||
Undistributed earnings (losses) | $ | (8,819 | ) | $ | (8,819 | ) | $ | (3,856 | ) | $ | (3,856 | ) | $ | (2,323 | ) | $ | (2,323 | ) | |||||
Common stock undistributed earnings (losses) | $ | (7,565 | ) | $ | (7,565 | ) | $ | (3,296 | ) | $ | (3,296 | ) | $ | (1,933 | ) | $ | (1,937 | ) | |||||
Class B common stock undistributed earnings (losses) | (1,254 | ) | (1,254 | ) | (560 | ) | (560 | ) | (390 | ) | (386 | ) | |||||||||||
Total undistributed earnings (losses) | $ | (8,819 | ) | $ | (8,819 | ) | $ | (3,856 | ) | $ | (3,856 | ) | $ | (2,323 | ) | $ | (2,323 | ) | |||||
Denominator for basic and diluted EPS: | |||||||||||||||||||||||
Common stock weighted average shares | 11,682 | 11,682 | 11,915 | 11,915 | 12,448 | 12,448 | |||||||||||||||||
Class B common stock weighted average shares, and shares under if-converted method for diluted EPS | 2,151 | 2,151 | 2,250 | 2,250 | 2,790 | 2,790 | |||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Dilutive stock options | — | — | 134 | ||||||||||||||||||||
Denominator for diluted EPS adjusted for weighted average shares and assumed conversions | 13,833 | 14,165 | 15,372 | ||||||||||||||||||||
Income (loss) from continuing operations per share: | |||||||||||||||||||||||
Common stock | $ | (0.41 | ) | $ | (0.41 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | 0.03 | $ | 0.03 | |||||||
Class B common stock | $ | (0.36 | ) | $ | (0.36 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.03 | $ | 0.03 | |||||||
Income (loss) from discontinued operations per share: | |||||||||||||||||||||||
Common stock | $ | — | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | $ | 0.05 | $ | 0.05 | |||||||||
Class B common stock | $ | — | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | $ | 0.05 | $ | 0.05 | |||||||||
Net income (loss) per share: | |||||||||||||||||||||||
Common stock | $ | (0.41 | ) | $ | (0.41 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.08 | $ | 0.08 | |||||||
Class B common stock | $ | (0.36 | ) | $ | (0.36 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | 0.08 | $ | 0.08 |
Warranty Reserve | |||
Balance at June 1, 2013 | $ | 188 | |
Accruals for products sold | 202 | ||
Utilization | (215 | ) | |
Balance at May 31, 2014 | $ | 175 | |
Accruals for products sold | 116 | ||
Utilization | (103 | ) | |
Balance at May 30, 2015 | $ | 188 |
15. | SUBSEQUENT EVENT |